Table of Contents - Single Mom Secretary Pays for 2 PhDs and an MBA with Real Estate – Sadhana Sabharwal
Dave Debeau [00:00:09] Hey, everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast. And today we have a special treat. I'm really looking forward to our conversation today because I am interviewing the single mom millionaire. And this is Sad, so Sad that where are you calling in from today?
Sadhana Sabharwal [00:00:31] I am in Toronto, Canada.
Dave Debeau [00:00:33] Toronto, Canada. I'm in Canada. So two fellow Canadians meeting and chatting via the interweb. Got to love technology. So that is a very, very experienced and accomplished real estate entrepreneur. And I really I don't want to take away your thunder because the way she got into real estate is very, very inspirational. Being a single mom with three teenage male children, that's challenging enough a full time job and then creating a very, very lucrative real estate portfolio. So how did you get how did this all come to pass?
Sadhana Sabharwal [00:01:13] Oh, my Lord. When I became single, call it, I had no choice. I had three kids at the time who were heading into teenage years and stuff. And I looked at them and I'm like, I need to pay for these guys tuition. I need to pay for the cost for these guys. How am I going to do it on my income of fifty sixty thousand dollars a year, which is not a lot of money these days. And so I I'm sorry. That was
Dave Debeau [00:01:42] before taxes,
Sadhana Sabharwal [00:01:42] too. So that's true. That's so true. So for me, I was just always looking for extra ways to make money because I mean, I could see the expenses coming back. You know, when the kids are small, they're happy with the looney and the two. Oh, no, no, no, no, no, no, no. Then they start into the fives and the 20s and then it becomes thousands. And I mean, there is no way I can do this. So I was always looking at different ways. So what I started off with was doing second mortgages and then I would borrow the money. At that time, the line of credit used to be six percent and then I would lend it out at 12 or 14 percent on a second mortgage. So making that difference like 80 percent. So that's how I started in real estate then.
Dave Debeau [00:02:28] So how the heck did you hear about that? How did you hear about second mortgages? That's usually something people get into after they've done a few deals. How did you hear about doing that? First of all, I
Sadhana Sabharwal [00:02:39] work at a law office. I remember I mean, I've done real estate as for clients, but I never thought about doing it for myself until this one real estate agent came in and he said he had a client for a church, for a client. And churches cannot get a conventional mortgage. So they were looking for a second mortgage. So I went in half with him. That was my very first second mortgage. And we made good money on that. The mortgage they had it out was at three percent. We ended up getting it at a discounted price and stuff. So I made probably around seventeen thousand in one year for one hundred thousand dollar mortgage.
Dave Debeau [00:03:21] Were you using your home equity line of credit? Is that what you were doing?
Sadhana Sabharwal [00:03:25] Yes. Yes. When my husband left, he left me with a home mortgage, some credit card debt, some family debt as well. So I was able to refinance my house for just a little bit more then. And then I was able to use that money in for the second mortgages. So that's when I started
Dave Debeau [00:03:46] to actually get into buying properties. When did you
Sadhana Sabharwal [00:03:50] know? I was thinking, like, you know, every at the end I would say, like, you know, eight thousand, ten thousand, I was making extra in addition to my income. And then all of a sudden I'm thinking, OK, this is still not enough. Like, there is no way I can take three kids, pay for my house, pay for my car and the whole thing. And then another good day. Another client came in and she was signing up documents for a property in Cornwall. And I'm looking at her mortgage and her mortgage payment was something like three hundred and fifty dollars. I had never heard of that because the property's, I guess, in Cornwall, Ontario, were cheaper. And that's when I started talking to her and she intrigued me. She invited me to her house. And my journey started with I think my very first event that I attended was Darren Weeks out from B.C..
Dave Debeau [00:04:36] Yeah, from Alberta. Yeah. So, wow, that well, that's not. So what year was that approximately.
Sadhana Sabharwal [00:04:44] I'm going to say two thousand eight ish. OK, all right. I started learning about real estate about twenty two thousand nine and I think I did my very first deal in 2009 and went on to buy real estate. And I think by two thousand twelve I had eighteen properties and then I was talking to my mentor and he asked me and I actually had to write down what do I own? Before that, I didn't know I had eighteen properties and I think I just froze. I was like, I don't need this stuff. What am I doing this what? I don't need this. Right? And then I just like I said, I just stopped buying. I mean, and then gradually, as the kids went to school, I mean, I have two kids, two boys who went on to med school, one who did his MBA. So as time went along, I saw some took some equity out. And I mean I mean, that was my whole reason for getting into real estate to pay for my kid's tuition and stuff. And I was able to do that. So now I can proudly say I have two doctors and one MBA and all paid for.
