00:00 Speaker 1 SA.

01:27 Speaker 2 Welcome to the real estate investing morning show with your hosts Wayne and Gabby.

01:39 Speaker 3 Good morning real estate investors.

01:41 Speaker 1 Good morning.

01:41 Speaker 3 It's Friday, it's the end of the week and we're going to see if we can end this week with a big banger.

See what we can do.

Two listener questions that came in, really good topics, numero uno.

Can you comment on the expected time involved to have rental investing replace a full time job?

I know, I know, right?

And another one that says, I live in a small town in southwestern Alberta with a high demand for rentals and I was wondering what your take is.

I'm having rentals in a smaller town.

Real estate prices are higher than the going rental rate right now and it seems pretty tough to find a property that will cash flow.

Is this the case for most areas right now?

02:31 Speaker 1 And that's great, great questions.

02:33 Speaker 3 And that's what we're going to be covering on today's show.

We broadcast the show live every weekday morning Monday through Friday at 6am Mountain time.

We broadcast it live so that way you guys can join in with us.

I mean we could sit there and we could do it any time of day, right?

And just record it and release it on itunes and Spotify and whichever else.

But I mean that would be great, wouldn't it?

02:57 Speaker 1 Fantastic.

02:57 Speaker 3 It would make things a lot easier.

We wouldn't have to get up so early.

But no, we do it every weekday morning at 6am so that way you guys can join in live.

It could be a part of your daily routine, getting your butt out of bed, getting you thinking about real estate investing first thing in the morning, planning out your day.

But additionally, we do it live so that way you guys can join us.

So you could join us and get the opportunity to bring any questions you guys have about real estate investing and we will answer your questions for free.

We provide free coaching for real estate investors every single weekday morning.

So that way you guys can get the answers, the confidence, the clarity.

03:35 Speaker 3 So you guys can go and take action today and get you one step closer to your goals.

Okay?

So we appreciate the questions that came in.

If you guys have any additional questions, put them in the chat.

Additionally, if you cannot make the live show at 6am in the morning, just email us at infoeimorningshow.com and send in your questions and we will read them the following day.

The way to access the live show, all you need to do is download an app called podbean P O D B E A N Download that app on your Phone, search up the real estate investing morning show.

Follow the show, and then you'll get notified at 6am when we're live.

That's it.

That's your instructions for free coaching.

Like I said, we broadcast this show live every weekday morning from Edmonton, Alberta.

04:23 Speaker 3 What does the weather look like in Edmonton today?

04:26 Speaker 1 The weather today will be 14 degrees and cloudy with showers.

It is currently 9 degrees and partly cloudy.

04:33 Speaker 3 It's 9 degrees.

04:35 Speaker 1 Yeah.

And only a high of 14.

It's going to be chilly today.

Yeah.

04:40 Speaker 3 Has this been the worst summer ever?

04:45 Speaker 1 Yeah.

I mean, you either take hot and dry and.

And smoky or cold and wet and so comfortable.

So I'll take this.

04:56 Speaker 3 Yeah, I guess so.

I mean, I will take it, but there's.

Isn't that the opposite of, like, global warming?

I mean, I'm no expert, but.

05:04 Speaker 1 Yeah, you're not.

05:05 Speaker 3 What are your thoughts on global warming, Gabby?

05:07 Speaker 1 I don't have any thoughts.

05:08 Speaker 3 Okay.

05:08 Speaker 1 But I was wondering.

05:10 Speaker 3 Thanks for your contribution.

05:11 Speaker 1 I was wondering if we might be able to squeeze in a quick conversation about the property that we're supposed to be closing on today.

Some fun stuff going on there that I thought could be interesting to share with the listeners.

05:26 Speaker 3 Yeah, no, I agree.

I agree.

And I was holding off.

So there's like a handful of things that I've been wanting to talk about on the podcast that I can't talk about on the podcast because there's ongoing stuff going on that might affect the outcomes that we're trying to achieve.

And also some of them are, like, legal stuff that, like, I need to get that legal.

Like, we need to get that stuff sorted first before I talk about it in a public setting.

I know this stuff is going to be super valuable to our listeners, but at the same time, we need to protect, obviously, our privacy.

We need to protect, you know, making sure that obviously we get the outcomes that we want and that other people involved, you know, aren't listening necessarily to the podcast as well.

06:16 Speaker 3 Like, you know, our financial privacy as well.

So there's.

There's so many different moving pieces and whatnot.

It's like, I want to talk about it, but.

Yeah, I can't, so.

But anyways, I'll talk about this for sure.

Because I think that this is kind of sorted out now.

Cross my fingers.

I.

When I get the keys, I'll exhale.

Yeah, when I get the keys.

Because this has been a little frustrating.

But anyways, yes, we.

We are supposed to be closing on a property today.

A really good property.

Really great deal.

I'll Talk more about the deal and the numbers and stuff like that in the coming weeks, if that's okay.

But we're really proud of it on this deal, how we found it and everything else.

And it's a super win for everybody involved.

Everybody except for the tenant.

07:07 Speaker 1 Tenant is not happy that the property is being sold.

07:13 Speaker 3 Yeah, they're certainly not happy about it.

It's.

And you know, life's full of decisions, I always say, and the decisions that they're making are not in their best interest.

Yes, we're buying the property.

Yes, there are existing tenants.

Yes, they are on a month to month lease.

07:36 Speaker 1 Ooh, sorry.

07:38 Speaker 3 But that's.

And you know what?

That's the least of my problems with this.

07:42 Speaker 1 Yeah.

07:42 Speaker 3 Like, I haven't even.

That hasn't even been addressed yet.

I know how to address it.

We're going to need to get them on a fixed term lease.

But I haven't even brought that up yet with them.

That's not even.

So this is just like one more layer on the cake.

So the issue is with this property is that we talked about pigtailing aluminum to copper recently on the show.

08:09 Speaker 1 Yeah.

08:09 Speaker 3 Want to know why that was on our mind?

Well, because we are buying a property that has aluminum wiring.

And so part of that meant that in order for us to be able to secure insurance for the property, we need to be able to have that pigtailed because they're not going to insure it with aluminum wiring.

Okay.

Thankfully, we have a good relationship with the seller and the seller allowed us access to the property before closing so that we could get that pigtailing done so that we could obtain the insurance so that we could close on the property within less than, what, like a week and a half?

08:52 Speaker 1 Yeah, something like that.

08:53 Speaker 3 Like, we went and looked at that property, wrote an offer that night, and possession is like, I don't know, like nine days later.

09:02 Speaker 1 Yeah.

09:02 Speaker 3 Which is like today.

So it's moving very quickly.

Again.

We, we're able to work out a really good win with the sellers that they.

That way they can get their money out and they could get that money for what they need it for, which is great.

And I don't like wasting time.

Like, I'm like, I'll take the property right now.

Why would I wait 45 days?

Give me nine days.

Let me get my money together.

Right.

So it worked out in that sense.

But we need to get that pigtailing done before so we can get insurance to close.

Well, so we ended up contacting Our electrician, he gave us the quote, said he can get it all done in two days.

One day maybe.

Worst case scenario, come back to in the second day.

That was early this week.

It was Monday yesterday.

09:48 Speaker 1 Yeah.

09:49 Speaker 3 You started on Monday.

Okay.

He starts on Monday, gets in there, no issues.

The.

The tenants are made aware.

The tenants are the ones that let him in.

The tenants moves all the couches and everything out of the way so you can have access to all the outlets and all the light switches and whatnot.

Right.

Everything's going good.

At the end of the day.

I think I sent you a message or asked you, like, hey, did it all get done?

I can't remember.

But anyways, come Tuesday morning, we get contacted by the electrician and he says.

What did he say?

He texted you?

10:24 Speaker 1 Yeah, he's.

He said, I'm at the property.

