Get Real Wealthy

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about alligator properties and how to deal with them as a real estate investor.

Alligator properties are negative cash-flowing properties, and they can seriously hinder your real estate career if you are trying to grow a portfolio of properties. Taking about negative cash flow, he adds “If I buy a condo in downtown Toronto, and I put 80% down, then my condo and my mortgage fee is $2,000, and my condo fees are $500, and my property tax is $300, and my insurance is $100, and my rent is $2,500. I am losing money every month because I have to bring money to the table every month in order to be able to hold on to that asset.”

He says that sometimes what people will suggest you put more money down, but it is not a great strategy. You have to look at what you're investing in, and make sure that they are going to give you both cash flow, and appreciation. Negative cash flowing alligator property is a liability. It's not an asset, and we want assets. You should be able to leverage your properties as much as possible to have positive cash flow and continue to purchase assets because you have positive cash flow.

Quentin adds that when you are investing in a property, you should not be betting on appreciation, and increases in rental income, adding “it's not really an investment if you're putting money into it every month. That's called a liability.” It will also make it harder for you to get mortgages. The bank is going to look at your low debt coverage ratio, they would not want to give you more money. If for every dollar they lent you, you're making $1.20 or $1.30, they are more than likely to be able to give you more properties.

In conclusion, he says that if you're trying to build a portfolio of property, you need to be good with financing, and you can't be buying alligators. What you want to do is find cash flow and appreciation.

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 why Genworth and Canada Guaranty also need to offer multifamily mortgages like CMHC.

In Canada, there are mortgage insurers, who allow people to borrow mortgages at a lower rate because they insure those mortgages. In the residential space, CMHC and private providers Genworth and Canada Guaranty provide these services for one-to-four unit properties. You can borrow funds up to 85% loan to value, 90% loan to value, 95% loan to value depending on your credit score. As for the multifamily space, there is only one lender – CMHC. He adds that they are a money-making machine when it comes to insurance, as defaults in this space are rare.

Quentin says that Genworth and Canada Guaranty need to step into the multifamily mortgages as well. This might prompt CMHC to optimize and expedite their funding process as they would have competition. He adds “So, if you're a candidate guarantee and you're Genworth, I want to see you tell me why you're not in the multifamily space. Why would you give up millions of dollars?” In conclusion, he says that these companies are missing out on millions of dollars, and this is something they should seriously consider.

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 pest problems on an investment property and how you can handle them.

While not a fun subject, Quentin says that taking care of bedbugs is crucial. When looking for signs of bedbugs, first of all, you want to talk to people who are staying there, and ask if they have little bites on their skin, or are there little brown spots on mattresses in different locations. He adds “when this happens, you really need to work with tenants quickly in order to identify what the problem is, solve the problem, you got to take action.” If you have a situation where you see bedbugs, you need to call a professional right away, don't handle stuff yourself, it's not worth it. It also depends on the type of treatment required to rid the property of the bugs.

He adds that sometimes, you deal with tenants that have mental health issues. In such cases, you need to follow through with the forms that are required, through the landlord tenant board in your area so that you can either get the tenant out, get the tenant help, or get the tenant to help you to do what you need to do. Quentin adds that the other challenge is carpenter ants. Ants that you see often on buildings inside buildings, around wet damp wood. They eat the wood, and it can cause serious issues.

If you spot any carpenter ants, you want to look for leaky areas, and moist areas, and work with tenants immediately to solve that because if you have carpenter ants for an extended period of time, it could cause structural issues to a property. In conclusion, he adds that as a real estate investor you need to take action, and perhaps work with a professional to handle bug problems before things get out of hand.

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 key metrics every real estate investor should know about. 

Metrics are a way for you to use tools to identify where you are, and where you're going. Some matrix can help you when you are evaluating a property while others can help you in the investing phase. One of the first things to look at is Cash on Cash Return, which helps you evaluate how much profit you've made in a year. Another key metric that you use in real estate investing is called Cap Rate. The formula for Cap Rate is equal to Net Operating Income (NOI) divided by the current market value of the asset. It depends on three different factors: the condition of the property, the location of the property and interest rates. He adds that if you go to a different area, you may find a different cap rate. It comes in handy when you are trying to identify an opportunity. 

