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Podcast Transcription

Announcer [00:01:24] Tired of only dreaming about the things you want to do. Want to have more time for your family. More time for you. More time for you. This is the Breakthrough Real Estate Investing podcast, where we interview qualified guests in the real estate industry all across Canada. We want you to live life on your terms, and we want to help you break through to that life through the power of real estate investing. This is the Breakthrough Real Estate Investing podcast. Now your hosts Rob Break and Sandy MacKay.

Rob Break [00:02:04] Hello. Welcome back once again, everybody. Glad to have you with us again today. And as usual, I have here sitting with me ready to go. I’m super excited for what’s ahead. This third Sandy MacKay that’s going.

Sandy Mackay [00:02:19] Fantastic. How’s it going there?

Rob Break [00:02:22] Excellent. Couldn’t be better. I’m ready. I’m feeling really excited today.

Sandy Mackay [00:02:29] We were talking earlier. I think this is one of the rare days that Canada is hotter than where you are. Maybe I could be wrong, but we’re summer here and in Canada you’re I guess summer now. We are the summer there too. Yeah.

Rob Break [00:02:40] Right now.

Sandy Mackay [00:02:41] Is always up.

Rob Break [00:02:42] There. Sort of. Yeah. Well yeah, that’s right. But it’s sort of going into rainy season right now. So we’ve had quite a bit of rain has cooled off a little bit. It’s still like now it’s very humid. But you know, I’m not complaining, but I don’t want it any hotter. So you guys can keep that.

Sandy Mackay [00:02:59] I’m finding a lot of people complaining here. So far in my day, I’ve heard like complaining. It’s always funny, you know, one or two days a year that are that are scorching hot and people want to get out of here.

Rob Break [00:03:08] Just where the right of tire you just got to you know. Yeah. As little as possible. But other than that, I’m just super pumped. We’ve had the tour that I mentioned on the last show, the investor tour that we’ve got in conjunction with Durham REI sold out a bunch of people on the waiting list already.

Sandy Mackay [00:03:30] I was going to say a waiting list because I’ve had people ask me about it and they sent me away. But I’m like, I don’t think there’s any spots but that one.

Rob Break [00:03:38] We’re going to have to do another probably in January. I think we’ll do another one. This one in November is sold out. Yeah. And I’m just super pumped about that. So there we’ve got a bunch of Canadian investors coming down here with Quentin de Sousa from Durham, REI, and they’re going to have some fun, check out some properties, and it’s going to be great. So if anyone I’m curious to I don’t know the best way for someone to get a hold of me, I guess just an email right now, we’re making our website for the for the tours. But if anyone listening happens to be interested in joining in on something like that, maybe just give me a quick email. Rob Mr. Bright through dot CA. That way we can put another one together and we know that for sure there’s enough interest to do that.

Sandy Mackay [00:04:26] Go.

Rob Break [00:04:27] And as usual, guys, you know, go over to our website, break through REI podcast dot CA, listen to all the past episodes, get in touch with all the past guests and all the other good stuff that we got going on over there. Get a free gift, get on our mailing list. You know, all the stuff that Sandy normally talks about that I just took away.

Sandy Mackay [00:04:47] While breakthrough podcast out there. They can grab the free gift when they sign up for our newsletter too. So you never miss a show and get updates and don’t miss out because I’m sure a lot of people are listening to this now and maybe send them. I wish I knew about that tour. Well, get on the list there and you’ll get the first crack at things like that. So don’t miss out on that to register for that. When you get the chance today grab a free gift. The ultimate well, the ultimate strategy really. Well, the real estate.

Rob Break [00:05:14] And leave us a rating a review of our on iTunes guys you know that helps just and tell us whatever topics you want to hear on the show maybe that we haven’t touched on in a little while. We’ve been doing some really good shows lately. I think we get some good feedback and actually the getting a lot of new listeners lately as well. So just excited all around to be able to share you know, continue sharing with people and all this Canadian real estate investing content. So we’re going to keep it up. And today is no different. We’ve got a great guest with us, David Geovanniello And really excited to talk to him today. So without further ado, welcome to the show.

David Giovanniello [00:06:00] Oh, thank you very much. Thank you for having me. I’m excited myself.

Sandy Mackay [00:06:04] And I am happy to have you here and really glad, Rob, you went for that name first. Thank you. I’ll probably try it here too, but I think you nailed it. So, David. Gillian. Jim, you’ve been yellow and you just butchered it.

Rob Break [00:06:18] I’m very good right now.

Sandy Mackay [00:06:21] You’re the best. The first realtor who lived in London, working in primarily London for 20 plus years as a realtor and investor, and does a lot of coaching with investors. Multiple strategies that you’ve used over the years to invest yourself and build wealth. And so we’re looking forward to learning more about this and your journey. Thank you for being here again. And why don’t you start out with just tell us a little bit more about how you got started in real estate and your 24 plus years in the business.

