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Real estate investing in Canada can be confusing. You own your first home, but where do you go from here? How do you build your portfolio and your wealth? The confusion ends here. Quentin DSouza is your host, an award-winning real estate investor and founder ofAppleridge Homes, which started with small single-family homes in 2008 and has grown to large apartment buildings and growing towards 100 million+ in assets under management. On this podcast, you'll learn how to take your high-income, and your first home, andmove into the ultra-rich with our lessons from how Quentin and many others did it withreal estate investing. Connect with Quentin at https://linktr.ee/qmanrei
In this episode of Get Real Wealthy Season 4, Quentin D’Souza talks about how real estate has outperformed other investments over time and why it is a great way to build wealth.
Quentin shares an advertisement from 1973 for a fully detached home in the Toronto area, selling for $16,745. If you wanted carpeting or an attached garage, the cost would increase to $18,275 and $19,495, respectively. A similar home today would sell for $1.3 million, which is 76 times its value in 1973. While the outer shell of the home probably remained the same, the interior was likely updated with $5,000 to $10,000 spent over time.
He adds that the value of the home changed due to lower interest rates, high demand and limited supply, which were caused by governments adding rules, regulations and fees. When compared to other commodities, such as gold and oil, the value of housing has appreciated significantly over the years. Gold has appreciated around 20 times, oil has appreciated around three times, while the dollar itself has seen an appreciation of seven times.
Quentin shares that he prefers investing in real estate for its cash flow and long-term growth potential. Owning an asset base for decades can lead to significant appreciation in value and the creation of wealth. He says that owning an asset base worth a million dollars today, which grows to $2 million in ten years, allows the debt on that asset to go down and increases the equity tremendously. Longevity is key in owning an asset base for a decade or more because it grows in an appreciating market.
Quentin adds that he is growing his portfolio using multifamily apartment buildings, which have a larger asset base and grow over decades. Holding on to that asset base allows the debt to go down, just like the person who bought a house in 1973 for $17,000, whose dollar has gone down by 700% or seven times. That is why he prefers owning a hard asset in real estate to create wealth.
In conclusion, he adds that while it’s tempting to talk about real estate through financial freedom and income, which can be a byproduct of owning a great asset base, the main goal of investing in real estate should be growing your asset base over decades and cash flowing on it every month. By doing that, you can create enormous wealth for yourself and your family.
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In this episode of Get Real Wealthy Season 4, Quentin D'Souza shares the qualities he has observed in successful real estate investors, and what you can learn from them.
Quentin says that successful investors possess certain qualities that he has observed over the years. He has met investors who own one or two investment properties and those who own $300 million in assets. There is a big difference between the two types of investors in terms of growth. He advises that to achieve your goals, you should follow people who have already succeeded in it. If you want to own one or two investment properties, you should seek advice from people who have done so. If you want to grow a real estate empire with $300 million in assets, you need to find those who have already achieved that goal.
Quentin shares that the first quality he has noticed in successful investors is their willingness to never stop learning. Successful investors are always seeking new knowledge and opportunities to grow. They know what they know, but they are aware that there is always room for improvement. The second quality of successful investors is that they do not make excuses. They take responsibility for their actions and admit their mistakes. They do not dwell on past failures but use them as learning opportunities to improve and continue to grow.
The third quality that successful investors possess is their constant effort to improve upon what they have already done. They make slight tweaks or little changes to their methods to continue growing and bettering themselves. They recognize that there is always room for improvement, and they actively work towards it. The fourth quality of successful investors is that they celebrate their achievements along the way. They take time to acknowledge their progress and enjoy the fruits of their labor. Whether it's a dinner out or a vacation, they take time to celebrate their successes, big or small.
The fifth quality is that they follow a vision and a process for achieving their goals. They have a clear vision and a plan to reach their objectives. They may use a vision board, quarterly plans, or 30-60-90-day goals, but they always have a process that they follow to achieve their goals. The sixth quality of successful investors is their commitment to keeping their word. They strive to do their best and follow through on their promises. They work hard to help others and achieve whatever they said they would do.
