Get Real Wealthy

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about four steps on hiring a general contractor for your rental property renovation.

Quentin says that it's really important to have a great general contractor and there are some tips and tricks that can save your time and money. The difference between hiring a general contractor and doing it yourself is time. Usually, you have to give up a lot of time in order to do a good job at a renovation. If you are giving up your time, then you are saving money. If you want to have more time however, you hire a general contractor, and they manage all the subcontractors like plumbers, electricians, carpenters, etc. He adds that there is a downside of undertaking the renovations yourself, and not going with the professionals. He says that one of the ways to find better general contractor is by talking to other investors and getting referrals. Quentin further adds “I would also ask a contractor to give me a referral from another investor. And then that way, I can talk to that investor and find out how they work with that person.”

Second step is to inquire them about the nature of their insurance. Do they have WSIB coverage? Do they have any type of insurance that you can verify? Step number three is to get everything in writing. This will help you keep things smooth throughout the process and save you from any misunderstandings. If they need to negotiate something with you that that's up to you, but get it in writing. Step number four is to make sure you're reviewing the work that is being done. Don't completely pay for anything until you've actually gone on site and reviewed the work, or you've had a very trusted employee, advisor or property manager to go in and inspect the work, someone who has done inspections in the past.

In conclusion, Quentin says that these tips can help the renovation process smooth and stress free for you while building a relationship with the contractor for future projects.

Important Links and Resources

• QuentinDSouza.com - Free 15 Min Discovery Call

https://www.instagram.com/qmanrei

• [email protected]

• https://EducationREI.ca

• https://GetRealWealthy.com

• https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about the purchase plus improvement mortgage.

Quentin says that this is a mortgage that you would use for the buy, fix refinance, and rent strategy or the BRRR strategy. He has highlighted this strategy in his book The Ultimate Wealth Strategy. This way, you're able to get a mortgage and get the funds for the renovation from the same bank. There are lots of banks that do this, or talk to your mobile mortgage specialist to see the options that are available for you. He says that there are a few things that you need to keep in mind. First, you need to define what the renovations are and get quotes in writing from contractors. Number two, you close on the property, and usually, you try to get the work done within like six months.

Once you close on the property, and you've completed the renovations, you're going to inform the lender that you have completed the renovations, the lender may send in somebody to see that you've done the renovations, and then they are going to give you that whole back of that additional money that they're holding back for the renovations to cover your cost on the renovation. As an investor, it's a great tool to add to your toolbox.

In conclusion, he says that there are different ways to look at it, depending on how efficient you can be, but the purchase plus improvement mortgage is a great mortgage for doing the BRRR strategy.

Important Links and Resources

• The Ultimate Wealth Strategy

• https://www.instagram.com/qmanrei

• [email protected]

• https://EducationREI.ca

• https://GetRealWealthy.com

• https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about six numbers that you should look at when you're deciding to invest in a new area.

Quentin says that it is important to look at this specific information so that you can evaluate its potential for investing and the value of the properties in the future. The first thing to look at is demographics. Look at the age of the population, are they working in the area or are they commuting to somewhere else to work? In the end, you want to be in an area that's in demand, with a growing population. Secondly, you need to look at the employment statistics. Is there a diversity of employers when you look at the census data? He adds “I would avoid towns that have only one major employer, a good example would be like a mining town.” Additionally, areas with multiple schools, universities, or colleges are also good spots to consider.

Number three, he says, is to look at what's happening to the population growth. Are people moving there? Number four, you want to see infrastructure. What projects are being built in the area? Are there new highways? Is there transit? What are the government initiatives in the area like an immigrant center? This means that the government is trying to push people to that area. He further adds that in such areas, what you find is a lot of demand for rentals and then a lot of demand for newer single-family or newer homes small, starter homes for families.

Number five is to look at the average income of the area and do you have income that's above average. Lastly, number six is to look at what is being built in the area. Are you seeing large swaths of land with houses being developed? Or are there large apartment buildings being developed? The rampant development of apartments can impact both the demand and the prices of rental properties. In conclusion, he says that these are some of the things to keep in mind when you are looking to invest in new areas to help you make informed decisions.

