Table of Contents
Podcast Transcription
Sandy Mackay [00:00:00] Break Through Real Estate Investing Podcast Episode 20 for.
Rob Break [00:00:27] Hello and welcome to the Breakthrough Real Estate Investing podcast, we put this show together to inspire you and help you break through to the life that you want to live through the power of real estate investing. My name is Rob Brake, and here with me again is Sandy MacKay.
Sandy Mackay [00:00:44] Hey, guys.
Rob Break [00:00:45] Rob James and someone else on the line there to tonight. Again, James Mag’s rock star real estate investor joining us tonight.
James Maggs [00:00:55] So thanks for having me.
Sandy Mackay [00:00:58] So excited for
Rob Break [00:01:00] me, too. I’m looking forward to it. We’re going to have that coming up in just a couple of minutes. And first, I wanted to just say that everyone should go over to our website, Breakthru REIT podcast here and sign up for our free gift, the seven freedom activators that you can trigger in your property. Starting right now. It’s a comprehensive report for everybody who wants to learn how to make their money work for them instead of working for your money. Right, Sandy?
Sandy Mackay [00:01:28] Pretty much say now that, of course, go to iTunes, check us out. You can download all our podcast there as well and always appreciate it. So, if you want to leave us a review, give us a five-star rating, of course. So, we’re happy to see those. So, if you have a chance to do that, I’d love to hear that. Love to hear any questions you might have about the show, about our guests, anything like that. Love to see you folks reaching out.
Rob Break [00:01:52] I think you thought I was joking last time when I was when I was saying that there’s something wrong with my computer when I go on iTunes, because honestly, I’ve heard that people are leaving some reviews on iTunes, but I can only see three of them, the first three that we ever got. There’s more than that, right?
Sandy Mackay [00:02:09] I guess I’m just hoarding them from you or something. I don’t know. I see.
Rob Break [00:02:13] Well, they should be up there for the public, isn’t there? I don’t know. I can only see the three of them. But I’ve heard like several people have told me they’ve written them and sent me copies of what they put on. And I can’t see them. I don’t know, no matter what I do, maybe it’s because I don’t have a mark there. It hates PC. I don’t know. Well, yeah, probably. And probably and I just want to mention that Cindy and I are big fans of Audible and we listen to a lot of our a lot of the education that we get comes from audible. And I did take your advice and I got Tony Robbins book money. I haven’t listened to it yet, but I do have it there. I got that through. Audible So again, yeah, I think I’m looking forward to listening to it. I’m right in the middle of another one right now. More than one called 10 percent happier. Yeah, I don’t know. I’m on the fence about that one. So, it’s about meditating and stuff like that, which I can see the uses, but it’s just hard for me. I don’t know, maybe I’m close minded. Like maybe I got to find the time to give it a give it a go and see what happens. What do you think, James?
James Maggs [00:03:22] Yeah, I’ve heard a lot of people had a lot of success with meditation, but it hasn’t worked for me. It’s tough for me to clear my mind.
Rob Break [00:03:29] Right. I guess it takes some practice is what they say, but yeah. Yeah, I don’t know. Finding the time to do it is tough.
Sandy Mackay [00:03:37] So, Rob, tell us about this, this I don’t know what’s been going on with you, you’re selling the house for some reason I thought I thought were never supposed to sell houses.
Rob Break [00:03:46] Well, hold on. I want people
Sandy Mackay [00:03:48] to maybe sell houses, but not our own houses.
Rob Break [00:03:52] Well, we don’t want people to go to break through R.E.I podcast’s audible free trial and try out Audible. Of course. Of course. Yeah. No, I am I am selling a house. I’m selling my student rental duplex. It just doesn’t fall into my current, you know, my current strategies. And quite frankly, I’m not a big fan of student rentals, so I decided to sell it. And you know what? It’s a good market, especially for duplexes over here right now. So why not? I’ll get I’ll pick something else up that. That’s more, more into more and more something that I’m into, you know, James, you’ve got some student rentals. I’m not into playing God. I don’t know if you’re managing yours, but that’s what I find is happening a lot. I was going to say
James Maggs [00:04:41] that’s for a good property manager comes into play.
Rob Break [00:04:44] Yeah, well, we started a property management company. Maybe I should have hung on to it a bit, but I was kind of looking at the dollar signs from selling it as well right now. Yeah. You know, in the cash flow on if I didn’t use it as a student rental, it really only would have brought in about one hundred and fifty bucks a month. So, I mean, that’s not that’s not terrible. But I can do a lot better, and I have done a lot better. So, I figured, why not? I’ll just sell it and move on.
Sandy Mackay [00:05:12] So what are you going to buy? You’ve got two realtors here. What are we buying in us?
Rob Break [00:05:16] Well, I don’t know. Show me something good.
