Struggling in today’s market? How would you like to learn how to not only survive, but thrive as a real estate investor in a down market? Welcome back to the “Inspired To Invest” real estate podcast!
Embark on a transformational odyssey with real estate maestro Michael Ponte, founder of the Savvy Investor as well as his real estate company, Prosperity Property Investments. Throughout this episode, he unpacks the genesis of his investment business & the strategic moves that have cemented his status in the industry.
Discover the pivotal choices & lessons learned from his initial forays into the market, providing a treasure trove of insights for those looking to harness the power of property for financial growth. Michael’s narrative is more than just a business blueprint; it’s a testament to the resilience & creativity required to thrive in the fluctuating world of real estate investment.
Anchoring down during financial tempests defines the mettle of an investor, & our exchange with Michael navigates through such squalls, including the 2008 crisis & the Alberta oil industry’s upheaval 8 years later. The discussion illuminates how challenges are reframed as opportunities, with practical wisdom on diversifying income streams & leveraging downturns for portfolio expansion.
Building a real estate empire isn’t merely about capital—it’s about cultivating relationships with other investors & embracing adaptability as the linchpin of success.
The episode culminates with Michael sharing invaluable lessons from his property management experiences, what he learned from them & his strategic vision for future growth. The narrative shifts from recollections of a tenant-run puppy mill debacle to an exploration of strategies for avoiding such pitfalls, reflecting the evolution of Michael’s approach to investment.
For those ready to elevate their real estate game, this episode doesn’t just inspire—it equips you with Michael’s seasoned insights & the motivation to carve your own path toward success & the freedom it affords.
To connect with Michael, go to @savvy_investors on social or online.
Thank you to Fluent Capital Lending Inc. for bringing us this month’s episodes of “Inspired To Invest”. To learn more about them, go to @fluentcapital on social & online.
“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 Feb. 28, for Ep36 to hear from an investor who will teach us how to make bank in real estate and share some sensational secrets about multi-family real estate investing.
Thank you for tuning in & remember, “when you invest in yourself, the sky’s the limit!”
Connect with our host, Serena Holmes & to buy a copy of her book, The Accidental Entrepreneur, click here.
And, for everything related to real estate and real estate investing, please make sure you’ve subscribed to @serenaholmesrealtor on YouTube & other platforms. 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.
Are you a full-time real estate investor with an inspiring story to share? Apply now!
Real Estate Podcast Transcript
Speaker 1
00:01
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 Inspire to Invest podcast has been brought to you by Fluent Capital. Welcome to the Inspire to Invest podcast. I have a great guest today named Michael Ponte, and, if you’re not familiar with him, he is the founder of the Savvy Investor, as you can see, as well as a company called Prosperity Investments. This is a real estate investing company that he founded back in 2002. He focuses on both commercial and residential real estate and currently manages an investment portfolio of more than 235 units and a value north of $30 million across various markets in Canada. So thank you so much for being here today, Michael. How are you?
Speaker 2
00:49
It’s great, my pleasure. Thanks for having me on, serena. This is just wonderful. So I’ve been watching your podcast quite a bit and, like I said, it’s been wonderful and honored to be part of it. So thank you.
Speaker 1
00:59
Awesome. I appreciate that. So obviously you’ve built quite a big business over the last 20-ish years. Maybe you can take us back to what life looked like before real estate came into your life.
Speaker 2
01:09
You weren’t supposed to say 20 years by the way.
01:13
So, before real estate, you know what I would imagine? It’s a lot very similar to what a lot of other people were kind of going through as well or are currently dealing with right now. You know working your job, you know just putting in the nine to five. And so for me, I started many, many, many moons ago and you know, I think I kind of shared a little bit just at the very beginning of this before we jumped on live. But for me I just wanted to own a piece of real estate. I didn’t really have no intention, you know, being in a podcast like this with yourselves or starting up SAP Investor.
Speaker 1
01:45
That wasn’t the intent, and so I was working for a pretty large organization.
Speaker 2
01:49
I was in a very high level position with a food manufacturing company and, with that being said, I was working like a dog, you know, kind of getting into the office at like 6 30 in the morning, leaving at 6 30, kind of coming home and doing all that stuff and it was really draining Okay, and I’m sure a lot of people can feel that way, especially in this day and age right now. And so I wasn’t happy with the returns and my investments being mutual funds or stocks no offense to them it just wasn’t the right fit for me. But one thing I did notice is my personal residence values were going up quite a bit. I’m like, yeah, I do more of this and less of this. Maybe it would be better for me. And that’s kind of where my journey kind of started right and started buying just a couple of pieces of real estate for myself, and then it just kind of grew from there right.