David Giovanniello [00:06:52] Yeah, it makes me sound old when I hear it like that. 24 years. But anyways, thanks, guys. Thanks for having me on here. I love talking about real estate and it’s one of my major passions. So to get a chance to teach people and tell my story, I’m honored to be able to do that. So, yeah, I’ve been I’ve been investing for 24 years and I started when I was 22 years old. I bought a house that was a duplex and I lived in one unit and rented out the other. They have the term house harking back then, but now it’s a little bit common that that’s the way people get started out. So yeah, that was an amazing way for me to get ahead and, and I recommend it to everyone. Um, it’s a great way to keep your expenses down. So I remember back then I was paying, I think $200 a month to live. So I was able to save a ton of money and be able to scale the business really early. So I bought a student rental after that and started investing in, in flips and bears. So yeah, that the house hacking gave me the huge head start at a young age.

Rob Break [00:07:56] And I guess when I think about it, I know that I don’t sound as old as you, even though I think you might be younger. But I was like, I think 17 years ago when my wife and I did the same thing.

David Giovanniello [00:08:10] Yeah.

Rob Break [00:08:10] And it is it’s the best way to get started. I mean, especially if you, you know, don’t have a bunch of money in your pocket. It works really, really well to all of a sudden go from, you know, not knowing where your next meal is coming from to potentially having more money at the end of the month. Right? Yeah, it’s so true.

David Giovanniello [00:08:32] And I try to recommend to anyone, especially the young people just getting started out, you don’t need that massive house off to start. You can have a goal to get that one day. But the house hacking will allow you to keep those expenses down. And then it’s also your first rental property. For myself, I kept that property. I eventually bought a home with my wife that we lived in and raised a family in. But I still have that duplex from 24 years ago that my son now is actually moved into as a May 1st, which is actually pretty cool too. So he’s living in the same unit that I lived in my early twenties.

Rob Break [00:09:05] He’s not getting off light though.

David Giovanniello [00:09:07] Hopefully he’s getting off a little later than I did, but he still has his responsibilities.

Sandy Mackay [00:09:13] As difficult as you guys are, great is great. Great advice. Wrap the heart for people that do that and or just buy a rental property somehow. Period. If depending on if you’re living at home, even maybe there’s the option to buy a rental property rather than going out and spending all your money trying to survive month to month. I think that’s pretty good advice then. And buying homes for your kids. Incredible opportunity there, too. When you when you buy those properties early on, one day down the road, 18 plus years down the road, when your kid’s ready to move out, what an opportunity for them to learn and see that how that that benefits generations.

Rob Break [00:09:47] Well, let’s talk about how you actually got into that. Was it Fluke? You were just buying a house that happened to be a duplex or did you were you like intentionally seeking out that kind of investment?

David Giovanniello [00:10:00] So yeah, it was intentionally seeking out, but luckily to be raised by my mother. So my mother, after she got divorced, she was basically a single mother working on a secretary salary. And I watched her go from weed move to like a semi. She would fix the house up and then we would sell it, say, a year later and we’d upgrade. And I saw how real estate was this amazing tool for just the average person, right? You know, single mom on a secretary salary. We were able to move up. She eventually had rental properties and we moved into like a 3200 square foot house a few years later. So I saw the power of real estate. And so with her guidance, definitely and her motivation, I had the mindset of to get that duplex and start that way. So, yeah, it wasn’t just luck, that’s for sure. It was proper guidance and then, you know, paying attention and wanting to do the same.

Rob Break [00:10:55] Yeah, that’s very cool. You know, I didn’t I didn’t even notice it at the time, but my parents did small things like that to where they would buy. Most of the time it was just a piece of land. Right? And they’d get so excited, we’d go and, like, hike down all the trees and clear it, clear it, never build anything. And then a few years later, they would sell it. And we did that like quite a few times, but I didn’t clue into it. I think the way that I showed up, the way that you did by the sounds.

David Giovanniello [00:11:24] Yeah. I think that, you know, for myself, I have other brothers that they didn’t, you know, gravitate to that for the entrepreneur life as much as I did. But I think you still plant seeds as a parent. Those seeds what you do plant seeds in your children and they see it and they might not pick it all up, but they’re picking some of it up for sure.

Rob Break [00:11:41] Mm hmm. What do we buy? What?

Sandy Mackay [00:11:45] What are the properties they invest in, then? How is that starting out? I know there’s got a pretty long list of types of property strategies. Yeah. You. Why do you take us through some of those? Yeah. So evolution of your strategies and what you were investing in.

David Giovanniello [00:11:59] Yeah. So I kind of go through the whole evolution into where I’ve found my niche now. But yeah, so I started with that house hacking and then I was young guy, so 22 years old. I think by the time I was 23 or 24, I purchased a student rental. So I was able to feel like I related to the students back then. And it just.

Sandy Mackay [00:12:16] All it was all ended on terror.