Sandy Mackay [00:05:20] OK, well, let me later maybe
Rob Break [00:05:22] send me some pocket listings. I’m not into competing, OK? Yeah, I’ve got I’ve got three that I’m actually looking into right now, one of them is a legal duplex and the other two need to be legalized. So, we’ll see what happens with those. Of course, man, I’m telling you, things are moving slow nowadays, though. It’s. It’s tough to get. It’s tough to get these things nailed down for me right now.
Sandy Mackay [00:05:49] Yeah, but private deals, I mean.
Rob Break [00:05:51] Yeah, yeah. I mean, I’ve got a couple of I’ve got wholesale deals closing. I got one wholesale deal closing in May and June and July. So that’s good. But as far as stuff for myself, I’m still looking. So, if you have anything. Yes. And on my way. Right on. And did you have anything you wanted to talk about?
Sandy Mackay [00:06:13] I’m not really. I guess we talked about our Berry project we’re working on. We just finished it and got it appraised. And I guess if people have been listening for the last couple of episodes, bought a house and Barry fixed it up and refinanced, then we’re pretty much we did pretty well. We’re getting almost all of our money out of it. Those are big projects. And there was. Yeah, we’ll get the details. I mean, I mentioned in our old episodes or last couple, so that’s it. Just finished off of that one and kind of happy. I’m kind of sick of we didn’t drive out there too much, but I’m a bit sick of even that couple of drives we did. I don’t feel like doing it more.
James Maggs [00:06:53] It’s better than driving to Barry in January or December.
Sandy Mackay [00:06:57] Well, yeah. Yeah, you
Rob Break [00:07:00] did. You to. Did you close on your new place yet?
Sandy Mackay [00:07:04] No. Maybe we’ll talk about that next episode. We’re still. But I think we get in three or four weeks.
Rob Break [00:07:11] OK, so that’s still happening though. Yeah.
Sandy Mackay [00:07:14] Long closing because vacant possession so.
Rob Break [00:07:17] Yes, the best kind. Yeah. OK, one more thing I just wanted to mention is that we are starting a property management company. I’m working with some really smart, hardworking people here from Durham area. I actually is where I met them. And we’re going to have that up and running really soon. It’s called the Big Surprise Breakthrough Property Management. So, yeah, that’ll be up and going. Hopefully by the time this episode comes out,
Sandy Mackay [00:07:47] the next one, we’ll hear about it. You’re going to you’re going to maybe you’ll have me as a client.
Rob Break [00:07:53] Yeah, well, that would be nice. I’ll send you some I’ll send you some info. OK, yeah. You’re not interested in driving out to Oshawa very much either lately?
Sandy Mackay [00:08:04] No, not really.
Rob Break [00:08:07] It’s a bit of OK. Yeah, you could be our first client of a house that we don’t own. OK, so let’s move on here. Get to our guests. So, OK, so today we’re on with James Mag’s. He is a realtor with Rockstar Real Estate Brokerage as well as an investor. And today he’s going to tell us his story of how he transitioned from his job into real estate full time. Do you want to tell us a little bit about yourself, James?
James Maggs [00:08:36] Sure. So, as you mentioned, realtor, the Rockstar Real Estate. I’ve been there just over a year now, and I live in Hamilton, actually in Lancaster. So, I think Sandy here in Hamilton or not. Yeah, yeah. So yeah. So luckily enough, when we moved out here before I started any real estate investing, before I found out that that Hamilton was one of the top places to invest. So, I kind of lucked into being nice and close to that. But so, I’m a full-time realtor, help people, teach them to do kind of what I did, learn how to invest properly and strategically in real estate in Hamilton and surrounding areas.
Sandy Mackay [00:09:18] Well, how did that how did he get into real estate investment? Yeah, this
James Maggs [00:09:23] big, big, long kind of sequence of events kind of led to it, which is, I think kind of a lot of people’s stories are similar. But so out of school, I kind of fell into a corporate job, very comfortable and paid well enough. That didn’t lead me to look elsewhere really for quite a while. So, I stayed there for before I started kind of feeling a little bit of the you know, you’re always talking about the pleasure pain response. Before I started feeling the pain was about 10 years. And then I realized that it wasn’t probably where I wanted to be for the rest of my life. If I was going to sit there and eventually retire with a pension, I was going to need to do something, something else that otherwise I was going to be miserable. So, I think it was about twenty-five. I started picked up a couple of real estate books, rich dad, poor Dad and some of the other Kiyosaki books, which kind of obviously started the ball rolling. And then 2007, I think I remember recalling getting an RRSP statement and realizing that even after putting money into it for I think it was two or three years, it was still lower than where it had been originally after the kind of stock market started to take a tank. Twenty-seven. Twenty-eight. I figure there’s got to be a better way. And then I thought it was it was really weird. I think I had started just signing up to a couple of the different online real estate sites to get additional information. And I got a call from one of the Robert Kiyosaki rich dad, poor dad coaching programs who were starting to operate in Canada. They had a I think it was an eight-to-ten-week coaching program that said, we’ll teach you everything you need to know about investing in real estate will help you to close on your first purchase within a year of starting. And long story short, I ended up buying a property eight months after starting that coaching program. So that kind of lit the fire under my butt to take some action and got me rolling.Rob Break [00:11:22] Nice. So, what was the one that you bought?