No one seems to be home, no one's answering the door.

I texted the one tenant who gave me their phone number yesterday, but I know that she's on her way to up north for work and can I get the other tenant's phone number or anything?

10:45 Speaker 3 Yeah, so I contact the seller, I say, hang tight.

Yeah.

I contact the seller, and the seller says, not a problem.

Actually, the seller lives nice and close, or, sorry, works really close to that property.

She said, don't worry, I'll be there in five to 10 minutes.

Perfect.

I mean, that seems like a pretty good solution.

Right?

11:04 Speaker 1 I'll be there to let him in.

Yeah, give me 10 minutes.

11:06 Speaker 3 Yeah, let the tenants.

Sorry, let the electrician know.

And then how much longer before you got contacted by the electrician again?

11:16 Speaker 1 I don't know, maybe like half hour, 40 minutes.

11:20 Speaker 3 Yeah.

11:20 Speaker 1 Yeah.

And his text was really unclear as to what was going on, but basically said that the seller wasn't able to get a hold of the tenants and she wasn't able to get me into the unit.

So.

So we're thinking, what doesn't she, like, why didn't she have a key to like, open the door?

I don't get it.

And then he also said it seems as if there was some sort of disagreement last night between the tenant and the landlord.

11:48 Speaker 3 Yeah.

11:49 Speaker 1 And he's like, I don't know if it has anything to do with it.

He's like, but I can't stick around, I have to go.

Let me know, let me know.

11:56 Speaker 3 Yeah, And I think he also said that I won't be able to get in until later next week.

12:00 Speaker 1 Until later next week.

Yeah.

12:01 Speaker 3 Which is, which is after closing.

12:03 Speaker 1 After closing.

Yeah.

12:05 Speaker 3 So that's super frustrating.

Super frustrating because we needed to get all this, like all these ducks in a row so we could actually close, you know, today, which is Friday, this week.

And now finding out that, you know, something happened.

So I contacted the.

The seller and called her and said, so what's going on?

Having some disagreements.

And she said, yeah, I didn't think it would be an issue, but apparently the tenants did a bathroom renovation, and they never really sorted out how they were going to be compensated.

So now the tenant found out the property's being sold.

Now they're like, you need to pay me my money for the bathroom renovations.

The seller offered $2,500 to the tenant for it, which, by the way, I don't think that it was an approved renovation.

I think they just did it.

12:55 Speaker 3 And this is just what happens with.

No offense if they're listening, but it's just what happens when with newer passive or amateur landlords, you know what I mean?

Like, I would have never allowed for that.

And I would have said, no, you're gonna actually tear all that out and put back exactly what was in there.

And we're not paying you a dollar because we're not responsible for reimbursing somebody for any improvements, let alone.

We're not responsible for reimbursing anyone for repairs.

Yeah, you contact us for repairs, we do the repairs.

Yeah, you don't do your own repairs.

13:31 Speaker 1 Not to mention that most leases say that you are not allowed to make changes to the property.

13:35 Speaker 3 No alterations.

13:36 Speaker 1 So that actually, even though they think they improved, it is a breach of a lease.

Yeah, unless.

Unless it was approved.

We don't know all the details.

13:43 Speaker 3 Yeah.

So anyways, they offered $2,500 and they said that's not enough.

So apparently they.

They left it in a very not so good state.

I mean, their.

Their communications were not so good, and she didn't think that this is going to affect them.

And the electrician coming in on Tuesday, which it turns out it did.

Basically, she said, I just contacted them and they said that they are not allowing anyone in, that they change the locks.

That's why the owner seller couldn't get in, and they said no.

So basically they're a standstill until they can figure it out.

So I let our lawyer know, and I'm like, I don't know what the heck to do about this.

Like, I can't buy this property if I don't have insurance on it.

Like, I can't transfer the money over.

14:33 Speaker 3 Not to mention the fact that like, we've got a serious situation now, we've got a hostile tenant.

That's.

14:37 Speaker 1 Yeah.

Is this how the relationship is starting?

14:41 Speaker 3 You know, it's one thing for like, you know, I could definitely reschedule my electrician for next week.

Worst case scenario, maybe I don't have insurance for a couple days or something like that, or I could figure out some arrangements.

Maybe I can figure out some arrangement with our insurance provider that says a conditional a condition that we need to get it done within 30 or 90 days or something like that.

You know what I mean?

That, that's, We've gotten that before.

But my biggest concern was that, you know, that's easy enough.

If I can get in there, if I know I can get my electrician in there, if I was to get a key, I could give 24 hour notice and enter myself and stand there while he did it.

You know what I mean?

15:19 Speaker 1 Yeah.

15:19 Speaker 3 But the fact that they changed the locks now, it's complicated.

15:22 Speaker 1 Yeah.

15:23 Speaker 3 Now I'm looking and I'm like, can I.

I'm pretty sure I can hire a locksmith to break in and change the locks and I could stand there with my foot open on the door and I'll let the electrician in.

But I'm like, do I bring my electrician and a locksmith into that chaos if it's hostile, you never know, right?

Yeah, like sometimes, you know, you would, you can say the Residential Tenancy act says that I can do this, right?

15:46 Speaker 1 Yeah.

15:47 Speaker 3 But it's, Do I have to physically defend my right to be able to do that?

You know what I mean?

Are they going to be slamming the door in my face and chucking fists at me?

Like, if that's the case, then I don't want to bring other people into that situation.

I literally just had a situation recently where an appliance technician was verbally assaulted by one of my tenants.

So, you know, it goes to show that like, or it's just we're.

It just we don't want people to have to experience that even though we have the right.

So they were actually issued a 14 day.

This is a long story, actually.

I didn't realize it.

16:21 Speaker 1 I didn't know how far you were going to go.

16:22 Speaker 3 Well, it's like there's a lot of pieces involved.

They were actually issued a 14 day eviction notice that night for breach of.

16:28 Speaker 1 Contract for changing the locks and not giving access for us to be able to get in and do what needed to be done.

16:33 Speaker 3 Yeah, exactly.

So, you know, what ended up happening was I, I, she's the seller's like, what do we do?

What do you want to do with this?

You want to inherit this or do you like.

And I said, well, to be honest with you, I can't close if I don't have insurance.

So let's let this marinate for a couple days and let's see if they change their mind.

But you know, it's, it's a tricky situation and I mean, I don't know.

Again, I don't know what these tenants are hoping for.

I mean you're certainly not going to be staying in that place if this is how you're going to act.

Right.

And even if they are to resolve it, do I want this tenant?

17:05 Speaker 1 Yeah.

And I guess just a little bit of like an interesting twist because people must be thinking like, oh my God, what crazy tenants.

Like why does, why are they even in that place?

But literally up until, like, so they've been very long term tenants.

How many years?

Six years.

17:22 Speaker 3 Six years.

17:22 Speaker 1 Six years they've been there and they have had a fantastic relationship with the current landlord.

17:29 Speaker 3 Yeah.

17:29 Speaker 1 And they, this light switch literally like flicked, like switched when they found out that she was selling the property.

And so I think that they can probably see some writing on the walls that, oh my God, I have this, you know, very under market rent.

They haven't increased rent on me once since I moved in six years ago.

You know, we've really made this a home.

We've done renovations.

What's going to happen?

This new landlord's coming in.

I think they freaked out.

Yeah, I think they saw some writing on the wall and they freaked out.

18:01 Speaker 3 Yeah.

I, I sent an email to the tennis.

Well, obviously some things have changed and it turns out that they had a late night phone call on Wednesday and they were able to resolve it.

They were able to figure out a reimbursement and also they're going to change the lock back and get a key to make sure the landlord has the key.

So I'll be able to have a key for closing.

We worked it out with the insurance provider that we're going to get a condition and so we have that all sorted out and so everything is looking okay.