02:39
And so, yeah, like like a lot of people here are doing this right now. They’re just, they may just want to look at improving their financial future or building an expansion of their pension or whatever it is, and that was the same vision for myself. I just saw this as an opportunity. In fact, my first property was losing $40 a month. I still want, clearly right, and it wasn’t the 40 bucks because I didn’t really know what the hell I was doing to be back then, but it was just really. I saw this as an opportunity to add more assets to my network. That’s what it was, yeah.
Speaker 1
03:11
I think everyone gets started in their own way. I mean, I started with a short-term rental in Florida that I bought when the dollar was at par and yeah, cool. Yeah, it wasn’t cash-long at all, so I actually paid it off with just money from my business and I knew the US dollar is obviously going to bounce back and that’s really where I was going to make most of my money a little bit on the market as well. But yeah, it was probably break-even or even maybe even a loss a couple of years ago.
03:35
So you kind of get started where you’re at and then you just start to learn and develop and grow, but to your point, even about the stock market, I think there’s a couple of things there that I’ve never really been comfortable with. One is a lack of control. Like there could be training, there could be a war, there could be who knows what, and then all of a sudden things are going everywhere. So there’s a lack of control that you have. But also you only have the value of what you kind of put into it.
Speaker 3
03:59
And with real estate.
Speaker 1
04:00
You put 10% down or 20% down, but it’s on something that’s worth 10 times that. So obviously, there’s just so much more opportunity just from economies of scale and stuff like that. Now I guess, when you did look at that, what really kind of pushed you over into real estate. So you obviously talked about your job and you talked about why you wanted to do it. Was there someone that said to you like, hey, you should consider this, or did you just kind of come to that on your own?
Speaker 2
04:25
Yeah, it was more on my own. The big aha moment and it kind of goes right back to what I said is I started back in 2001. And prior to that real estate prices weren’t going up that much, and so a lot of people don’t know this because this is going back over 20 years ago. But shortly after that the market started to kind of not the insanity that it’s been over the last 15 years, but it started to go up and with that and my first property was in Edmonton, of all places, and I’m based in Vancouver and I just bought a small little townhouse. That’s all it was. I’ve shared the story of other podcasts before, but I bought this little townhouse losing 40 bucks a month. But it didn’t take long, like within about a year and a half, where I was able to significantly increase the rent of that property because the value of, because the rent demand was higher. But guess what happens, serena, was that negative cash flow turned into positive cash flow. Now there isn’t stuff like we’re seeing today. Here we are in a podcast, hopefully supporting other real estate.
05:29
Back then there was not a lot of information about anything to do with real estate investing, so we were kind of doing this a little bit blind, trying to figure it out, but it was truly my aha moment. I’m like, wait a minute, I’m not dishing out 40 bucks anymore. I’m now putting in like $300, $400 in my pocket every single month. And that’s when the light bulbs kind of came on. It’s just like, wait a minute. If I bought a few more of these, yes, maybe there’s something to it, right, and that’s kind of where it really. That really opened my eyes to this and again, for me, it was just there wasn’t a lot of understanding back then and I was going blind, but then it came to the realization that this can actually drive some capital in and put money in our pockets. And then, with that being said, if I continue to expand and grow and buy more properties, could I?
06:21
maybe, maybe do this as a job, and that kind of was my aha moment for me back then, and so again going into very, very blind. But that’s really was the pivotal time, and I think it was like one or two months after the fact of that that it just really came to the conclusion. And I remember talking to my wife I’m like, listen, remember that property we bought that we lose the port? What if we bought a few more? And that’s exactly what we did. We bought a few more after that. So then, how long did it?
Speaker 1
06:49
take then to make that jump from working in that corporate job? How many properties did you have before you? Ended up retiring technically from the corporate world.
Speaker 2
06:59
Yeah, it’s a great question, very good question, and then magic number okay, but I don’t want you guys to write this down, it’s very very clear because there’s a further part to this story, but I left my corporate job in 2007 and that magic number at that time was, I think, 12 properties, or 10 or 12 properties, and I don’t really remember the guy.
Speaker 1
07:20
And they were all single family or had you moved into multifamily at?
Speaker 2
07:23
this point. They were all single family properties.
07:26
So, part of what I was sharing earlier is working like crazy, and then, at the same time, I’d come home, gobble up some dinner, kiss the kids good night and then start my second job, which was obviously real estate investing right, and so, with that being said, they started to learn about partnerships and stuff like that, and then joint venture partnerships and started to integrate this, and so that started to kind of happen.