James Maggs [00:11:24] It was actually a triplex in in Hamilton.
Rob Break [00:11:27] First property. A triple-A.
James Maggs [00:11:29] Yeah, I kind of it was almost a blessing that I didn’t know any better that I should start with, like, you know, simple stuff, single family. And I jumped right into the multifamily because everything that I had read said, you know, you got to look for like at least a thousand dollars a month in cash flow. So that’s that was my goal. And that’s what I achieved on my first purchase.
Rob Break [00:11:48] So do you still have that one?
James Maggs [00:11:50] Yeah. Yeah. No, I’m not giving that one up now. It’s known. Well, yeah, it is. It’s in Hamilton. Like I said, everything except for one of my properties is in Hamilton and yeah, it’s, it’s not if you if I’m looking now if I, if I were to look back, I probably wouldn’t tell people to buy in that area. But that’s just because most people don’t have tolerance for it. I guess different profiles. I think I’ve had one. Maybe two months vacancy over the past five years of all three units, so, you know, it’s been very good to me.
Sandy Mackay [00:12:22] and you’re probably I don’t know what area, but you’re probably going to get a little better here. Probably already has.
James Maggs [00:12:28] Oh, it has. Yeah, it’s huge. Yeah. It’s actually just north of the new Timonen stadium, so. Yeah.
Sandy Mackay [00:12:35] Cool. So, I’m really curious about this next one. Walk us through from where you were there to where you are now.
James Maggs [00:12:43] Sure. So yeah. So, started. And again, this is where I mean you read enough books to know I supposed to build my team trying, trying, trying to get a realtor that was going to help me. They said that they were they were familiar with dealing with investors, where I found out after about six months that I was teaching them more about real estate investing than they were teaching me. I found an accountant who said he knew how to do the books for real estate investor. Again, I found out after the first year after I finally realized that they were able to help me, they were more of a small business focused. And so, I realized that I needed to join some sort of organization that had a focus on real estate investing. So, I started looking around and the big one that that I found was a real estate investment network. And so, I joined them, went to the first big, big conference they have every year that they just had actually last weekend, the A. the authentic Canadian real estate conference, and actually met my partner and mentor, Erwin Zito, who is Mr. Hamilton there. And from then on, I started using him as my realtor and he kind of guided me and I was able to continue to invest successfully in Hamilton. I went from one property in 2000 and 10 to one property 2011. And then I met him, and I bought five properties in 2012. Wow. So, I went from kind of being on the fence, really being uncertain of whether the decisions I was making were the right ones to. OK, now I’ve got somebody who is validating what I’m doing is in the right direction. And I had the support of the real estate investment network and a lot of the teams that I was able to build from there. And it was, you know what, full steam ahead. And that year was it was crazy. So, I was working, you know, 60, 70 hours a week at my job, as well as picked up five properties and fully managing everything myself, doing all the tenant placement and all that good stuff.
Rob Break [00:14:49] So what kind of properties were you buying them in that year? Was it seeing did you have to do a lot of Runnels or?
James Maggs [00:14:56] No. So, I mean, I did rentals on the triplex when I first bought it. I realized after that I think it took me took me six months to finish the rentals. I realized if I had paid somebody, I would have I would have actually not. I would have made the same amount of money because the amount of money I saved by doing it myself, I would have made back in rent by having it. Oh, sure. Well, so
Rob Break [00:15:17] what I meant was, did you have a lot did you buy a lot of properties where you had to get rich?
James Maggs [00:15:22] No, no, no. Actually, everything else was pretty much turnkey. So. So after I joined Real Estate Investment Network, I actually joined rock star. Rock Star has a subscription similar to what Reyna’s and newsletters and CDs and their focuses on a lot on rent to own. And because I wasn’t really sure what my investment horizon was going to be and what my overall strategy was, I really just was drawn to rent, to own, as you know. What if I’m if I’m unsure after three years, I’m able to sell the property, get out and get my money back and reinvest in whatever I finally decide to do. So, then I started looking at rent to own. Those properties are pretty much all know what they’re turnkey. And I’m able to I was able to actually close on a few of them and have tenants in without even a single month of vacancy. So, I think first property was the triplex that I had two straight rentals before I figured out about rent to own, and I did for rent to own, had one rent to own buyout. There’s another rent own. And I’ll tell you the story about after. And then I started to look more at student rentals. Now know, you say you don’t like them, but the cash flow is it’s just a little bit too attractive at this point. So, and all that my property manager deal with all the headaches.
Rob Break [00:16:34] There’s plenty of people that love them. It’s not something for me, that’s all. Yeah, I know. We have someone their focus. And you know what? I applaud those people that want to go through that. My you know what? You’re probably right. Like, as far as the management stuff goes, I should have tried to delegate it. I thought of a lot of different things, a lot of different ways to go forward and hang on to, because that is one of the things that I like. Sandy, you were saying when you asked me about it, so many people say that their biggest regret is selling whichever selling any of their properties. So, I hope I don’t fall into that. But we’ll see. Yeah, right.