Important Links and Resources

• https://www.instagram.com/qmanrei

• [email protected]

• https://EducationREI.ca

• https://GetRealWealthy.com

• https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about five things you should know when borrowing to invest in real estate.

Quentin says that these invaluable strategies are mentioned in detail in the book The Ultimate Wealth Strategies. He says that the first thing to keep in mind is that you can’t save yourself to financial freedom. Budgeting is important to learn so that you don’t overspend your income. While it's important to save some on the side, to help you to invest especially at the beginning, but if you want financial freedom, just putting money in the bank isn't going to do it. You will have to understand the power of leverage. He adds “Well, let's say you are going to invest in something... So are you going to get an annual rate of return on that asset, when you invest in it, I'll give you an example. I buy a rental property, and I buy it for $500,000. I have a mortgage on it for $420,000, I have $80,000 invested in that property, that property, remember is leveraged.”

What usually happens in real estate is that property goes up 5% to 20% or even more in a year. So that 5% is what you have made on the property through appreciation. Now, on top of that, your mortgage went down. If you improve the property in some way, you are adding additional equity and that increases the rate of return. So you need to understand that rate of return. He adds “if you are working with an accountant, and I suggest you do, you can also reduce any income that you get from your rental properties by using capital cost allowance. So it's a way to reduce your taxes.” It is something to keep in mind when you are starting your real estate investing journey.

Secondly, Quentin says that you need to think about when borrowing to invest in real estate is the interest rate. Are you getting a fixed rate or a variable rate? What is the term? What are the type of terms that you are getting within your mortgage, and what are the penalties? Are you able to put a second behind the first mortgage? What kind of flexibility do you have on it to refinance? All of those aspects need to be considered. Thirdly, how long are you going to hold on to the asset? If you need the money, be careful, because that may force you to sell an asset that you don't necessarily want to sell. So make sure that you understand when you're buying an asset and how long you plan to hold that asset. Be careful not to over-leverage yourself into a position where you're forced to sell that asset.

Next, does the property itself support the payments or do you have to come out of pocket to pay that loan or mortgage? It's really important when you're thinking about leverage, and when you're borrowing to invest in real estate. Lastly, it's the mindset – are you able to tolerate the ups and downs when it comes to the residential market? He adds “you're going to recover in the future as long as your payments are fixed, and you're not in a variable rate product, or you're in a product that is going to get you into trouble, that you're comfortable with that. So just make sure that whatever your mortgage payments are, they're able to cover it.”

In conclusion, he says that it's important to have the right mindset. By these tips in mind, you can navigate the roller coaster ride of real estate investing.

Important Links and Resources

• The Ultimate Wealth Strategy Book

• https://www.instagram.com/qmanrei

• [email protected]

• https://EducationREI.ca

• https://GetRealWealthy.com

• https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about the challenges of purchasing multifamily properties.

Quentin says that when you buy distressed multifamily assets, the benefit that comes with repositioning that asset is that you're buying a property, as the value is based on the net operating income and the current cap rate. This means that when you're buying a property, there is value that you can create by increasing rents,  increasing the quality of the building, and therefore increasing the value of the building. So, there are a few challenges and things that you need to be aware of when purchasing multifamily properties. Oftentimes, you'll find that there are unexpected arrears that happen when it comes to a residential property. The way to mitigate that risk is by having a good reserve fund. So when you're buying a property, you want to have enough funds in the bank to cover at least three months of all your expenses, if not more for an apartment building.

Secondly, expect tenant troubles. It's going to take time to get to know the building, understand the different tenants that are in there, and the type of issues that come up when you are taking over a building. Your property manager or you will have to learn how to deal with them. Number three is to dig deep into the mechanicals of the building and the roof system. Those are some of your bigger expenses and structures. The number four thing to watch out for is keys. Sometimes you'll find that you get to a building, and you may have the keys for the units, but not the keys for the washing machine, the dryer, the elevator, the electrical room, and the electrical panels sometimes have locked locks on them. So, when you're going through your building condition report, you should locate where all of the keys are.