David Giovanniello [00:12:19] And yeah, everything, everything pretty much I’ve done is in London, Ontario. So it was all in London now. So London’s a great student rental market. You have Western and Fanshawe, so it’s a great spot. And so that student rental created unbelievable cashflow for me at that age, what I thought was unbelievable cash flow for sure. So I was living for free and then getting great cash flow from this rental. And then after that I purchased another duplex that was in the same it was in the student area. Well, I shouldn’t even say it wasn’t even a duplex. It was a single family home near the student. I converted it to a duplex right up to its highest and best use. So I made it to a five bedroom main floor and a two bedroom upper. So I had student rental on the main floor and then like grad students above it. So and I had to keep it keeping that one for a few years and eventually sold it. I did a flip and then at one point I got into Rent to Own. There was a time where rent owners had had a place and I feel like they’re going to be coming back here when people have a hard time qualifying. But that was a rewarding thing as well. Where I got into the rent owns, I was able to help people as well as make money. So it was kind of like a win and it was very control. And then I also purchased it last year, but yeah, so I bought it for Plex that I still own today, but another duplex that I still own today. Yeah. So I want to bore people with, you know, to me the details, but I’ve done a little bit of it all and then now I kept all the multifamily and I’ve grown to bigger now from there.

Rob Break [00:14:11] Yeah, we’re going to talk about that down the line. Let’s just transition into some of the challenges that you ran into because that’s always like a really interesting conversation that we have with the guests is. I always expect it to be one thing and then it’s and then it’s usually a different thing. Like the challenges are not very they’re not the technical things that I thought that they would be. So what have you run into?

David Giovanniello [00:14:38] You know, you probably you run into all kinds of problems in real estate. It’s not it’s not just so black going so easy and totally passive, especially early on when I was doing all the work. But the biggest thing that happened to me being young was that you run to a capital and every investor has this problem. I feel this is the most common, common problem for investors that want to scale is that eventually the bank say no more or you’re going to get a down payment. Money. I can only burst so many times or refinance so many times before the banks just say no. So that was probably the biggest concern I had or biggest obstacle I had was I couldn’t grow anymore. So I applied, took a couple of years off and just, you know, sat there with what I had. I was pretty happy with my rentals, but I wanted more. And so I went to the root of joint ventures, which is common among most investors that have a lot of units. And so I brought on joint venture partners.

Rob Break [00:15:36] Yeah. And now like just because I’m curious on the like I was saying on those to sort of that’s always the challenge. That’s always the answer that we hear is the financing, right? Like I wanted to grow and then that was one of the issues that got in the way and here’s how I solved it. But on the other side, like, have you ever had any, like you do a bunch of rentals and you buy, fix, refi the, the properties that you purchase. So what kind of like things have you run into on that side?

David Giovanniello [00:16:12] Well, I guess all kinds of things that way. So the biggest thing that I try to teach people is to treat it like a business and your number one customer is your tenant. So I try to treat my tenants with the utmost respect and I treat them like a customer that they’re always right. I give regular gifts to the good ones that pay on time, right? That keep their units and keep the buildings in good shape. And so early on, that wasn’t the way I was or wasn’t always that way. You know, there was a learning curve to learn that the tenants were very important to my business, and it’s a mutual respect. So early on, I did find that I needed to learn that. And also I found that inherited tenants, I had way more issues with the tenants that I chose and we started the process together. We both knew that, knew the expectations of each other, and I feel that that’s really important that you set the expectations and what you’re going to provide and then actually provide that for those tenants. And so I find that’s really important. I try to teach that a lot.

Sandy Mackay [00:17:22] Yeah, that’s a component to it. Like you say, if treating it like a business. Most businesses do, you have a similar challenge. When you go and take over a business, you inherit whatever problems it’s tough to optimize that and make it better versus starting from scratch. Like kind of you’re saying starting we’ve got the fresh people, new relationships, that’s you’re starting together. It’s often a little bit simpler. Not always possible.

Rob Break [00:17:47] But also especially when you’re buying the multi. Like the bigger Maltese. Like you’re doing now, for sure.

David Giovanniello [00:17:53] Yeah. And the other, the other thing is very important is to put together a team. So I treat it like a business. So I’m not going there and trying to tinker. On how to fix a plumbing issue. I have a team for every aspect of the business and so, I mean, everything’s just a phone call or a text away. So the tenants are being dealt with quickly and by the proper professional. And then I treat those professionals with respect to I pay them on time because I want them to be there for me very quickly. So a proper team all around on the buying regarding, you know, real estate, real estate agents, lawyers, inspectors, appraisals, but also on the owning side where you have, you know, handymen, plumbers, electricians and the whole gamut.

Sandy Mackay [00:18:40] Is there an evolution to that, to coming to that point and treating it that way, too, or like has a lot of people starting out early on? They’re trying to do everything themselves, especially, you know, especially when they’re younger in life and they haven’t maybe matured in other ways around that. It’s tough to get to that mindset of I should have people helping me so I can go to Costa Rica and hang out for hours on there and, you know, things like that.

David Giovanniello [00:19:05] 100% is there is a process to that. And most people not right now, especially because the cash flow and the cap rates are so low, there’s not enough spread. Most people do try to do too much and then it comes across as unprofessional or cost them more money. And I actually find sometimes with some of my joint ventures, I have to have this conversation with them because they’ll see maybe a bigger expense than they expected on, say, a plumbing job that they feel they could have fixed for less money. But I have to remind that it’s a business. The idea is that they’re investing and not putting their time. It’s just money, not time. And the goal for me as an investor is to invest, to create more time for my family. So me going and fixing a plumbing issue, it just isn’t worth it to me. My time now is worth more than that. And people have to do that more often. Not just family man. Everyone, your time is important.