Sandy Mackay [00:17:10] James, what was your family life? I mean, did you have a family at this point, too, and everything?
James Maggs [00:17:15] Yeah, no. So, I bought. It was funny because I have a distinct memory of my wife helping me paint via the unit in the triplex when she was probably about seven months pregnant with me with my daughter. So luckily, we knew we were using low VOC paint, so I wasn’t too worried about that. But yeah. So, my daughter was born in 2010. Obviously, she took up a lot of our time and my wife was on maternity leave and all that stuff, but so I was really just I was putting as many hours as they could. Morning and night into trying to build the portfolio. Before my daughter was like walking and talking. And then I was I was able to be present for all of those kind of big milestones and stuff like that. So, she’s in she’s five now, just turned five. She’s in first year at school. So, it’s been awesome to be able to be in the position that I’m at now and be able to spend as much time as I can with her.
Rob Break [00:18:10] Yeah, that’s cool. I’m looking forward to doing that myself because I still work like 11- or 12-hour days myself every day, too, and then try and do this stuff around it.
Sandy Mackay [00:18:20] So you. So, you. You’re so you. But I just want to put it in context for people listening, because it’s something that a be the year that you’re dealing with terrible twos and buying five properties and one.
James Maggs [00:18:31] Yeah. And I think my even those terrible twos, my clients were probably more terrible than that. So, because my clients from my corporate job were all were banks and insurance companies and stuff like that were a lot of unreasonable demanding executives that I was I was dealing with. So, what I didn’t mention was what actually and to put stuff into perspective was I was actually able to work from home for a lot of that time. So even though I was putting in a lot of hours, I was doing a lot of the real estate stuff. You know, I would get up at quarter to 5:00 in the morning. I would do that from five till nine. I would do my corporate job from 9:00 till about four thirty. And then I would pick up and do the real estate stuff in the evenings after spending a couple hours with the family.
Rob Break [00:19:18] So I’m going to go off the real estate topic for a second. Speaking of terrible twos, I think they should change that because both I have two sons and both of them when they were two, they were great. And I thought, where is this terrible to thing? And then as soon as they turned three, they like when they turned into maniacs.
James Maggs [00:19:35] Yeah, I have to agree. My daughter was the same. She was. I have to clarify, though, she was never we were lucky. She was never, ever, ever bad. I mean, to put it compare it to what I know of friends and their kids, that that did go through the terrible twos or the terrible threes. Even when she was bad, she was still good in comparison. So, we were very lucky that way.
Rob Break [00:19:57] So how did you transition then from that full time salaried job into real estate full time?
James Maggs [00:20:03] Right. So, it was I don’t remember how it came up in conversation, but after working with Irwin for I believe it was probably three years by that point, he kept on half-jokingly kept telling me to get my real estate license. And after, you know, probably about three or four months of him, at least on a monthly basis, telling me to do it, I said, you know what I’m doing? I’m going to start looking into it. I was pretty swamped at work by that time. Obviously, I’ve got I had, I think, eight properties at the time, too. And I said, you know, I’m going to take a month off and take a leave of absence from work unpaid just to kind of get caught up on everything from a real estate standpoint. Get my head set on what I wanted to do long term and figure out what the time commitment stuff was going to be for getting my real estate license. And I figured the worst case, I’ve got it. I can pay myself when I buy a property. Right. I’ll get paid at least for my own property, even if I do nothing else with it. So, I figured that out. Realized what? That it was something I was going to make sense and then slowly started to work towards it. I think I took my first exam that fall, which would have been twenty thirteen. And then I think it took me about eight months to eventually get my license. I had to push a couple of times a couple exams because it got really busy. I got my license and then said, you know, OK, I’ve got it, I’m going to start taking on clients and see how long I can do both. And as it so happened that that year at work was probably one of the most stressful years I’ve ever had. And then add to that, managing all my properties and trying to sell real estate at the same time as a beginner realtor. So again and have my family and stuff at home. And so, I kind of had that conversation with my wife and said, listen to what I’ve got to do this. It’s going to be probably the most insane year we’ve ever had. But I think if we can just get through it, then just things are going to be so much better. After I worked my dd butt off until probably I think it was September when I realized, OK, think it was kind of the breaking point. And I had a big shift at work to wear. They had said, you know what, you’re going to have to be on customer site downtown Toronto three days a week. So not only was I no longer working from home, but I was also commuting from Hamilton to Toronto three days a week. So, again, I was getting up at like four thirty, doing as much real estate stuff as I could in the morning, jump on the go train at ten after seven, taking the train into downtown Toronto, being a client site all day. My wife was still working at the time, so sometimes I was jumping back to try and pick up my daughter from daycare just in time. And then I was trying to sell houses in the evenings, on the weekends. So, as you can imagine, it was pretty insane.