In conclusion, he says that these are the challenges with purchasing multifamily properties or just acquiring multifamily properties that you need to be mindful of to make your experience smooth and easy.

Important Links and Resources

·    https://www.instagram.com/qmanrei 

·   [email protected]

·        https://EducationREI.ca

·        https://GetRealWealthy.com

·        https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about the differences between getting a residential mortgage and a commercial mortgage loan.

Quentin says that when you are getting mortgages for your rental properties, they're going to look at the debt coverage ratio on the actual rents that you get, your income, credit history, tax records from the last few years, etc. So, in the residential space, it involves a lot of paperwork. Commercial properties on the other hand are very different, as you would get a mortgage on commercial property because it is a business. They look at whether the building supports the loan on the property or not. If it does, they'll give you a mortgage based on how much that building can support. If you're looking at a conventional lender, like a regular bank, they can give you a loan, perhaps with a debt coverage ratio of 1.1, based on the net operating income of the building. Commercial loan-to-value ratios generally fall into the 65% to 80% range.

These lenders would look at things like your credit report, net worth, etc. As different lenders have their own criteria, you should consult with your banker or mortgage broker. He adds that typically, the building takes priority in commercial, and in residential, it's the person that takes priority. In conclusion, he says that depending on what you're doing – commercial or residential, it's going to depend on either the building or more on you, depending on the type of mortgage that you're getting.

Important Links and Resources

·https://www.instagram.com/qmanrei 

·[email protected]

·https://EducationREI.ca

· https://GetRealWealthy.com

·  https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about the importance of building a real estate power team.

Quentin says that it's important to build the best power team possible based on your current position, and there are seven members you need to have on your team. The first ones are realtors and brokers. The second ones are lawyers and paralegals, and the third ones are bankers and mortgage brokers. The fourth ones are home inspectors. the fifth ones are appraisers and the sixth one are the environmental companies for phase one and phase two. Lastly, there are insurance brokers. Quentin adds that realtors and brokers change depending on the type of properties you're buying. He adds “I don't suggest that you use a real estate broker who does one to four-unit properties in the five plus unit range. Because the type of contracts they use, and the due diligence that you do is very different.”

Secondly, we have lawyers. Quentin says that you need to do is find lawyers that will work with you on your level. Furthermore, the lawyers dealing with residential are going to be different from the lawyers who are dealing with commercial properties. As for mortgage brokers, the same rule is valid. In the residential space, there are mobile mortgage specialists who work specifically at a bank. For commercial, you want to find a firm that specifically works on commercial properties. The next ones are the home inspectors. They are people that will help you identify issues with the property, in one to four-unit spaces. As for commercial properties, you need a building condition report, which requires an inspection company. The next member of your power team is an appraiser. Similarly, they vary depending on the residential or commercial space. Oftentimes, the process in commercial is longer than an appraisal in residential, so you need a company that can quickly carry out the project. 

The next power team member is an environmental company that can do a Phase I Environmental Site Assessment, to see if there are any environmental conditions in the property that will require you to do some remediation. Lastly, we have the insurance broker or insurance agent, who is going to help you reduce your net operating income and give you the best coverage possible for your apartment buildings. You want to work with somebody who has specific experience doing rental properties. In conclusion, he says that having these power members on your team can greatly help you in your real estate investing career. 

Important Links and Resources

• https://www.instagram.com/qmanrei  
• [email protected] 
• https://EducationREI.ca
• https://GetRealWealthy.com
• https://DurhamREI.ca

In this episode of Get Real Wealthy Season 2, Quentin talks about how you can make a great ad for your rental properties. 

Quentin says that these are some of the tips mentioned in The Filling Vacancies Toolbox book, which is a step-by-step guide for Real Estate investors and landlords for renting out residential real estate. He says that a great ad is important because if you don't get people into your rental units to actually take a look at them, you're not going to rent them out. The first thing you can think about is, what you see first, when you come to the website, because the days of newspaper ads are gone, and offline marketing is now limited to options like student rentals, etc. So, in an online ad, the first thing that people see is the title. The title needs to be compelling and grab the attention of the reader and make them want to click on the link.

