From Teacher To Investor, Author, and $100M+ Portfolio - Quentin D'Souza and Host Stephen Simpson - Ep.9

On this episode Stephen interviews Quentin D’Souza. Quentin D’Souza is a multiple award winning Real Estate Investor, and a trusted authority on investing in the Durham Region. He is an Ontario Certified Teacher and holds two university degrees, which includes a Master’s in Education. Quentin has appeared on local and national television and radio, interviewed in national publications, and has been a keynote speaker to large audiences or real estate investors. 

Quentin owns a real estate portfolio in excess of $125 million dollars of assets under management across Canada by the end of the year and the US and transacted on 80+ properties since 2004. 

Quentin is a proud member of the Entrepreneurs’ Organization and been accepted in to Tiger 21. His company, Appleridge Homes, uses the Buy, Fix, Refinance, and Rent strategy on long term rental properties in Ontario, Canada, as well as with joint venture partnerships to create win/win relationships. He also invests in rental properties in the USA. 

Quentin is the author of “The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords,” “The Filling Vacancies Toolbox: A Step-By-Step Guide for Ontario Real Estate Investors and Landlords for Renting Out Residential Real Estate,” “The Scaling Up Toolbox: A How to Guide for Real Estate Investors Who Don't Have to Use Their Own Money to Buy Property,” “Finding Properties Toolbox: Buying Real Estate at a Discount” and “The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate.”  

He is also mentors real estate investors through the Durham Real Estate Investors Club – www.DurhamREI.ca 

Connect on socials: https://linktr.ee/qmanrei 

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Listen on your favorite Podcast Player: www.buzzsprout.com/2358487  

Web: focuscapital.ca  

Transcript

0:00

And I'll see you next time. Hi guys, Stephen here. Welcome to the Focus Capital Podcast. On this episode, I interview Quintin D'Souza. Quintin is a very successful real estate investor. He's got a portfolio of properties worth over a hundred million dollars. He's an author and he's also the founder of a Investment group here in the GTA called the Durham REI. We have a great conversation talking about the current state of the market, talking about his influences and his background and how he initially got into real estate investing. And then we also spent a bit of time talking about some of his personal development goals and what he's been doing to both push himself physically and mentally and what he's doing to get further ahead. It's a great conversation. I think you'll enjoy it. And if you're interested in other things that we've got going on at Focus Capital, I invite you to check out our website focus capital.ca, that's focus capital.ca on there. If you leave your email, you get access to our free resources, our newsletters, our investing guides, and some resources that I think you really get a lot out of. And so with that, I hope you enjoy the show.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 1:16

Quinton, welcome to the podcast.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 1:18

Ah, thanks for having me, Stephen.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 1:20

Great. I'm looking forward to the conversation today. we've known each other for years and obviously I've been at the Durham REI events and got to know a little bit more about your journey and how you're helping investors out here in Durham region, just east of Toronto. So I'm looking forward to talking about your background and how you got into real estate as well as learning a bit more about what Durham REI and yourself are up to these days. Sort of what you're seeing in the market and then finally, talking a bit about the future and what the plans are and what you're seeing as next steps, not only here in Canada for the real estate market, but personally, and some of the things we're looking forward to. But just to start off, I'd love it if you could just share a little bit of your backstory. Maybe what some of those early influences were that sort of got you into real estate, got you into entrepreneurship and Really started that that process and that journey for you to to get into this market.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 2:13

