From teaching students in the classroom to creating steady cash flow from student rental properties! Welcome back to the “Inspired To Invest” podcast. This week Dan McMullen is here with us.
Dan lives in Whitby Ontario with his Wife and 3 kids. He is a High School Teacher in Markham Ontario. Along side his teaching career , Dan has recently become a Life Insurance Advisor and will be continuing to serve people but just in a different fashion. Dan has a passion for real estate investing and has been active since 2019.
Dan’s primary focus is student rentals in Peterborough Ontario. Dan contributes much of his success to collaboration and networking with like minded investors. This passion for connecting with people lead him down the path to create a mastermind group called Cashflow Crew. If 2023 wasn’t busy enough Dan made time to co-launch a podcast title, Beyond The Bell: Lifestyle Design for Canadian Teachers.
Dan McMullan made the decision to shift from education to the student rental market in an episode that is not only inspiring but loaded with strategic nuggets for anyone looking to replicate his success.
From a significant birthday milestone that ignited Dan’s journey to financial freedom, to the importance of building a strong team and fostering tenant relationships, this episode unpacks the blueprint of a real estate investor’s life-altering choices and the savvy incorporation of whole life insurance into his financial portfolio.
The landscape of real estate investing is ever-changing, and who better to navigate it with than those who live and breathe the industry?
Enter the Cashflow Crew, a mastermind group forged in the fires of the pandemic, offering an intimate setting for financial growth and networking unlike the vast sea of faceless connections.
As we dissect the hurdles and triumphs of student rental investments, we highlight the essential role of informed decision-making and proactive steps in an environment where interest rates are as unpredictable as a roll of the dice.
Wrapping things up, the conversation shifts to the microcosm of student rentals in Peterborough, revealing the intricate dance with municipal support, regulations, and the ever-present student housing crunch. It’s a deep dive into the day-to-day actions that compound over time, leading to life improvements and investment success.
As we bid farewell, we leave you with an empowering message: invest in yourself, for it’s the surest path to a future that soars. Just remember, as alluring as the stories and strategies shared may be, always sprinkle a healthy dose of personal due diligence and professional advice into your investment recipe.
To connect with Dan, go to @danmcmullenlifestyles on social.
Thank you to the Multifamily Conference for bringing us this month’s episodes of “Inspired To Invest”. Check them out on social and to get tickets to this year’s event May 24-26/24.
“Inspired to Invest” is proud to support the Beyond Success Program, a not-for-profit financial literacy program for students, launched by More To Give & MAK Investments. Find out more.
Join us again on Wed., May. 15 to hear from a woman who is investing in real estate while inspiring others to take charge of their financial future.
Thank you for tuning in & remember, “when you invest in yourself, the sky’s the limit!”
Never miss an episode!
To connect with our host, Serena Holmes, click here .
Buy a copy of The Accidental Entrepreneur, or download a free copy.
And, for everything related to real estate and real estate investing, please make sure you’ve subscribed to @serenaholmesrealtor on YouTube & on social.
We also have a page dedicated to this podcast on Instagram and Facebook @inspiredtoinvestpodcast where we preview guests each week, highlight their episodes, top takeaways, tips, quotes and more.
Investing In Student Rental Properties Transcript
Speaker 1
00:02
Welcome to the Inspired to Invest podcast, where we’re sharing stories from real estate investors and how investing has changed their lives. This episode of the Inspired to Invest podcast has been brought to you by the Multifamily Conference. Hey everybody, Welcome to the Inspired to Invest podcast. I have Dan McMillan joining me from Whitby today. So he’s from my neck of the woods and he’s a high school teacher in Markham, but alongside his teaching career, he also recently became a life insurance advisor and he’s leveraging a whole life cash value insurance policy as part of his investment strategy. And he’s had a passion for real estate investing since 2019, with a focus on student rentals in Peterborough, and he contributes much of his success to collaboration and networking with other investors. And this passion led him to create a mastermind called the Cashflow Crew. And if that’s not enough, he also has his own podcast specifically titled Beyond the Bell Lifestyle Design for Canadian Teachers, since he’s obviously trying to connect with people that he is with in the workplace. So thank you so much for being here today, Dan. How are you?
Speaker 2
01:05
Hi Serena. Thanks so much for having me Really excited to be here.
