In this weeks episode we discuss working with partners and scaling through joint ventures or syndications. When you're managing other people's money, you’re not just managing dollars and cents; you’re managing trust, expectations, and relationships. Mismanagement of these can lead to more than just financial losses—it can harm your reputation, which is essential for long-term success in the investment world.

For someone hesitant about scaling or taking on partners, here are some key takeaways from the insights shared:

Advantages of Raising Capital and Partnering:

Accelerated Growth: Leveraging other people’s money allows you to take on larger or more projects simultaneously, which would be slower or impossible with just your resources.

Diversification: You can invest in varied opportunities, reducing risk concentration on one market or property type.

Network Benefits: Collaborating with experienced partners often leads to insights, strategies, and connections you might not have otherwise.

Skill Development: Raising capital teaches invaluable business skills that transcend real estate, such as negotiation, presentation, and financial acumen.

Challenges to Be Aware Of:

Increased Accountability: When dealing with investors, every decision carries added scrutiny. Clear and consistent communication is a must.

Emotional Burden: Handling someone else's capital comes with pressure, as their financial outcomes may impact their personal lives.

Relationship Dynamics: Partnerships can become complex, particularly with friends or family. Setting clear boundaries and agreements is critical.

Risk of Over-Leveraging: Scaling too fast without a solid foundation can lead to operational or financial strain.

Tips for New Investors Considering Raising Capital:

Start Small: Begin with family and friends who trust you but still approach them with a professional pitch and clear investment plan.

Build Credibility: Demonstrate competence through smaller, successful projects to earn the confidence of future partners.

Learn the Rules: Understand legal frameworks, especially securities laws, to avoid unintentional violations.

Get Educated: Focus on honing your knowledge of market analysis, deal structuring, and risk assessment.

Partner Strategically: If you're new, align with experienced investors to learn while minimizing your risks.

For those who choose to go it alone, it's essential to understand that while independence provides control, it can be limiting. Ultimately, the decision between scaling through partnerships or staying solo depends on your goals, resources, and tolerance for complexity. Whether you’re leveraging other people’s money or your own, success comes down to clarity, diligence, and aligning your actions with your long-term vision.

Mathieu Bourgouin, a Canadian real estate investor and agent from Mont-Tremblant, Quebec, started investing in the U.S. in 2014. His journey began in Florida and then expanded to Pittsburgh, including ventures in wholesaling and mobile home parks. He has now transitioned primarily to short-term rental properties in Florida.

• Initial Investments: Mathieu found U.S. properties more affordable than Canadian ones. His first investments were in lower-value properties in Pittsburgh that provided good cash flow but were challenging to refinance due to their low value. As the Pittsburgh market appreciated, he sold many properties and shifted his focus.

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• Transition to Florida: Mathieu moved his investments to Florida, particularly Orlando, capitalizing on the strong year-round demand driven by Disney World and tourism. Short-term rentals appealed to him due to higher returns and fewer tenant-related issues compared to long-term rentals.

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• Investment Strategies:

o He emphasized creative financing methods like seller financing and targeting properties with opportunities for value-add or optimization.

o Mathieu noted the importance of working with realtors to find deals that meet his criteria.

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• Short-Term Rental Tips:

o Focus on properties in tourist-friendly areas with strong zoning for short-term rentals.

o Look for amenities like community pools and recreational facilities that add value.

o Optimize property performance through better marketing, like using custom websites and leveraging tools like Facebook pixels.

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• Operational Insights: The rise of apps and automation tools has made managing short-term rentals much easier, from finding cleaners to managing bookings. This has reduced costs for property management, which can now be as low as 15%.

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• Selling Optimized Properties: Short-term rental properties can be sold as turnkey investments with higher value when optimized for income, appealing to buyers who want passive income without additional setup.

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• Key Lesson: Invest in areas where you enjoy spending time. This ensures a more enjoyable experience if visits for management or oversight are required.

The conversation highlights the evolution of short-term rentals and the importance of adapting strategies to market conditions.

This podcast episode discusses Wendy Russell and Mike Moroz's experience with Canadian investing in U.S. real estate. Here’s a breakdown of key points:

Investment Background: Wendy and Mike started investing in Canada over 25 years ago and expanded into the U.S. in 2010. They’ve invested in various properties, including multifamily homes, single-family homes, and short-term vacation rentals (STRs).

Why They Chose Specific U.S. Markets:

Indianapolis: They began investing in Indianapolis due to a personal connection—Mike's best friend and their godchildren lived there. The affordable housing market was appealing, especially in 2010 when the U.S. housing market was struggling, and the Canadian dollar was favorable.