The seventh quality is that they dream big and achieve bigger. They set lofty goals and push themselves to achieve them. They continuously work on their process to achieve their goals, which often leads them to achieve more than they thought was possible. The eighth quality of successful investors is that they leverage their failures throughout the process. They understand that failure is part of the journey and use it as a learning opportunity. They use their failures to grow and do better in the future. Finally, successful investors have deep relationships with others. They understand the importance of building strong, meaningful connections and leverage those relationships when needed. These relationships often help them achieve their goals faster and more efficiently.
In conclusion, Quentin suggests that to become a successful investor, you should reflect on these qualities and make some changes while never stopping learning.
Important Links and Resources
In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses the reality of real estate seminars and the need to be careful when signing up for them.
Quentin highlights that although some real estate seminars may be legitimate, many of them are merely ways to enroll participants in more expensive seminars. As a veteran of the industry, Quentin provides listeners with tips to make informed decisions and avoid scams.
According to Quentin, attending low-cost or free real estate seminars that cost around $100 or $200 will likely only provide a high-level overview and not much actionable information. The majority of the time is spent discussing why you should invest in real estate, how it's important, and how you can earn more money. However, the ultimate goal is to persuade attendees to invest in a more expensive course, usually offered at the end of the seminar. This is a classic example of a real estate quick money seminar.
Quentin cautions that during seminars, presenters often showcase their wealth by sharing their vacations, cars, and properties. This is done to create an association with wealth in the attendees' minds. The seminars teach how to buy a property with little to no money down, which is doable, but difficult without help and support. Even though this is achievable, it will take more than a weekend or an education course to learn the required skills. Attendees should keep this in mind.
During the seminars, the presenters ask a lot of questions to which attendees are expected to respond with a "yes." This is done to soften the audience, making them more likely to agree when an incredible offer is presented. The offer is usually valued at thousands of dollars, but the cost is only a fraction of that if purchased right away. There is typically a time limit or a limit on the number of courses available, creating scarcity. This is a component of the weekend course, and Quentin warns that this technique is used to make participants more susceptible to buying the product offered.
Quentin says that although he has learned a lot about real estate from various courses, including weekend courses, he suggests having the mindset to learn something from any course. However, he emphasizes that networking with other participants is the most important aspect, as they are on the same journey and can provide valuable insights. He suggests doing research on the presenter, checking out their website, references, and reviews to learn more about them, and warns against seminars that guarantee returns or once-in-a-lifetime opportunities, as there are no guarantees in real estate.
In conclusion, Quentin advises caution when considering attending low-cost or free seminars that include upsells at the end. If you’re interested in learning more about him, his real estate investing career, and find free resources and learning materials, you can visit, https://EducationREI.ca and https://DurhamREI.ca.
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In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses how to effectively manage your property manager.
Quentin suggests that before purchasing a property, you should consult a local property manager in the area to determine if they are willing to manage it. This conversation can offer valuable insights into the various factors that may influence a property manager's decision to manage—or not manage—a specific property. Quentin emphasizes that when working with a property manager, it is vital to obtain copies of all lease agreements and addenda given to tenants, as well as any other documents completed by the property management company, such as the property management agreement.
He further states that it is essential to review these agreements for a better understanding of how the property manager will charge fees. This encompasses determining whether they will charge a flat fee per month, based on gross rents or a per-door fee, tenant placement fees, and if there are any additional charges. It is crucial to discuss these fees with the property manager, especially if they are not outlined in the agreement. Moreover, it is important to inquire about the management fee for repairs and maintenance, as well as how the HST will be charged and when it will be applied.
Quentin also highlights the importance of closely monitoring vacant units, particularly if they have been unoccupied for more than 30 days. Managing these vacancies thoroughly and maintaining regular communication with the management company is essential to make necessary adjustments to the units. If the property is not filling quickly enough, renovations, such as interior updates or a fresh coat of paint on the exterior, may be required. Quentin advises comparing the quality of your unit to other units in the area to ensure it meets or exceeds local standards.