Speaker 1
01:09
Yeah, so obviously you have this teaching background, so can you talk a little bit more about how you fell into that and then where the catalyst into real estate investing transpired?
Speaker 2
01:19
Sure, I come from a family of teachers. My mom was a teacher, dad was a teacher, grandparents teachers, so teacher, teacher, teacher all the way through. And that was sort of the plan. That was familiar. I had the template, had the map and I followed that and it was really. It was awesome. You know, I landed my dream job.
01:36
High school phys ed teacher, went up the ranks to become a department head and you know, I guess the real catalyst for the transition into real estate, investing and things above and beyond I’m noticing the age of 40 for a lot of people is, is a very interesting age. We, many of us, have had, had families or are married, we have our house, we have our careers and we start to maybe question what’s next. And I can remember thinking like man. My wife and I are both teachers, we make a good salary, but we keep spinning our wheels Like every time we go on vacation or we have to purchase a new car. It’s just a setback. So I started asking questions how are other people doing it differently than we are? And I sort of started opening my eyes. And you know, how are people affording cottages up in Muskoka or Haliburton? What are they doing differently? And it led to this curiosity.
Speaker 1
02:33
Yeah, yeah, so basically what the wealthy are doing. So obviously your first foray was into student rentals, so why did you decide to start there and specifically in that market?
Speaker 2
02:41
It really. I had a friend who was already doing it and I was a complete copycat, so the template was already there. He mentioned, you know, he had student rentals in Peterborough and I was on the mindset if you can do this and I can do this. So I think it just happened to be that I knew someone I was familiar. I trusted he had the team and template in place. I trusted he had the team and template in place and I just I literally took his team and made it my own team and then executed. So you know, I really for anyone who’s starting out, that’s a great thing to do is just find what’s already being done and copy that template.
Speaker 1
03:18
Yeah, no, that makes sense. Now can you talk about the experience of now having these student rentals and managing them Like you know? How many do you have at this point? Are you enjoying it?
Speaker 2
03:28
yeah, no, we.
03:29
We have two. So I say we. I ended up going um a joint venture with my brother and best friend, ryan, and I. Really it’s been a great team because, um, we manage these properties ourselves and it can be a lot of work, um, for just one person. Let’s say, someone wants to go on vacation or they’re not available and there’s a maintenance call. Well, we can now share the load on that. So, really, really important on that Now it’s been a success. We take managing very seriously. We make sure that we build relationships with our tenants and if they call, we respond. We buy high-quality assets. These if they call, we respond, we buy high quality assets. These houses are really really nice. Sorry, it’s two. We have two eight bedroom student rentals in Peterborough, so that’s really really important. The eight bedroom piece is important because it allows you know, it allows for a higher cashflow within the property. So, yeah, no, it it. It really is something we pay a lot of attention to and I think, when it comes to investing, anything you pay attention to will do better.
Speaker 1
04:30
Yeah, no, I think that makes sense from an economies of scale perspective and that’s why so many people go into multifamily, and you know, obviously here in Ontario, I think the other benefit to having student rentals is that you’re not dealing with those same kind of landlord tenant roles that you would have if you had long-term tenants in place. So I think that makes sense. If you are going to invest in Ontario, you can find ways to do it that you’re not going to be stressed out should you face any challenges. Now, where did life insurance come into this? Because obviously I can see how it’s complementary and I’ve learned a lot about that in the last year myself. But for you, why did you decide to become an advisor and like, how are you incorporating that into your entire strategy?
Speaker 2
05:07
Yeah, really, really great question. So it just happened to be the individual who I got the student rental template from also had the book Becoming your Own Banker by Nelson Nash dropped on his lap, and then he he sent it over to me. So you know, it took me a little bit of time to learn the concept of how we’re using whole life insurance policies to as a financial tool in our structure. So it really that’s how it happened and I ended up getting two policies early on. So we had cash flow coming from our first student rental and we use that cash flow to fund our first two insurance policies. And then I watched my, my cash value grow inside these insurance policies and I was like, wow, this is, this is a banking function in my life. So when we did our next student rental, I was able to extract some of that money from a policy loan and and put that money to work in the renovation process of that money from a policy loan and put that money to work in the renovation process of that second student rental.