But I, you know, I've sent it, I didn't tell you this.

I sent an email proactively a notice of landlord to the, the, the tenants and they haven't responded yet.

So I don't know.

18:54 Speaker 3 I mean, like, it sounds like everything is all ironed out, but, you know, we'll kind of see.

We'll keep you guys, you know, in the loop as it all plays out.

They, hopefully they're.

They, they do what they're supposed to do.

19:10 Speaker 1 Yeah.

And yeah, it's, I guess for me, I, I feel like it's an unfortunate situation for them acted in that way.

Like it could have been a, you know, like they could have entered into this new relationship with their new landlords in a really nice, peaceful.

Yes, we'll let you in to do the work.

Yeah, no problem.

Okay.

Yeah.

Really nice to meet you.

But instead they denied us access and, you know, change the locks and like, just.

It's too bad.

They had an opportunity to, you know, set an impression as to, hi, we've been here for a long time, we'd love to stay.

It's really nice to meet you.

And they chose to.

19:53 Speaker 3 And how do you think I'm gonna react to the way they reacted?

You know what I mean?

Like, those aren't tenants that I want to deal with.

19:58 Speaker 1 Sets a stage that we're like, oh my God, these are very much problem tenants.

Do we want this?

Do we want.

Yeah.

20:05 Speaker 3 Right.

So now it's something I got to deal with.

Which it is what it is.

Like I said, there was some other things like, you know, the fact that it's on month to month and I'm gonna have to address those things once we get all this other stuff ironed out.

20:15 Speaker 1 Yeah.

20:16 Speaker 3 Which, you know, is going to get.

It's going to get heated.

And it's not uncommon for, you know, newer landlords to let fixed term leases lapse into month to month.

Just a side note for those of you guys that don't know, don't ever let it lapse.

Please don't.

It's terrible because there's nothing I can do.

I can't, I can't end their tenancy now.

They can stay as long as they want unless I have some form of breach, which we had.

We had a breach that there was an active breach, which was them changing the locks.

But now that it's fixed, it's almost.

We have to cancel it.

So we're in a situation now where like, I can't terminate their lease.

20:54 Speaker 1 Yeah.

So we play it out.

20:56 Speaker 3 See, we'll see how it all plays out, but we'll keep you guys in the loop.

Again, like, there's so many.

There's still some moving pieces that, like, I Just have to kind of keep, you know, out of the public.

But I want you guys to hear that, I want you guys to know what it is that, you know, one of the million things that we're working on right now and to understand our thought process and how we go through it and how we assess the situation, but also how we deal with it so that way you guys can better prepared when you do inevitably do run into a situation like this and you have to figure out how to deal with it.

21:34 Speaker 3 I think that there's probably three, maybe four different parts of that story that, you know, three or four different scenarios that you might be find yourself in.

You know, where a tenant doesn't let you do repairs, where a tenant changes the locks, where a tenant is on month to month and you need to get them on fixed, where a tenant is under market rents, where a tenant, you know, suddenly where you're trying to.

21:55 Speaker 1 Get insurance but there's aluminum wiring.

21:57 Speaker 3 Yeah.

So there's like five different separate topics all in one scenario here, which I feel like, you know, you guys could run into at any time.

22:04 Speaker 1 Yeah.

22:05 Speaker 3 And I, again, I, we share this with you guys.

We're vulnerable and we're open with you guys about this.

So that way you know how to handle these situations on a very like, you know, micro level.

So that way you get the best possible outcomes when you do inevitably run into situations like that in the future.

But we're going to take a quick little commercial break because we have two other questions, two other topics we're going to be covering today and I want to make sure I leave enough time for this.

These are two very in depth conversations.

22:31 Speaker 1 I know I'm looking at the time.

22:32 Speaker 3 Going, oh, Gabby, how little faith you.

22:37 Speaker 1 Have in me when you.

Okay, overcoacher, let's go.

22:41 Speaker 3 We'll be right back, guys.

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23:05 Speaker 2 Contact Krystal Kromm today for all your realty needs.

23:11 Speaker 4 The Real estate investor conference September 6th and 7th here in Edmonton.

23:18 Speaker 3 Galvin.

I'm stoked.

23:20 Speaker 4 I cannot wait.

Wayne, There is going to be so much opportunity happening in this room and I think they're even giving you a mic and doing a live podcast.

23:29 Speaker 3 Yeah, we're doing the live podcast in person.

You can come and see Gabby and myself in our pajamas drinking coffee.

And I'm, I'm.

Like I said, I mean, I'm stoked for it.

It's going to be a blast.

23:40 Speaker 4 And we're serving waffles.

Who doesn't love waffles?

This is the conference you want to come to where the focus is not sales, the focus is value.

Learn what your next step is in real estate investing.

Rub shoulders with some of the top Canadian real estate investors out there.

This is the opportunity you do not want to miss out.

Get your tickets today at REI conference.

24:02 Speaker 3 See you guys there.

Do you need to clear your throat?

Yes, please.

I'm gonna mute so you can clear your throat.

I went to unmute and Gabby's, like, supposed to do that on the break.

24:19 Speaker 1 That's why I thought were still on the break.

24:21 Speaker 3 Okay.

24:22 Speaker 1 I was messaging Darby in the chat.

24:24 Speaker 3 Okay.

So paying attention.

So, yes, recon is coming up very, very quickly.

That September 6th and 7th, man, we.

So we just had back to back meetings yesterday for the REI conference in Edmonton and.

24:40 Speaker 1 Oh, my God.

Calvin.

Calvin Realty.

Calvin and the Calvin Realty team.

24:45 Speaker 3 Calvin.

24:47 Speaker 1 Give a pre round of applause.

You guys, you guys just don't have no idea.

24:50 Speaker 3 You have no idea.

24:51 Speaker 1 You have no idea how big it's going to be.

And just the lengths that they've gone to make this absolutely incredible like I am.

I was actually blown away yesterday just listening to Calvin talk about the plans and everything that they have in motion.

25:05 Speaker 3 And.

25:06 Speaker 1 Yeah, so if you don't have your tickets, like, you actually, I like, I don't.

I don't say this lightly because I'm the kind of person where I won't go to.

I don't, I don't just go to conferences, you know, to learn because I.

25:21 Speaker 3 Know that most of them are shite.

25:23 Speaker 1 Most conferences are just people on stage.

They're given.

They're given half an hour to inspire you and get you jacked up and then to go to their booth and to purchase something of really high value.

And that's normally what conferences are.

And so I don't normally be like, oh, yeah, you should definitely go to this conference.

Like, oh, this.

There's a conference in Toronto.

You should go.

Oh, there's a.

No, that's not.

You'll never hear me say that.

But I'm actually like, this is so exciting, what they've put together and I'm excited to be a part of it.

So I think that you guys will really enjoy it and that you should be there.

25:58 Speaker 3 I hope that you guys respect that as well, that the, the author did.

The fact that we tell the truth and that we're real and that there's no bs and there will be plenty of booths at this place, by the way.

26:09 Speaker 1 Yeah, there'll be plenty of opportunities, our booth included.

Spend high values of money, if that's what you like to do.

26:14 Speaker 3 Yeah, there's plenty of opportunities to blow lots of.

Not blow, to blow your money on our program and other programs.

There's lots of that.

But you know what?

He's made it very clear.

And I remember from the beginning, even last year, he was saying this isn't like, this isn't one of those things where you run to the back of room and sell your shit.

Like it's.

There's opportunities for that.

Like, if that's what you're looking for, that's your opportunity to go and meet all the various different coaches across Canada and the different programs and stuff like that.

There's opportunities for you if you choose to do that.

But it's not like a big old sales pitch.

It's all about providing value.

So there's Saturday and Sunday.