Additionally, Quentin says that getting to know your neighbors and establishing communication with them can be beneficial. This provides an extra set of eyes on your property and potentially valuable feedback, whether solicited or unsolicited. Keeping a few people in the area informed about your property could offer valuable insights. Regular communication with your property manager, facilitated by quarterly or bi-annual phone calls, is essential to maintaining open lines of communication. This practice is particularly important if an issue arises that needs to be addressed and you were not previously aware of it.
Lastly, Quentin recommends reviewing all monthly bills and statements from the property management company and utilities to ensure there are no unexpected increases. If any changes occur, the property management company should provide an explanation. As the property owner, you remain ultimately responsible for your property, and hiring a property manager does not absolve you of that responsibility.
In conclusion, Quentin suggests that if you're interested in learning more about managing your property manager, check out the full course on filling vacancies and property management at educationrei.ca. You can also find his books on Amazon, which cover the topic of property management. Furthermore, you can join Durhamrei.ca and become a member to gain access to all of the video courses.
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In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses using registered funds for private mortgages to create an income source and the associated risks.
Quentin notes that the public is generally unaware that they can use registered funds, such as TFSAs, RESPs, and LIRAs, to lend as mortgages and earn a fixed return. The reason for this lack of awareness is the mutual fund industry's focus on managing portfolios and not providing information on alternative investment options. People are not aware that this option is available.
He adds that the mutual fund industry earns money based on their management expense ratios, regardless of the portfolio's performance. As a result, they prefer that people keep their funds in mutual funds instead of lending them privately and earning higher returns.
Quentin recommends placing registered funds with a trustee, such as Canadian Western Bank or Olympia Trust, to lend to third parties while adhering to specific criteria, such as not exceeding 100% of the property's appraised value. For instance, $300,000 can be moved to an Olympia Trust account to lend as a private mortgage.
He emphasizes the importance of transferring funds directly between registered accounts to avoid taxation. Due diligence is crucial when lending funds to third parties, and it is recommended to focus on investors. The loan-to-value ratio should not be too high, as this increases the risks associated with the investment. Mortgage brokers can help with private lending and bring together multiple investors for a single mortgage.
When lending, understanding the borrower's exit strategy, the loan-to-value ratio, and the property's risk is essential. Retail properties are riskier than residential properties at the same loan-to-value ratio. The area, person's experience, and returns should also be considered. Understanding that a good return may not be achieved if the funds are returned earlier than expected and there is no other project to invest in is essential for private lending using registered funds.
In conclusion, Quentin advises that there are numerous resources available to learn more about using registered funds for private mortgages. You can also contact him at quentin@getrealwealthy.com to learn about his own experiences using registered funds.
Important Links and Resources
In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses the Underutilized Housing Tax Form.
Quentine explains that property investors in Canada must complete the nine-page form, issued by the Canada Revenue Agency (CRA). Applicable to corporations, holdingc ompanies, and partnerships, it must be submitted annually by the end of April, starting in 2023. The form discloses property ownership under structures like corporations, limited partnerships, or joint ventures and is mandatory for properties with three or fewer units. Non-compliance fines are steep, at $10,000 per property. The form includes details about ownership, partnership, and vacancy, aiming to target vacant properties for additional taxation.
However, Quentin notes that the form may cause confusion for investors with non-traditional ownership structures or partnerships where not all owners are listed on the title. While the CRA may already possess some of this information from annual tax filings, the new form and database create a separate compilation of data that could potentially be shared with third parties like financial institutions. This could create problems for some investors in qualifying for properties or loans.
Although it is unclear whether the CRA can share this information, it is essential to be aware of potential risks and consider solutions like putting the property in your name or co-qualifying to alleviate any title issues. Quentin advises listeners to make sure to review the Underutilized Housing Tax Form if they have not completed it yet.
