Episode Transcript
Speaker 0 00:00:02 Hey guys, it's, Penoza here with the more to life real estate investing podcast, where we help you get more to life through the power of real estate investing. I wanted to take a quick minute here this morning and deliver this solo, um, factual interview with myself, um, about how grateful I am, the support, uh, and feedback and positive reinforcement and support through all of our listeners. Since we started this podcast has been incredible. Um, we just surpassed a year in recording our episodes. We're on episode number 41. So we've delivered 41 episodes in that first year. And you know what amazing, amazing statistics I want to share with you. And again, super grateful for this. We're just at 11,135 lessons in our first year of recording. So like almost, uh, like crazy numbers that I never thought, you know, that I would see a year ago when we started this podcast.
Speaker 0 00:01:13 I hadn't, I really didn't know what to expect other than I wanted deliver some great content. Um, obviously all the knowledge I have 11 years being in the business, plus bringing on some amazing speakers that, you know, we've done and it's indicative of the feedback I'm getting from listeners and whatnot on, on how they're enjoying, uh, the information, the episodes as they roll out, uh, week after week after week. So, you know, what another P uh, piece of information we're just in the last 90 days, we're at almost 5,000 listens, which is incredible. And again, guys, I'm super, super grateful, um, for all the support and positive feedback that we're getting. So I'm gonna continue pushing and I want to continue putting out some great content. I mean, some of the, some of the guests we've had have been incredible sharing their knowledge in the industry, right from the dos and don'ts to some great tips to their experience, the mindset component of all this, and, you know, failing forward and, uh, just sharing everything they've been able to accomplish some great successes they've had that obviously you can put in your toolbox and, and do the same, or, uh, just help you in general.
Speaker 0 00:02:33 So that's the goal here is just deliver that great content that we've had and continue to help you on that note. Um, again, thank you so much. It's been a great first year accomplishments have been superb and I'm over the moon grateful for, for all your support, continue to leave our comments and rate us on iTunes and everything. It helps modern podcasts like us. It, it obviously goes a long way and we'll continue to put out some great content. Great, great guests. Uh, and we look forward to trickling what we've done this first year in our second year on that note, let's get into this next episode. Cheers. Hey everyone, it's Adrian. Pozo here with the more to life real estate investing podcast, where we help you get more to life through the power of real estate investing guys, I'm super, super pumped today. We're doing something that we've never done before on the mortar to life show.
Speaker 0 00:03:30 And that's bringing back, uh, in a fireside kind of chat to really, really powerful people in the real estate investing industry that, um, were on our show, uh, way back episodes, 11 and 12. So I invited both these gentlemen, um, to come back on our show. Our good friend, Wayne loves real estate, um, is here with us again. And Matthew has, uh, millennials choices. Come back again, but let me, for those of you who don't remember how qualified and amazing these two guys are. Let me just tell you quickly again, a little bit about who they are and where they're from and what they've accomplished. So starting off with Wayne, um, way back, you guys can even go back to episode number 11 and listen to that episode again, where he tells us all about his life, but in a nutshell, Wayne's self-made man. And, um, Wayne is a real estate investor, uh, as well.
Speaker 0 00:04:35 He started out by acquiring properties across the GTA, leveraging property equity, building a portfolio over now, probably closer to 14 million all without any formal training. He has since become a licensed real estate agent. And he's ranked within the top 1% in Ontario, which speaks volumes as to the experience. This gentleman possesses in the real estate world and being licensed realtor as well, going hand in hand, he's a self-made man whose hard work ender determination has allowed him to take charge of his life. Not only is he built up a solid portfolio, giving him and his daughters, the financial freedom, cuz every time I talk to you, Wayne, you're somewhere in Europe, <laugh> uh, enjoying the fruits of your labor. Yes, but um, to chase his and their dreams, meaning his daughters, but also fulfilling job that satisfies Wayne's passion for real estate and provides exceptional worklife balance. Thank you, episode number 12 for everybody listening, go back to that. Listen to that one. Uh, Matthew applicant was interviewed by us way back when, um, Matthew is essentially the founder of millennials choice group, a real estate, mortgage insurance and education brand aiming to assist Canadians with their real estate mortgage and insurance needs. He's acquired his first property. Believe this guy's age of 19, this guy bought his first investment property. Now at the age of, are you still 29? Are you
Speaker 1 00:06:19 30, 39
Speaker 0 00:06:21 <laugh>. Okay. So now you're 30. He owns over 23 properties over a 15 million portfolio. He holds a bachelor in education, an honorary degree in law society, real estate brokers, license and mortgage brokers license, a life insurance agent license. Um, he hosts the millennial choice podcast produces content on YouTube at the millennials choice channel. And also does some public speaking to further educate others. I'm pumped to have these amazing individuals of wealth of knowledge. And what are we talking about today? The topic of the month, couple months, several months, the real estate hikes in the interest rates and how that's affected our markets. Our clients are investors ourselves as we're. The three of us are all investors. So it's more of a mastermind guys. I want to put out to all of our listeners where you are at what your comments are, what your stats are so on and so forth. Your clients, yourselves, everything from a to Z. I want to go hard for 30 minutes and I want to get out there as much as we can to all of our listeners, cuz most likely some of your followers will be listening to this sooner or later as well. Your clients, your, your investors, as well as mine for that matter. So Matthew let's start with you is the world ending. Where's this going? What's happening out there. What's your professional opinion on everything going on right now?