07:49
So I had a great discussion with my wife and said, listen, this is insanity, I can’t do this forever. So the kids were very, very young and we took a look and I really just said we have an opportunity here to take a little bit of a leap of faith and try to go for it. This is the type of capital we’re producing. Yes, it’s offsetting a lot of the income that I had when I started, but if I continue to grow and expand it, we can do this. And we had a buffer. We were very fortunate position where you had a buffer to kind of support it and give it a shot. But, as I shared with you when I left my corporate job was late 2007.
Speaker 1
08:26
Yeah.
Speaker 2
08:26
Okay, I don’t know if you remember, if anybody remembers, what the following year happened right, and so let’s just say not the best time to lose your or the best time to quit your job or, you know, 2008. And so, with that being said, it’s one of those ones. That was kind of an eye-opening experience and obviously the lessons that I learned back then is significant, which is probably similar to what a lot of lessons people are learning today.
08:53
But, it really set the tone for myself, for my career. That was a very pivotable time because with all the challenges that occurred back then was some of my biggest opportunities too. That’s where I really scaled my business, but it came with a lot of pain, but truthfully, it was about wanting to do anything I possibly can to ensure I took care of my family, and this is-.
Speaker 1
09:20
Well, your survival skills kick in. You’re like I gotta do what I gotta do, right.
Speaker 2
09:24
And that’s it. So you know I go back to it and I’m like listen, guys, this is my story. If I can share one thing is just be aware of this and we’ll maybe talk about this after about making that transition, what you should do, kind of before you do that. But don’t go in all in with not a real good clarity of a plan and I thought I had a reasonable plan, but guess what? Something happened and believe it or not, look what’s happened over the last five years and it’s been insanity, and so you gotta be prepared to make that leap.
09:54
And, more importantly is you gotta have all your kind of ducks in a row. I thought I kind of did, but it really wasn’t, and so that was a real big change for us. Even though we made that transition, then it was really, really tough. It was very, very tough.
Speaker 1
10:07
So I guess, to that point, what would be some of those lessons, like what would you say was the hardest that you went through during that time?
Speaker 2
10:13
Well, I think you know, the biggest one for us is in 2008,. We saw a lot of the ranks going down. Actually the opposite. All that cash flow that we were kind of generating from these properties and also depending on now yeah, and depending on now is gone bye-bye. Right. My wife was at home managing the kids. That was her job, and then here I am unemployed and technically doing this as a career.
10:38
So it’s all about being creative, and our approach to this is looking at all the income streams that we were able to generate, and so, with that being said, our number one was specifically cash flow, and so, with that being said, we really had to get a better understanding of our business a little bit more effectively here.
10:56
So the fortunate part during that time was, even though the cash flow was going down quite drastically, we had to pivot, we had to adjust, we had to be creative, we had to look at multiple different ways, and this could be very similar to a lot of people. That hopefully resonates a little bit with people as well. This is the only focus that you are is just based on cash flow, and rents are going down. Values Are going down. Values are going down. Don’t bury your head in the sand. You got to go into fight or flight mode in some cases, because this is your business at the end of the day and you got to really manage through this. And so, with that being said, we had to kind of restructure the way we looked at our business completely is not just focusing on the joint venture or just on the cash flow side, because it isn’t a sustainable business.
11:37
And so now we had to add things to our agreements with our partners in regards to acquisition fees and disposition fees, and people do things a little bit different than I’m not going to spend too much time talking about this, but we have a business that we need to run, and it can’t always just be focused on that, so we had to also take into account that it had to always make sure that it was maintaining profitability for all parties involved.
12:01
Now with the negative cash flow side also came opportunities, as you’re probably well aware. Which is what we’re seeing even in some cases today is we were getting properties at a significant discount back then too. And so, as 2008 was a struggle, 2008, 2009 and 2010 was when we did our largest acquisition pools. Like we were buying properties and this is not a joke probably one to two properties a month. Like we were going like I was literally living at the lawyer’s office signing papers. I’m like, just give me a desk and let’s do this. And so we were in full acquisition mode.
12:38
So during that time of challenge of cash flow was actually when the opportunities became available to us because we found a big, obviously lots of discounts. We buying stuff back in the days was like 67, 58 a door. We started to transition at that point in time into multifamily and so, and it didn’t take long before the prices just went up drastically and that really was kind of the boom right. But during those challenging times, those big lessons, there was opportunities. But, just like anything is, you have to kind of adjust, you have to look at your business sometimes differently and I know sometimes this is not taught very well. Out there is is not. A lot of people just think it’s just cash flow. It isn’t there’s so much more to it than that, right?