Unfortunately, it's the same with a lot of people. They read the Rich Dad Poor Dad book and I started to really invest in myself by learning about different types of income and I experimented with different businesses before I got into real estate in 2004. And then I realized. That everything that I was doing, I was making more money on the real estate than I was on all the other little businesses that I was creating. So it made a lot more sense just to focus on buying rental property. So I really, I really started to scale that in 2008 and I started to buy, three or four properties a year. And then by the time I got to 2010, 13. I believe I had about 15 properties at the time, and I was using a BRRRR strategy where I was buying a property, adding a basement suite or buying something that needed a lot of work or had some equity in it, refinancing, pulling out all my equity and then doing it again. And so I was doing that And by the time I got to 40 years old, I had a choice. I was a teacher at the time. I had a ma, I have a master's in education, my, and I have my principal qualifications, and I was going down the path of becoming a, an administrator in the school system. And I, at that point I was like I talked to my wife. I, for a year, I banked my income from my teacher job, the coordinator job. And then I decided to focus on I was able to bank all of it and show that the income from the rental properties was going to be able to cover my income. And my kids were really small at the time, five and three, and my wife supported me leaving and. So I did, and then I started to flip houses, do rent to owns, do assignments, do a bunch of different stuff and I made a ton of money, a ton of mistakes, and then I realized that I was making more, I was doing more work than I was teaching running all of these different flip projects. So I decided to really just focus on doing the small scale multifamily property. So in 2015, I had I had quit my job for 2 years. I've been doing those kind of active strategies and then decided to get into smaller multifamily buildings. So 6 units, then I bought a 7 unit, 11 unit, and now I have about 580 units with Partners across Ontario. I also have properties in Tampa, so I have four properties myself in Tampa, and I've invested in different limited partnerships. I do private lending, so I've got my fingers in different places. pies. But when I was starting, I didn't have any peer group. So I created Derm REI in 2008 because I didn't know anybody else that was doing what I was doing and none of my relatives were You know, into that, and we started in a bar and now we have about 300 members that come out to our monthly meetings. We have guest speakers. I try to keep it relatively inexpensive for people. I make my money through my real estate portfolio and I just want to encourage other people to be able to, Use real estate to create financial freedom for themselves. So that's like how I got started, how I got interested and, my path. But now I really focus on multifamily apartment buildings. I still have about 14 or 15, I think one to four unit properties actually maybe closer to 20. I actually am not sure I have to go through, but but it's been really good. I've really been happy with what's been going on. Of course, the challenges are always their interest rates over the last few years have been a real challenge for everybody, but particularly for me. But, I just continued to work on on the real estate portfolio. I've also, focused on my health and, I've lost about a hundred and 35 pounds I've focus on also traveling more and spending time with my kids and do unique experiences with them. Like I took my oldest son to Everest and we did base camp together a couple months ago and I've done the Camino with my younger one. In Spain, which was cool. So I try to do those sorts of things, but. Yeah, it's it's been quite a, quite an interesting experience to get to where I am, for sure.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 7:18

Yeah. That's awesome. And just seeing that evolution and the progress. And like you said, maybe even just change and focus and what you're doing to not only just focus time and energy on entrepreneurship and investing and things like that, but also making sure that you're taking the time and putting a priority on health and fitness, which is amazing too. I'd love it. If you could talk a little bit more about, again, some of those early influences, what were those things, or maybe you had a mentor, or maybe there was a book you read that sort of got you started down this, we'll call it a, non traditional path, right? Where, you had. Maybe a more traditional career, but you started looking outside of that. You started looking for opportunities to, to grow your wealth, to, develop yourself personally, to, become an entrepreneur. What was it an event or a book or was it a combination of things? I'd love it if you could share a little bit more about that.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 8:13

Sure, there was a couple. I'm an avid reader. I still read a book a month. Now, more audiobooks than anything. But I I started off with Rich Dad, Poor Dad. I found a group. It was called the Real Estate Investment Network at the time. And Don Campbell was very influential for me talking about the fundamentals of real estate investing. I wasn't really interested in, they seemed to be focused more in Alberta and I wasn't really Interested in Alberta. I focused on Ontario and, but I still looked at the fundamentals of the real estate markets where I was investing in. I've always been a long term investor, although I have used a lot of different short term strategies in the past, I still, still look at all of the different strategies. People that I've interacted with over the years, and I've always tried to find mentors from people who have successfully done what I want to do, and I think that is, there's so much noise out there and social media and so many people portraying themselves as experts, and they've done one or two properties, and, they flipped a few houses, and now they're an expert coaching somebody, and I just, I tried to avoid that early on. I tried to look for people who had been successful and then I became friends with them. Like some of my friends now have a lot more properties than I do. And they're now they're at the point where they're starting REITs and raising 40 million dollars, and, doing some really amazing things. And I'm just glad that I continue to know them, but I know that they are real as. To what they're saying, they're doing it and actually doing it. So I also joined the entrepreneur organization, which was amazing for me. It was a great group to find other business owners. And I learned through. The mistakes that other people were making in their businesses, how to improve my business, hiring staff directly and having people who work for me, rather than me working for within my business, working on my business a lot more, which was good. So I learned from them. I still continue to have, relationships with clients. Good people that I continue to learn from. And I think that's really key is that you need to find authentically authentic people. I found that through a lot of real estate groups that were out there, there are people who claim to be gurus and they maybe own a small percentage of a big property. And that's about it. But they, they're, they portray themselves as, all of these different things that they're doing and they really don't. And so I, I tended to look for like I said the people that I could really authenticate. And those are the people that I kind of stick with. And I try to get those people. to speak at Durham REI. So that's what my thing is I've got a lot of people who ask me to present and most of the people I don't allow to present because I just, I've heard like the community, you think it's a big community, But it's not. It's a small community. If I ask two or three people, I can probably connect them to you and find out a little bit more about you and what you're doing and get some feedback. And so through that, I've. I filtered out quite a few people who have asked to present and just didn't bother.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 12:00