Speaker 1 00:08:03 So, so first of all, I just wanna say thank you to Adrian. For those of you guys listening, Adrian is doing an awesome job. Content creation is not easy. All three of us know that. And also I'm looking forward to doing this with Wayne, who is a peer of mine. We, we know each other off social media and like Adrian said, he's one of the top 1%. So I think when we all came up, we didn't have podcasts and YouTube channels to listen to. Right. Uh, we were kinda just figuring it out as we went and we were asking different people, uh, different kinds of questions. So for those of you listening or watching this take advantage, take advantage of the opportunity, um, with respects to the, the world is, you know, it's still spinning. We're not worried too much about that. Um, but there's a lot of fake news out there.
Speaker 1 00:08:50 Um, there's a lot of headlines and click baiting and a lot of different stats that are being thrown at people. And I've seen from the very beginning, since the first interest rate hike in March, a lot of people have just went on the sidelines. A lot of buyers are just either priced out of the market or they're waiting to see, uh, if this whole thing is gonna crash. If the, if the bubble is gonna burst and we have a lot of information for you guys today, lots of stats, but, uh, we're gonna explore that in, in greater detail. So what I'm seeing personally now that, um, we've had five interest rate hikes six months now gone by there's that always that little bit of an adjustment period at the beginning, when things tend to change from what we're used to, we're seeing people come back to the market.
Speaker 1 00:09:37 Demand is up month, over month and prices are up year over year. Prices are also up month over month, rents are up. I mean, I think Wayne would concur that we're busy where there's a lot of people in the market we're looking for deals. And the interesting thing is, and I hope we touch on this later on in this conversation is that supply is also down. Yes. You know, we, all we were talking about in February and January of, of 2022 was how are we gonna keep up with demand? How are we gonna build enough? We're not building enough. Um, in any given year, if Ontario builds 40,000 units, that's huge. And we're, we're nowhere near that now. And we need millions of homes to satisfy demand. So the world's still spinning real estate still looks good. And uh, I'm, I'm still investing personally myself.
Speaker 2 00:10:24 Yeah. And I just wanna jump in there. So first of all, again, I wanted to say thank you again. I always love to be around and share my energy with people that have the same sort of passions as I do. And, uh, this is my first time actually speaking to Matthew, even though we've texted back and forth and obviously Ari and I have, uh, have spoken several times before I echo a lot of what Matthew's saying. And I have to tell you, it is absolutely fantastic right now because what we're hearing every day, when you listen to the radio, when you watch the news, or when you read anything in the media, they keep speaking negatively. And the more they speak negatively, the better it is for us. Cuz I can tell you when it comes to real estate investing, it's the easiest concept in the world.
Speaker 2 00:11:07 You wanna make money in real estate investing. It's the same thing as playing poker. If everybody in poker is playing passive, you play aggressive in real estate. If everybody's selling, you buy, if everybody's buying you sell. So every time we hear in the media that it's a bad market, these are the same people that were telling us. It was a good market. Back in January and February, I can let you in on a secret, there is no such thing as a good market and no such thing as a bad market. We have three types of markets. We have buyers, market sellers, market balance market. So right now we are in a buyer's market. And what that means, there's more sellers than buyers. That buyer's dollar is going a lot further. He's getting offers often accepted. That include conditions. Now because of that, these buyers are getting fantastic deals.
Speaker 2 00:12:02 If you have investor clients, or if you're an investor yourself, you should be lined up around the block to be buying right now. Now the same metrics. And this is just what Matthew said. And again guys, sorry, if I get on a tangent, just tell me to stop. <laugh> I get a little bit passionate, but I echo exactly what math. You said, the same metrics that were in place in January and February that made real estate so expensive are still present today. And it all comes down to supply and demand. We do not have enough supply for the demand that is out there. So obviously supply goes down, demand goes up and consequently pricing. Right now we are in a freeze because of what we saw with those interest rates. Now with those interest rates going up a lot of times, the big mistake is a lot of people look at real estate emotionally, as opposed to analytically, I've listened to Matthew's podcast.
Speaker 2 00:12:58 Matthew breaks everything down analytically. He will go through percentages and numbers. And if you can listen to that podcast and not be excited to buy today, I don't know what time you are gonna be excited. Listen to the people that know all of us as investors are loading up right now because we know that we can't change the price that we paid for a property to get into it. But as that interest rate starts to go down, which is going to happen in my opinion, Q3 Q4, next year, as we start to slide into our recession and obviously the lower the interest rates can stimulate the economy, look at the value of those properties. Going up again, comes down to the age old thing that everybody says, it's not timing the market. It's time in the market by two day and sorry, I'll throw back to you guys.
Speaker 0 00:13:46 Now. That's a, that's amazing advice. And uh, I'm I don't need to tell everybody out there listening that obviously I concur with you both. Thank you. Um, I had a conversation actually this morning with an investor and it's funny because I think at this point in time, we are gonna take advantage. We will, we are, we are taking advantage of the prices because we're buying less than what we would've bought at the end of 2021, per se
Speaker 2 00:14:17 Exactly
Speaker 0 00:14:18 The balance. Now though mindset concept, correct me if I'm wrong and maybe you guys see it differently in your market centers, because I know Matthew, you do a lot of business in the condo or pre-construction and stuff like that and, and whatnot, but out in Hamilton where we're at, um, we're getting, we're taking advantage now being the buyer's market, but obviously with the interest rates, um, cash flow, obviously isn't as abundant as it was when rates are 2% mm-hmm <affirmative>, but like I'm trying to educate and, and I had this conversation again this morning with an investor I'm trying to educate and say, okay, but we're buying the property potentially for 150, $170,000 less. Now. Yes, our rates are higher. Our cash flow is a little bit lower. Yes. But when the market turns again and now that that property starts to keep, continue to go up and value and interest rates come down a bit we're winning on both ends.