26:49 Speaker 3 Saturday and Sunday is going to be full of lots of different opportunities to see some great speakers, ourselves included.

They're doing the deal tank, which is like a shark tank for real estate investors.

On Sunday, there's breakout rooms.

So I'm going to be in a breakout room with Natasha Phipps and Richard Bell.

We're going to be doing creative strategies.

We're also going to be.

We're also going to be analyzing a wholesale deal as well.

And then you can pay an extra.

Apparently this is an option.

I knew that it was.

It was.

We were planning it, but I got the full details yesterday.

You can pay an extra 50 bucks or something like that.

And you can come in on Friday as well.

27:26 Speaker 1 Friday night.

27:27 Speaker 3 So myself and Patrick, Francie and Gabby are going to be doing.

It's a Friday evening kickoff.

It's called investing Yourself and I'm just reading the details on the website.

So it says start your recon weekend with intention.

Our Friday evening Invest in yourself Add on gives you a head start on success.

Meet select recon speakers before the main event.

Learn the foundational strategies behind real estate investing.

Work with a personal concierge to help you navigate the weekend, make key connections and get the most out of the time.

Whether you're brand new or ready to scale, this exclusive session helps you focus, connect and elevate so, basically, Patrick, myself, and Gabby are going to be doing a full evening on the foundations or the fundamentals of real estate investing.

28:15 Speaker 3 So if you're newer and you want to learn, like, the basics of real estate investing before the weekend gets started, before they start getting into all these complicated, advanced strategies and stuff, that's definitely worth it.

Patrick Francis.

Been in the game for a very long time.

CEO of Rain.

Obviously, you guys know us and how.

How we like to make things simple.

So there's also the opportunity to get in on that as well, which I think is great.

And you get your own concierge, apparently.

I don't know, like, do they.

Do they.

They take care of your laundry or.

28:42 Speaker 1 No, but they.

If, like, you will be.

You'll have their number.

And, like, if you need anything, if, like, somebody on stage says something and you're like, oh, I didn't quite get that.

What do they mean?

Like, you text your concierge and they come and find you and they're like, let's work through this.

Let me help you.

Or, like, let me go introduce you to this person.

I think that they could really help you work through this.

Like, they are your connection maker, your person to help you understand what's happening.

Yeah, yeah.

29:09 Speaker 3 Like, yeah, it's gonna be a lot of fun.

And like I said, we're gonna be there.

So I'll be.

I'll be presenting on Friday, Saturday, and Sunday.

Plus, we got the live show on Sunday morning as well, so plenty of opportunities to see us up on stage, speaking on the main stage, and then also plenty of opportunity.

Excuse me.

I'm gassy this morning.

29:24 Speaker 1 Yeah, you want to meet that?

She's, like, live.

29:26 Speaker 3 Like, I didn't actually burp in.

29:29 Speaker 1 I'm just teasing you because you teased me.

29:31 Speaker 3 Plenty of opportunities.

Come and chat with us as well.

You'll see Gabby as well.

She at the booth.

And you'll see some of our other students in our mentorship program.

And on that note as well, for the mentorship program.

Sorry, there's so much to talk about today.

29:43 Speaker 1 Yeah, we're screwed.

29:45 Speaker 3 We've got our real Estate Investing Masters retreat, the mentorship retreat, this weekend as well.

And you've heard us talk about this over and over again.

We're so incredibly excited for the retreat, the yearly retreat, Saturday and Sunday this weekend.

It's all finalized.

It's all ready to go.

Our students are going to have an absolute blast.

It's going to be a ton of fun.

Plus, you know, Sunday's, you know, Session for the retreat is just going to be so incredibly impactful and moving.

And our goal is to make it as, like I said, as impactful as possible, making sure that everybody leaves in the weekend feeling inspired and motivated in order to go out and just go take on the world.

30:26 Speaker 3 It's going to be really heavily focused on planning, making a big plan, really figuring out why it is that you're doing this in real estate investing and really connecting with your why and connecting with what really, truly fulfills you and building a life around real estate investing.

You know what I mean?

30:44 Speaker 1 Yeah.

30:44 Speaker 3 It's your.

The reason why you invest in real estate is not to just make big money.

It's.

It's that even if it is, the money is supposed to be buying something, whether that be, you know, resources or whether that be, you know, the home of your dreams, or whether that be, you know, to support your family or whether that be to create the life that you want to live.

And that's what we're really going to be focusing on this weekend.

It's going to be an absolute blast.

We got awards as well.

We're handing out awards for the first time to all of our students.

The awards are amazing.

It's about time we start.

31:11 Speaker 1 You just said to all of our students, but, well, not everybody.

To the ones who earned them.

31:15 Speaker 3 The ones that earned them.

I'm sorry.

For our students.

And it's about time we start.

You know, somebody's applauds them for all their hard work.

Right.

So we're really excited about that, too.

So it's going to be a lot of fun, Really, a lot of fun.

Since we started, like, another thing I wanted to say just about the mentorship program is the amount of people reaching out and booking discovery calls this week has been absolutely crazy as well.

It's been great.

We're really happy about it.

I've had some really good conversations with people who are interested in the REI master's medicine program, and I got a lot of phone calls booked for next week as well.

31:52 Speaker 1 So if they joined today, could they come to the retreat?

I say yes.

I can get them in on our food order.

32:05 Speaker 3 Yeah, yeah.

32:10 Speaker 1 If you've already talked to Wayne.

32:14 Speaker 3 Yeah.

Don't go booking a discovery call today.

And then it's the day before, like a huge weekend.

I don't know.

I.

Yeah, yeah.

I mean, this is your last chance.

If someone was.

If someone was serious enough about it, if someone was serious enough about it, and they're like, they're the type of people that are actually going to do what they say they're going to do, then I'm not going to get in the way of that.

And if it just means it's a little extra work for me, then I guess I can figure it out.

Yeah.

Yeah.

You just bought yourself a whole lot of extra work, Gabby.

Be careful.

So if anybody joins today, they can still get in on the full weekend retreat for free.

32:54 Speaker 1 Yep.

32:55 Speaker 3 Okay.

All right.

Well, my hesitancy is just.

Just based off of there's only a limit of an amount of hours for us to get everything done that we need to get done.

33:04 Speaker 1 We're good.

33:05 Speaker 3 Thankfully, we got really great help on our team.

33:07 Speaker 1 Yeah.

33:08 Speaker 3 And.

And don't take that as like we.

33:13 Speaker 1 Don'T want to have, like, you're a burden.

33:15 Speaker 3 No, that's not the case.

We're actually.

We would be really happy to have you.

I think this is, like, a really good Kickstarter for anybody.

Like, we've got.

We got a small handful of people who just joined recently, and this is their Kickstarter.

And I just feel like this is.

This is the.

The.

The catapult for them to just plow.

33:35 Speaker 1 Through and to get to meet everybody, like, in person up front, Like.

Yeah, Yeah, I agree.

Killer.

33:41 Speaker 3 All right, so we got two monster huge, valuable, huge questions with huge, valuable answers we're going to be getting into.

I'm going to plow through them, but I'm going to plow through them efficiently today so you can get those answers.

And you guys are going to love it.

You're going to love this show.

And we'll be right back.

We just got to take a quick little break.

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35:54 Speaker 3 I.

Sorry, Gab.

There's just so many things I want to say.

I just got a message.

I just got a DM from one of our students.

Josh officially sold his fix and flip conditions were removed.

It sold.

36:10 Speaker 1 Wow.

So I just want to say congratulations, Josh.

36:13 Speaker 3 I know how.

How big and stressful that project was for Josh.

So we just want to say big congratulations to Josh and congrats on removing those conditions.

And we're getting those conditions removed and selling your property.

36:22 Speaker 1 Yeah.

And also congrats to our other student, Nat, who was the realtor who helped sellers.

36:28 Speaker 3 Yes.