That's an interesting point, Quentin, and you're right. I think it. It may seem like a big community, but really the community of people who are taking action and the people who are doing deals and investing and being really active in, in the market, that's a much smaller community. One of the things that I've seen at your events and just. Knowing different members is they're active. They're not just, coming around and some of them are, but like for the most part coming around and really wanting to get information and learn and get practical, strategies to do deals, to invest and to grow. Yeah I think that's important and you're right. I think. Especially here in Canada and in Southern Ontario the community is even smaller. So yeah that's a very fair point. Go ahead

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 12:50

a lot of people like pushing their own agendas. They're selling, I don't know let's say they're selling projects in the U. S. to, as a realtor and which is fine. Everybody has to earn a but at the same time, like you have to be invested in all of those things. If you're pushing that on other people, I want to see that you've been successful at doing that and probably successful for a few years because you haven't even seen a cycle. You haven't seen the ups and downs of the U. S. market, how it works it's very different than southern Ontario And, same with other provinces. I don't want to pick on that, but like Alberta versus Ontario, and industrial versus residential you have to have experience in those areas before you, start to tell people that it's a good thing,

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 13:42

Yeah, for sure. Yeah. Yeah, You're not just faking it. I wanted to ask you, I actually, before we hit record here, I actually grabbed some of your some of your books and I'd forgotten how many books. You've actually written, it's it's quite a number and I'd love it if you could share just a bit about, writing these books, was it just, you're getting a lot of questions from people and you said, Hey, maybe I should just put everything in a book or was this sort of, how did that come about? And, what was the process with writing that many? Yeah.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 14:13

yeah. So it's six books right now. And the first book was the property management toolbox. And it really was a it was a book. So that if I were something to happen to me that my wife could. Manage the portfolio of properties, and that's not going to happen today, but at the same time, it's been very handy because, when I hire a property manager, I'm expecting them to follow my way of doing things and having that book is really helpful. Easy way to share with them, also creating videos and courses around it helps to educate the people who work for me, but also and I've done filling vacancies. I've done, just a lot of different books that I think that, People who have a lot of questions typically ask and so it makes it easy for them to find the answers. And I've, I'm, I've relied on books to act like a mentor to me and I think that, creating those books if something were to ever to happen to me and my kids. Really get into real estate. They can have my voice in those books and it can share, my point of view around how to build a real estate portfolio. What are some strategies that have worked for me, how to create systems and processes in your business? How to, find off market. Properties, like all those sort of things that helped to make me successful. I put it together in those books and, my goal is that, one day if my kids get really interested in it, that they're going to pick up those books and read them on in the side. Benefit is that anybody can do it right? They can pick it up and read it and. Get my insights and if they want to follow in those footsteps, they can.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 16:07

No, and that's awesome. And I really see a lot of the teaching background coming out in the books. And obviously on, through the Durham REI, you've got courses and different training materials. And yeah, there's definitely a teaching focus there that you can really see coming out and then all the materials,