Speaker 1
13:19
So Now, what point did you start engaging other investors to scale your portfolio? Was it right after the first property that you purchased, or was it a few down the line? And how?
Speaker 2
13:28
did you do that?
Speaker 1
13:29
Cause they weren’t. The social media wasn’t even in existence yet, so how did you go about that?
Speaker 2
13:34
Now you are aging me. Look at that, right? No, I’m just joking, but no, truthfully, it’s a great question and I didn’t have the right answer at first. Is this kind of like, you know, for me? I started at about property. I think it was number five and I do.
Speaker 3
13:47
I got maybe a little amnesia or something like that going on here, but I think yeah maybe four or five properties at that point in time.
Speaker 2
13:55
But then what happened is like again, there’s not a community like this or like you know, based on podcasts or savvy investor or other groups or whatever it is, and five properties in our space, yeah, it’s still. It’s still very good. But you’ve seen people doing, you know, hundreds of deals and stuff like that and but a lot of people forget in the general public when you’ve got two or three investment properties, that is like crazy, like they just they just can’t even fathom because they don’t understand how you were able to even do that no-transcript. So when you were saying, you know, you have your general discussion with people, hey, how are things going? Things are great. I just bought another investment property.
Speaker 1
14:38
You did what, it was like what, and now?
Speaker 2
14:41
how did you do that Right? And so now they’re just like well, you know, the common thing you hear is well, you know what, I’m interested too. Maybe we can do something together. So next time you find the deal, let me know. Yeah, and that’s where I was like huh, yeah, what does that look like? You know, I don’t know what it looks like, I have no idea what that looks like. And so now all of a sudden we’ve got partnerships just kind of coming out of the woodwork, and most of those individuals are like friends and family to begin with yeah, things are just happening organically?
15:10
Yeah, very much so, and so, with that, that’s where it happened. And so, as friends and my employee at this point in time, I started partnering up, made a lot of mistakes at the very, very beginning and the structures and all sorts of stuff. But again, even myself, I was getting to a point where the banks were saying you know, mike kind of get cut off here with how many properties you have, and I shared this a lot.
15:32
It’s like he wouldn’t do that, but it’s just the natural order. You know, they’re the ones that make the rules. You have to follow their rules. Unfortunately, they got all the money right, so, but then this is where it opened the doors. Now is just like I’m literally unlimited. I can go to whatever level that I want because I’ve learned how to raise capital. And so, with that being said, that’s where it started. It started kind of number five and then started to kind of push myself out, and from that point forward, that’s pretty much mostly what I do. Like you know, I’ll be refinancing properties, I’ll sell a few properties here and there and don’t get me wrong Now my portfolio continues to expand because I believe in this. I believe in this space and investment strategy. So when I’ve got capital, I’m reinvesting it back into my own personal assets as well, and that’s actually part of my long-term plan too, which I’m sure we’ll probably talk about.
Speaker 1
16:19
Yeah, no, let me just focus on Now. I know, you talked about the challenges that kind of came along with 2008, but is there anything in particular that stands out to you as one of the biggest obstacles that you’ve faced so far?
Speaker 2
16:30
Yeah, I think the biggest one. There’s been so many of them. It’s a separate podcast in itself, Like, I think, the biggest one that we had and it may be I’m trying to even think it’s the best one. Actually it wasn’t 2008. That might shock you, OK, and it’s actually was 2016. That was probably one of the toughest times and this is basically specifically in our portfolio in Alberta and for those that have been in that market in 2016, 2015,. Somewhere in that vicinity, they totally get it. Ok, it was significantly worse than 2008.
17:05
And what people are dealing with right now. This is nothing Like this is nothing compared to what we were dealing with, to be very, very frank. Ok, and so back in 2016, for a lot of people that don’t know, saudi Arabia just opened up the tops of oil Right and that was one of, obviously, its main industries. Oil in Alberta was just under absolute attack still is in some cases, but we were seeing, instead of people moving into the province, we saw mass exodus out of the province, like mass exodus. Everybody was leaving and then, all of a sudden, we saw prices going down all of our properties and, to add insult to injury, we saw a lot of people leaving and rental. The rental demand was, the vacancy was just significant, like it was absolutely through the roof, and so you know, to put it into perspective, I think it was probably close to around 8%, 9%. It was high, like it was very, very high, and so, very similar to kind of what I said, it’s like you know what we’ve had to deal with challenges 2008. And now we’re dealing with challenges in 2016. You can’t bury your head in the sand. You had to constantly be pivoting and adjusting and being creative versus everybody else. So, even though we were seeing kind of a mass exodus of people.