Sandy Mackay [00:22:51] Crazy. I don’t know. I can’t imagine doing anything else like a real job along with being a realtor. Oh, I know.
James Maggs [00:23:00] Yeah. And I mean, I’m not sure. And we do like weekend. We were doing evening boot camps and stuff once a month and we do weekend training sessions and stuff for clients. So yeah, it was just insane. And so, I talk to my boss, and I said, listen, I’m going to need to take an extended leave of absence. And I originally had no intent on going back. But I said, you know what, at least the door’s still open if I do ever decide. So, we agreed to a six month leave of absence unpaid. I kind of stayed on for an extra four weeks to help train my replacement. And then that’s it. As soon as soon as she was trained and I got the green light, I went ahead and moved into it full time, which was October 10th, 2014.
Rob Break [00:23:42] How do you go about getting clients and that kind of thing while you’re working full time and make that work, make that build that into something that you can confidently say, all right, now I can leave my job because I saw this already built and I can fall back on it.
James Maggs [00:23:58] Right. So similar to what a lot of other brokers do is there’s the option to do work on a team. So, I was able to join the Mr. Hamilton team. Right. So I wasn’t, you know what, Green starting out on my own like a Remax or something where I had zero clients, zero marketing, zero, anything having to, like, doorknocker do cold calls and stuff. Right. So, I was coming from an established client base where I was able to gather new clients through the Mr. Hamilton team. And that was actually part of me, made the transition for me very easy because I knew that I was going to be able to leverage that at least to the to start off my real estate career as a realtor.
Sandy Mackay [00:24:39] So if you look back, because I’m just I don’t know if there’s a budding release out there listing, maybe there is. If you were to look back, would you still do both at the same time for a period, or would you think just jumping into being a realtor makes more sense?
James Maggs [00:24:58] I think jumping in would have made more sense for sure. I don’t think I knew the number of clients that that we were going to have. And at the beginning of the year, though, for me, I was like, you know what? I probably should keep my foot in the door. But if I had had to make the decision again, maybe mid or late last year, I probably would have right away just gone and been a full-time realtor. I just wasn’t sure because I think when I started thinking about it, it was like January, February. Right. So, our client base was a little bit slower. I knew there was there was low inventory, slow market. So, and then, of course, when I first when I got my license in March, it was spring market rate. So, it was there was tons of activity. There was it made it a lot easier. And I thought, well, OK, I can do both for a while. But I mean, it really depends. It’s very situational. But I was just lucky that I was able to do both when I when I could. So, it was also nice to build a little bit of a nest egg in case it didn’t work out for me, and things were a little bit slower.
Sandy Mackay [00:25:59] Mm hmm. Wow. I tell you, when you get in your life,
Rob Break [00:26:05] it’s every other day I flip flop and I can’t decide.
James Maggs [00:26:09] Oh, I see where that was coming from. I think back to the amount of effort I actually put into the exams. And it wasn’t a lot. I mean, I’m pretty good at Multiple-choice because that’s what I took all through university. So, I think that helped a lot. But I mean, just use some of the study AIDS. And I mean, I think I put in four or five hours for each of the exams. No problem.
Rob Break [00:26:34] Yeah, right. It’s interesting. It’s something that, you know, OK, so you know what? You’re doing some other cool creative investing as well. You want to tell us about some of that?
James Maggs [00:26:44] Yeah, for sure. So, I mean, coming out of my corporate job, I’m now add a whole bunch of hours which are in underperforming mutual funds and I wasn’t sure what to do with them. And so being a real estate investor, I wanted creative ways to look at being able to use our space to invest in real estate. And originally, the only way I knew of was to do like arm’s length, second mortgages and stuff like that without a triggering tax consequence. And so just recently, after a little bit more digging, being able to come across a couple different companies that are offering RRSP and TFSA eligible investments, which are in real estate. And so, the first company that that I’ve invested with, which I was introduced to, I think it was last year actually through Rock Star when they came to speak at one of our events is Cranebrook Securities. So, they’re a little bit different from a traditional real estate investing in that instead of leveraging a lot of the investor’s money in syndicated mortgages and stuff like that, its actually raw capital used to purchase the land, which they then do development on and partner with a developer, and then the profits are split equally. So instead of getting profit on the back end, you’re actually getting the manufacturer’s profit. As the inventory is sold off developer margins, they’re able to offer a lot higher returns on investment. The last project, I think, which is set to be in Hamilton that I was looking at, is targeted to do twenty nine percent return on investment over the first five years. So that’s one of the big ones. And the other one, which is a little bit closer to traditional real estate investing, is through a company called Paramount Equity. What they offer is it’s a syndicated second mortgage, but instead of being tied to a single second mortgage where the risk is much higher and when the mortgage holder decides that they want to terminate, you’re now on the hook to try and find a new second mortgage to invest in and potentially have your money not working for you. It’s more like a fund of second mortgages where you’re investing and your capital is actually spread across a couple, which minimizes your risk. And it offers a return of 12 percent annually, which is paid out on a monthly basis. So, one percent per month annually. It’s a one-year term. So, if you want your money back after the first year, you get it back. And the best part of it, what Paramount has is even though it’s not it can’t be written on their advertising and marketing stuff, as per the Ontario Securities Commission is, they actually have a no loss resolution policy so that they will guarantee pretty much that that your money will be safe and you’ll get the interest owed regardless of whether there is a foreclosure or something on a second mortgage. And they’ll manage that entire process. They’ll manage getting it back on the market. They’ll manage renovating it and then the sale of the property in order to secure your funds. So pretty cool. We did a lot of due diligence on both of these companies and both of them have been in the business for quite a while and have a lot of very happy investors. So, we were confident that it made sense for us. So, to invest in them, and that’s where I chose to put my money,
Rob Break [00:30:00] I heard Greg, Brooke, that the Toronto Investor Forum.