Rob Break [00:19:58] Yeah, right. And what I what I have found is that I used to think I was fairly efficient at fixing things, but it turns out that it probably takes me three or four times the amount of time as a professional right with the right tools and the right knowledge to get it done.

David Giovanniello [00:20:14] You know. So the good thing is I don’t have I know I’m not good at all, so I don’t even try.

Sandy Mackay [00:20:21] So that’s like me.

Rob Break [00:20:23] Getting other.

Sandy Mackay [00:20:23] Things. I found out quick I was not good either when you it that’s you mentioned it in the markets and they have, you know, markets evolving over time but in the market like we’ve seen for the most part the last few years pretty you know I know in London and most of on most of Canada pretty tight in terms of cash flow. Very tough to make, you know, especially the smaller, you know, duplexes, things like that, where the price points kind of God’s at a control in a lot of cases. And those are conversations I know I’ve had a lot of and I’m sure you’ve had that, too. And it’s always like, how does well, I can’t afford for property management because then the numbers don’t work and it’s like, have you have those conversations with either joint ventures or investors? They’re leading to buy the properties. What’s your take on that? Is that, wow, what do you do those situations?

David Giovanniello [00:21:14] So for myself, I only buys my number one rule is by smart so I don’t get attached to anything. My process is long term. So I wait things out until I find a property that works. And an example of that was last year in the hottest market we had. I found a turnkey building 14 units, plus a garage with a seven and a half cap rate mint condition property in Saint Thomas. So it’s possible. So I don’t have to jump at a three or 4% cap rate because everybody else’s if you’re doing the work to find off market deals or to find deals, it’s possible to find them.

Sandy Mackay [00:21:55] Yeah, a lot of people will get probably hung up on the you know, they want to buy X amount of properties in this year and they’re not hitting that goal or there are they see, you know, or they see ten other people buying about ten properties this year and they’re like, damn, I’m not keeping up.

David Giovanniello [00:22:12] And that’s true. That last year was probably the worst for that was like the fear of missing out. Everybody was watching other people. You know, buying all kinds of properties. And that’s one thing for me is I always use those people’s motivation that it’s possible to do, but I don’t get caught up in trying to keep up with them. And that’s kind of a philosophy for me in life in general is try not to compare myself that way. So I try to I’m a fitness, not fitness. I’m a fitness enthusiast, I guess I try to take really good care of myself. My wife and I own a gym in that industry. It’s very, very easy to compare yourself to someone and then you’re never going to be satisfied in real estate. Investing is very similar. If you’re always trying to watch what other people are doing, you’re probably in and of making a massive mistake in buying a property. It’s going to cost you a lot of money and the same thing. You’re just never going to be satisfied in your life. So I try not to chase. I use it as motivation.

Rob Break [00:23:09] Yeah, I really like that. And I think that there is there’s definitely you have to look inwards for the answers to those kind of things, how fast you want to grow and what you’re trying to do. Because I think it is all it should, in my opinion, all be based on your lifestyle and what you want like that is that is the bottom line. It should be all as far as real estate investing goes and how much you want to scale and how much work you want to do should all be based on what kind of lifestyle that you want to live.

David Giovanniello [00:23:37] I agree. I agree 100%. I feel real estate is the most amazing tool for the average person to get ahead in life. And every single strategy I talked about works. You just have to find what works best for you, what’s going to get you to your goal. So a lot of times when I’m coaching people or even helping them buy, we start with the end goal to start and you know, try to find the best route to that or even your personality, you know, what’s going to be best for you. You might not want to deal with student rentals or a flip or a burner. So they all work. But you have to you know, you have to find it’s going to work best for you and your situation.

Rob Break [00:24:16] So let’s talk about partners in that relationship that you that you formed to continue to scale into these bigger buildings. How do you find partners who are interested in this type of thing and like who are like what type of people are they?

David Giovanniello [00:24:32] Yeah. So I have a few different partners I’ve partnered with and many have done it now multiple times. So the way I found them, the first one was an acquaintance. They knew I was in the business. They wanted to get into real estate, but they didn’t want to do the work. They had capital, they had young children, but they didn’t want to do the day to day work. And plus they were scared that they didn’t know how to do the work. So with that particular partner, we bought a six plex. At that point, I couldn’t qualify, probably on my own. It would have been difficult. So we used private money, bought the six plex. He had never seen the property at all. He trusted me 100% to do it. At one point he did come to see it during the renovations. But we bird that six plex each with each other, and together we ended up buying a 12 plex in Old South London, which is probably the best neighborhood in London for a rental property. And so that was an acquaintance that just didn’t want to do the work and had capital.

Rob Break [00:25:36] But he saw your track record, right? And like what you had done in the past.