Speaker 0 00:15:24 You are, and their cash flows gonna go up, right. Because rates will come down, but maybe they won't come down at 2% where they were or, or high ones. But you know, everybody's saying, yeah, there, there will be, there will be, uh, them, them coming down. Okay. So then we're gonna win because right now we're buying it much less. Mm-hmm <affirmative> the numbers still work and we're not in the red, when interest rates do come down and prices go up. Now our cashflow will be more so we're, we're gonna win in the end long term wealth. Right. Investing in real estate and whatnot. How do you guys feel about that?
Speaker 2 00:16:03 Yeah. So I'll just jump in here for a second. If you guys don't mind and I'll let Matthew, uh, follow up. Um, listen, I know a lot of investors really like cash flow and I understand why, but cash flow is not the true indication of the value of a real estate asset. And I'll tell you why, because if you put a large enough down payment on any property, it's gonna be cash flow positive. For me, there's only three ways to make money in real estate. There's cash flow, which personally, I don't really care about too much cuz at the end of the day, it's taxed. Uh, the second is appreciation. Now, as we, as we've seen the last five years, we've had crazy appreciation. I don't view appreciation as something that I focus on when I'm purchasing a property. Uh, because to me appreciation is fantastic, but it's the icing on the cake.
Speaker 2 00:16:47 We can't expect 18, 14, 8 and 6% returns year over year. Um, typically over the last 100 years and I know Matthew knows more about stats than I, but I believe that, uh, if we look at the last 100 years, Toronto real estate appreciates that 4% on average every year. So I always cut that in half and I always just say 2%, but the one way that I always focus on those three there's cash flow appreciation. And the one I focus on the most is equity build equity build is by far the safest way to make money in real estate. Every single month that you pay that mortgage payment after the tenant pays you rent half of that mortgage or thereabouts is dedicated to principal pay down. The other half is interest. So every single month that that mortgage payment gets paid. It's like having a forced savings account.
Speaker 2 00:17:38 So if you have a mortgage payment of hypothe, hypothetically $3,000, 1500 is, uh, principle 1500 is interest $1,500 a month times, 12 months, it's $18,000 at the end of the month at the end of the year, excuse me, no matter how bad the market is, it could be up. It could be down at the end of the year, you have $18,000 that you just got for free because your tenant anticipated off. Now, listen, I know that appreciation and cash flow are sexy. I know that appreciation and cash flow things that people like to hear. But for me, they're fantastic, but it's viewed as icing on the cake. I'm not a gambler, I'm an investor. And as an investor, I know I'm getting that $18,000 every single year, the other stuff fantastic. But that's not what I focus on. But again guys, I appreciate you guys giving me this phase. Cause I know I speak a lot and I'm incredibly passionate, but uh, I'll throw over to Matthew now. Go ahead, Matt.
Speaker 1 00:18:34 Yeah, and I, I echo everything you're saying Wayne. The other thing is to keep in mind with real estate investments that may not come with other investments is so all the interest rate on your investment properties are obviously a tax deductible items. So when you who are listening are investing in real estate, the CRA sees it as you're buying into a business and the property becomes the business. So you collect income in the form of rent and then you pay expenses in the form of property taxes, maintenance, fees, interest, and realtor fees, accounting fees, anything that you pay fees on. So there's, there's a lot of things to consider when you're talking about is real estate, a good vehicle for you to invest in. So you have expending the interest. You have depreciation with which a lot of people don't talk about in the property.
Speaker 1 00:19:22 So you can depreciate the value of your property. If you have a good real estate accountant every single year. And those two things are very, very important. And then the third thing that you don't see, and it's a mistake that my generation is making and the generation after me because everybody wants instant gratification. Everybody wants the microwave results is what Wayne just mentioned, which is that equity buildup. You don't see that money and, and it's gonna be something you're gonna see in a long, long term. Let's say, if you start refinancing your properties every five years, or if you sell after 10 years, whatever your strategy is, but it bothers me. And it pains me so much when I speak with people that say, well, I don't, I don't mind paying a hundred bucks out of pocket every month. You know, that's okay, but I won't do more than that.
Speaker 1 00:20:09 And it's like, you do understand that the principle is being paid down of the debt by the tenant every single month. Even if you're paying a hundred bucks out of pocket, big deal. And I still, my portfolio that way the office I'm sitting in right now, I paid for it through one of my investment properties. The second property I ever bought that first property Adrian mentioned, I still have that. It's tenanted. I still own that in my portfolio. And a lot of times I've had to pay out of pocket. A lot of times I didn't cash flow positively. And that was okay for me because as I grew and the, the experts know this Wayne and Adrian know this, for sure, as you grow your portfolio, it becomes less riskier than if you have the one property or the two property, right. It becomes less riskier for a number of different reasons, but especially because of vacancy.
Speaker 1 00:20:58 So you have 10 properties. One of them goes vacant. Well, your portfolio is 10% vacant. If you have one property, it goes vacant youre 100 time vacant. So you gotta grow. You gotta scale. And one other thing, and, and a lot of people don't like when I say this, but you need to understand the, the monetary system that you're in. And we're in a system where money is fabricated. It's created, it's injected into our economy. We're experiencing inflation because of all the money printing that our country has done over the last couple of years, I think the sta is like over 40% of the, the money we've ever printed happened in the last couple of years. I know that's the case in the states. So we're experiencing inflation. But why I say that is because if you understand the monetary system you're in, then you are gonna understand how to navigate that system.