James Maggs [00:30:03] That’s right. Yeah, they were the big sponsor there.
Rob Break [00:30:05] So it seemed pretty interesting, sounded a little bit different than the rest. So that was a good thing. But again,
James Maggs [00:30:12] great has a lot of cool projects to like. There are tons in Toronto. I think they just bought a huge plot of land in B, and I think it’s Bandler and they have a couple of beer stores where they’re actually keeping the beer store retail facility in there and building the condominium units around it. It’s a lot of cool stuff that’s going on that they’re doing.
Rob Break [00:30:31] Mm hmm. I haven’t heard of Paramount, but I’m going to check that out. Not too
Sandy Mackay [00:30:34] well. So, what’s the motivation to invest in stuff like that? I mean, you’re obviously doing well with your houses, and that is just to diversify a bit or what’s the what’s the actual reason to look into that?
James Maggs [00:30:45] Right. Well, so the big one for me was my hours were tied up right now. And so, unless I’m going to sell them and incur the tax consequences, there’s really limited options. So, by having these RRSP eligible investments, that’s that made sense for me. So, I can still invest in real estate. I mean, the returns were fantastic. Right. So, the arrival kind of some of the stuff that I’m getting with the non-registered real estate investments. And the other cool thing is with the I think there was just announced today the recent change to the TFSA limits to up to ten thousand dollars. Right. So, anything that I’m not paying any taxes on is beneficial to me. Right. So, if I can throw, I think the currently if you haven’t invested anything in a TFSA, the limits about forty thousand bucks. So, if you can start growing that now tax free over the next 10, 20 years, you’re just laughing. Right.
Sandy Mackay [00:31:39] Definitely not underperforming mutual funds. I don’t know. Is there any.
James Maggs [00:31:43] Well, that’s a very good point. I was trying to remember what I think it’s in the Tony Robbins book that that showed that most mutual funds, if you average it out, it’s less than inflation. It’s like one, two and a half to two percent.
Sandy Mackay [00:31:55] Yeah, yeah. Not many good ones, if any, out there. I don’t know, maybe there someone knows about them. I’d be interested to hear about them. So, what about some wins or AHA’s you’ve had in your career, I guess as an investor or a realtor, do you have any good stories.
James Maggs [00:32:11] So yeah, of course one of the big ones for me. So, I think I’d mention quickly that I was I was big on rent to own, especially at the start of my career. I was also helping other investors. So, before I got my realtor’s license, a couple of friends had also started investing in real estate and a lot of them were from out of town in Toronto, but they were still set on investing in Hamilton. So, I said, listen, in order to help you guys out, because I had already filled four of my own rent to own, I would help them out and try and find tenants. And so, I was filling rent to own. I was at a showing, and I think it was the last showing of the evening I had these guys come through. They seemed very different from the traditional kind of rent own tenants when they walked in the door and they were they were saying stuff like, well, my fridge wouldn’t fit here, my stove wouldn’t fit here, and all our big furniture wouldn’t fit here. They were talking like they were homeowners. And so, I kind of dug a little bit deeper and I asked them their back story and they said, well, we’re recurrent. We currently own our home, but we’re we are running into some financial troubles and we’re probably going to lose it to foreclosure. And I said, well, OK, well, maybe tell me a bit more where you guys live. And they’re like, oh, our house is just a few minutes away. And I said, well, why don’t we go there? We might be something that we can do. So, it took me to their house and went inside and it was fantastic. Stainless steel appliances, granite countertops, three bedrooms, two bathrooms, which is kind of the exact model that we look at from a rental standpoint. And I said, well, listen, instead of you guys trying to rent to own some other house that doesn’t fit your furniture, that that you really don’t want, you obviously don’t want to leave your own current house. How about I buy your house and I rent to own it back to you, so you don’t lose it. You get to stay where you’ve raised your two children. You’ve got this lifetime of memories here. And it works out as a Win-Win for everybody. So did all the due diligence on them make sure that their credit was in a position that they were going to be in a position to buy the house, made sure that their income levels would support all the payments, all the credits would work out so they would have enough down payment and we were able to work out a deal. And so now they’re in a three-year rent to own getting their own house back instead of losing it to the bank and having some strangers buy it and having to be uprooted and move their whole life into some other house and just renting.