18:23
How do we keep our, how do we keep rent going into our portfolio to maintain a lot of the expenses and everything that’s going on and this probably resonates well with a lot of people today. But again, this is this, is it? It’s just like, what do we do? We’ve got a specific amount of capital that we need to maintain to cover off all these expenses and everything. We’ve got partners that we got to report to and things aren’t maybe necessarily going that great, and so what are we going to do? And that’s what you know for a lot of partners. That’s what they want to hear. They want to hear kind of what the plan is. They understand challenges happen. It’s, it’s, it’s.
Speaker 1
18:54
Well, I think it goes to your integrity to have transparency and to be proactive with this communication. Right, Like you can’t just ignore the emails coming through and ignore what’s happening in the world right.
Speaker 2
19:04
Exactly Like. That’s the thing that it when you’re dealing with partners. They are your partner and be very, very clear, you know, and to pretend it’s not happening is really doing a disservice to you and obviously your partner as well, and so the open lines of communication and transparency is one of the most important things whenever you go down the road about capital raising with individuals.
19:24
So like I, said, for me that was a big, that was a big one, and what it did do is it forced us to be much more efficient and systemization of multitude of different things, very responsive in regards to. So if tenants are responding to ads, we were, you know, back then. You know we wait a few hours, or like six, you know six, eight hours to respond. Where we had that set up systems, where the turnaround was like minutes, and so we were capturing it.
Speaker 1
19:51
Oh, it was taking so long, so fast.
Speaker 2
19:53
Yeah, it was capturing it fast, scheduling it fast and so and just being very, very creative in regards to attracting that quality individual too. So we had to even change kind of our whole platform that we kind of had to work with. We actually brought a lot of our advertising in-house, so we had involved more control. But again, that was a negative but it has now helped our business significantly because we’ve had to change and pivot. Now our vacancy is pretty much almost non-existent, it’s like, and that’s across the board, and so we know that we’ve done the right things. But a stirring times of challenge is when very unique ideas and creativity really starts to kind of come in. And this is one bit of advice I can give to people, especially during right now, is, you know, be proactive, and all of the negativity that may be happening right now.
Speaker 1
20:43
Yeah, no, I think that’s perfect and, on that note, we’re just going to stop for a really brief break from our sponsors and we’ll be right back. 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 bootcamp 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.
Speaker 3
21:37
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Speaker 1
22:22
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 throughout this entire process. Our homes are where we eat, sleep, relax and play. My clients’ best interests are at the heart of everything I do 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 want to help you fulfill your goal of home ownership and become your trusted real estate resource for life. I can’t wait to share my passion for real estate with you. More importantly, to find you the perfect house to turn into your home.
23:17
Looking to buy, sell or invest in Durham Region or Toronto? Let’s chat. Hey everybody. Welcome back to Inspire to Invest. I have Michael Conte here from Savvy Investor and Prosperity Investments. He’s talking about his journey as a real estate investor over the past 20 years, and we’re obviously talking about the challenges and obstacles that you faced, not only in 2008, but also in 2016. What I want to know as well is what are you most proud of? So what would you define as maybe one of your biggest successes?
Speaker 2
23:44
Yeah, and it’s not going to have to do anything with real estate. Actually, I think I’m going to shock you, that’s perfectly okay. Yeah, so honestly with the success, well, I shouldn’t say that has nothing to do with real estate.
23:53
It actually has everything to do with real estate, but one of my goals and what I first wanted to get into real estate is you know, everybody hears about understanding your why. It’s a little cliche about there, but at the end of the day, it’s the truth, and for me it was about spending time with my family. That was the most important part for me, you know be able to drive my kids to school, pick them up, go to their activities. I want to be more involved in their day-to-day stuff. That was my, that was the priority and for me, that was my success.
24:23
And being able to break away, run it as a business and be able to do the things that I wanted to do is free up my time. No, don’t get me wrong, I work hard, but I choose my hours. I don’t have to be forced to do whatever I want and, honestly, that is my biggest success. And you know it’s very rewarding. You know and I’ve done lots of trips before, but not to an extent like we did last year we’re in Portugal for almost a month and so, with that being said, it was, it was kind of a test. In a lot of ways, it’s like you really want to test your systems. Let’s see how it goes right. Is you walk away and then you let your team do it and you know you’re dealing with almost a significant, almost a 12 hour time change it was. You know, I’m waking up, they’re going to bed. They’re going to bed, we’re waking up.