Dave Debeau [00:05:52] Well, congratulate. That is an amazing accomplishment in a relatively short period of time. And getting kids through medical school ain't cheap. My goodness, I don't. I don't.
Sadhana Sabharwal [00:06:06] I still feel the bruises.
Dave Debeau [00:06:07] Sometimes I try to do it. Like, how much does it cost to put a kid through medical school these days?
Sadhana Sabharwal [00:06:15] Well, my oldest one, I'm going to say it was close to four hundred thousand. Oh, my God. Yes. And my second one and is in Halifax. He's at Dalhousie. So he was able to get his own line of credit because he is in Canada. And my third one actually went to Northwestern, which I'm not sure if, you know, it's one of the top five schools for management. So he got a scholarship for his tuition. But then we had to pay for his expenses and stuff.
Dave Debeau [00:06:47] Yeah, which is which isn't cheap either. And the first one was four hundred thousand. Where did he go to school.
Sadhana Sabharwal [00:06:52] He went to Grenada and the US. So it's like a joint thing. They so they're in England then they're in the States and then one year there in Grenada. So it's like all over the place.
Dave Debeau [00:07:04] But it sounds like American prices.
Sadhana Sabharwal [00:07:07] Yeah. Oh my God. Yes, yes. Yes. So I mean, you know, I feel like they're done. I feel free. I can travel a lot more. But I mean, you know, real estate has honestly allowed me so much freedom that I cannot thank God enough. And you know what? If I didn't I mean, I so many times think, like, how does a single mom am I really worthy of all of that? Because, I mean, for my youngest one to get a full scholarship and that's like one hundred and forty five thousand US dollars, it sometimes makes me want to cry, like, how did I do it? I guess it wasn't me. It was definitely not me.
Dave Debeau [00:07:47] There is there is something helping it along the way. That's wonderful. Sagna So when I was really a little bit about your background, again, you you were working at a law firm, your daughter. You weren't a lawyer. You're a legal clerk. Is that correct? Yes. Yes. So you're not the highest paid person in the office by any stretch. Now, I would venture to say your net worth is probably way up there compared to the other people in your office. Are you still are you still working at a job or are you full time?
Sadhana Sabharwal [00:08:18] I am. I do enjoy my job a lot. I am working there. My net worth. You asked. I would say it's I'm going to say close to somewhere between two and a half to three million.
Dave Debeau [00:08:30] Yeah, well, I wasn't actually I was just going to say I bet it's it's more than most of the lawyers in the office.
Sadhana Sabharwal [00:08:37] I would agree with you. It's I don't openly disclose that
Dave Debeau [00:08:43] and you probably don't. So they have no idea. So one thing that when I was really a little bit about your background, you've done most of your deals using other people's money. So tell us a little bit about that. That's that's something I'm always very curious about. How did you how did you get your you probably had enough capital to do your first deal or two, but how did you start raising money to do your deals?
Sadhana Sabharwal [00:09:09] My very first house that I bought, I will tell you, I bought it for five thousand dollars.
Dave Debeau [00:09:15] Wow. Where was that one
Sadhana Sabharwal [00:09:17] that was into Samori? It's a small town up north, and I bought it on a tax sale and I still owned that house and fixed it up. And it rents for seven nine, almost eight hundred dollars a month. So, I mean, that's just one example. But I think and then I've done so much stuff I can I've done joint ventures. I, I bought a ten plex. It was an eight unit building and a duplex where I got the vendor to give me the money for the down payment and for the closing costs. Guys, was that another type of deal? It is. It is. I mean I've since then but also but I was going to say in the bigger towns, because I made bigger gains, I had to sell those, as I said, in order to pay for tuitions for my children. Right. Or my little ones expenses and stuff. So these smaller ones, they have I get a higher monthly cash flow and they're just sitting there. I don't care if they don't grow. It's just giving me money back. If I wanted to retire, I can retire right now with the cash flow like I am financially free. Like I get enough money for my expenses from my real estate dealings.
Dave Debeau [00:10:37] Yeah, that's wonderful. So are a lot of those single family homes in the smaller town are those the mortgages are paid off. They're free and clear type properties or do they
Sadhana Sabharwal [00:10:46] still have mortgages on. I do have mortgages on them because as I said, I pulled some money out. Right. I mean, there is a five plex that I own, which is about twenty minutes from my house. That one I bought for I'm going to see two seventy. I put some money into it and the last offer I got on it was one point three million. Wow. I turned it down. And you know what it's giving me if I pay off the mortgage, let's say when in another ten years that property will give me something like thirty to thirty five thousand dollars of cash flow
Dave Debeau [00:11:21] neutral so that when it comes to finding money, partners are joint venture partners. What kind of things have you done?