Rob Break [00:34:23] That is a really cool story. And it’s nice when you can help people out. But I’m wondering, how does that work as far as the payments go? How do you get it? So that because I would assume just quickly from the outside taking a glance at this, that rent to own would cost more on a monthly basis than it would when they were just paying their own mortgage. So how does that work?
James Maggs [00:34:45] Well, you’ve got to remember. So now as a homeowner, you’re not only paying the mortgage, but you’re also paying property tax. You’re also paying all the maintenance and repairs. So typically, when you’re looking at all those costs together, it’s all. Equivalent to the rent to own payment, and that’s I’ve always found that in my experience. So even if they’re paying, say, 1750 and rent their mortgage payment because most people don’t have the 20 percent equity in their house. Right. So, their mortgage payment is probably twelve hundred thirteen hundred bucks and then two fifty to three hundred dollars in property taxes, plus a little bit of maintenance and repairs. And all of a sudden, you’re at the same amount that you were at for the rental and payment. But with a rent to own payment, they’re putting two hundred to four hundred dollars a month aside for their down payment, whereas when they’re just owning their home and paying their bills, they’re unable to save anything on their own.
Rob Break [00:35:38] Very, very good story. I like that. Like when things work out for everybody.
James Maggs [00:35:43] Yeah, no, that was that was pretty cool. It was it was kind of being in the right place at the right time. But I think it was it was being having done as many Renton’s that I had, I knew to ask just the right questions in order to kind of dig deeper, to find out why they were looking into it and being able to take advantage of the situation, to be able to help both of us out.
Rob Break [00:36:06] I’ve never done any ringtones and I did have this similar situation where; you know, I’m always looking for private deals. I get lots of calls and somebody want somebody ran that idea by me. And I just since I don’t know much about it that my first thought was just that. Well, if you can’t afford it now and you’ve let yourself fall behind, how are you ever going to afford it once I buy it. Right. So, yeah.
James Maggs [00:36:30] Yeah. The other big thing for them was that with the they weren’t able to get a second mortgage to pull out the limited equity they had in the property. But on the sale of the property with no realtor’s fees involved, they were able to pay down all of their outstanding debt. So, they pretty much yeah, they wipe the slate clean. And that also reduced now like, what, 29 percent credit card interest payments. Right. So that had a huge, huge impact on them being able to get things back on track.
Rob Break [00:36:59] So you have a lot of big plans, I guess, over the next couple of years, probably. What are your big plans for the next three or five years or so?
James Maggs [00:37:08] Yeah, so I mean, biggest for me right now is so my switch into being a realtor was not I didn’t make the switch just because I wanted to sell real estate. I made the switch because I saw what my realtor had done for me in from not just being a realtor, but from being a coach, from educating me, from helping me from a personal development standpoint. And I really wanted to do the same in order to help others. So, my big goal is to be able to help as many people as I can kind of replicate the results that I’ve had. I know not everyone’s going to buy nine properties in five years, but if I can help even a handful to get one or two properties just so that they can, you know, 10, 15, 20 years from now, they’ve got a property that helps them that they can refinance and pay for their child’s education or that can give them that little bit of extra cash flow in retirement or whatever it is that they use in order to enrich their lives from just a little bit of extra wealth that that real estate can give them. That’s kind of huge for me. And that’s I mean, obviously, the monetary benefit is there. But that’s the bigger draw for me to this is almost it’s almost like you’re being just a coach. And I really love that. So that that’s one of my big things, is I want to be able to help as many people as I can. The other one is obviously I’m still looking to grow my own real estate portfolio. I originally had a goal of ten, but I think that number of doors is almost irrelevant. So, I don’t want so many that it’s going to have an impact on me being able to manage and manage my own personal life. My whole big thing, too, was to be able to, um, just on a Segway rock stars big motto is your life and your terms. And I wanted to be able to you know what, as much as I’m doing, I want to be able to spend as much time with my family and with my daughter as possible. So, by picking up another 10, 15 properties, if that meant all my time was spent in management, it’s really taking away from what my goals are. Having said that, I’m still looking to grow my property, buy or put my portfolio by at least one property a year over the next few years. But without with just stated income for this this past year, I’m probably going to be on hold until 2016, but always open to joint ventures and stuff like that. So, I’m looking into that a little bit more for the for the end of this year.
Rob Break [00:39:35] OK, nice. And as far as helping people goes, how like did you have something set up where people can get in touch with you and maybe get some mentoring from you?
James Maggs [00:39:46] Yeah, I don’t have we don’t have an official coaching program or anything, but all of our clients, we have we run monthly meetings that are free for anyone to attend where we bring. And similar to what you guys do on your show is similar, what to Quentin does Quinton’s come and spoken and we have accountants come in, we have lawyers come in. We have a paralegal actually coming in this weekend just to talk about and really just educate people on the different nuances and of real estate investing. So, if anyone’s interested in information, I know we’re going to share contact information at the end, but anyone can just email me or give me a call myself and I’d be happy to share any other information.