36:28 Speaker 1 Yes.

36:28 Speaker 3 So big shout out, guys.

36:30 Speaker 1 That's amazing.

Okay, so our first question is.

Well, first, I'm.

I'm trying to.

I'm trying to cut through and.

And not waste time, but.

Oh, wow, 1,000 episodes.

Congratulations.

Thank you.

36:44 Speaker 3 Yes.

36:45 Speaker 1 Okay, so it says, I live in a small town in southwestern Alberta with a high demand for rentals, and I was wondering what your take is on having rentals in a smaller town.

Real estate prices are higher than the going rental rate right now, and it seems pretty tough to find a property that will cash flow.

Is this the case for most areas right now?

37:09 Speaker 3 I'll give it as a simple answer.

Small towns are typically riskier.

I would just say that if you want sustainability, if you want to be able to weather the crazy storms that can pass through, and not just hail storms in southwestern Alberta or southern Alberta, other kinds of storms, too.

If you want to be able to weather storms like interest rate, you know, hikes and.

And falling rents and oil, you know, prices and all that other stuff, you want to be in the big cities.

Okay.

So I will just point out, generally speaking, risky.

Now, the other part of it is that you also want to make sure that it fits the Five fundamentals that we teach.

And generally speaking, most small towns don't.

38:07 Speaker 3 Now I also personally feel like investors who have insider information about small towns, meaning if you grew up in that small town, you know more about that small town than I know.

Right.

Would I personally go invest in a small town that I'm not familiar with?

No, I don't know it.

But someone who's grown up there, they have some, they have a huge edge on other people.

Out of city investors, out of province investors.

You have an edge and I do think that you can take advantage of that edge and sometimes that edge can actually outweigh the negative sides of investing in a small town.

So don't let that discourage you.

If you have a competitive advantage, take advantage of that.

38:52 Speaker 3 But the second part of like, you know, the rents coming in won't cover the expenses and doesn't have a sufficient amount of cash flow.

Did he, did he reference the 5% rule at all?

No, he didn't.

I would, I strongly recommend going and picking up my book, the 5% rule, the real estate cash flow test for Canadian investors and run the numbers through the cash flow test to see if it fits and if there's a sufficient amount of cash flow because that will determine whether you have a big enough buffer to be able to weather potential storms.

But if you can't find cash flow, then don't do it.

Cash flow is your risk mitigator.

39:36 Speaker 3 And if you can't mitigate your risks, if you don't have a sufficient buffer there in order to protect you when things aren't good, because things are, I would say things are good right now in Alberta, but when they are not good, which will be inevitable, like it's cyclical, you want to know that you're going to be able to ride it out and if you can't put those measures in place, you can't, you know, you don't have that cash flow, then don't do it.

Now, you know the follow up is this the case for most areas right now?

I would say it's the case for 95% of Canada.

95% of Canada doesn't cash flow.

With the traditional 80% loan to value a 30 year amortization in today's interest rates.

I would say 90% of our favorite city, Edmonton, doesn't cash flow.

40:30 Speaker 3 Yeah, you heard that right.

90% of Edmonton does not cash flow.

Even the best city in Canada for cash flow, with all of those boxes checked, you know that we talked about on the podcast, the other day.

You know, the sustainability, the potential for growth, the tenant profile, the landlord and tenant laws, everything.

Even that 90% of the homes in Edmonton do not.

Cash flow.

You just need to learn how to find the cash flow.

That's the thing.

That's the key.

That's what our students are doing.

That's why our students are buying all these amazing properties, because they know where to find them.

And I'm not telling them where to find them.

I'm teaching them where to find them and how to find them.

41:10 Speaker 3 Because what works right now might not work next week and might not work in six months and will definitely not work next year.

You need to be able to keep your finger on the pulse and know how to spot these opportunities.

And that's something you're just going to have to learn.

And it's something I can't really teach on the podcast because it's too much information.

Right.

But I promise you that, you know, if you do get the right education, you learn how to do it, you will be able to spot it.

So to answer your question, it is the case for most areas in Canada and it is the case for most cities as well, even the good ones.

And you just need to get the right education in order to learn how to spot those things.

But don't give up.

41:47 Speaker 3 Don't let that discourage you.

41:48 Speaker 1 Yeah.

I just want to add that the reason why a lot of people find smaller towns enticing is because generally you're going to find a lower buy in those properties haven't appreciated like they do in major cities where there's more demand.

So you're going to find cheaper houses that usually still have a pretty good, decent rent on them.

So you're actually, so you're actually in most cases able to find a pretty tempting cash flow amount on them.

So if you're in a small town where this isn't the case and the prices are actually higher and you're not able to find that cash flow, I would say, in my opinion, that's a pretty good reason to just straight up say no.

Like, I like, it's not worth it.

There's no, there's no enticement.

There's no upside here.

42:44 Speaker 3 Yeah, yeah.

It's, I don't tell people what to do.

I don't tell you where to invest.

Like, and I don't want, you know, people to be like, oh, Wayne says you can only invest in these two cities in Canada.

Well, it's just like, I'm trying to help.

You know what I mean?

I'm not saying, oh, yeah, for sure.

There's opportunities everywhere.

You know, with the right attitude and the right mindset, you can find cash flow.

No, that's not the case.

I'm sorry.

Your mindset will not help you find cash flow.

The cash flow is where the cash flow is.

It's just numbers.

Okay?

So I try and do my best to help people when, you know, people are like, well, where do I invest?

I'll literally tell you the top five cities.

I've mentioned it recently.

43:20 Speaker 3 I do that to help save you guys time.

Okay.

But at the end of the day, you're gonna have to learn.

Why?

Because I just can't.

Can't keep coming on here every week and telling you the top five cities of the week, and then you just go and buy those properties.

It doesn't work that way.

You got to figure it out.

Right.

And again, I'm not saying those are the only places to invest.

You invest where you want to invest.

But if you value our opinion and value the information that we share and you trust us that we are people that just really want to see literally every person succeed investing in real estate, then you'll understand why it is that we make it so simple and why we say just those two or three cities.

Right?

It's just because of the math.

43:59 Speaker 3 That's all it is.

Okay.

44:02 Speaker 1 All right, so the next question is, can you comment on the expected time involved to have rental investing replace a full time job?

Specifically to get to a place where either cash flow was at a significant enough level that you would feel comfortable enough taking out $120,000 a year or the after sale equity in the properties was 3.1 million or more.

Interesting.

44:34 Speaker 3 So the targets are $120,000 a year in cash flow or a total equity of 3.1 million.

44:45 Speaker 1 Yes.

44:46 Speaker 3 I wonder why $3.1 million.

44:47 Speaker 1 I know these are very.

Yeah.

Very specific.

And this listener also says thanks for the 5% rule in the great show.

Have listened to every epis.

Enjoying joining you on the live show now.

44:56 Speaker 3 Okay.

All right.

44:58 Speaker 1 So we're enjoying having you.

45:00 Speaker 3 Yeah.

Yeah.

So calculator is out, guys.

Pretty simple stuff here.

This is pretty simple math.

45:11 Speaker 1 That's why we love you, Wayne.

45:14 Speaker 3 Is that why you love me?

45:16 Speaker 1 I love you for your math skills.

45:18 Speaker 3 Yeah.

45:18 Speaker 1 Nothing else.

45:19 Speaker 3 Is that what you saw in me on the other side of the bar that looks like a guy that can handle a calculator?

I'd like to one plus one him that didn't hit.

No, I'm just reading this over again just to get it.

I, to be honest with you, I didn't really review this beforehand.

So I'm just kind of putting all my thoughts together here.

3.1 million is a very interesting number.

I'm trying to really just quickly try and figure out, you know, is he, is this plan to invest it at 5% in some, you know, dividend earning stock and take that out and live off of that, like what's, what would that work out to be?