Another key metric that we use is called an Annual Rate of Return. It is the amount earned on an investment over a 12-month period, and is usually expressed as a percentage. He adds that it comes into play when we are refinancing or selling an asset, adding “that usually happens on the sale or refinance of an asset, the shortest time that I've ever been able to do that is a year, the longest time I've been able to do that is four years in an apartment building.” The last metric you should know about is the Internal Rate of Return. Internal rate of return (IRR) is the discount rate at which a project’s returns become equal to its initial investment. It is the percentage of returns that a project will generate within a period to cover its initial investment.

In conclusion, he says that as an investor, you should be familiar with metric such as Cash on Cash Return, Cap Rate, Annual Return, Internal Rate of Return, so that you can make informed and profitable decisions. 

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 using registered funds to lend or borrow as a mortgage.

Quentin says that a lot of people know that registered funds, such as RRSP, RSP, TFSAs, LIRA, can be put in a self directed account and lend those funds as a mortgage and get a fixed amount of return. He further says that it is a great tool to use, “I borrowed hundreds and 1000s, from different people on our projects, and I've lent out hundreds of 1000s to different people through my registered funds…”

Talking about how this works and the things that you need to keep in mind, he says “Number one, it has to be arm's length. Now, arm's length means that it can't be my wife, or anybody that is immediate family.” The second thing is that you will have to use a trustee, adding “keep it in your RSP, but move it to cash inside the RRSP, then transfer the funds into Olympia Trust, into your self-directed account.” When you do that, you never removed the funds out of your registered funds, and that's how you're not going to pay taxes. 

Quentin adds that you should do your research about which company to use as a trustee. Once you have those funds into that account, there are going to be some fees associated with it such as a setup fee and an annual fee. Legal and realter’s fee can also incur if you use them. One of the steps of doing this, he says is getting an appraisal on the property. The only challenge with doing mortgages is the time it takes between when you have a mortgage that's finished and a mortgage that starts.

He says it's really important that you're doing due diligence on the investor who's borrowing the funds and the business plan that they have. you want to see somebody who has a depth of experience, not the person who's just doing this for the very first time, because that may be a warning sign for you. In conclusion, he adds that using registered funds is a great tool for somebody who has money in registered accounts, but is not happy with the stock market.

Important Links and Resources

• https://www.instagram.com/qmanrei  
• [email protected] 
• https://EducationREI.ca
• https://GetRealWealthy.com
• https://DurhamREI.ca
• 15 Minutes Discovery Call - QuentinDsouza.com

Episode Summary

In

this episode of Get Real Wealthy Season 2, Quentin talks about seller financing.

Quentin

says that seller financing

is one of those great tools that you can use in your toolbox to give you some

financing when you need it. The first thing is to understand what seller

financing exactly is. Oftentimes, when you're buying a property, the owner may

have already paid off that property. They don't have a mortgage on that

property, but you need a mortgage on the property. So, you can ask the owner of

the property carry back a mortgage for you, and they can get paid a specific

interest rate.

He

adds that it is also a way for investors to delay paying the capital gains tax

if they do carry back mortgage on the property. A lot of investors already

understand vendor takebacks, so it's easy for them to implement, but you have

to ask the owner. It is a simple clause and a lawyer can help you out with it. .

If you're dealing with a realtor, and you're not going directly to the owner,

your job as an investor is to educate the realtor. You may have to educate them on how to

use this creative financing tool.

He

adds that you can find seller financing on places like MLS listings. You could

have your realtor send you any listings that have seller financing in there.

as long as the numbers work

on the deal, that's the most important part for you as the investor. Another

way you can use seller financing is through private sales.

Lastly,

rental properties and buildings are the key to finding seller financing. In

conclusion, he says that seller financing and creative financing really can

boost your ROI and boost your returns.

Important Links and Resources

• https://www.instagram.com/qmanrei  
• [email protected] 
• https://EducationREI.ca
• https://GetRealWealthy.com
• https://DurhamREI.ca
• 15 Minutes Discovery Call - QuentinDsouza.com

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about talk about appraisals, their importance, and the process involved.

Quentin starts by saying that appraisals are crucial because that is when you get paid or make money as a real estate investor. So, understanding how it works is important. He adds that the three different ways appraisals are figured out include comparative market analysis, the income approach, and the replacement value or cost approach. 

Comparative market analysis is the most commonly used for residential properties between one and four units. It is based on the recent selling prices of similar properties in the same neighborhood. When you can do that with two or three other properties on the same street, that is a comparison between numerous properties in that particular market on that street. 