David Giovanniello [00:25:40] And for sure, the track record definitely helps 100%. Social media is unbelievable how it connects you with investors and connect you with people. So I’ve been approached many times by people on social media, but a lot of times they don’t meet what I’m looking for. And so I’m a little bit pickier on who I want to work with. And I really prefer to work with people who just want to put up their money and do not want to do the day to day work because that’s right. That’s what my strength is. So I bring that to the table.

Sandy Mackay [00:26:14] That’s an important piece for people. Anyone looking to do partnerships, joint venture or whatever version of that, it’s who you’re going to business with, especially when you’re your philosophy is pretty long term. You’re going pretty, pretty long into the future. With that, you don’t want to deal with someone that’s not aligned in that vision and where you’re going in and mutually benefiting each other. So, right, right. So I think that’s a lesson a lot of people learn by getting, you know, doing the wrong type of partnerships. Right. But sounds like you got good clarity on that and who that person is. I think that’s probably as important as anything is just understanding who your perfect person is, which is.

Rob Break [00:26:51] Well, I think that what some people get hung up on, too, is they feel like, you know, I’m asking for money. Right. And I’m not they undervalue what they bring to the table. So. Yeah, so instead of being picky like you are, you’re just like, if anyone’s going to give me much money, you just give me money and I’ll work with them. But I think that that’s definitely the right approach, is just make sure that you align. You know, it’s not it can end up a lot worse than not getting the deal.

David Giovanniello [00:27:22] Let’s say that I don’t agree with 100% person if you have the wrong person that just make your life miserable right off the top. So for me, again, it’s all about creating more time for myself. So I don’t want to have to now deal with an unhappy investor. So the idea is to be on the same page. Show them good returns and then they come back. So at that particular, my first joint venture, it was a six plex, 12 plex and a duplex I purchased with them on that we still hold today. I have another joint venture partner that I currently hold with and that’s the 14 unit property that I bought in Saint Thomas that was at a 7 to 7 and a half percent cap rate, which is unheard of even, you know, five, ten years ago, never mind in the market last year for a mint property. So again, they’re very happy. Right. And I did many rentals I’m sorry, I did many joint ventures with rent owns, which I feel is a really good way to do or get started in joint ventures because it has a fixed timeline, basically fixed numbers. And so it’s very easy to structure it and to show the investor what’s going to happen. So I usually tell people in a market that rent owns can work to start with rent owns if they want to get in joint ventures because it’s just it’s easier, it’s an easier sell and it’s, everything’s kind of spelled out for everybody on paper.

Rob Break [00:28:51] Yeah, that’s a good tactic. I like that. A little bit of advice there. It makes perfect sense because then, then, you know, if it goes well, you can move on to the next one and.

David Giovanniello [00:29:00] Then you can move on. Move on to bigger.

Rob Break [00:29:02] Yeah, absolutely.

Sandy Mackay [00:29:03] When you’ve done your rent zones with is a tenant first or property first?

David Giovanniello [00:29:08] I always do tenant first. Okay. For me now property first. You can make more money potentially, but tenant first, you have a happier tenant more likely to close on the deal because they’re choosing the property. And so I have an unbelievable record. Perfect. I haven’t done a ton of I think I’ve done five rentals, but every single one closed on the house.

Rob Break [00:29:30] Yeah, that’s all.

David Giovanniello [00:29:31] So and that’s important and that’s my goal to my goal. The goal is to make money, but I’m not trying to squeeze someone for money. Right? So I had a good return. I’m really happy with the structured return of the deal. And now I have a person buys the home that they wanted. It all went as planned and so that’s rewarding and the way I rather it go.

Rob Break [00:29:49] So we’ll just break it down really quick. I’m sure that most people understand, but basically what we’re talking about is when you’re doing a rent to own, if you do a tenant first, they’re qualifying that tenant that they’ll be able to maybe they’ve got some issues or whatever and they can’t buy something a traditional way and go to the bank and get financing. But with a little bit of help there can repair their credit and be able to purchase it with the bank down the road so they would qualify as the tenant for you. They would go out and shop for the house and the other, and then the other way would be to find the property first and shop that to potential tenants. Just wanted to clarify little very good outline.

Sandy Mackay [00:30:33] Why did you go into some of the bigger buildings? You know, you mentioned you starting no more duplex or that stuff and then now it’s 50 units.

David Giovanniello [00:30:43] For the 15 unit, the 15 using Thomas, the 12 in the city. So for those ones, again, it’s actually easier to qualify for a commercial mortgage, six units and bigger they qualify more on the cash flow and the building itself than they do for me. So I also help solve that problem, you know, regarding not qualifying for mortgages anymore.

Rob Break [00:31:07] So when you find a solid, you have no problem getting the part defined as when you find a 7.90. Yeah, no problem getting financing for.

David Giovanniello [00:31:16] That, particularly that particular deal. People like the banks I had banks fighting for that deal that yeah. That’s a better way to do it.

Rob Break [00:31:23] Yeah. Yeah, for sure. And then your partner’s probably like, okay, well where’s the next two? Or, Oh, let’s find another one.