Or is it to do private lending and private lend it 10% per year?

46:12 Speaker 3 If he was private lending and got an average of 10% per year, it'd be $310,000 a year, which would be two and a half times his previous cash flow goal.

So I don't know what it is.

So I'm going to assume it has to do with a putting it in something that got a 5% yearly dividend that would equate to 155,000.

It's the closest thing I can think of.

Maybe 4%.

What's 4% of 3.1 million?

Maybe he's, maybe he's got some, like he's got something or he can get 4%.

4% is 124,000.

That makes a little bit more sense.

Okay, so maybe he throws it in like a GIC and gets 4% per year.

That might be it.

That's what I think.

46:52 Speaker 3 I think he wants to sell the whole portfolio, throw the 3.1 into a million, into a GIC at 4% and then that'll get him $124,000 a year.

3.1 though.

Why not 3?

This.

I'm sorry, I'll answer the question when I can figure out why 3.

47:08 Speaker 1 We're going to need a follow up email.

47:10 Speaker 3 Why 3?

Help me out here.

Anyways, if he's here, please answer in the comments.

But I don't want to burst this bubble.

But.

And I don't want to burst anybody's bubble.

I don't want to.

I don't want to.

47:25 Speaker 1 But we do.

But we do want to burst bubbles if we feel like you are at risk of making bad decisions.

Yeah.

47:31 Speaker 3 Or misguided.

Yeah, you know what I mean?

47:34 Speaker 1 Like I'm not saying that you are.

I'm just saying that would be appropriate.

47:38 Speaker 3 This is the problem with conferences and seminars.

God damn people set these unrealistic expectations that you can, you know, get to a point where you can have $120,000 a year in like, safe cash flow.

Get you that $10,000 a month.

That's everybody wants.

$10,000 a month is a nice round number, by the way.

This isn't criticism for you at all, by the way.

This is just like, I just want to set realistic expectations for people.

And the problem is that like most people, I'll answer the question, I promise.

Most people get into real estate investing or they're interested in real estate investing because they think they heard that real estate is a really good asset to invest in.

That's safe.

That always goes up.

They heard some person say that by land, they're not making any more of it.

It sounds really cool, right?

48:35 Speaker 3 That's, that's sound logic right there.

That's a really good point.

Right.

And you know, I, I, I see the value in gold and silver, you know, they'll definitely always be of value because, you know, electronics and stuff.

So I mean, that's, that sounds, you're always going to need it, right?

So it's physical, right?

You know, what else is that?

You know, I like the idea of real estate and land because that's physical too.

And everybody's always going to need a place to live.

So it's not like it's ever going to go down in value, and it has to go up in value.

So that's the, that's the logic that most people have when they first go and decide that they want to Google how to invest in real estate, right?

49:18 Speaker 3 Then they Google it and they see a sponsored ad immediately at the top of the, Of Google, right?

49:23 Speaker 1 Yeah.

49:23 Speaker 3 And it's like free or $50, let's say like free webinar free seminar coming up this weekend in your city.

Come and learn how to invest in real estate and how to quit your job investing in real estate.

And then suddenly everyone's like, whoa, whoa, whoa.

I was just planning on putting my $20,000 in savings into this thing.

I had no idea I can quit my job, right?

So they get to the seminar, they show up, and everybody's smiling, everybody's hugging.

It's great.

They get up there and instantly the music is just bumping.

They're like, oh, I love Chapel Rome.

This is awesome.

They got Chapel Rome going.

Guy comes out dancing to Pink Pony Club.

Smoke.

There's smoke.

Guy comes out and says, I died.

I was dead for literally 12 minutes.

I was on the table.

50:16 Speaker 3 God pulled me back and said, you're not done yet?

No, no, you're not Done.

God lifted me from the table and said, you're going to go out and you're going to change people's lives and you're going to do it by investing in real estate.

And since that day, from that moment, as soon as I came to, as soon as they put that, that defibrillator to my chest and my life came back, the first thing I did was I called my boss and I said, I'm not coming into work tomorrow.

No.

And I haven't been to work ever since.

The next day, I learned how to raise money for real estate.

I bought 15 houses in 15 months.

And I never, ever went back.

And to this day, I have been a full time investor.

51:05 Speaker 3 And I live life the way that I want to live.

When I died on that table, the old me died.

When I came back to life, it was a new me.

It's a new Wayne, and it's a new day.

And I want to share that with you guys today.

51:18 Speaker 1 And guess what?

I didn't have a penny of my own money.

I did it all with opm, which stands for other people's money.

That's right.

51:32 Speaker 3 Yeah.

That's what your seminars are like.

So anyways, the person originally that Googled it, they thought, I'm going to put my money into real estate investing.

And then they get to the seminar and then they're like, wait a second, I don't want to invest my real estate money, my money into real estate.

I want to invest other people's money.

And why would I just do it?

Very, you know, very.

Why would I do it?

Basic.

Why would I do it basic.

And buy a little house or something like that?

I want to go buy a 100 unit building that's not way cooler.

And that 100 unit building is going to get me $10,000 a month in cash flow and I'll never have to go to my job ever again.

So they forget the whole reason why they googled it in the first place.

52:08 Speaker 3 And now they have this standard that real estate investing isn't about getting good returns and having it as a safe place to invest your money or your savings.

The standard is, when do I get to quit my job?

And the only reason you have that unrealistic standard in your mind and that belief is because somebody on stage told you it was possible.

Here's the truth.

Literally every person on stage is completely full of.

I can name less than three people who have a sufficient amount of cash flow in our community.

Now there's there's lots of high net worth, you know, individuals and, you know, that have large scale firms that are, you know, big, you know, but the majority of the people putting on seminars are completely full of.

53:00 Speaker 3 Ask them for their statements, go through the numbers, and you tell me if there's enough cash flow there.

Go ahead.

Why am I outing them right now?

I'm outing them right now because the industry is.

This industry is.

Everybody who's been in it for a long time knows it.

The only people that are falling prey to this are the new people who are googling how to invest in real estate.

They're falling prey to it.

And then it's.

This is, it's just, it's supporting it more and more, and it needs to stop.

We need to be real.

We need to be truthful.

Okay?

Gabby and I do not live off of the cash flow from our rental portfolio.

Our cash flow stays in our rental portfolio.

53:42 Speaker 3 The only time I pay myself cash flow is in when my joint venture partners want their monthly cash flow.

I always tell my joint venture partners, we don't need it.

I don't need that $75 a month, if you're cool with it.

I would prefer to keep the $75 in the reserve fund as extra money.

So that way, whenever something happens, we always have money in the reserve fund, right?

We put our minimum amount of cash flow into our reserve.

It sits in the account to cover rainy day things like furnace, hot water tank, appliances, vacancies, et cetera, et cetera.

54:13 Speaker 1 A new roof, we just.

54:13 Speaker 3 A new roof, right?

That stays in there for that money.

So that way, in the event that anything ever happens, interest rates go up and mortgage payments go up or rents go down, we always have the cash flow to be able to protect us.

That is our buffer.

Okay?

Some of our properties, we do pay out cash flow because for every dollar that our joint venture partner wants in cash flow, we have to pay ourselves the equal amount.

But it works out to be like, it's only a few thousand that we actually pay ourselves.

The rest is sitting in that reserve.

We could pay ourselves our cash flow.

But what I learned, what I was saying long before COVID 19, was that anything can happen.

And I remember, before COVID 19, I remember saying this, and everyone's like, oh, no, that would never happen.

55:00 Speaker 3 They would never not pay, like, nothing.

Like, we didn't even know what a pandemic could be at that point.

I mean, sars never, you know, and the West Nile never even came close to this.

So it was never even something in our mind.

But I said, what if rents go down so much that we couldn't, like, all the cash flow went away.