Sandy Mackay [00:40:26] Obviously, we want to encourage everyone to go and check the check. All that I would do with you, James, and your team, can you share success, quote, which has made an impact on you and your either in real estate or business or personal?
James Maggs [00:40:39] Oh, sure. Yeah. There’s I mean, I’m part of I’m sure you find the same thing on Facebook. I have a lot of very motivated people and I see a lot of quotes on a daily basis, but one that has actually stood out for me. I’m taking a coaching course through a company called the Leadership Management International, one of the founders of the course. His name is Paul Meyer. And one of the quotes that kind of stood out for me is from him. And it’s whatever you vividly imagine, ardently desire and sincerely believe and enthusiastically act upon must never inevitably come to pass. And I just found that it just really hit home. And if you focus on your desires and live them day in, day out, there’s no helping you to be successful.
Rob Break [00:41:27] I agree with that 100 percent. You know, when this is probably going back a couple of years and it doesn’t all come down to just seeing it. Obviously, that quote says, you know, imagine it and then do what you’re supposed to do to get there. So, and that’s exactly what I did when I first started out to just, I mean, because let’s face it, I worked in I worked in equipment like construction equipment rentals for ten years, something like that. And so, I mean, for me to start thinking this other way was really a shift. There was a big one and it was a real learning process. So, I just started telling myself, you know, you’re going to be a real estate investor, you’re going to do this. And you got to and then take actions. But it really does help when you’re when you’ve got your mind set the right way, I think.
James Maggs [00:42:23] Yeah. I mean, and that’s the people talk about a different way to you. But if you don’t have your big why, like what’s the whole thing that’s driving you towards this, then if you’re wise and big enough, you’re never going to get there.
Rob Break [00:42:37] So I guess we’ve gotten to the point where now I can ask you, how is it that people can get in touch with you?
James Maggs [00:42:43] Sure. So, anyone could send me an email. My email address is James at Mag’s gutsier, very straightforward. Last name is a SGS again. That’s James at Max. Gutsier or call or text nine or five one six, seven, eight, two seven. And yeah, I’m always there to offer support from a coaching standpoint or if you have other real estate questions or you’re looking to see how you can start getting into real estate investing in Hamilton, I’d be happy to help out.
Rob Break [00:43:17] That’s great, we’re going to put all of that stuff in the show notes for anybody who’s interested in and hooking up with James and I mean, you were a very inspirational guy. You’re doing a lot of stuff, taking all these courses and offering your education to everybody out there. I really do want to thank you for taking the time to come out and talk with us tonight. And I did meet you at the Real Estate Investor Forum. That was really fun. I enjoyed that weekend. What about you?
James Maggs [00:43:44] Yeah, yeah. That was great. Again, I’m always it’s so energizing to be surrounded by so many people who are taking action and are in the real estate world. Because I find in my you know, in my day-to-day life, obviously, I’m out there showing properties stuff. But other than that, so many of my friends and family really have no clue when it comes to anything real estate. And you can’t have those detailed and in-depth conversations that you can with investors that really just get it at those types of events. Mm hmm.
Rob Break [00:44:14] And then now Sandy and you were both enrolled in the same course going forward here. So, you guys are going to meet. So that’s
James Maggs [00:44:20] right. We going to see each other every week for the next seven weeks, right?
Sandy Mackay [00:44:23] Actually, it’s funny. I guess I just wanted to mention one thing. I want to recommend everyone to go. And this resonates with anyone, and they want to work with you or just meet up with you. James, they should definitely get in touch with you. I know. Maybe someone’s asking why we have you on. And since I’m a realtor, too, and we’re reporting your stuff, I mean, I think I think as violently as possible. I think there’s enough business out there for everybody and anyone who’s doing a good job if d their stuff resonates with them. I recommend that you get in touch with them like you, James, and see where it takes you, you know. So, I think sure. I think you your history there speaks for itself. You obviously know what you’re doing in the investment world. And we definitely want to recommend anyone out there listening to get in touch with you.
James Maggs [00:45:08] Oh, thank you. Yeah, I agree wholeheartedly. There’s only so many clients and any of us can help out at one given time rates. So, and there’s so many poor realtors out there that it’s up to us to kind of pick up the slack and help other people to be successful.
Rob Break [00:45:22] Yeah. Yeah. And you know what? I think it was shown No. One, Sandy, we committed to having a no scarcity mentality and just sharing everything that we had. Right. I mean, that’s what it’s all about. The kid is scared. There’s plenty for everyone. Yeah, great. OK, well, thank you again, James. Really appreciate this. You have yourself a good night.
James Maggs [00:45:42] Thanks for having me, guys. Take care. Bye.
Rob Break [00:45:45] And you can reach myself or Sandy info breakthrough R.E.I, podcasts.