Speaker 1 00:21:45 And in the system we're in, you need to borrow money. If you're not borrowing money, that is a good thing. But if you're not borrowing money, then your savings are, are just diminishing over a month. And, and you might look a year from now at your bank account. And the hundred K that you had in your bank account is still there, but it's not gonna be able to buy you as much as it was a year ago. So you, you, when you're investing in real, you gotta understand all these concepts cause they all are integrated and they play a very important role. And I do believe that rates will go down. Cause traditionally when you're in a recession, rates have to come down, cuz they want the government wants to encourage, uh, consumer spending and reinvestment to the economy. But also keep in mind that the, when we hear rates are going up, the bank of Canada is raising rates.
Speaker 1 00:22:33 We're talking about unsecured debt rates. We're talking about the variable rate, fixed rates operate on bond yield, which, which they're they're calculated completely differently. So when, when the bank of Canada raises rates, the income that a bond can generate typically will decrease which results in the value of the bond decreasing two. So the banks compete with the bond yields cuz they wanna raise money and they wanna raise capital. So the five year fix rates are, or all the fix rates are based off of the bond yields. So when the bond prices go down and the yields are going down and all that stuff, the banks are gonna also adjust their fixed rates. I think one of the issues we have here that we're not considering is people's ability to qualify for loans. So a lot of mortgage brokers and bankers are putting people in variable rates.
Speaker 1 00:23:22 Now, even though the climate is that the rates are increasing, but then they're locking in after closing because it's easier to qualify under the variable rate cuz the rate is lower than it is on the fixed rates. So we qualify at our, all of our applicants have higher interest rates than qualifying rate. And so that's sidelined some people, but what it's also done is it's put people into the rental market. So we're seeing 20% increases in Toronto, 26% increases in Calgary, 25 in, in, in Vancouver. And I think that trend is gonna continue. And if you're a real estate investor, regardless of what happens with the value, like Adrian said, we're picking it up for a couple hundred thousand dollars below what we could have in February, for example, but rent are going up. Yeah. So eventually things are gonna catch up and then maybe like Wayne said, you're gonna have the, the cherry on top, the icing on top, which is the cash flow and then the appreciation.
Speaker 2 00:24:17 Correct. And that's an amazing point that you're getting that, that you hit on as well. And that's what we keep coming back to the same metrics that we're in place in January and February still there. And I don't know if you guys know this, but I'm sure you guys probably do. I'm not sure how much developing you do on the site. Cause I know Matthew did you do a lot of, uh pre-construction as well, but even in the GTA, within the last six months we have doubled doubled our fees and development fees. So all that does is that it's going to limit the amount of properties that are going to be out there. It's the same situation that we're going through right now. And as a landlord, I can tell you I've had some pretty bad issues at the LTB as I'm sure you guys know the RTA, the residential T act is so favorably, so heavily favors the tenants. It's not even funny, but that's actually a good thing when you look at and the reason why it's a good thing for an investors and an awful thing for renters is because all that does, is it disincentivizes any developer from creating any rental properties? Like if you look at the GTA over the last four years, Matthew, I'm gonna ask you how many new condo projects have been available in the last four years, 2022
Speaker 1 00:25:24 Tons, tons, tons.
Speaker 2 00:25:26 But how many of those are residential rental apartments, zero zero. And that is a beautiful thing. The harder they make it for landlords, the harder they make it for the RTA RTA, it disincentivizes those developers from building rental properties. Because if it wasn't so heavily favored towards tenants, obviously developers who are driven by their bottom line would build those rental properties. So because they're not, it gets us an opportunity to get in there and be landlords. And all you have to do is weather the storm with any bad tenant that may come up because I can tell you just like Matthew hit on. I've seen it myself. I just did two leases for two clients. Each of them got, um, a ton of offers. I don't wanna get into the exact details, but a ton of offers that are roughly 25% more than what the same unit would've rented out for six months ago.
Speaker 2 00:26:24 So as a landlord and as an investor, no matter what the situation is, hold onto the property, weather, the storm. If you have vacancy, if you have a bad tenant, if interest rates go up, if all a central property taxes go up or they want to hit you with a wealth tax or a vacancy tax, all of those things are small picture. You will notice that the wealthiest investors over time focus on the large picture. Remember I heard this from my father once when I was a little kid, because I grew up around real estate and he told me, rich people sell real estate, wealthy people hold onto it. The longer you hold onto that piece of real estate, the more money you will make. So just weather the storm investors. And especially again, I know Matthew does a lot of the precon and I'm sure as these properties are start to be, um, obviously absorbed into the market and people are closing.
Speaker 2 00:27:17 And if they were expecting to make $200 on cash flow, maybe they're negative $200. Now that does not matter. You are focusing on the wrong thing. Focus again on that equity bill focus again on holding that property for as long as possible focus again on, not on the here and now, but in the big picture over time, the longer you hold that real estate, the more money it will be worth. And I'm sorry, again, I don't mean to be jumping in here, but even when you said Matthew, that some investors of yours are a little bit upset about losing a hundred dollars or $200, those are some of the same investors right now that are putting $200 into an RSP every month or a mutual fund. Instead of doing that focus on your own money, why are you going to let somebody else dictate how much that RSP mutual fund pension plan, stock bond?
Speaker 2 00:28:09 What have you is going to be worth again? Remember once you know how money works, you have to understand the best assets to have are tangible because they can start printing money tomorrow. And as they print that money, obviously with inflation, you're buying power goes down. If you buy those properties, if you buy a tangible asset where somebody is living, it's not a desire, it's a need, it's not a want, it's a need. There will always be a demand for residential real estate because people need to live there. But again, sorry for hijacking back to you. Sorry.
Speaker 1 00:28:43 Yeah, just wanted to just wanted to chime in on those points. Yeah, please. We completely agree. So number one, with preconstruction real estate, I'm closing a building out in Barry. Now that was purchased in 2 20 19. So we sold uh, 38 units in 2019. We're helping people grow. We're finding tenants. Uh, my brother's doing mortgages and, and we are still generating a couple hundred bucks positive cash flow at rates of five and a quarter.