Speaker 1
06:08
Now for someone that doesn’t know anything about whole life insurance or how this can be used, can you talk a little bit more about the concept in general and why it’s valuable? Because I think a lot of times people think like life insurance, they think term insurance and stuff like that, but can you talk about how that can be leveraged as a business owner or as an investor?
Speaker 2
06:27
Absolutely so. What we’re doing is we’re using an insurance policy called participating, dividend paying whole life insurance product, and this is a permanent life insurance and, contrary to a term life insurance, where you’re renting your insurance whole life, you own your life insurance policy and one of the advantages of owning this life insurance policy is equity builds up inside the life insurance policy, much like equity builds up inside your rental property. So as the equity builds up, I can take one of the contract contractual advantages I have is the insurance company will allow me to take a collateralized loan against my insurance policy and use properly. I can take that loan and make my money work in more places than just one. So I’m not taking my money outside the policy. I’m taking the insurance monies outside to use that money. My money is still compounding and growing inside the policy so it structured and used properly, it can be a really great compliment to real estate investing because it allows you more access to to funds and you can be liquid.
Speaker 1
07:42
Yeah, Now, if you don’t mind me asking how much would you have overfunded the policy when you first opened it?
Speaker 2
07:48
Yeah, so my first two policies I’m I did a $10,000 policy on myself and a $10,000 policy on my wife. So, you know, we we got our feet wet. That might seem like a, you know, might seem like a lot of money to, to, to people, but it’s one of those things you know as real estate, uh, investors we were used to dealing with, with some larger numbers at times, and, um, we have able been able to make this work. So, um, so far success. We’ve grown out our system. Um, you know another sort of tidbit, uh, that a lot of people maybe aren’t doing it instead of contributing to registered funds for our, our, our kids for educational purposes, we’re actually we’ve started life insurance policies on them and they can leverage those policies later on when they’re school age or wedding age or whatnot.
Speaker 1
08:35
Yeah, yeah, no. I think that makes sense Now, in terms of you know your portfolio and your experience so far. Like I know, you haven’t been doing it that long, but when you look back at the last five years, what would you say? You’re most.
Speaker 2
08:50
Yeah, I think I’m really proud of Cashflow Crew, the mastermind group that we have. It all started back during COVID, actually, when we were in lockdown, and let’s bring a different topic every month for educational purposes. So we would bring on experts you know, similar to yourself real estate agents, advisors, mortgage brokers, crypto, bitcoin, whole life advisors and we would do learning sessions and this is really morphed into you know, a of 50 individuals and it is zoom, it’s virtual, so we can sit in her in her comfort of her own home and and learn. And what I’m really proud of is this is actually morphed into people. Um, I’m hearing of people I go on ski trips now with with people from this. Um, there’s a group of individuals, uh, going down to the bitcoin conference this summer and they didn’t know each other prior to cashflow crew. So this bringing together is forged friendships and the whole idea is helping each other out and let’s all rise together.
Speaker 1
10:02
Yeah, no, I think that makes sense. I mean, I’ve been part of a real estate education group for about five years but it’s very, very big, so there’s, say, 3300 of us. Obviously I’ve gotten to know some people. You see a lot of the same people posting, but then I joined a mastermind about a year and a half ago and it’s obviously a very different experience because it’s much smaller. It’s 65 or something like that. They have weekly calls that cycle through expert speakers Like last night we had someone that she actually coaches female entrepreneurs and talking about overcoming imposter syndrome and and things like that.
10:37
But we’ll share resources, so they’ll have a round table or a best in request and then we also have three trips. But a lot of the people within the mastermind have gotten very close. Some of them have done business together, some of them bought properties together. So I think it’s just there’s value to both. But obviously when you’re in a smaller, more intimate group, I think you can obviously just get a lot deeper and like get people, get to know people a lot better. So I think that makes sense. Now you obviously talked about some of the challenges and work involved in student rentals. Can you talk about maybe one of the biggest obstacles that you’ve faced as you’ve gone down this path.
Speaker 2
11:07
Well, many, this, this one’s easy, the biggest obstacle, when we were just getting started out 2019, we all know 2019, 2020. So we had just purchased the property, we were renovating the property, our students are just about to move in April 30th, may 1st, and COVID happened. And so here we are with this. You know, this big purchase, something we’ve been working away and boom everything shuts down.