To reduce costs and bureaucracy when completing the required housing tax forms for multiple properties, Quentin suggests having an accountant complete the forms using one property as a template. Accountants may charge $500-$800 per form, but they can ensure that the nine-page forms are filed correctly.
In conclusion, Quentin emphasizes that as more bureaucratic procedures arise, fewer housing units might become available, especially for smaller-scale landlords managing three or fewer units.
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In this episode of Get Real Wealthy Season 4, Quentin D'Souza shares everything you need to know about accessory dwelling units.
Quentin says that accessory dwelling units usually refer to basement suites, or when a particular house or duplex has another unit added to its footprint. He adds that a new bill, Bill 23, has been implemented in Ontario to increase the number of units in single-family homes. The bill enables the creation of additional basement units or garden suites, thus increasing the density of existing properties. As for what you need to look for in accessory dwelling units, Quentin says that being closer to major centers is important to obtain higher rents, which could result in a larger net operating income for the asset. However, this may be offset by higher purchase prices.
Quentin recommends looking at places like Peterborough, Belleville, or Kingston where you have a lower purchase price but similar rents. He further adds that you also need to be cautious when inheriting an existing tenant on a property to be purchased. To ensure the legality of the rental, a tenant acknowledgment form should be obtained and the legality of the suite should be verified before purchasing. If the accessory unit is illegal, it may lead to complaints from neighbors, and the unit may be shut down, resulting in a loss of rental income and potentially affecting the property's maintenance and cash flow.
He further adds that when looking for basement suites, you should also look at the amount of natural light going into the bedrooms and living room. This is important as it can help one forget that they are in a basement. In the suburbs, it is necessary to ensure that each unit has at least one parking spot and public transportation nearby. Having separate entrances and laundry facilities for each unit can reduce tenant interactions and lower management issues. Quentin further suggests that including a bathroom with a tub in the basement is a great idea as it provides more flexibility for different tenant profiles.
Quentin adds that when considering a basement suite, it's important to think about small upgrades that can make it more attractive, such as lighting and flooring. These details can affect the overall appeal of the unit. It's also essential to ensure good color combinations and sufficient lighting to prevent the space from feeling smaller. In conclusion, he says that the top priority should be to have a positive cash flow every month after all expenses, including mortgage, insurance, utility costs, property tax, maintenance and repairs, and vacancy, are accounted for. This will ensure the property continues to appreciate in value while generating income..
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In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses the five golden rules of borrowing against equity.
Quentin starts by sharing that borrowing is a common financial tool for real estate investing. It is used to buy investment properties and can help grow and diversify a portfolio. Equity in one's home can be used as collateral. If you're investing to build a portfolio, it's a valid financial strategy. But whether you're considering borrowing against equity for investment or other purposes, make sure you follow these five rules. Number one, beware of low-rate offers from banks and other financial institutions. Banks and financial institutions can make borrowing appear cheaper than it is, but be wary of low-rate offers. You should check the rates, including how they could rise, to avoid any financial shock to your investment portfolio.
Number two, always read the terms carefully. Borrowing can be a financial necessity for real estate investments, but it's essential to use it correctly. When considering borrowing, be wary of banks' low-rate offers and read the terms carefully. The terms may include penalties for early payment or balloon payments at the end of the term. Number three, credit could harm your credit score and reduce your score altogether. Borrowing against equity can harm your credit score and decrease your ability to get a new mortgage on an investment property in the future.
Number four, remember that all borrowing is risky for both lenders and borrowers. Accessing equity in your home can reduce risk for lenders, but increase risk for the borrower as they risk losing their home. Make sure to have a safety cushion in case of any issues. Number five, examine the alternatives. Before borrowing, one should be aware of its risks and examine the alternatives. Borrowing should only be used to create assets and income, not for spending on non-essential things, adding "the risk of borrowing badly is something that I really want to you to consider. You could lose your home, your family, your livelihood; it does happen."
In conclusion, Quentin says that borrowing for investment in real estate is necessary for most people but must be done carefully. Five rules to follow include: be wary of low-rate offers, read terms carefully, understand how it will affect your credit score, remember that all borrowing is risky, and examine alternatives before making a decision.
