In this episode of A Canadian Investing in the US, we discuss Brooke's transition from investing in Ontario to focusing on other regions and passive investing in the US.

Leaving Ontario for Other Markets

Brooke moved out of Ontario's real estate market due to challenges, including:

Landlord-Tenant Board (LTB): Ongoing disputes and difficulties with enforcement, even when rulings favored landlords.

Poor Cash Flow: High property values and refinancing often erased rental income.

Airbnb Regulations: Changes in short-term rental laws created additional hurdles.

Investing in Alberta and Beyond

Brooke turned to Alberta for better cash flow, though it has become more competitive.

She has also invested in Winnipeg, the US, and Asia:

In Asia, investments were accidental (family-owned properties turned into rentals).

US Passive Investing

Brooke has consistently focused on passive investing in the US, including:

Flips: Initially as an equity partner in Florida, Ohio, and Phoenix.

Private Lending: Provided second mortgages, earning returns of up to 18%.

Limited Partnerships: Transitioned to more secure structures for passive income.

Lessons Learned

Early deals were riskier but provided valuable experience.

Promissory notes: Brooke no longer recommends these due to lack of security and risks in volatile markets.

Preferred methods now involve secured lending (e.g., registered mortgages) to mitigate risks.

Partner experience and deal details are critical in evaluating investment opportunities.

Advice for Passive Investors

Understand the market, the operator, and the deal specifics.

Avoid blindly chasing high returns without assessing risks.

Secure investments (e.g., registered mortgages) provide greater protection.

Continuous learning and due diligence are essential to making better decisions over time.

This podcast interview between Glen Sutherland and Joe Fairless touches on several key insights for those looking to get into real estate investing, particularly through podcasts and attracting investors.

Starting a Podcast: Joe reflects on the importance of starting a podcast to build a brand, even if the beginning is slow. He mentions how a podcast can be a tool to connect with experts and share knowledge. He emphasizes consistency, noting how it took him thousands of episodes to gain traction. His advice to Glenn was to keep pushing through challenges and not give up, as this persistence can eventually lead to success.

Content Sharing: Joe also advises that authenticity is crucial in content creation. He believes in giving value to your audience without holding back, following the philosophy "The secret to living is giving." He believes that providing value creates a sense of abundance and reciprocity, making it easier to build relationships with your audience and potential investors.

Raising Money: When it comes to raising funds, Joe suggests that a podcast or public platform could be an excellent way to attract investors, but it’s crucial to first have a solid business plan and team. He also advises making connections by leveraging personal and professional networks. Instead of targeting the wealthiest individuals, focus on connecting with the "social leaders" within your networks, as they can help bring in additional investors.

Attracting Accredited Investors: Joe defines an accredited investor as someone who meets specific income or net worth thresholds (e.g., $250,000 in annual income or a $1 million net worth, excluding their primary residence). These investors are key when it comes to raising capital for deals like real estate syndications, particularly under a 506(c) offering, which allows the general solicitation of accredited investors.

Real Estate Market Outlook: Despite some concerns about the current market, Joe remains optimistic about purchasing multifamily properties due to the favorable supply-demand dynamic. He advises considering the specific submarkets, but overall, multifamily real estate remains a solid long-term investment, especially when supply is limited and demand remains strong.

In summary, Joe’s approach emphasizes persistence, giving value, and focusing on relationship-building, whether through podcasts or other channels, to attract the right investors for real estate ventures.

Guest: Raheem Madjavi, President of Knightsbridge Foreign Exchange

Topic: Currency Exchange, Interest Rates, and Economic Trends

Key Points Discussed:

1. Knightsbridge FX Overview

o Knightsbridge FX specializes in currency exchange services, offering better rates than banks for buying/selling US dollars.

o It's often cheaper than using traditional banks, but users should shop around.

2. Factors Influencing the Canadian Dollar (CAD)

o The CAD's strength depends on the relative performance of the Canadian and US economies.

o A stronger US economy draws investment, strengthening the US dollar.

o Recent trends:

 Canada is cutting interest rates faster than the US, driving funds into the US.

 Economic uncertainty, such as potential tariffs, creates a risk premium that weakens the CAD.

3. Inflation and Interest Rates

o Lower inflation in Canada allows for more rate cuts to stimulate the economy.

o The US economy remains robust, leading to fewer rate cuts.

o Rate cuts in Canada could continue, potentially weakening the CAD further in the short term.

4. Tariff Concerns and Economic Risks

o Tariffs could severely impact the Canadian economy, pushing the CAD down further.

o If implemented, the CAD could weaken to 1.50 against the USD.

5. Long-Term Outlook for CAD

o Currency fluctuations are cyclical and often tied to resource prices like oil.

o In the next 1–3 years, Canada's economic prospects may improve, stabilizing the CAD.

6. Investment Advice on Currency Timing

o Avoid trying to time the currency market; it’s unpredictable due to global events (e.g., wars, political changes).

o Instead, focus on the fundamentals of your business or investments.

o If an investment makes sense financially, proceed without overanalyzing currency trends.

7. Practical Tips for Investors

o Buy currency only when needed rather than speculating on future rates.

o Accept that currency markets are volatile and plan investments to account for fluctuations.

8. Closing Thoughts

o Stability in currency rates is desirable for investors and businesses.

o Successful investments should generate returns that outweigh short-term currency fluctuations.

o Focus on long-term goals rather than being distracted by market timing.

This episode highlights the importance of understanding macroeconomic factors while emphasizing pragmatic strategies for investors dealing with cross-border transactions.

This podcast highlights a variety of key aspects of real estate investing, particularly the strategic considerations in Alberta compared to Ontario. Here's a summary and analysis:

Why Alberta?

Tenant Laws: Alberta's landlord-tenant regulations are much more favorable compared to Ontario's, where eviction processes can be long and cumbersome.

Market Dynamics: Alberta is perceived as being in a recovery phase, with Edmonton showing significant growth and development activity, presenting opportunities to buy undervalued assets.

Cost of Acquisition: Buildings in Alberta, like the 10-unit purchased for $1.2M, are selling for less than replacement cost, making them attractive for value-add plays.

Potential Boom: Alberta’s efforts to diversify its economy beyond oil, combined with its affordability, create optimism for steady growth.

Ontario Challenges

Tenant Regulations: Ontario's Landlord and Tenant Board (LTB) is often slow, creating frustration for landlords dealing with non-paying tenants or vacant possession.

High Costs and Red Tape: Acquiring properties with value-add potential often requires overcoming steep premiums and bureaucratic hurdles.

Execution on Business Plans

Your approach mirrors the insights shared by Alex's mentor:

Operational Efficiency: Focus on improving Net Operating Income (NOI) through better property management and cost control.

Value-Add: Identifying opportunities to increase a building's value, whether through renovations or operational improvements.

Project Strategies

Flips: Projects in Ontario like Thorold and Haldeman illustrate the ability to transform distressed properties into high-value assets.

Private Lending: Leveraging a strong private money network with a consistent track record of payments allows for efficient financing of projects without partnerships that dilute returns.

Future Trends

Alberta Expansion: A focus on growing portfolios in Alberta aligns with its improving economic and market conditions.

Political Considerations: The province’s direction, supported by strong leadership and economic planning, could significantly impact long-term viability.

This aligns with your philosophy of diversifying investments and finding markets that offer better cash flow and manageable risks. Do you see Alberta fitting into your portfolio strategy, or are you more inclined to continue exploring the US and other Canadian provinces?

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