11:35
Yeah, so you know, there was no real playbook for this, so we really had to. You know, we just had to figure it out and and what we ended up doing was we just, you know, we, we really worked with the students. We said, hey, you know what can we do to support you? So we would actually send them links to the, to the resource where students could get get funding. You know what can we do to support you? So we would actually send them links to the resource where students could get funding. You know, funding help from the government. So we were really saying, hey, you know, we want to make this work.
12:02
And what turned out was the students still wanted even though they were learning remotely, they wanted to be together in the house and they were excited about that. So we did have two students leave, so they never ended up moving in. So we did have to pivot, do a quick, you know tenanting process right in the middle of COVID as well. So, yeah, so that would say that was the biggest obstacle right away. And I think you know what it was advantageous that we went through that, because it allows us to gain confidence in, in sort of obstacles moving forward yeah, now I’m sure just um in addition that there’s just been different lessons that you have had along the way.
Speaker 1
12:39
Is there anything that you know now that when you look back at the last five years, maybe you would have done differently?
Speaker 2
12:46
yeah, for sure, I think. Um, it’s not, it’s not believing the news. So I coming out, the news was saying that interest rates were not going to rise until 2024.
Speaker 1
12:58
And I’m surprised.
Speaker 2
13:00
Yeah, so you know being a young investor and thinking I knew, you know, I knew enough, I wish I’d locked in to. I wish I locked in and I didn’t. And I was thinking, oh, they can’t raise rates, they would be in trouble, and that was not correct. So that really I said I’ll never rely on future news, I’ll just really be more cautious.
Speaker 1
13:29
Yeah, I mean, that’s one thing I’ve seen as well. There’s some investors that I’m connected to and they’ve talked about their expenses going up between 250 to 400%. And that was one question I kind of had was, like you know, as things were on this upswing with the interest rates like we had 10 in a year you would think maybe by the second or third you might think like, can I flip this into a fixed? Like usually you can go variable to fix fairly easily, but usually it’s the opposite that we maybe you’d have challenges, right? So I’ve often wondered that when I’m hearing about these, you know not to say sob stories, to like make light of it, but I’m like, well, why wouldn’t they have moved more swiftly, like just to protect themselves, right? So I think, um, you know the people that I’ve spoken to and in some instances that really study the market closely, like they’ve said, we may see things come down incrementally, but we could probably see something within a percent to a percent and a half for at least the next 10 years. So for people thinking we’re going back to 2%, like highly, highly unlikely for a long time. So, yeah, I think you just have to try to look out for yourself in that instance. So, on that note, we’re just going to take a really brief break for our sponsors and we’ll be right back.
14:33
The multifamily conference is back May 24th to 26th at the Metro Toronto Convention Center. Get your tickets at multifamilyconferenceca, thank you. Our homes are where we eat, sleep, relax and play. I value transparency, integrity and trust. If you choose to work with me, you can be assured that business will be conducted honestly and openly. Time is of the essence in this industry, so you can expect nothing short of quick, clear communication from me. I’ll keep you informed every step of the way so you feel comfortable through this entire process and, with this said, my service to you doesn’t end when the transaction does. As your realtor, I’ll not only help you buy and sell your property, I’ll also educate and support you along the way. I can’t wait to share my passion for real estate with you. More importantly, find you the perfect house to turn into your home.
16:56
Inspired to Invest is proud to support the Beyond Success program. In today’s complex world, it’s absolutely crucial for our youth to learn how to take charge of their financial future. We believe that every young person deserves access to accurate, practical financial information Designed to bridge the gap. The Beyond Success program leverages a comprehensive educational boot camp to equip young minds with essential financial literacy skills. At Beyond Success, it’s not just about teaching financial literacy. It’s also about fostering a foundation for a prosperous and empowered future. Join us Together we can build a brighter financial future for the next generations. Join us Together, we can build a brighter financial future for the next generations.
17:47
Hey everybody, welcome back to the Inspired to Invest podcast. I have Dan McMullen here. He is a teacher from Whitby who’s diversified into real estate investing with a focus on student rentals in Peterborough, and he’s also become a life insurance advisor as well, incorporating whole life insurance into his investment strategy. So I guess my next question is what’s the craziest thing that’s happened to you as an investor? I know you just talked about a couple of challenges, but is there anything that really stands out to you Like? That blew my mind.