David Giovanniello [00:31:29] Like that’s the problem with that one. My partner said we had to pay too much tax last year. That was the bigger problem. The tax bill was too high. That’s a good.

Sandy Mackay [00:31:36] Problem. Big tax is a good problem to have. Yeah.

David Giovanniello [00:31:40] Yeah. I’ll take that any day.

Sandy Mackay [00:31:42] Yeah. What about Saint Thomas? Is interesting. Maybe we can touch on that for a minute or so here, because I’ve heard a lot of interesting deals in last couple of years. And of all the places like where are all the no places where I’ve heard about deals like you just said, except for I’ve heard a couple of people mention Saint Thomas is an interesting market. So it’s right there by London. I mean, it seems like a maybe a place that most people don’t know about. It’s not that big. So there’s not an abundance of opportunity.

David Giovanniello [00:32:09] But it’s a small town just, you know, 20 minutes south of London and just 10 minutes away from Port Stanley Beach. It’s a nice town that got hurt by the auto industry leaving. And so the values of the homes got the press, the little bits. And so there was opportunities to make money. But it’s a nice town. And again, close to London, a lot of people who work in London will live there because it is a little cheaper. So there is opportunities but London’s. Also like that, there are many investors that come from come from the TRON or GTA area to come to London and St Thomas for the cash flow or one of the last places that could cash flow where it’s still good, nice cities that you’re not dealing with too many issues.

Sandy Mackay [00:32:56] And it’s a relatively diverse economy and not relying on just one.

David Giovanniello [00:33:01] Thing, not just one. Especially one that’s not relying on one.

Sandy Mackay [00:33:03] Yeah. Yeah. What about starting out? So what about newer investors who come to you and want to like how do you work with those people in terms of them getting started? And, you know, we talked about I was talking and recommending things like that. What does that look like? How do you work with them and coach them?

David Giovanniello [00:33:23] So originally what I’ll do is sit down with someone and find out what their goals are. And so if they’re just looking to buy a house, then I always steer them towards house hacking. If they’re just starting out and want to invest, I still am towards house hacking off the hook. But it really depends on the investor. But I have a, I guess, a basic philosophy of real estate. And I teach people my idea of real estate is to get rich, slow, and I’m going to do that over a long period of time, and I’m going to create generational wealth. And so I teach them to buy smart. The property has to cashflow or I’m not buying it. And for me, cash flow would mean a minimum of 5% cap rate last year. And probably I’d be getting up to like a 6% cap rate as these interest rates rise back to where I was maybe three years ago, three years ago, I would recommend nothing under a 6% cap rate. And obviously that had to drop a bit. I also teach him to use to use other people’s money as much as possible. Especially when you’re starting out. So obviously in real estate, we all use other people’s money because we’re using the banks money. So I try to get them to use as much as a bank’s money as possible. So it’s just starting out. They can potentially use a CMHC mortgage, 95% loan to value in a house hacking situation. That’s very little money tied up in the property and they’re living for free. They got to live anyways. The third prong to my five pillars would be add value. So once you buy the property add value and I add value all different ways, you might add a garage for more storage and rent that out. A simple way that I did with my 15 unit is I added internet similar to similar to a hotel. So everyone has wi fi that I pay for. So now when I rent them out, I get more rent because I have wi fi included. And so it doesn’t cost me very much for 15, 15 units, but they’re paying me extra each person. So that’s one way to add value, but also add cash flow. And then I teach them to hold long term. And so when I mean long term, I mean, for me, I’m holding forever. I’m not selling most any of my core assets. I’m creating generational wealth for my family. And so my boys, this is going to be their inheritance and hopefully they’ll be able to take this over one day. So my goal is long term. I’m going to probably refinances and enjoy my life down in Costa Rica with Rob, but I’m not going to be there. My boys are going to get, you know, hopefully a very good inheritance. So when I say long term, I mean basically forever. If it means if the property makes sense and then I teach them to refinance and then repeat the process, and that’s how they’re going to scale. So once you add value to a property all different ways, we repeat, refinance and repeat until you get to the number of properties that you want to meet your goal.

Rob Break [00:36:28] Well, I like that you have based on the market, there’s this threshold, right? For what you feel like the investment should look like. And that’s not just an arbitrary number. That’s the one that you look like or you look for. That’s right. When you’re investing. So that’s the one that you recommend to other people. And just having that in place, I think will stop the whole, like, wrong purchases from happening.

David Giovanniello [00:36:55] That’s right. And that’s why I think meeting with someone wrapped up and being clear on your goals and objectives. We’re not just buying real estate for the sake of buying real estate, but you have to have a goal in mind. And then that’s where you come up with the strategy that’s going to work best. Are we going to house? How are we going to br are we going to flip by multifamily? Like I said, they all work. We use by a condo, someone we just buy a condo, make lots of money. I know guys that own 30 condos, they love it because they don’t have much. They don’t have much to do. It’s very little work for them. So it all works. You just have to know what you want your outcome to be and then you make a plan towards that outcome.