Important Links and Resources
[thrive_2step id='834']In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses how to guarantee rental profits.
Quentin says that once you've bought a cashflow-positive property and taken out long-term debt, deciding on the right rent is crucial, as a wrong decision can lead to vacancy and financial losses. You have to consider the benefits and features of the property location and highlight them to potential tenants. If the property remains empty, it may be due to an overpriced or underpriced rent. For example, setting the rent too high could discourage prospective tenants from even considering the property. Setting the rental price too low for a property in a great location can also turn off prospective tenants and attract lower-quality renters. He emphasizes that setting the right price is essential to avoid months of vacancy.
Quentin further adds that staying competitive in rental pricing is crucial for minimizing vacancy, especially in Ontario's rent-controlled environment. You should use tools like rentalmeter.com and doorinsight.com to find the average rent for a property in a given area, and check rental websites like Kijiji, Craigslist, or Facebook Marketplace to see current offerings, further adding "setting the right rent will make your profit on your rental income." Quentin adds that the goals that you want to achieve from your property investment won't be the same as another investor. However, whatever your goals are, for most investors, rental income should cover the cost of their expenses, mortgage insurance, maintenance, etc.
He says the first few years may be challenging, but the property value and rental income should increase as the property stabilizes. At the same time, keeping rents competitive will also maintain the property's value. Quentin continues by saying that the rent you can charge when selling a property with tenants depends on several factors, including local and state rules, the economy, and property-specific features such as appliances. If the local economy is weak, rental prices may improve due to a higher demand for rental properties. To establish a competitive rental price, compare your property to similar properties in the same area with the same bedroom and bathroom mix. The rule of supply and demand dictates the rental potential; where demand is higher, the rent will be higher.
Furthermore, to increase rental potential, consider specific benefits of your property, such as appliances, flooring, layout, outside space, views, amenities, and utilities offered. These factors can influence the rent you can charge. You can also compare your property to similar properties in the area. In conclusion, Quentin recommends that to learn more about renting out a property, consider getting "The Property Management Toolbox" and "The Filling Vacancies Toolbox" from Amazon.
Important
Links and Resources
· The Property Management Toolbox
· The Filling Vacancies Toolbox
In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses taking advantage of a deflationary cycle in real estate.
Quentin says that the interest rates in real estate have risen over the past year, leading to lower real estate prices in Canada and the US. Deflation, the opposite of consumer price inflation, where prices for goods and services decrease, also has its own opportunities. People may delay their house purchase, but if selling property in a persistent deflationary environment, one could experience a decrease in equity. Deflationary effects may take six to eight months to materialize. Quentin explains that the currency supply influences deflation and inflation. An increase in the currency supply leads to an increase in prices, while a decrease in the currency supply results in deflation. For example, if the government restricts the bank's reserves, there will be less money available to lend, increasing the cost of borrowing.
Deflation affects borrowers and lenders differently. In a deflationary environment, borrowers repay more expensive money. He adds that falling property values can be a disadvantage for borrowers. Quentin further says that as a real estate investor, it is important to consider the cost of interest rates during a deflationary period. He says that you should only consider purchasing properties at a discounted price if you can maintain a cashflow-positive position. He adds that deflation can become a self-reinforcing cycle and punish all except borrowers. The federal government, as the largest borrower in the country through its national debt, may also be impacted by deflation. With the recent increase in interest rates, the cost of the national debt has put the central bank in a negative position.
In conclusion, Quentin says that understanding deflation and its effects is important for anyone looking to invest in real estate. By considering interest rates, currency supply, and asset prices, you can make informed decisions and take advantage of a deflationary cycle.
Important
Links and Resources
· https://www.instagram.com/qmanrei
Amanda is a wife. A mother. A blogger. A Christian.
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Scamanda is the true story of a woman whose own words held the key to her secret.
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Amanda’s blog posts are read by actor Kendall Horn.