Speaker 2 00:29:11 Beautiful,
Speaker 1 00:29:12 Beautiful there's time on our side, right? That's that's one of the best things about what, what you need to do in real estate. You gotta have time. Um, but the other thing is cuz the topic of conversation I I'm hearing the most. I was oh, stock market's crashing. Crypto is crashing real estate follows shortly thereafter. Well, let's just play this back a little bit. When COVID first became mainstream news in north America, it was sometime March of 2020. And we saw the stock market tumble and crypto was down as well. But then what happened? They injected money into our system. And typically when money's injected in our system, it's going to all these big corporations, we see a small piece of it and they're buying back their own stock. That's literally what we saw happen. And what did we see millennials do? And gen Z, they dumped a bunch of money into crypto.
Speaker 1 00:30:03 Here's the thing. We have something called utility and utility in real estate is simply people need a place to live to live. Now all the money that's being taken out of the system has resulted in the stock market and the crypto market to crash. So what do people expect those listening here? What did you expect to happen when money's being injected into that market? Obviously things are gonna go up and when money's taken out, things are gonna go down, right? You're a yoyo in those markets. We're not yoyo is in the real estate market. We're not, we, we have strategies that we follow. And I just wanted to point that out because I always get asked that question. I say, you cannot even compare gold, silver and, and crypto and stocks to real estate. Cause we have utility. People need a place to live. We have immigrants coming.
Speaker 1 00:30:51 The border was closed for two years. Uh, premier, Doug Ford even said it recently in a press, we need more immigrants. We have the jobs, but they're vacant. We need people to work those jobs. Okay. So I see growth in our future. And then when we're talking about new construction, the cost is going up every single month, just quarterly, like from the second to third quarter, the cost to build went up just over 5%. So in a year, if it just continued that way, that's a 20% increase. Yes. And what builders are doing now, especially the big ones we work with. Even the big ones are not able to, I say guesstimate, the cost of construction and what that's gonna be in 2023. So they're holding off on launching new projects because they don't know how to price them and what that's gonna do, cuz regardless of what the government says, you guys, it's the builder and developers that control the supply.
Speaker 1 00:31:47 Yes. It's private property. You can't force them to build true. So if they're gonna say, we're gonna build, you know, we're gonna postpone these launches. We're gonna build maybe end of, of 20, 23, we're gonna start launching these projects. It's gonna put further constraints on supply, further pressure on supply, which as we've been saying this entire episode, yeah. Is one of the things that is creating this, this problem that we have with housing affordability and that's gonna continue. This is these interest rates, you know, going up here and there five times, uh, we were U we were spoiled. We were used to interest rates being basically nothing. And we had free money. Uh, so we were spoiled, but the curve ball I think, is gonna be when we see the federal budget next year and what they decide to do, um, mortgage qualifying. If, if anything, we might see 40 year come
Speaker 2 00:32:39 Think so too.
Speaker 1 00:32:40 We, Japan is hitting a hundred year ization. Yeah,
Speaker 2 00:32:43 Yeah. MultiGen yeah. Yeah.
Speaker 1 00:32:45 So they're gonna figure out a way maybe to make things more affordable. But those people that are waiting for a crash, they're listening to this letter are hoping guys, you know, what's gonna happen. If things, if we play that out, that scenario out and things did crash, you're not gonna time the bottom and you're gonna lose so much confidence that you're probably not gonna buy anything anyway.
Speaker 2 00:33:05 Yeah. So
Speaker 1 00:33:06 You gotta be buying in, in all cycles, you see a good deal. You love a property, you understand the strategy you're use on that property. You buy all beginning Q1 and Q2 this year I bought and I'm waiting for, for a few deals that I'm watching that I wanna, I wanna make a move on. So we're buying it.
Speaker 2 00:33:26 Yeah. And I couldn't agree more. It's the same thing that I've, I've heard that too, is that some people wanna wait for the crash. Now remember real estate as much as guys like us, look at it. Analytically, the mass majority look at it emotionally. And the problem is is that the property market will never crash. And the reason why, the only way the property market can crash is if more supply hits the market. And the only way that more supply hits the market, if more people decide to sell now, while I will ask you those people don't look at it, analytically, they look at it emotionally. So say hypothetically, I come up to someone and this lady wants to sell her house. And she turns around. She says, yeah, Wayne, I bought this house for $800,000, excuse me. But I heard the markets crashed. So now I can only get $600,000.
Speaker 2 00:34:10 Can you sell my house for $600,000? And when I bring her an offer for $600,000, she's gonna say, well, thank you. I just won't sell. Like I'll just sit on it. Which is one of the reasons why even in Toronto, the same thing we keep going over supply and demand. The same metrics are in place. Doesn't matter if the market is bad, it doesn't matter if we're in a recession. It doesn't matter if interest rates are up, people are still gonna get married and have a child and therefore need a larger place. We have our older generation that is living longer. They need a place to live. We have, um, obviously a very good birth rate, our birth rate. I think it went up from 1.8 over 10 years ago. And now it's at 2.2. So all of these things, not even including the 400,000 new immigrants coming to Canada every year, 60% of which settle in the GT, a, those metrics will further show that all our issues are surrounding supply and demand.
Speaker 2 00:35:09 The older people are living longer. We're still having children. We have immigration. And if I come to somebody and I say, Hey, listen, your house was worth a million dollars like, you know, last year. Um, now because the market crashed, I can give you 500,000. That guy is gonna tell me to take a long walk on a short deck. So there are people that are waiting for this crash. I'm sorry, it's not going to happen, but please keep listening to the media that says it's going to, because it just, just allows the rest of us that really understand that opportunity to keep buying these properties at a very good discount. But I just wanted to, uh, say that back to you guys.