Rob Break [00:37:29] So obviously we all want the lifestyle, you know, more freedom in our lives. But let’s talk about the other things and obviously not too, but the things that motivate you, help you get to those goals and keep you going every day.

David Giovanniello [00:37:42] Now, such a good question. So yeah, this is actually a really good question. I find interesting and it’s interesting to me so early on, I’m not going to lie. I was interested in things. I want a nice car, nice house. You know, I wanted I wanted money. And that’s what would have interested me or motivated me early on. And it’s interesting how fast that changed. And I find you just you just chasing money and you’re never happy. And so for me, for me, when I realized that I had to have like a strong Y, and I find that again, for investing as well as for fitness or any other goal that the Y has to be strong or you’re not going to be motivated always. So for me, when it comes to, say, fitness, my mom died young and I turned 40 years old. At 40 years old, I decided to change my life and get in the best shape of my life. But it wasn’t for like vanity or esthetics. It was for longevity. I wanted to have energy for my sons. I wanted to be there for them long term. So my goal is I want to be as fit as possible to give my to be with my boys as long as possible. And the bonus is esthetics. And it comes as a bonus. And so the same thing with real estate is. I have a goal to create this generational wealth for my family. And I want my family, my boys to have, you know, the greatest start to their lives ever. And so that’s what motivates me, not the money anymore. And so I find that that will keep me on track longer. And the other the other part of that question that I find interesting is the inspiration. So I’m on social media, not as much as most people, but I’m on there. I try to be active. I get inspired by other real estate investors; I get inspired by other fitness enthusiasts. And I try to I try to show people not to get jealous of them. When you see someone doing well or envious to use that, when I see someone doing well, it’s funny. I think I can do that by watching a fitness video on a guy’s doing. A guy does a muscle up and he goes like 20 of them. I can’t do one, but I’m like, If he could do it, I can do it. And so that inspires me and motivates me to want to get there. And after six months, I was able to do a muscle up and same thing. So right now I see a guy doing a flagpole. Have you ever seen that? A guy doing a flagpole. Is this like on pulleys, like, for example?

Rob Break [00:40:17] Yeah. Oh, yeah, yeah.

Sandy Mackay [00:40:18] Yeah, yeah, yeah.

David Giovanniello [00:40:19] So I see a guy do that. I’m like, I can do that. I can’t. I try it. I can’t do it. Almost impossible. Like literally impossible is a goal. Now, if that guy can do it, I can do it. So I use people as inspiration instead of envious and jealous. I use it as if he can do it. Why can’t I? Right. And so I’ve always had that mindset no matter what, what it is in life. And I use those things as inspiration.

Rob Break [00:40:43] You know, inflection means everything in a sentence like that. Like if he can do it, if he can do it, why can’t I like or, you know, the way that you said it? Because I remember just talking about the gym and muscle ups. Like I mean, I remember I sort of joined the gym at the same time as this one other guy. And, you know, the one day I was in there and he came in and did this like first muscle up, and I, I was jealous. But the reason why I couldn’t do one and still can’t is because I don’t focus and practice and work on that is the goal because it do then you can get it done and it’s so cheap and it’s the same with it’s the same like when people look at real estate and they go, Well, no, I can’t do that because, you know, everything hasn’t been. It’s unclear how to get there. Right? Like, we have to set that goal and then sort of work backwards from there. On how to get it 100%.

David Giovanniello [00:41:38] And I hear I hear that as well. I started back in whenever it was 1999 or 98. It was easier back then. Or my mom helped me. Well, my mom never did help me at all. I was all on my own. Everyone has an excuse me going to work for them. But I watched. I see people in their early twenties right now killing it in real estate. I know a guy here in town is in his mid-twenties with maybe more units and I have so it’s possible. It’s just a matter of, like you said, am I willing to focus and actually do the work.

Rob Break [00:42:07] I love that. That’s awesome. I think we all need a lot more motivation. Where do you see your business going in the future?

David Giovanniello [00:42:16] Yeah, so I feel like I have a really good trajectory and it’s been the goal the whole time, slow and steady. So for me I, I’m very happy where I am. But obviously the goal would be to continue to grow it at the state that I’m at the same pace, I’m growing it now. So every year by, you know, by another building, if it makes sense, it doesn’t make sense. I just wait. And the idea is it would be to create enough cash flow that I can just enjoy my time with my wife and in retirement. And I could be anywhere in the world whenever I want to be and my boys will be able to inherit this business.

Sandy Mackay [00:42:53] Funny how, you know, I hear you talk about basically like kind of slow and steady wins the race kind of quotes and even in even in your fitness world, you kind of, you know, longevity is the key versus let’s just let’s just go hard and, you know, that’s short term goals. I think it’s really that’s it. It’s good to hear, I think, because a lot of people will come on sometimes on our show and then the other investors I talk to where they’re just they’re all hot and excited about what’s, you know, this whatever success they’ve had in a year or six months and they’re all like amped up over it. And not that there’s really, really wrong with that necessarily. It’s just it’s it can be really, really easy if you just take a longer term outlook on it. You know, it’s a lot easier. There’s a lot less stress involved than now. There’s a real balance in there somewhere independent. Everyone wants something different, but it can be really easy this game if you want.