The income approach is usually what you use for commercial and rental properties, from one to four units to apartment buildings. The value of a property is based on the income it generates. It’s calculated by taking the net operating income, and dividing it by the capitalization rate, the expected rate of return. 

The third approach is slightly different and it is referred to as the replacement value or cost approach. It evaluates what it would cost to rebuild something. Oftentimes, you see this when you're trying to finance that building that doesn't exist yet.

Quentin shares that the members can access his course on EducationREI.ca which can help you get higher appraisals. He adds that the things that you can do to get a higher appraisal include preparing a package for the appraiser to share our own market analysis, two or three comps, a letter of what we've done to improve the property, and sharing a higher value of the property than we expect to get. 

In conclusion, he says that the refinancing process is when you get paid. It can help you recapture funds that you can reinvest in other projects, and all of this is possible with good appraisals. 

Important Links and Resources

• Getting a Higher Appraisal
• https://www.instagram.com/qmanrei  
• [email protected] 
• https://EducationREI.ca
• https://GetRealWealthy.com
• https://DurhamREI.ca
• 15 Minutes Discovery Call - QuentinDsouza.com

Episode Summary

In this episode of Get Real Wealthy Season 2, Quentin talks about talk about doing delegating or dumping part of the weekly plan in The Action Taker's Real Estate Investing Planner.

Quentin says that you need to identify tasks and get them done quickly. That is how you continue to achieve your goals. If you can do this every week, you get things done and you can get them done faster and easier, and you create systems around it. The idea behind doing, delegating, and dumping is identifying something that you need to do now. When you see a task, what are the things that you can get done now? The next thing is to go through the list and delegate. It could be to an employee, contractor, subcontractor, or new team member.

Delegation means that you get rid of that task off your list because you've delegated it to somebody else. The last one is different. Is it really important to have it on this list right now? It's crucial to be able to get the things that you want to do. In order to achieve your goals, there are tools that you can use to help you to do that, and The Action Taker's Real Estate Investing Planner is packed with such tools.

In conclusion, he says that every week, if you do, delegate or dump your activities, you are streamlining your daily process. That's really how you get things done off your list and through your daily and weekly plans.

Important Links and Resources

• The Action Taker's Real Estate Investing Planner

• 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 setting real estate investment goals.

Quentin says that it's important for any real estate investor to have some big goals and you need to connect those goals together. He likes to do 10-year goals, and suggests that you should write them somewhere you could see them every day. It could be a vision board or a chart. He recommends the book, The Action Taker's Real Estate Investing Planner, which will help you with goal setting. The book has plenty of templates and examples to help you get started.

He adds that when you are setting your 10-year goals, you need to start with the reality of your current state. Understand it, so you know where you want to go. Number two, ask the hard question of why. Why do you want to have that particular goal? Whether it's a real estate goal or not, you want to figure it out. He further adds that you can start with just one goal. It's the easiest way to develop weekly, and daily habits that help you to focus on that goal.

Another thing that can help you is telling others and sharing what your goal is. In a like-minded community, people will try to help you reach your goal. Lastly, you should get an accountability partner. They could help you evaluate what you are doing weekly and the action items that you are working on. All you need to do is find another person to act as an accountability partner.

In conclusion, Quentin says that if you are interested in finding an accountability partner, you can reach out to him or the EducationREI and DurhamREI communities.

Important Links and Resources

• The Action Taker's Real Estate Investing Planner

• 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 weighs out the pros and cons of staying or switching your mortgage.

Quentin says that some people think interest rates are the only thing you should look at, but terms are just as important when deciding whether you should stay or switch on a mortgage. Terms and conditions are not limited to the timeframe but also things like prepayment penalties, etc. He adds that another thing to think about is the current rate versus the new rate and what are the potential savings. You also have to look at the interest savings over the mortgage term. So it's not just the interest savings based on the month.

He further adds that you want to know also what the mortgage balance will be at the end of the term with or without switching. This will help you make comparisons. Look at both the cost over the near term and the cost of breaking your mortgage and savings when making that comparison.

In conclusion, he says that there are a lot of factors that you need to take into consideration when you are pondering over the idea of staying or switching your mortgage.

Important Links and Resources

• Free Discovery Call with Quentin

• https://www.instagram.com/qmanrei

• [email protected]

• https://EducationREI.ca

• https://GetRealWealthy.com

• https://DurhamREI.ca