Savannah, Georgia: They later expanded to Savannah because of Mike's job (he works as the Director of Canadian Operations for a U.S. company with an office in Savannah), which led them to frequently visit. Wendy loved the area, prompting them to invest there.

Personal Connection to Markets: While many real estate experts suggest that investors don’t need a personal connection to the markets they invest in, Wendy and Mike prefer knowing the areas well. Wendy also likes to guide guests to local attractions in their short-term rental properties, and having a strong local presence provides comfort to their partners.

Challenges with Property Managers: They emphasize the importance of having reliable property managers, sharing an experience of a terrible property manager in Indianapolis that almost made them quit investing. They created a thorough vetting process to avoid similar situations.

Investment Strategy in Savannah:

Multiple Rental Strategies: Savannah is attractive because it allows for multiple rental strategies, including long-term rentals, short-term rentals (STVs), and rentals to film crews or corporate clients. The city has a growing film industry and a large student population, which offers a variety of rental opportunities.

Short-Term Rental Regulations: There are restrictions on where short-term rentals can operate in Savannah, limited to three historic districts. Investors must either find properties with existing short-term rental licenses or purchase commercial-zoned properties for new licenses.

Market Selection Considerations: They focus on markets that offer cash flow, especially in the Midwest, where cash flow is stronger than in areas like Ontario, Canada. Savannah, while more expensive, offers diversified rental opportunities, such as film industry rentals, traveling nurses, and student housing, making it a good place to pivot if rental markets shift.

Commercial Properties and Financing: They highlight how they were able to secure residential loans for properties in commercial zones in Savannah, which is a unique opportunity. While commercial properties are typically less favorable for residential investors, Wendy and Mike found a way to make it work, leveraging their knowledge and experience in the U.S. market.

The discussion underscores the importance of local knowledge, a strong team (especially property managers), and diversifying strategies to mitigate risks in real estate investing.

Nathan Payne, shares his experience with virtual wholesaling, emphasizing that it can be done from anywhere, including internationally. He explains the process, noting that the key is solving the seller's problem—whether it's a distressed property or a situation like foreclosure or troublesome tenants.

Here are some key insights from the conversation:

Wholesaling Process: You find a property at a discounted price, often due to a distressed situation, sign a contract to purchase it, then assign the contract to a cash buyer for a fee. The key is to buy at a price that allows for profit when reselling the contract.

Virtual Wholesaling: Nathan successfully wholesales real estate across the U.S., even while living in Canada, showing that wholesaling can be done virtually if you have the right systems in place, such as using texts or email for communication and working with local teams.

Sales and Marketing: Wholesaling is about sales and marketing. You need to generate leads, reach out to sellers, and find a solution to their problem, whether it’s a distressed property or a challenging situation like a non-paying tenant.

Follow-Up and Persistence: Successful wholesaling often requires multiple follow-ups with sellers. It’s not uncommon for deals to take months of consistent communication. On average, at least seven touchpoints are necessary before securing a deal.

Alternative Solutions: If a seller doesn’t accept a cash offer, Nathan suggests other creative strategies such as seller financing, subject-to deals, or listing the property on the open market to find a higher-paying buyer. This flexibility helps close deals that might otherwise be abandoned.

Market Conditions: While hot markets make wholesaling more difficult (as homes sell quickly without needing to discount), a slower market presents more opportunities, though the deals may take longer to close.

Nathan also shares his approach of simplifying the process, advising new wholesalers not to worry about complex systems like CRMs at the beginning. A simple spreadsheet is sufficient to track leads in the early stages.

This week on "A Canadian Investing in the USA Ben Humble shares his journey from being a refugee from Romania to building a successful career in real estate. Key points include:

Background:

Born in Romania, his family fled communism in 1989, eventually settling in Canada.

Initially pursued a music career but shifted to real estate after recognizing the need to secure financial independence.

Real Estate Journey:

Began investing in Canada in 2006, starting with duplexes and scaling aggressively after the 2008 crash.

Bought, sold, and managed over 300 properties in Canada, with strategies like private lending and creative financing.

Transitioned to US real estate during COVID, settling in Scottsdale, Arizona, and expanding into luxury Airbnbs and syndicated investments.

Investment Philosophy:

Emphasizes long-term ownership, targeting $10M+ in assets under management for financial freedom.

Advocates leveraging market cycles: buying during downturns (e.g., 2009 and 2024) to capture equity and selling during upturns.

Highlights creative strategies, like seller financing and partnerships, to maximize opportunities.

Creative Thinking in Real Estate:

Attributes his success to a musician’s creativity, applying innovative solutions to challenges.

Stresses the value of creative problem-solving in real estate, particularly in volatile markets.