Speaker 1 00:35:46 And, and Warren buffet says it perfectly. I'm not a Warren fan to be honest, but he says, be fearful when others are greedy and be greedy. Exactly. Others are fearful
Speaker 2 00:35:55 When hundred percent
Speaker 1 00:35:57 To be greedy for a lack of a better phrase. And um, yeah, I, I totally agree with that. And, and I just, just to go over some quick, quick stats for you guys, like at the end of the day, it's all about the numbers for me. That's what I base it off of. That's what I think anyone should base it off of, but year over year. So we're talking now August, 2021 to August, 2022, the total number of transactions year over year are down 34.2%. So we went from about 8,500 transactions to 5,600. Now I, I like that stat, but I wanna look at what happened to from July, 2022 to August, 2022, just one month. The reason being is we know this cuz we're in the industry. Summertime is always a slower season than real estate. Like people are vacationing. Uh, these last two years we've been locked down so more and more people wanted to go out and that's typically a slower season.
Speaker 1 00:36:53 So what happened from July to August, we actually saw the number of transactions go up. Demand is back mm-hmm <affirmative>. So not back to the February levels, not back to the January levels, but it's back now year over year, prices are up about 1%, but I wanna look at from July to August, prices are up actually 2%. So for those people who are quoting, and this is an average, right, we're talking all properties types and it's, there's an average, right? But for those people that were looking and saying, oh, the market crashed 20% already. It's like, well, based off what?
Speaker 2 00:37:29 Cause
Speaker 1 00:37:30 You could throw that number out there. And everyone says doom and gloom, like, you know, the sky is falling. But when you're saying that price corrected itself from February to March or March to April, okay, well what's happening from April to may, may of June, June, July, July to August. Prices are up and year over year prices are still up. So if you're waiting for this correction to happen, you are better off buying at the start of COVID. Then you are now cause prices are still expensive. And we also wanna talk about supply. So supply the total new listings year over year, it's not down by much, it's down by 1%. But going back to what Wayne is saying, the only way the price is really gonna adjust is if it's just common sense, you have lots of people trying to sell and not a lot of people wanting to buy. And so supply is down and that's something we really want to pay attention to because that's gonna be the determining factor of what's gonna happen to prices. As, as everybody wants to know
Speaker 2 00:38:30 Exactly
Speaker 1 00:38:33 I'm us.
Speaker 0 00:38:36 I think you guys are on roll echo with each other back and forth. You guys are on a roll. I'm letting you go. And the, the, the content coming out from this back and forth between you and Wayne, this is exactly why I wanted to put you guys on together and just let it go, uh, free for all sort of open fireside chat, but no, the content coming out of this and, um, the, the comments, the statistics and everything like that, I think is invaluable to the audience. And I, I wanted, that was my goal today. I wanted to put out this media hype that this is such a terrible time. If you're buying real estate and the world's gonna end and oh my God, oh my God. Oh my God. And it's all, you know, part of my, friend's all bullshit at the end of, of the day, right?
Speaker 0 00:39:26 Because you're talking and you're hearing guys from two very, very highly competent people in this industry that speak facts and no media bullshit behind it. And I'm, I'm a true believer too. I mean, we bought three properties last month. Our goal is to buy another three this month. Nice. We're not slowing down as well because I agree like now's the time to buy. And I'm really pushing all of our joint ventures to do that because when this turns we're gonna capitalize huge, not only when, when prices turn and continue, then go back up, God knows to what, but when interest rates start to fall, it's gonna be a win-win for us. End of end of story. End of story. So, yeah, I, I, I, I really like hearing you guys go hard back and forth, so yeah, if there's any, uh, other comments you guys want to touch upon, we're kind of getting up to the 40 minute mark. Um, but let's, let's wrap it up with maybe another, I don't know, three to five minutes. Are there any other things you kind of want to touch upon or go over one more time before we get to the boards? The end here, Matthew, you wanna go ahead?
Speaker 1 00:40:41 Yeah. So one concept that I've been, I've been really looking into a lot more than before is everybody talks about real estate and says it's location, location, location, the three LS. And I obviously couldn't agree more, but that is gonna be, I think, way more important than it's ever been going forward. And the reason being is that where the jobs are, where the people are moving to what's happening in that local economy, what's happening at all levels of government. That is gonna be super important going forward because you're gonna see different markets behaving differently. And you may see a market that is down 20%, but then you'll see another market that's actually up 20%, right? So for those listening and those wanting to get in, or even, even some investors that are just get that are getting started, have a couple properties under their belt, by the best locations, that's, that's gonna be so important, close to transit, close to universities, close to hospitals, close to anything that moves an economy and makes a big impact in the economy.
Speaker 1 00:41:46 And that's gonna be way more important than it's ever been. Cuz if you say I'm buying a property in Toronto, okay, which part Malvern or Ville like you wanna buy something in VA? Are you buying something at, you know, I don't wanna knock a property I have, but let's say Kela major Mac, old maple, or you buying it right at Western road and highway seven, there are differences in, in, in those locations and going forward, that's gonna be more important than ever by the location, by the best property in the location, in the best location. And also decide on the strategy you want. When you heard a few strategies today, um, decide on the strategy that works best for you. Everybody's different. There's no one size fits all. I started with preconstruction. I've, I've got into the point where I've been banking, some land land deals that I've been buying on my own and anything in between commercial retail, a little bit of multi-family, which I love single family, anything in between and, and good investors understand that, that you have to walk before you could run, but you're gonna make mistakes. It's part of the process, learn from them, learn from our mistakes and that's it look forward to the, the wealth you're gonna create buying real estate. Uh, we all have we, we enjoy it.
