Listen to our episode with The Freedom Chasers Podcast!
Link to podcast: https://www.podpage.com/the-freedom-chasers-podcast/they-help-clients-overcome-their-fear-of-investing-with-anthony-santhosh/
Quotes –
9:04 “In general, we see cheaper cost per unit and higher cash flow in the US than in Canada. But Canada historically has appreciated more, so it’s kind of a balance. You’re always getting something and giving something away.”
14:42 “If we have a client for example that’s looking for a rental property in a certain area of town with certain criteria and we are also looking for the same thing; if we see a good deal, we have to show it to them first. We have to run it by them, get them to check it out and if they don’t want, then we can jump in.”
17:31 “The reason why these multi-families don’t seem to make sense is that they’ve kind of got overvalued over the years, especially with COVID, kind of ‘boomed’ in prices.”
19:08 “It (more houses than apartment buildings) kind of created that imbalance in the market with strong demand for the multi but there isn’t a lot of supply.”
22:47 “I think it would be more meaningful if you went to a landlord union or something of that sort in your area and reached out to the government and if the government’s not taking action to address the issue (then try to fix it) than just building illegal suites across the board.”
24:04 “We have one called the Calgary residential rental association and they actively lobby governments or city officials to push changes like that. So definitely it’s great to join those groups and have your voice heard because they actually do put a lot of pressure, they’ve got more negotiating power than just you.”
26:25 “For anyone who’s looking to get their first property, I would say find a reputable realtor or an expert in your area. Seek a mentor of some sort and go to them and talk to them first. Get all your fears answered but also remember that at the end of the day, you’re the one who’s got to pull the trigger.”
28:18 “We try to make it easier for them because we’ve been there ourselves. We know what it is, right? Like we’ve been at that stage where the new investors are when we bought our first property and we didn’t know where to start either so that’s how we try to view it. To put ourselves in their shoes.”
30:29 “Real estate tends to go up in the long run and you just gotta stick it out, you just gotta survive these periods and then you cash out when it’s the right time to do so.”
32:18 “For some people, it takes time. For some, they’re more confident to pull the trigger pretty soon, and for some people, it could take six months right? For me, it doesn’t matter. I try to stick it out with every single client and understand that I was once there.”
35:13 “Because the portfolio, you can rebuild it. You wipe out everything from under my feature model, it’s gonna suck but I’ll rebuild it. Skills, you can acquire them. You can do training. But the relationships are the ones that take the longest. The experience is what takes a lot of time and that’s where the real wisdom is.”
37:32 “A lot of people forget about the process. They look at where people are today but they don’t look at what they’ve been through to be there. And if you only look at the result and not the process, of course, you’re going to miss on that you think that they’re wealthy because they have money.”
Concepts –
- It is a good idea to diversify your portfolio by getting properties for the cash flow and getting properties for the appreciation value. 9:50
- If there is a conflict of interest between you and your client, i.e. in cases where you and your client want the same property, the client must always get the first priority. 15:25
- In Calgary, the best-performing real estate investment is in two-to-four-unit multi-family properties. Larger multi-family with five units and up, and single-family properties tend to perform worse. 16:45
- In Calgary, illegal suites/basement-rental units have been given a chance to become legal as long as the unit only meets the fire code for a limited time. So, there is a lot of demand right now for acquiring illegal suites as the requirements are less than when you build a new one. 20:21
- Giving your clients everything they need and explaining the terms and concepts of real estate to them can help alleviate their fears and worries. 26:10
- When showing properties to your clients, talk to them about the pros and cons. You should identify some areas that you think might be problematic later but also offer solutions if they need them. Being transparent with your client and showing them all the possible scenarios that may happen will be a huge plus for you and also gives your clients the confidence they need to ‘pull the trigger’. 26:50
- Having a network of reliable contractors is a huge advantage in securing clients and helps you stand out as a realtor/real estate agent. 27:32
- When working with clients, ask for feedback when working with them so you can work on your deficiencies and continue to improve. 28:45
- One of the most common fears of first-time investors is their properties dropping value, fearing that the market will crash. You can help ease their fears on this by educating them on the fundamentals of real estate. It doesn’t need to be thorough, just enough to show them that real estate is a long-term game. 29:55
- As for fears of ‘nightmare’ tenants, you can teach them how to screen their tenants. Tenants should at least have a valid ID and a credit report. Be sure to be thorough in screening your tenants so you can trust them to stay at your property. You can also recommend property managers so they won’t have to do those things if they’re not confident with their screening. 30:55
- When working with clients, you should assess how confident they are and offer deals accordingly. If a client is more confident, you can offer them a riskier yet higher payout. While for clients who are fearful, offer them safer deals. Or you can offer them different strategies so they can choose the one that they are more confident about. 33:00
Time Stamps –
0:00 Introduction
8:45 Canada or USA, where is your money worth more to invest?
10:20 Property Taxes in Canada
11:25 Parliamentary System vs. Presidential System
12:50 What is your business model?
14:15 Concepts for an investor-focused business model
16:40 Canadian real estate’s focus on Multi-family investments
19:30 What is a legal unit in Canada?
22:35 Your opinion on citizens providing for the gaps/lapses of the government
25:00 Helping your clients overcome their fears in investing
29:15 Mindset issues first-time investors
31:55 Should you ‘sit’ your clients down if they are too scared?
34:50 Relationships vs. Skills vs. Portfolio
38:45 The future of Real Estate in Canada
41:35 Predictions for the markets in the future
42:25 Vision for the next 12 months
45:50 If you had a billion dollars, how would you live your life?