Speaker 1
25:07
You know those are actually the patients that I like the most, because I actually had my own business for 18 years and I kind of liked not being accessible. So I got married in Thailand, for example, has gone for a month, so when they were. You know I’m waking up, they’re going to sleep so you can kind of check your emails and know that nobody’s going to email you all day long. But it was the biggest test to know that my business is actually running without me. You know it’s still check in. I would still have to like hit accept to process payroll and stuff like that, but I think it’s definitely like the best indication of the strength of your business 100%, but that, exactly to your point is, like you know, it’s one of those things.
Speaker 2
25:40
I really enjoyed that holiday for exactly the things that you did you references because, you know what? It’s simple like checkpoints. You know I would check early in the morning at the end and the E or late in the afternoon boom, boom.
25:53
And that was the end of it. They, everybody knew exactly where I was. There was nothing urgent. They all knew systemization, what they needed to do. They all had a specific authorization to approve things that needed to be done. It was really, really simple. So the only thing that was being you know that they would bug me for is anything maybe significant, which there was very little at that point in time. But you know that that really bolts well to kind of what you know when we talk about real estate, investing and trying to create a little bit of and I don’t know if I really like the term financial freedom.
Speaker 1
26:23
Yeah.
Speaker 2
26:24
But it’s really.
Speaker 1
26:25
I mean I had another question, but we’re talking about it now, so we’ll just kind of go through it. It’s just sure. It’s not like someone necessarily wants to be a landlord so badly or like just for what it is. It’s more of the things that come along with it, whether that’s your return on time, the flexibility like it’s, all of those just things that can change your life, just based on the fact that it’s on your own terms.
Speaker 2
26:45
Then that’s the truth of it, right, and that’s honestly the truth, and we got to be. You got to be really clear. This is still a business. I don’t. I don’t like the term passive investor. The only way you’re a passive investor is if you’re one of my partners, but truthfully, as a real estate investor, you are running a business, so don’t nope, it’s always comes back here, right, it falls right here.
27:05
But once you’ve got the right systems in place, you’re not necessarily needing to work 40 to 60 hours, maybe it’s like 10, right, but it takes time to kind of get to that specific level. And you know I’m kind of, at that stage right now, been doing this as long as I’ve been doing it, for you know We’ve got all the right systems, things are working out accordingly, you know. And so, with that being said, I’ve learned so much over, like, challenging time. Now you look at what’s kind of happening now. It’s like, oh well, just another one, just another day in the game of real estate investing, right. And so what did we do back then? Let’s do that all over again, right, and it’s kind of just what it is. But honestly, you know, we’re kind of. You know my kids are now graduated high school, going university and stuff it. It’s, it’s. It’s quite rewarding now that, all of a sudden, that time freedom is becoming much more pronounced and it’s given us so much more flexibility in our lives, and that’s what we’ve all worked so hard for to get to that specific point. So that is truly one of my success stories, is that and, like I said, don’t get me wrong I’ve had a lot of success stories in my real estate journey, but for the biggest one, that’s it.
28:11
It’s it’s the time back or not. It’s the time to do the things that I kind of want to do. I can, you know, go on a podcast, like right now, and not necessarily need to worry about it, you know it’s, it’s all of that stuff that really comes along. That’s why I got into it in the first place, and and then it’s just come into fruition, which is wonderful, right?
Speaker 1
28:30
So that makes perfect sense to me. So I guess, just going back to you, know your journey over the last 20 years. What would you say is the craziest thing that’s happened? I know you talked about you know some of these economic impacts but when you look at actually you know the nitty gritty stuff.
Speaker 2
28:45
Is there anything? Yeah, there is. There’s probably the biggest one, it’s still. It still haunts me Back in my early, early days like now. Now I just I just kind of brushed stuff off, but it was probably earlier on and this probably will resonate with a lot of people now. Nothing surprises me, but when I first started you’re just like you know, you’re living in kind of la la land, you’re just like yeah, I’m an investment property.
29:11
There’s gonna be cash flow tenants, they’re gonna take care of it, it’s all yeah, and I’ve shared this story before with lots of other people. So again, if you hear it again, you can hear one more time. But it’s but this is my big shocking one, so it was kind of my. I think it was my second or third property. I wish I can remember which one it was. You know, hired a property manager, brought this person on and I thought he was gonna be good and all this stuff like that. The property was in Edmonton. I’m based in Vancouver and guess what? Everything seemed tickety-boo, everything was great. You know, it’s just like rents coming in every single month. It’s just like money’s going in my pocket stuff, and I didn’t go out to see the property for about probably a little bit over a year and a half I’ve been out that mentioned in a long time. I had no real need to because, you know, I just didn’t need to. Everything seemed to be working great.