Speaker 2 00:42:59 Yeah. I thought you were gonna go another way with that. So it's funny. I thought it was just about ready to disagree, but I couldn't agree more on the location location location now. Uh, the interesting thing is, um, obviously for me, I will tell you that real estate can be viewed a couple of ways. Uh, it could be viewed as an end game, but also for that starting game. And that's what I was going to say that even though the location may not be the best or may not be the most ideal, if that's all you could afford at that time, then use that as that stepping stone and then eventually what you wanna do, or at least my strategy, not necessarily for everybody, but I always look at whatever I'm buying investment property. I look for three things, a am I buying it below market value?
Speaker 2 00:43:38 B is a cash flow positive, or at least cash flow stable and then C or three, what is it that I could do to this property to outpace the rest of the market gains? So that's what I do. When I identify properties, I try to buy the worst property on the best street. And then my exit is obviously the build and the development at the end. So the only other thing is that I just wanted to touch on. As Adrian asked if, uh, we wanted to throw anything else out there, guys, I have to tell you now again, I know I'm one of those called boomers. And I know a lot of people will say it was a little bit easier when we were coming up or there was, wasn't quite as many challenges as a millennials today. But what I gotta tell you is, listen, there are so many opportunities for those millennials right now to get on the phone and just Google Matthew, just Google, Adrian.
Speaker 2 00:44:27 Even if you wanna Google me, you have at your fingertips, not only sound strategies, but mindset, positivity, joint venture opportunities. There is so much opportunity out there that guys like us weren't necessarily afforded. When we first started, remember, it's the same thing that I was saying earlier today. I'm not sure if it was here or possibly to somebody else that I was coaching earlier is that you have to be very careful with who you share your energy with. Because again, we all have a finite amount, but if you just listen to this podcast and you don't get excited, because if you listen to the energy in this podcast, in this room, if that doesn't excite you, if that doesn't make you wanna pick up the phone and call Adrian or ask Matthew about land banking or ask Adrian about Hamilton, or ask me about GTA, then I don't know what is because eventually you have to choose.
Speaker 2 00:45:22 And again, I've said this, I'm not trying to sound arrogant, but I will tell you something I'm rich. And it is a lot of fun being rich. Why don't more people choose to be rich? All it is is it's a choice. I chose to be rich. And I did what it took to do that because every morning when I woke up and I know I heard you, uh, Matthew, that your counselors at university, I believe spoke down to you and said that you're gonna be washing somebody's car. I have a great 10 education. I didn't graduate high school. I dropped out because I had a hard time trying to understand when people would complain to me about things that I don't wrap my head around. When people complain to you every day about the price of gas or about a cell phone bill, I have no idea what the cost of gas is because I have to drive a car.
Speaker 2 00:46:12 What am I gonna do? Forget about it tomorrow. I don't know what my cell phone costs, because I need to use that cell phone. So in the end, all, I'm going to give as advice, talk to people that are where you wanna be. And don't share that energy with people that complain or they look for a problem for every solution that is out there. Again, guys, get on the phone, call Matthew, send him a text, go on Instagram. Same thing with agent. There is so much opportunity out there and just refuse to live an average life. And that's my only advice for anybody that hopefully is listening out there. I love it to live an average life. Oh, no way. I won't live average, refuse to live an average life used to live a life that's average. Like again, don't wear average suits or drive an average car or live an average life or go on average vacations or hang out with average people.
Speaker 2 00:47:06 But most important don't have an average conversation. Don't like, it's so weird when we used to sit on, I've used this example and I'm sorry, I'm not taking too much time. But when I was a kid, I remember we used to a grade seven or grade eight. We used to sit around the lunch table and everyone would talk about what kind of car they wanted. What kind of car their dream car was. You'd hear Lamborghini, Ferrari McClair and Maserati. Now you talk to, to those same people and they're like, I don't know, Toyota or Honda Dodge. What happened to you? Why did your dreams match your reality? No way, man, stop talking to guys about Dodges. Start talking to guys about the McLaren, because if you talk to them, even if you don't get the McLaren, maybe you'll land on the Ferrari and the conversations are just different with people that are driven with people that have ambition. And the most important thing again is you'll notice, even though a lot of us are goal driven. When we get to the goal, it's just kind of expected. We just enjoy that journey part. And as long as you enjoy that journey, this is a lifelong thing. It's a life long way or vehicle to live the life that you want. But again, guys, now I'm going off on a tangent and I sound like a used car salesman. <laugh> so I will throw back to you guys again. My apologies, man. I
Speaker 1 00:48:24 Just, sorry, Adrian. I wanna jump in real quick too. Don't live an average life, but also speaking to the millennials and the, and the gen Z don't live a dependent life. Everybody wants this utopian crap that's being pushed. And it was, I went to university and it was pushed. I hated university.
Speaker 2 00:48:41 Yeah. Right.
Speaker 1 00:48:42 But I hated it. I did it anyway. Cuz my parents forced me to do it. They didn't even pay for it. I did. But they forced me to do it. Cuz culturally that was respectable. Mm-hmm <affirmative> and so I did it, but they pushed this crap on you just look at what's happening in Venezuela. Look at what's happening in China. Look what happened to Iraq. Look what happened to I any other socialist communist? Correct? You know, once at the time the Soviet union look at what happened. They
Speaker 2 00:49:06 Crumbled. Cuba
Speaker 1 00:49:08 Becomes equally poor. Yes. That's what happens. So don't live a dependent life.