Events and Networking:

Promotes hosting events and creating content as tools to build synergy, attract investors, and find deals.

Advocates using platforms like podcasts and conferences to establish authority and grow a network.

Ben believes now is an excellent time to invest, especially for those willing to think strategically and creatively in the current market climate.

Ben Humble

https://www.glensutherland.com/revival/

EP342 The Dos and Donts of Flipping with Danielle Chaisson by Glen Sutherland

Lane Kawaoka shares his journey in real estate investing, which began in 2009 when he bought a home in Seattle while working as an engineer. He soon realized the potential of cash flow by renting out his property and later expanded into buying rental properties in secondary markets like Birmingham, Atlanta, and Indianapolis for better rental value ratios. Initially, he managed single-family homes and experimented with turnkey properties for remote investing. However, as he scaled to 11 properties, he faced issues with tenant turnover and maintenance, prompting a shift toward larger multi-family investments and syndications.

Lane emphasizes investing in landlord-friendly red states and secondary or tertiary markets with strong rent and job growth. Over time, he moved from single-family homes to syndications, which allowed him to connect with higher-net-worth investors and family offices. He advocates building a network once reaching a certain financial level and recommends taking calculated steps rather than waiting for a "big deal" to build momentum in investing. His approach highlights the importance of surrounding oneself with successful peers, saving, and reinvesting as he transitioned from small properties to larger, more scalable investments.

Lane Kawaoka

Here is the mp3s!

https://docs.google.com/document/d/1fwC65sBVMgICTpFkP4kzVZFkHbqi3mfuxTHoetafS7s/edit?usp=sharing

Darcy discusses Halloween horror stories in the context of real estate, particularly focusing on property management challenges. They emphasize the heightened alert around events like Halloween and long weekends due to potential property damage caused by rowdy behavior.

The speaker shares personal experiences, admitting to making poor decisions in managing properties. One story involves hiring a property manager who turned out to be a two-time convicted murderer. Despite initial warnings from colleagues, the speaker, in need of a manager, hired the man who ended up stealing rent money and leaving the property. Darcy details the nerve-wracking experience of firing the dangerous individual, eventually managing to do so without incident.

https://open.spotify.com/show/3YmSVFnxtJZeCeLJvVkpeQ?si=64b0b2c2a93c450c

Darcy White

darcywhite.com

Frederick is a real estate investor who moved to Canada in 2021 and focuses on property investments in both the U.S. and Canada. His investment strategy prioritizes cash flow over appreciation, using a "buy and hold" approach, often involving creative financing like seller financing. He has invested in U.S. markets such as Texas, Michigan, Ohio, and New York, as well as Canadian provinces like Saskatchewan and New Brunswick. Frederick values networking with professionals for reliable contacts. He manages his investments closely, focusing on undervalued properties and adding value through renovations.

• Instagram: fredrickobodozie

• TikTok: frederick.obodozi

• Facebook: fredericknnaemekaobodozie

• X: CoolFreddi

• LinkedIn: frederick-obodozie-tep-a754174a

• Website: www.econovacapital.com

This conversation with Megan highlights the importance of treating real estate investing as a business, emphasizing the need for systems and processes to manage operations efficiently, especially when starting with a smaller portfolio. Here are some key points:

Business Structure: Investors should break their operations into key areas like accounting/finance, operations, sales/marketing, and HR. Setting up systems such as CRMs, project management tools, and SOPS from the start (with 3-5 properties) is much easier than trying to fix things after growing to 35+ properties.

Timing and Organization: Investors are encouraged to focus on systematizing their operations early on. This can involve time-blocking creative activities (e.g., marketing) and standardizing accounting processes (e.g., paying contractors at set times).

First Hires: The typical first hires for real estate businesses include a bookkeeper or a social media specialist. Virtual assistants (VAs) are also valuable, but investors must know what tasks to delegate by creating clear job descriptions and differentiating between high-value and low-value tasks.

Scaling Challenges: As portfolios grow, having software that integrates everything into one system (e.g., HubSpot) is invaluable for efficiency. Many investors resist change if they think their current process works, but organizing early makes scaling smoother and avoids a mess later.

Consulting and Specialization: Specialists, such as a consultant or fractional CFO, can help implement systems and take on specific roles, freeing investors to focus on higher-level strategy rather than day-to-day tasks. Investors can also hire professionals on a short-term or project basis, minimizing long-term costs.

Hiring Strategy: When hiring for specialized software roles or complex tasks, it's better to hire someone with expertise in that area rather than opting for a lower-cost general VA who may need extra time to learn the tools.

The focus is on working on the business rather than getting bogged down in the day-to-day tasks, allowing for more growth and scalability.