What if our interest rates were to jack up to like 7% and everyone's like, interest rates have never gone up more than 0.25 per quarter in history.

So the worst that it could happen is if they went every quarter, it went up 0.25, then it would be 1% per year.

So like always go variable.

Makes total sense that was literally what everyone said and myself included.

And then look what happened in 2022 and 2023.

55:38 Speaker 3 Interest rates went up to like 7% and it was like, ha.

I knew it.

Why did Gabby and Wayne make it through that?

It's because we had all that cash flow, we never spent it.

Why did all those other people fail?

Because they didn't plan for it.

They didn't stress test their portfolio.

Okay, so I'm all over the place.

I'm putting a bunch of different realities here in because I want to piece it all together towards the end here.

And then I'm going to answer your question.

The truth is that you cannot rely on cash flow.

Even if you had enough properties, you cannot rely on cash flow.

So these people up on the stage saying that, yes, you could buy 20 properties, that cash flow, $500 a month, which equates to $10,000 a month, which equates to 120,000 dollars a year.

56:20 Speaker 3 Yes, you can buy 20 properties, the cash flow, $500 a month each in some certain cities and some certain markets in some certain property types, if you know how to find them.

The problem is that at any moment that cash flow could be gone.

Gone.

Did I not do an example, did I do an example, an interest rate example yesterday on the show, or did I do it in our coaching session where we changed the interest rate from 2% to 7% and goes on our coaching call?

Okay, okay.

I wasn't quite sure if I did on the show or not, but what we did is we did a standard $500,000 property.

If someone had bought it back, it.

57:00 Speaker 1 Was on the podcast.

57:01 Speaker 3 I think it might have been on the podcast.

We did a $500,000 property at 2% interest and then we changed it to 7% interest and we found out it was about a 700 and 400, $740 increase in mortgage payments.

There's a great example of how if you had $500 of cash flow how you could be in just a year or two if interest rates were to jump up that much, that they could instantly go from a $500 cash flowing property to a negative $240 a month cash flowing property.

Right.

57:28 Speaker 1 Yep.

57:29 Speaker 3 This is what I mean.

I'm sick and tired of people telling people that this is possible.

It is in a sense, but it's not the right way to address this.

It only works when it works.

The second it doesn't work, you're screwed.

You're absolutely screwed.

So let's stop telling people that you can retire from cash flow in your rental property and let's start teaching them how to do it properly.

I like the idea of the $3.1 million better because if you had $3.1 million in equity, I can give you a much more realistic approach to how you can take the cash flow and have a much more conservative approach to paying yourself out and leaving your job.

I would also like to share that I don't teach anyone.

I actually discourage everyone that I work with.

58:18 Speaker 3 From the belief that you're going to leave your job from real estate investing if Amanda's here.

How hard have I, like, how hard have I, you know, argued with you about this over the last few weeks?

I'm sorry for, you know, singling you out.

But like, I will do everything in my power to tell people that you shouldn't do it.

Now if you can, if you can prove, if you can like fight me hard enough and give me a good enough reason, then I, at least I know you put the effort in to really come up with a good plan and not just have this unrealistic expectation like, okay, cool, I just need to get 20 properties.

I'm going to buy 20 suited houses in Edmonton.

They're all going to cash flow.

500 bucks a month each.

And then I can quit my job.

59:04 Speaker 3 And as you dive deeper into.

There's so many, there's so many more layers I can get into this, Gabby.

But just the point is that there's your answer.

I gave the answer already to this listener.

If you want to do that, making sure I answered it properly.

Can you comment on the expected time involved to have a rental investing replace my full time job for $120,000 a year?

The most realistic thing I would say is to buy houses with secondary suites.

500amonth in cash flow if you can find them that work that way and buy 20 of them.

Right.

So what you would need, if they're $500,000 each.

Gabby, how much money would you need in order to buy those 20 properties?

59:44 Speaker 1 Well, 20% down one of them would be $100,000.

So times that by 20 and you'd have 200,000.

59:51 Speaker 3 2 million.

59:52 Speaker 1 Sorry.

59:53 Speaker 3 Sorry.

Yeah, it's not.

No, it's just, it's not that much money.

So what you would need to do is you need to save $2 million to buy 20 suited houses at $500,000 each with a hundred thousand dollar down payments.

So get saving.

Why don't they say this at the.

Why don't they say this on stage, Gabby?

I don't understand why they don't say it on stage.

Oh, because then people would realize that you need $2 million in order to do that.

01:00:21 Speaker 1 Yeah.

01:00:21 Speaker 3 How long is it going to take you to save up 2 million or make $2 million doing fix and flipping and wholesaling and stuff like that?

01:00:26 Speaker 1 Yeah.

Or 40.

Joint venture.

01:00:29 Speaker 3 Oh, no, no, sir.

Yeah, that's a very good point.

We're gonna go extra on the show today.

It's Friday, baby.

Oh, we don't use our own money, people.

We use something called opm.

God didn't bring me back from, from the underworld just to use my own money.

No, no siree Bob.

No.

I use opm.

So what I'm actually going to do is I'm going to get joint venture partners.

They're going to bring the money, they're going to bring the mortgages, they're going to bring the $100,000.

So I could buy those $500,000 speeded houses.

Okay.

That are going to give me $5 a month in cash flow.

Oh, shoot, I forgot.

Joint ventures are a 50 partnership.

So I have to give up 50% of the equity and also 50% of the cash flow, which means that I won't be making $500 a month.

01:01:19 Speaker 3 I'm going to be making $250 a month.

Month.

So, as Gabby shared, you're actually going to need 40 suited houses.

40 suited houses.

01:01:29 Speaker 1 40 partners.

01:01:30 Speaker 3 40 partners.

And you have to raise $4 million in order to get $10,000 a month, which would make $120,000 a year.

But by the way, that's.

That's.

In order to get that 500amonth, I don't have any money to pay a property manager, so I'm going to have to manage all of those properties.

So I only have to manage 40 tenants.

That's not that big of a deal, right?

01:01:57 Speaker 1 No, no, no.

01:01:59 Speaker 3 Oh, sorry.

01:01:59 Speaker 1 Sweeted.

01:02:00 Speaker 3 Oh, shoot.

Math.

Math is.

I lost a little bit of my, my math ability when I passed.

I forgot.

So they're suited.

So they have basement suites.

So it's not 40 tenants.

It's 80 tenants that I have to personally manage.

So I have to manage 80.

No, I mean, it's not that bad.

I mean, like I'm.

I quit my job, Gabby.

Now I've got all this time to manage 80 tenants for $120,000 a year.

But I'll have all that.

I'll have that all that time, right?

All that.

I can do that from Mexico, the beaches in Mexico.

Right?

It's just 80 tenants, Gabby.

01:02:42 Speaker 1 Potential for 80 move outs a year.

01:02:44 Speaker 3 And move ins and speeded houses aren't like the hardest to manage, are they?

01:02:52 Speaker 1 What's 80 times four?

01:02:54 Speaker 3 80 times four?

What do you mean four?

01:02:56 Speaker 1 What's 80 times.

What's 80 times four?

01:03:00 Speaker 3 It's 320.

01:03:01 Speaker 1 Okay, so 320 quarterly inspections a year.

01:03:04 Speaker 3 Oh my God, that sounds like a full time job, Gabby.

01:03:07 Speaker 1 That is a full job.

01:03:07 Speaker 3 That actually sounds like more work than the previous job that they worked at.

Yes, I would rather stay at your job.

I would rather.

I would rather weld than do that.

No offense to my welders, but you know what it's like to burn rod.

You know what it's like to watch that wire spin.

I, I don't want this to be something that discourages you.

I just wish that people said this up on stage.

I just wish that when people googled how to invest in real estate, this is what was said.

And they didn't set unrealistic expectations for people.