29:58
Yeah and Made the trip, got out there, I’m like you know, property manager, I want to go see all of our properties. Let’s do quick inspection of everything and see, see what happens, right? And so walked into our first property of the day and Knocked on the door and introduced myself I’m the owner of the property, pleasure to meet you. And I knew trouble was up front when the property manager introduced himself for the first time to the tenant as well and I’m like, okay, that’s really odd. So. But then as they opened the door is like an absolute punch in the face, like just pow, like this.
30:36
The smell that was coming out of this house was I can’t even describe, yeah, so if you can imagine An episode of hoarders, that was pretty much it right. And so it was Absolutely closed and stopped everywhere. It was an absolute disaster. And so you kind of walking through the unit and in disgust, and then, but you know you, just you couldn’t pinpoint where that smell was coming from. And this was just a small little town how it’s tiny little thing. And we went down to the basement and all of a sudden everything became clear and they were running a puppy mill at the basement of this townhouse, right, but the damage that was there was just absolutely significant. So literally at the moment we walked out the door, I fired the property manager instantly, absolutely instantly, and you know I come back, you know, after I kind of cool down after a little while. I, you know it really wasn’t his fault, it is his fault.
Speaker 1
31:36
Yeah but the real expectation for him to go by the property. Like was he supposed to be doing spot checks? Like monthly, quarterly, like Well, here we go.
Speaker 2
31:45
So this is the lesson learned. Like you know, I take responsibility for this. It was actually my fault that the situation happened. Number one I wasn’t actually out there doing inspections of the property on a more consistent basis, so that’s my fault. But at the same time, I wasn’t holding my team accountable for the things that needed to be done. At the very least, they should be seeing their properties every six months. So you know, like I said it, has there been situations of other challenges that maybe were worse than that? Yeah, there is. I’ve learned a lot of stuff.
32:12
That’s why I’m not just gonna surprises me, but the most memorable was something like that, and the biggest reason why I say that is you have to manage your team and you got to take ownership of everything that you’re referencing. So you know, it was a big aha moment of this business that we call real estate investing, and the key word is business. And so, with that being said, you’ve got a team, you’ve got a group of individuals that are supposed to help manage this on your behalf. You got to make sure you’re holding them accountable, but you got to also be accountable as well to the asset there by making sure you’re doing your spot checks on an ongoing basis. So that was a big lesson. Like I said, the lesson in that one was probably about $20,000.
Speaker 1
32:53
Like in regards to damage Did you a bit of a tenant right after that, after you saw it. Or like what was your next step beyond that?
Speaker 2
33:00
Yeah, so that happened pretty much immediately too. So we evicted the tenant and we just kind of went with a pet policy right off the bat and just overall damages and just based on the market that we ran we had lots of bucks at the door, yeah, this panel, unless we want to start charging pet fees of an extra 50 bucks a month.
33:15
But it was, it was, it’s kind of a done deal right. And so that was a big lesson, because you know what. We could have caught a lot of this stuff earlier on. And again it goes back to systemization. It was a lesson that I learned and it just improves the way we do things now much more proficiently.
33:31
So now, even when we go and get a new property or buy a new property or bring in a new tenant, the inspection doesn’t wait. So if they move in today, the inspection doesn’t happen six months later. It actually happens roughly around two and a half to three months. Because you know what. You can start to see a pattern starting to kind of occur earlier on and you can catch it really, really quickly and we communicate to the tenants. So if they’re wanting to like in advance and say listen, just so you know we’ll be doing inspections on a regular basis and just to catch that. So tenants don’t like that in a lot of ways, because problematic tenants don’t like that, I should say that okay. So anyway, that was kind of a big lesson. A more most memorable lesson How’s that?
Speaker 1
34:12
Yeah, I can understand that. It’s nothing like a smell to really like take you into something Totally totally. So, obviously you built a pretty substantial portfolio through different partnerships and stuff like that. What would you say is next for you Like, do you have a plan to grow your portfolio to a certain size or go into, like a different market or anything like that?
Speaker 2
34:31
Yeah, absolutely, and kind of a combination of both. I don’t really like the door count for anything For me. I love the game. Now I’m kind of at a point where it’s not such a you know, I’m not needing to buy 100 doors a day or whatever. You know, some people are very ambitious in regards to owning a million doors. I wish them all the best. To be honest with you, I like my life nice and simple, to be frank, and so for me, it’s about finding the right deal that makes the most fundamental sense, and it’s not a deal, and I don’t need to be buying a deal tomorrow.