He further adds “Now, the great thing about online is that you have an infinite amount of space, you don't have to be overly descriptive, but be descriptive, help the tenant to visualize the property, what are the aspects of the property that really make it unique and different.” Quentin says that the key here is to focus on benefits and not features. Describe the actual benefits of the area like schools, parks, malls, etc. You should also be upfront with rent numbers, and any additional utilities and or maintenance agreements or anything like that on the rental ad.

Furthermore, you should have images of the property that highlight the mentioned benefits. He adds “add lots of pictures to be to be able to show what the unit looks like show the best features.” Lastly, you should clearly mention how they can contact and reach out to you. Some apps can help you with answering FAQs as well. In conclusion, he says that these are a few of the tips that can help you make great rental ads, and if you want more tools like this, you should check out the book The Filling Vacancies Toolbox on Amazon. 

Important Links and Resources

• The Filling Vacancies Toolbox
• https://www.instagram.com/qmanrei  
• [email protected] 
• https://EducationREI.ca
• https://GetRealWealthy.com
• https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin tries to demystify the differences between what's happening in the residential market and the commercial market.

Quentin says that in the residential market, you have one to four-unit properties, and they are based on what's called the comparative model. For instance, if the house next door from you sells for $700,000, your house is most likely close to the value of $700,000. He adds that in the current market across Canada, we're seeing differences. He adds “let's use the GTA, for example, and where we're seeing is a 20 to 25% decrease in prices over the last few months. Now, you always have to ask compared to what. So if you compare that price drop to the beginning of January, or let's say March this year, you see that 20 or 25% drop, if you compare that between this year and last year, you see a slight increase.”

He says that what's happening now is there's a lot of supply on the market versus demand. Now, the commercial market is very different. The way that you evaluate a commercial portfolio is based on the net operating income, and the net operating income is your income minus your expenses. Then you divide that by the cap rate, and the cap rate hasn't changed much in the last year, but there have been slight variations. He further adds that if you're a new apartment building investor you may overpay for something just to own it, whereas an experienced operator selling an apartment building would just pull it off the market if they're not willing to sell it at a particular price.

Quentin says that the competition is very different between one to four residential, and multifamily apartment buildings. He concludes by adding “You're buying a business when you're buying commercial property, whereas when you're buying a one to four-unit property, and you are an investor, you treat it like a business, but it is evaluated very differently.”

Important Links and Resources

• https://www.instagram.com/qmanrei  
• [email protected] 
• https://EducationREI.ca
• https://GetRealWealthy.com
• https://DurhamREI.ca

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about five mortgage traps real estate investors face and how to avoid them.

Quentin says that the first trap is a fixed closed mortgage with a five-year timeframe. You may get lower interest rates, but you will have problems accessing equity. Secondly, with a fixed closed mortgage, you will have a large prepayment penalty a large prepayment penalty if you want to break that mortgage after a year or two. He adds “lowest rate isn't what real estate investors should be looking at.” The next mortgage trap is buying insurance on your mortgages. With insurance on a mortgage, where the mortgage amount is actually declining, you're paying insurance at a higher rate for a declining coverage over time. Quentin suggests “get a term life insurance policy that would cover you for the same amount of the mortgage, and then you're covered off in the same way.”

Number four is trap equity and the inability to access that equity. If you have a fixed closed mortgage with a five-year timeframe, your equity will be trapped. You will have to pay higher amounts to untrap that equity. Instead of being able to refinance the property with the same lender, you'll probably have to get a second mortgage with a private lender at a steeper rate. Lastly, as a real estate investor, building a portfolio and not the lowest rate should be on your mind if you want to succeed as a real estate investor.

In conclusion, Quentin adds “if you think of mortgage brokers … and lenders that are out there, those ones that look at you from your goals, versus just qualifying on the next property is the type of mortgage broker or lender or mortgage agent that you want to work with.”

Important Links and Resources

• https://www.instagram.com/qmanrei

• [email protected]

• https://EducationREI.ca

• https://GetRealWealthy.com

• https://DurhamREI.ca