Speaker 2
18:11
Yeah, you know what Truthfully like things. You know we’ve had small little blips but we’re so far so good, like we’ve. You know we’ve had the bylaw officer knock on our door and I’m sitting in a staff meeting and the tenants call me and say the bylaw officer is at the door and you know the students are kind of freaking out like what’s going to happen and I just say, just breathe, we have a license, it’s OK. So one of the advantages of doing student rentals in Peterborough is Peterborough actually gives a large dwelling license in order to operate these student rentals, and that that is gold for me.
18:51
As being a family man, a teacher, I want to make sure that what I’m doing is legal and is popping up and and is on par. So I had a quick conversation with the bylaw officers as, hey, listen, we have a, we have a license here for this, um, this unit. And obviously a neighbor called, because you know they were they were noticing a lot of activity in a student house and so we had to rectify that. So that was a little exciting for a little while but, um, we had the right things in place.
Speaker 1
19:21
Yeah, and that’s the thing I think there’s. Just municipalities do make changes, whether it’s like Airbnb changes and stuff like that. But to your point about student rentals, someone in my mastermind has some fairly profitable student rentals in the East Coast and he picked them up, you know, probably for around $200,000. He’s profiting like $6,000 a month, like it’s really good in that sense. But there was another house in the area that burnt down and I guess it put a lot of scrutiny on the student housing, dwellings and stuff like that and how well they’re being maintained, if there’s like slumlords managing them and just student safety and stuff like that.
19:55
So he was fearful that they were going to basically like clamp down on all of those things or like heavily regulate them. So you just never know when things are going to change. So you just have to adapt and pivot and deal with it the best way you can as it comes at you Now, obviously with your mastermind. I’m sure there’s a lot of people sharing in their experiences. What would you say some of the best advice that you’ve gotten so far?
Speaker 2
20:15
Oh goodness, what is the best advice? I really love and I got this advice from a podcast. I’m a big podcaster. Every day I’m listening to podcasts. I’m sort of sharpening that ax, but it was from Sean Croxton, the quote of the day. Really liked that podcast and the expression is little by little, a little becomes a lot. So back in 2019, 20, I just said okay, a little by little, a little becomes a lot. Every single day I’m going to do something that’s going to improve my life tomorrow. And whether that was having a conversation with another investor, whether that was reading, whether that was podcasting, going up and seeing a different property, just taking action every single day. That compounds after five years. And here I am sitting today multiple properties, multiple incomes, a full mastermind sitting on your show right now. It’s all that work in the previous years has led to the success of where we are now.
Speaker 1
21:16
Yeah, now what would you think is next for you? Do you think you’re going to continue to focus on student rentals in that market or do you plan to diversify outside? Of you know your backyard.
Speaker 2
21:25
Yeah, I’ve really thought about that. We really love Florida. We, we, we love vacationing down there. There is opportunity down down in Florida. But really I I can’t beat Peterborough. I can’t like. I really it’s comfortable. There’s a huge demand for students. I love the licensing, how the city’s on board. So we do have a refinance coming up. We’re at our five-year term. There is equity in that property, so with my partners we’re definitely having a conversation of what’s next and with rents being it’s unbelievable. But our cheapest room now is $850 and we’re getting a thousand dollar room, is not it’s?
Speaker 1
22:07
not unheard of.
Speaker 2
22:08
Yeah, and on an eight bedroom house you can see. You can see the money and how it makes it worthwhile.
Speaker 1
22:13
Yeah, no, I can see that and I’ve heard that I was looking in and again just different markets. But even in Cape Breton they said that’s like actually a big struggle for students right now, where they just there’s nowhere for them to go. So you know, it’s just I students right now, where they just there’s nowhere for them to go. So you know it’s just, I think across the board there’s a housing shortage and obviously this section has been impacted as well. Obviously I’d really encourage.
Speaker 2
22:33
Sorry to cut you off there like just maybe I can leverage your show a little bit here is I’d really encourage the municipalities to take a playbook of what Peterborough has done, because I think there’s a lot of people who are on the sidelines and would invest in student rentals if there was more regulations within the municipalities and more support. So you know, I definitely you know there’s a lot of yeah, there’s just a lot of great people that would do an investment if there was support on that. So I really wish they would look into that.