34:59
But, I am very, very picky in the deals that I’m positioning now, and so if it doesn’t make our partner’s money and I’m gonna be a little bit selfish me money I’m not doing it. It’s that easy. I just don’t have the time and energy to focus on stuff that is just not gonna work based on some key criteria that we tend to look at. So right now, we are expanding, we are continuing to grow. I don’t ever see that changing. We’ve got properties that we’ll be selling. We got properties that we’re gonna be buying. We’re kind of at that stage where we’re doing some rotation I’ve been doing this a long time too where we kind of repurpose a lot of the cash and capital that we have from our existing partners out there. So it works really, really well. And then, in regards to some different markets, yeah, like for us, believe it or not, we are very bullish in Calgary and Edmonton. Those are the two markets.
35:48
We’ve been in that market and those markets for a long time, but we like seeing the trends that we’re seeing there. It’s crazy because we haven’t seen some of this stuff in a very, very long time. That’s that one. Secondly, and I haven’t really shared this, this is maybe the first time I’m actually sharing this, but, yeah, we are maybe looking at expanding and looking at different markets completely, and that’s actually in Europe, in Portugal, is actually one of our first spots.
36:11
I am Portuguese so, with that being said, I’m just waiting for my dual citizenship to hit, but once I do, part of kind of our long-term plan where we, at some point in time, will be able to, instead of snow burning down to Arizona or Florida yeah, a little Portugal. I think I like Europe a little bit better, and that’s just me, right and so that’s kind of part of our plan is that we would like to start kind of maybe snow burning there for six months and then going back and forth and being able to manage our business. Equally. Obviously, we got home base here is with our family and stuff like that, but part of our vision for our life is to do a lot more traveling and so, with that being said, having kind of a portfolio or at least getting started out that way too also gives us an opportunity to be much more visible to other markets other than just here in North America.
Speaker 1
37:01
Yeah, no, I love that. Now, obviously, the name of the podcast is inspired to invest, so are there any quotes that really motivate or inspire you?
Speaker 2
37:10
Yeah, great one actually, and it’s one okay. I actually have it on my phone and gonna sound kind of strange, but I’ll just read it Stop playing small, show up and be seen. And that may sound like it’s a business quote, and it can be, but when the reference is stop playing small and showing up and being seen, it’s in everything in your life, and so to me, that where it resonates is be present, be big in everything that you do, anything that you have your heart associated with this, be big in your approach to this and be seen. Be visible to that, be visible to your family, be visible to your colleagues, be visible to your peers, be visible to your friends. That, to me, was a big one. And then, obviously, from a business perspective, believe in yourself and, at the same time, just continue to grow and do the things that you want, so that one’s always. That’s one that stayed with me for literally years. It’s literally on my homepage, on my phone, and it’s just about constantly trying to be visible out there in all aspects of your life.
Speaker 1
38:15
Yeah no, I love that. Now, is there anything in particular that you wanted to leave with anyone that could be watching or listening right now?
Speaker 2
38:22
Sure, I think for a lot of people is you know what for the challenges that we’re. A lot of people are facing right now. Honestly, this is just yet part of the cycle and it really really is. This is myself talking, and if you talk to a lot of people that have been doing this a long, long time been there, done that, they’ve seen this stuff before the important part is you guys. Well, everybody will get through this. It’s gonna. It might be having some challenges, but more importantly is just take the time to look for options.
38:51
Talk to people, engage with other people that have been doing this a long time. Educate yourself, like even this podcast as well that Serena’s put together. I’m sure she’s had some amazing guest speakers to share some of their words of wisdom to help support them. But the more knowledge you can get, the more advice, the more engagement, the more involved you get in your business. It will help you go through some of these turbulent times and more importantly is stay this as you stay the course and continue to go forward, it will help the way you manage your business moving forward and it will help you be much more successful over the long term. I can’t tell you all the challenging times that I’ve had to go through over my career as a real estate investor. It was during those times of challenges where the leap was so significant after the fact, and I’m treating this exactly the same way. So I wish you guys all the success in the world, and more importantly is just work really, really hard, stay positive and keep pushing forward. You’ll get through this, so okay.
Speaker 1
39:50
Awesome. I love that and thank you so much for taking time out of your day to be here. Of course, for anyone that has enjoyed this episode, please make sure that you like, comment and subscribe, and if you are tuning in via audio, please make sure that you leave a review as well. You can follow along on Instagram at inspire to invest podcast for lots of free promotion, inspiration and takeaways and, of course, remember above all else, when you invest in yourself, the sky’s the limit. Thanks again to Fluent Capital for bringing you this episode of inspire 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 hosting guests featured on inspire 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.