David Giovanniello [00:43:45] Yeah, 100 and I think I think long term for both things. You just talk about real estate, business or fitness. If your goal is long term and it’s consistent, slow, consistent, disciplined, it’s almost a guarantee it’s going to work. You know, and you know, for some people, like I said, it can be fast or they have goals that they want quicker and there’s not there is nothing wrong with that. But there is a lot of that in society today, that quick fix, you know, magic pill, it doesn’t exist. You got to do the work. And that’s a motto of mine. I don’t know where I first heard it, but I live by it. And it is do the work. I teach my boys it and I live it. It’s you have to put in the work if you want to succeed.

Rob Break [00:44:25] Well, I think especially when it comes to real estate, like a lot of people that want to get into it, for some reason, I guess it’s those late night infomercials or something that they think that there is actually this like magic bullet that, you know, as long as they do this one thing overnight, it’s going to be very successful for them.

David Giovanniello [00:44:45] Yeah, for sure. And that’s it is a that’s a pet peeve of mine, like 100%. There’s a lot of people out there peddling, you know, get rich quick. And I’m sure it maybe it’s possible you can do a flip, make a lot of money but it really doesn’t exist that get rich quick. You might get lucky with long term investing. It has to be it has to be controlled done right and you know in general I guess everyone’s definition a quick for me if I was to you know make a pretty good return in five years to me that’s pretty quick. My goal my goal or real estate is, you know, 20 to 30 years minimum.

Sandy Mackay [00:45:21] But even those get rich quick, even if they happen to work, because, you know, for whatever reason, the stars align, it’s almost, almost inevitable, almost guaranteed that that’s it’s going to reverse very quickly after they’re going to give it away, they’re going to you know, they’re going to because they haven’t you haven’t put in that effort to earn.

David Giovanniello [00:45:37] They haven’t put it in. I didn’t put in the work or the fundamentals or are you going to see a market shift? We’re going to see that here stuff that worked last year for people, meaning buy anything is going to appreciate to be the case always. And yeah, you know, we’ve been around long enough to know different markets. I’ve definitely seen different markets. And I remember when my one of my first properties 8% interest rate. So, you know, that’s why the goal has to be long term for me anyway because something I work last year might not work this year. That’s.

Rob Break [00:46:11] Yeah, that’s great. And, I mean, we kind of danced around a little bit, but you’re heading down here in a couple of days, so, yeah, we’re going to get together. That’ll be exciting.

David Giovanniello [00:46:22] Checking on my first international property that you helped me with, so I’m excited, my wife and I, Shannon, we’re going to come down there and just have a vacation this time.

Rob Break [00:46:31] But see, like, I wasn’t. You were just here, what, two months.

David Giovanniello [00:46:35] Ago? Yeah, I was just here in April. We were there in April. Yeah. We closed the deal.

Rob Break [00:46:40] Yeah. And then. And then you get to come back down because of what real estate’s done for.

David Giovanniello [00:46:45] Real estate’s been really good to us. We have a good lifestyle. So we went to we went to Costa Rica in April, we went to Bahamas in May. And now we’re going to be going to Costa Rica in June and a little bit of July.

Sandy Mackay [00:46:56] So unless you go there and check up on your properties or make a business venture, there’s maybe some tax incentives.

David Giovanniello [00:47:04] There’s some benefits to that part, too. So we’ll see how that works.

Rob Break [00:47:09] Awesome. All right, David, how can people get in touch with you?

David Giovanniello [00:47:13] Probably the easiest way to get in touch with me would be my website. So it’s real advisor London dot com and so my.

Rob Break [00:47:21] Phone is London dot com.

David Giovanniello [00:47:23] Yeah you’ll have my phone number email address there and.

Rob Break [00:47:28] That’ll be in the show notes so anyone who needs to see it in writing, whatever needs the link, just go to the show notes for the show today and you can get contacts. David, thanks very much for being here with us. Appreciate everything you shared. It was a fun conversation, too.

David Giovanniello [00:47:44] Yeah, thanks. Thank you very much for having me. It was an honor and I just love talking about this stuff. So I’m glad you had me on and I look forward to seeing them on the offer sometime next week.

Rob Break [00:47:56] Sandy How can people get in touch with you?

Sandy Mackay [00:47:59] Sandy at freedom reps dot com or they can find me on any social media platform pretty easily as well. And yeah, thanks. That was awesome. It was exciting. So this is a good one. Another, another great one. We’ve got some great shows here in the last while. So I just one of those lists.

Rob Break [00:48:14] Absolutely people can reach me at Rob at Mr. Breakthrough Dot CIA. Well, thanks for listening and we will see you next time.

Announcer [00:48:23] You’ve been listening to the Breakthrough Real Estate Investing Podcast. We hope you’ve gotten some useful and practical information from the show, and we hope you’ve been inspired to take control and live life on your terms. We’ll be back soon. But in the meantime, make sure to like, rate and review the show. And don’t forget to subscribe and listen on Apple Podcasts and Spotify. See you next time.

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