Speaker 1
23:03
Yeah, I think people just don’t know what they don’t know, right. And I think maybe some people that might hear the word student rental might think like parties, like irresponsibility, like issues and stuff like that. So not to say that any one asset class is perfect, like, if you’re dealing with long-term tenants, like there’s a rent revolt of like 500 people not paying rent right now, like there’s things that you can experience wherever you are, right. So I think it’s just trying to determine what, what works for you. Now, obviously, you kind of started down this path trying to think of your future. So is there a particular financial freedom number that you and your family have in mind?
Speaker 2
23:37
Yeah, for sure it’s not an exact number, but for me it’s being able to work remotely, so that is really one of my goals. I’m looking to take a sabbatical from teaching, actually in June, so I’ll work out this semester and then the goal is to transition full-time into the life insurance and being a full-time investor, and we’ll see. We’ll see how that goes. So, really, as I design my life, I don’t want to. I don’t want to have to be limited to commuting and and hitting a bell and being in a certain location for 191 days.
Speaker 1
24:12
Yeah, I think that’s one thing the pandemic did shift for a lot of people, right. Like there’s people that used to commute, you know if they’re going downtown from like where we are, you could be looking at like three hours of commuting plus each day, right. So I think everyone’s, you know, live that good like work, life balance. So I’m striving for that. So how would you say real estate investing has changed your life up until this point.
Speaker 2
24:34
Yeah, it’s really given us flexibility and being able to design a lifestyle that includes things like going to Florida. We go to Florida multiple times a year we went at Christmas, we go on March break, we go in the summertime.
Speaker 1
24:47
Which area.
Speaker 2
24:49
We’ve done. We really like. We really like St Augustine, we’ve done that, we really like Orlando for the Disney and my wife’s really partial to St Petersburg. So yeah, sort of all over. And yeah, the investing has allowed us to have that lifestyle of being able to escape in the wintertime multiple times and you know, and it allows for that freedom.
Speaker 1
25:14
Yeah, no for sure. Now, obviously, the name of this podcast is Inspired to Invest. I know you shared one of your quotes earlier, but are there any other quotes that really motivate or inspire you?
Speaker 2
25:24
I really like the quote borrowing someone’s confidence. So the idea that you know, surround yourself with amazing people and borrow their confidence, and that’s what I’ve done over and over and over again. So when it came to that original friend that I had for the student rental, I borrowed his confidence in order to jump in and take action. When it came to you know, whole life insurance and IBC, infinite banking, I borrowed someone’s confidence. And then, finally, when it came to life insurance and becoming an advisor myself, I was able to borrow someone’s confidence and do it again. So I love that expression and it really find someone a mentor, finds someone a champion for you and broader their confidence.
Speaker 1
26:10
Yeah, no, I think that makes sense. And just trying to learn from people who are where you want to be already right, so I think that’s awesome. So, for anyone that does want to get in touch and learn more about maybe your investment opportunities, your mastermind or your podcast, where’s the best way that they can find you?
Speaker 2
26:24
All right, here we go. So, uh, dan at cashflowcrewca, Dan at returnonlifeca is the insurance piece, and then, um, the podcast. It’s on all the platforms, uh, spotify, itunes, um, and it’s beyond the bell lifestyle design for Canadian teachers.
Speaker 1
26:43
Great, awesome. Well, thank you for your time today, of course, for anyone that is tuning in, thank you for watching. If you like what you’ve just seen, please make sure you like, comment and subscribe. Make sure as well that you’re following along at Inspired to Invest podcast on social. We do a lot of pre-promotion and post-promotion from each episode and, above all else, make sure that you remember when you invest in yourself, the sky’s the limit. Thanks again, thank you to the Multifamily Conference for bringing you this episode of Inspired to Invest. The views represented on this podcast are for general information only and does not constitute investment or other professional advice or an offering of securities. The host and guests featured on Inspired to Invest make no representations as to the performance of any particular investment. Should you decide to make an investment, you are responsible for conducting your own review and analysis. It is recommended that you obtain independent legal accounting and tax advice from licensed professionals.