They set them down this path.

Years and years of trying to find OPM to get their first joint venture partner, and they finally get their first one, they're like, all right, one of 20, done.

I'm almost on my way to financial freedom.

01:04:02 Speaker 3 And then it's funny how none of them ever reach it, right?

One, because it's fucking hard.

And two, eventually, somewhere along the line, normally about three, four, five, six years later, they finally pull out a calculator and realize, oh, shit, this is terrible.

Or maybe they get to 10 tenants or 20 tenants and then they're like, oh my God, I can't do 80.

This is ridiculous.

Right?

They realize that this whole dream they've been sold is a fucking sham, right?

Oh, but wait, Gabby, wait.

I've got another solution for you.

Something that we like to call M Li Select.

Why would I put 20% down when I can put 5% down.

So, you know, it might not be as many tenants.

So maybe we can utilize this MLI select program.

This will be the solution to it.

01:04:55 Speaker 3 But the truth is that it's not really the solution to it either.

And I can go through all of that math with you, but I'm running out of time, guys.

The truth is that what I don't want you to do is come into this space thinking that this is going to be the solution for quitting your job.

There are ways to go about utilizing cash flow to quit your job.

This is not going to be a quick thing, to be honest with you.

I'm going to share something realistic with you.

I bought a property 10 years ago that when I bought it cash flowed $140 a month.

Today, that property cash flows $900 a month.

Does anybody want to know why?

Do you want to know?

01:05:42 Speaker 1 Please?

Yeah, please.

01:05:44 Speaker 3 The reason why is because the mortgage payment stayed the same, but the rent went up.

That's because over time, market rents will go up, but your mortgage payment stays the same because you establish the financing when you bought it, right?

And over time, 1%, 2%, whatever, per year, 3% per year, rents will go up.

And as the rents go up, the difference between the expenses and the rents, the expense that, that margin, that cash flow increases as well.

So here's the deal.

You can maybe buy 10 properties and just kind of sit on them and be patient for 10 or 20 years.

If you wait your cash flow, that cash flow margin will increase over time as long as you don't refinance those properties.

01:06:37 Speaker 3 So if you can wait 20 years, realistically, there will be enough cash flow there and you could live off of that cash flow.

I like that approach a little bit better because it's a lot more conservative.

By then, you've built up a significant amount of money in your reserve fund.

Assuming that you didn't deplete it with, you know, a roof and a furnace and all those other things.

And if there's enough money in the reserve, and if at that point there's enough cash flow as well, and it's a nice, healthy amount, then you can make the smart, educated, calculated decision of whether you want to pay yourself out some of that cash flow every month.

Right?

But don't come into this thinking, I need to buy a property, it needs to have $500 a month in cash flow.

01:07:15 Speaker 3 I need to buy 20 of them or 40 of them, right?

So that I can quit My job as quickly as possible.

I think you guys should completely remove that vocabulary and those statements from your mind, from your head.

If you hear anyone say it, I want you to slap them in the face.

The industry needs to change.

The dialogue needs to change.

How educators try and sell tickets and put butts in seats needs to change.

Come up with another gimmick, for God's sake.

Come up with another marketing gimmick.

Because I think that real estate investing alone just as a way to build long term wealth, just as a way to better your financial future, just as a way to create certainty for your, how much inheritance you leave for your kids and your retirement.

01:08:02 Speaker 3 That alone is enough to sell tickets, that's enough to sell programs.

That right there.

Because people came here originally with the intention or the, the objective of learning how to invest to better secure their financial future, they did not come here wanting to quit their jobs.

You put that in their head, not them.

You put that in their head.

You're the freaking reason for the problem.

I will not do that to you guys.

I will not set unreal realistic expectations to sell you on our program.

Not going to happen.

We're going to have realistic expectations.

We're going to, we're going to back all this by facts and math.

And if you are willing to work really hard and if you are patient, I will show you how you can leave your job realistically in the future.

01:08:53 Speaker 3 But we're going to do it conservatively, we're going to do it safely, and we're going to do it without putting your current financial, your current family finances at risk.

I'm not going to put you into high risk strategies just so you can quickly leave your job, which isn't even sustainable.

I want to make sure that everything is realistic is the word of the day, by the way.

I want to make sure it's realistic and I want to make sure you're not putting your family's finances at risk.

Okay?

I hope that you guys can respect that.

I think I put enough math together to give him a realistic expectation or not an unrealistic expectation of how long it would take as far as the $3.1 million equity is built over time.

01:09:38 Speaker 3 Okay, you can't build equity quickly, not unless you're doing value add renovations, which is a risky strategy.

It's risky, but if you want to know how long to build $3.1 million, pull up a mortgage calculator, pull up a regular calculator and figure out how much money gets paid into my mortgage, into the principle of my mortgage, every mortgage payment that I make.

What you'll find is if you buy a $500,000 property amortized over 30 years at 80% loan to value, I'll actually pull up the real calculator.

I'll give you the real number.

That way I'm providing value at 4.5% interest over 10 years.

At 4.5 interest, it pays off $62,200 in mortgage pay down.

Okay, so if you were to buy a $500,000 house and you had a 4.5% interest rate for the next 10 years, you would pay off.

What did I say?

01:10:44 Speaker 3 $62,000 worth of mortgage pay down.

Okay, if your house goes up 3% per year.

Sorry, Scott, my calculator here.

If your house goes up 3% per year, on average, that they will have about $80,000 worth of market growth.

Okay, so 80,000 plus what?

80,000 plus 62.

Not including any cash flow, that property will make about $142,000.

So if you want $3.1 million worth of equity, then take 3.1 million and divide it by 142,000.

So you would need 21, 22 suited houses for the next 10 years to have $3.1 million in equity.

01:11:32 Speaker 1 And purchasing all 22 of those properties.

01:11:35 Speaker 3 Today, cash your own money, bought them today, literally.

So you would need 20 times 100,000.

You would need $2.2 million.

Buy all those 22 houses today, and in 10 years.

And in 10 years you would have $3.1 million.

If you wanted to do with the OPM, you would have to buy.

Well, you would need four point, whatever, $4.5 million of OPM.

You'd have to buy them all today, and in 10 years you would have $3.1 million of net worth.

Again, I'll just.

This is all math, guys.

Just simple.

I'm doing this for you guys to set so you guys know what's real.

And if some of you guys came in here and you're like, oh, shit, like, I don't want to do real estate, then.

Then don't.

Whatever.

I just, you know what I just did?

Congratulations.

01:12:21 Speaker 3 I just saved you guys fucking six years of running around with your head cut off and not really knowing what it is that you're doing.

And I feel better about that than actually, you know, helping people, you know, the ones that are going to stick around.

I feel better about saving all of those other people tens of thousands of dollars on dumb courses that won't teach you anything.

And wasting your time for six years on a path that's not really going to get you the outcome or the result that you want.

I feel better saving all those people that time and that money, that's a huge.

That's a huge win for me.

But for everybody else, that wasn't discouraged by this.

Stick around.

We're going to teach you a few things and you're going to do really well.

01:13:02 Speaker 3 But you're going to do really well with your eyes open and realistic expectations.

01:13:07 Speaker 1 Love it.

01:13:09 Speaker 3 All right, guys.

01:13:10 Speaker 1 What a banger.

01:13:11 Speaker 3 What an absolute banger.

All right.

Super long show.

Thanks for sticking around, guys.

To all of our students in our mentorship program, we're looking forward to seeing you guys tomorrow.

And for everyone else, we'll see you guys on Monday.

01:13:24 Speaker 1 Have a great day.

Bye.

01:13:28 Speaker 2 Thanks for listening.

Want to be coached personally by Wayne and Gabby?

Then you should join the Real Estate Investing Master's mentorship program.

Details are in the show.

Notes to get started.