Sadhana Sabharwal [00:11:30] I have done where they have put down the down payment or I mean how I find them or how I utilize them both anyway, so I have done it where they put the down payment down and they've gotten a mortgage, I will go out and find a deal. I have also done it where we put money. Both of us have put money in and they still get the mortgage, but we do get the profits 50 50. Yeah, there's so many different ways of working with it. I've also done it where I put all the money, they did the work and we split the profits 50 50.
Dave Debeau [00:12:05] OK, so all you've got a whole variety of different things.
Sadhana Sabharwal [00:12:10] And this is why I like, you know, I guess somehow because it was based out of necessity, I was able to be so creative and I never went to school for studying this. So I never did. Of course, I had no money down. It was just all like, how am I going to do this? How am I going to make this happen? And I think it's just Godchaux, you'll be
Dave Debeau [00:12:31] so curious, as are most of your properties in smaller towns or do you or smaller cities or.
Sadhana Sabharwal [00:12:39] You know, not anymore. I had some in Toronto. I have some in Georgetown. I have one in Burlington. I had one in Muskoka. I had about four or five that I sold last year that were in smaller towns. I'm just trying to clean up my portfolio now and then. I mean, I've done some flips as well in between. There was one in Sudbury, so I mean, it's all over the place. I just go wherever the deal is. I'm not I'm not one of those people who I need to stay like half an hour from my house. I don't care. I'll drive an hour. And if the deal is right, does it matter?
Dave Debeau [00:13:15] OK, well, that brings up another really good question that I'm sure a lot of people are wondering is how do you manage these properties that are so far away,
Sadhana Sabharwal [00:13:24] the far away ones? I have a property manager and the ones that are close by. I've managed them myself.
Dave Debeau [00:13:31] OK, so for example, you're in Toronto, you've got that little house and it's also Marietje, which I don't know how far away that is, but
Sadhana Sabharwal [00:13:40] so Savery from my house, I would say from Toronto is about seven hours drive. One hour. All right. I want to
Dave Debeau [00:13:49] drive in there very often.
Sadhana Sabharwal [00:13:50] Oh, no, I don't.
Dave Debeau [00:13:51] So how do you in especially in a small town, how do you find a good property management company that wants to take care of a single family home?
Sadhana Sabharwal [00:13:58] Because, well, I have other properties there at one time. I did have I mean, right now, remember I said about the Ten Plex, so I have eight, ten, eleven units into Sainte-Marie. I have five in Georgetown, I have one in Burlington. There is one I'm looking at right now in Brantford to go do a flip with that one. And I've got one at my house. I finished my basement about four years ago and there is another income producing property now. Beautiful.
Dave Debeau [00:14:30] Yeah. All right. So I guess my question would be back when you just had the one house. And so Samori, I'm probably saying it wrong.
Sadhana Sabharwal [00:14:41] No, no. It's actually exactly the way you said it's same.
Dave Debeau [00:14:45] It's where are you able to find a property management company to take care of just the one unit.
Sadhana Sabharwal [00:14:51] Yes, yeah, because as I was looking at that, so what happened in that scenario was that the real estate agent that I was using, I used him for that one house. And then when I bought my next six plex there, then it was just continued on. And then he went on and joined a professional property management company and then it went from there. So now I have a management company that looks after this stuff.
Dave Debeau [00:15:18] Very, very good. Well, time flies when we're having fun, so
Sadhana Sabharwal [00:15:23] it already flew away.
Dave Debeau [00:15:25] It's fly away. So if people want to find out more about you and what you're up to, I know you you do some limited coaching with people sometimes. So people want to find out more about you and connect with you. What should they do?
Sadhana Sabharwal [00:15:41] OK, so I have a website called w w w single mom millionaire dot com. Yeah. And if they reach out to me from there I could send them a report that is seven steps to success in real estate. That's one thing. And then also I am working on a no money online course. I want to do an online course because every time, wherever I go, people want to know how did I do it? So I'm thinking I'm going to do an online course and hopefully I can reach out to you then as well. And then we could put something that
Dave Debeau [00:16:12] that sounds like fun. So I thank you very much for your time and sharing some of your experience and wisdom with us. Thank you. All right, everyone, take care and we'll see you on the next episode. Take care. Bye bye. Well, thanks very much for checking out the property profits podcast and you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review it. 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.