Speaker 1 00:49:15 I can't believe how many people were in the best country in the world. We are. I believe that. And how many young people I speak with my age or a little bit younger to, I think it's a great idea that the government pays for everything and we don't need to own house or all this crap. Yeah. Excuses for your own mediocrity because you don't wanna put in the work, put in the work. It's not easy. It's hard work. It is hard work and it's not easy. And real estate investing. Isn't easy. And we, that's not the message we're getting across here, but you have to understand that nothing is easy. So choose what you wanna do. Like Jim, Ron, I was gonna say Jim, as if he's with us, but Jim, Ron says, you know, pain of discipline or pain of regret you choose.
Speaker 2 00:49:57 Yes. But Matthew it's the same thing. Like so many of those younger people, uh, they're the ones that depend on the government to take care of them. When they're older, I can tell you without a doubt, that is not going to happen. No offense. But if you look at the way that we run our country, I will ask you, would you run your house with that much debt? Would you run a business with that much debt? Absolutely not. Even though, obviously we're promised that we put our CPP in the government's gonna take care of us when we're old. I do not believe it. Take your future into your own hands. Start to invest, start to, and if you can't afford to invest, I always ask people. Have you asked about a joint venture? Have you spoken to enough people? Because it's the example that I was writing in my book.
Speaker 2 00:50:40 It's the same thing that I call the bubble gum effect. I don't know who wants bubble gum around me until I take that pack of bubble gum outta my pocket. Once I take that pack of bubble gum outta my pocket, everyone around me wants bubble gum and they will come to me. You have bubblegum within you that bubblegum, you can share with your friend, with your barber, with someone, from your mosque, your template, your synagogue, the guy that walks your dog, the guy at the gym, a police officer, the, the crossing guard. Keep being yourself, always speak about your truth, your power, your object, sorry, your goals and aspirations that I'm telling you. You put that energy out there. I guarantee someone's gonna meet you. So don't tell me that you don't have friends that don't wanna invest. Don't tell me that you don't have no one else that wants to invest because each of us, we, we where you were at one time, but we kept living our passion, living our truth and speaking about what we wanted and the right people found us. Go ahead. Sorry. I didn't need to take over your point, bro.
Speaker 0 00:51:40 I love the energy man.
Speaker 2 00:51:43 Sweat.
Speaker 0 00:51:44 Yeah. Right in there. It's like you can rip your shirt off and fucking rip my language and go. You go. That's amazing. That's amazing. That's exactly what I wanted out of today's episode was to just get the knowledge out from these highly, highly, highly educated guys in this industry and the passion about it and forget about the media propaganda and you know, the, the world's ending and it's such a bad time to be in the real estate and everything else. The facts are the facts. As Matthew, you said the numbers are the numbers. We're still up year over year, month, over month actually demands coming back into our favor. So I'm buying another three properties, uh, this month and next
Speaker 2 00:52:32 Month. Good, thanks.
Speaker 0 00:52:33 We're not stopping. And if I'm living proof that it works for everybody listening, I don't know who else. Isn't 11 years ago, I was working night shift trying to get a half an hour sleep and behind a factory, trying to get comfortable in the back of a cruiser, um, sort of speak 11 years later, I could do what I want when I want, how I want, whatever day of the week, whatever time of the day it is, I can do whatever I want because with whoever you want with whoever you
Speaker 2 00:53:01 Want, whatever I want share the energy. I love it. Love it.
Speaker 0 00:53:04 Good point because of real estate. So yeah, you know what guys, um, for our audience, I'm gonna cut it. We're at 50 minutes, I thought we were gonna do 30, but it just goes to token. As far as the energy, these guys bring to the table and how passionate they are and what they do, uh, in them. So for everybody listening again, episodes 11 and 12, they were featured originally, believe it or not, we're already on episode. This is episode number 45 that we're up to now. So super something like that. We're, we're approaching over 11 500 listens on our, uh, podcast channel in just over a year. So I'm pumped about that. But for the audience, we'll start with, we started with Matthew, we'll start with Wayne. How do they get ahold of you, Wayne? Um, for people who want to connect with you, do business with you, where, where can they find you?
Speaker 2 00:53:58 Uh, you can find my, uh, dating profile at Bumble. <laugh> I'm kidding. Uh, sorry. That was silly. Vital. Uh, yeah, so it's, I'm always on Instagram. I actually like Instagram more than a 15 year old girl, if I'm gonna be honest, I'm on it all the time. So it's Wayne underscore loves underscore real estate, or you can call me at (416) 402-3735 or Wayne Skinner, realty.com.
Speaker 0 00:54:25 And Matthew, how did people get a hold of you?
Speaker 1 00:54:28 Follow me on Instagram. Send me a message. I manage my own account. I'd sat Matthew a account and I'll be happy to respond.
Speaker 2 00:54:35 Awesome.
Speaker 0 00:54:36 Awesome.
Speaker 2 00:54:37 I'll take the message way ahead here.
Speaker 0 00:54:46 All right. I hope everybody, uh, enjoyed this episode, guys, if you have more detailed questions or maybe want to dive deeper into these guys' minds, not only mine, cuz we're obviously talking on a very, very fluid basis, reach out to them, say, Hey, I heard you on this podcast. I really want to talk to you a little bit more about this and this and that, or potentially get into business together, whatever the case may be. Cause you guys are a wealth of knowledge for sure. So on that note, buy property now. Yes.
Speaker 2 00:55:17 Agreed
Speaker 0 00:55:18 Action. Now for everybody listening and thanks again, Matthew and Wayne. Thank you so much for being again a great, great guest on the Mor to life for the state invest podcast.