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 16:24

Yeah, That's my background, right? I used to develop curriculum for the for the school district. And I've, I actually was teaching teachers for a long time for the last few years that I was working at the school board so I've, I'm pretty familiar with the curriculum. Adult learning and different models, but also I've found that real estate has really been helpful to me and I really want other people we have a real privilege in Canada and sometimes I think we tend to victimize ourselves rather than looking at the benefits that we have and the opportunities that are there. And I want other people to know that, look, if you really want to be Real estate, no matter how you get started in life, you can be successful at it, right? There are lots of opportunities for you to learn and then, get into the property ladder, do different strategies in order to help you to continue to grow and learn. And and continue to do well better yourself. When we came to Canada in the seventies like we had nothing, we're the typical immigrant story. We didn't have anything. We, had a family that let us stay in their basement. And, we started from scratch. And I was born in Fiji. I came here when I was. Three or four. And I really, I worked hard and if I can do it, anybody can do it. I'm not really that special, right? It's just consistency and persistency.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 17:50

yeah, no, that's awesome. Yeah. And it's, I think there's that hunger, right? You need to have a little bit of that hunger to do something. And, that's, a cool story. And I think a lot of us who, were either children of immigrants or were born and came here, have a little bit of that it's not a chip in the shoulder, but it's just a bit of that hunger and that drive to, to, take advantage of this opportunity, because I think, for a lot of people, they they take it for granted and you did something, I remember at a meeting about a year ago, at one of the Durham REI meetings, and you asked everybody To, if they were worth over a certain amount in terms of their net worth, you got them to all stand up and it was like almost the entire room. And then you made the point Guys, you're in the 1 percent or something like that. I forget the actual stat. So stop whining, stop complaining, be grateful and let's get on with it. And it was a really cool experience. Cause I think, we we tend to forget sometimes how lucky we are, how fortunate we are to be in, like you said, in the positions that we are. So that was a pretty cool thing that I saw.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 18:56

Yeah, it is. It's really a neat group of people, but yes, but it's the power of. Owning real estate over the long over a long period of time, right? You got to be able to take the ups and downs and go and understand that there are cycles And and as long as you can do that and then you get that benefit of it,

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 19:16

Yeah, for sure. Okay. So maybe moving into the present time. I wanted to talk a bit about the current state of affairs of, the real estate market here in Canada and specifically Ontario I know it at your meetings, you're always providing updates and stats and things like that. So it would be great if you could just share your thoughts on things and how the market overall is looking. We're obviously in a higher interest rate environment compared to previous years. We've had a large run up in prices, although they've dipped a bit after COVID. But what are you seeing in, in, in the market in terms of, real estate investors here and how maybe have strategies changed since the past? Because I know when you and I started investing, the ratios were a lot better. It was like, the average house was a couple, two or three times the average income and it was much more affordable, but obviously all that's changed. So I'd love it. If you could just share your thoughts on the current state of affairs.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 20:16

right? So I don't really want to get political but I think I have to Start off with that. There has been a real change over the last, I would say, 10 years in particular from the federal government around the positive influence that investors have instead of looking at it as a positive. There's been a war on investors, I think in Canada just from the different changes. It's really a blame game. Blaming real estate investors for a lack of housing supply not focusing on the real issue, which is, how long it takes to build in these areas where we have issues as well as the cost to build the amount of. fees and charges that are associated with it. So I think there's that part of it that also financing. There's been a real, I would say, change in in particular for, From the federal government on real estate investors, particularly owning one to four unit properties from a financing perspective, it may, it's very difficult for investors to own more than let's say four or five properties or just, even one property now, like it's really challenging. And even those people who have existing rental properties, like a larger portfolio, it's impossible or it's very challenging to refinance those properties. It's, it's very challenging to continue to grow. And unfortunately. The government doesn't really understand, or the federal government doesn't really understand that 80 percent of the rental properties are purchased and maintained by 20 percent of the real estate investors that are out there, right? They'll buy a majority of the properties, and those are the ones that are being affected by the rules that they've created. And it's actually making it very challenging for Any additional properties to be added. And it's also reduced the number of rentals that are being added to the rental stock. You can see that in Ontario specifically as an example, as the number of rentals actually went down last year to this year, where there's over 6000 rental units that went down. With all the where we want to create rental housing, we want to build more. You know what how does it go down in that situation? One there's the cost to add, but we're not adding, we're taking away units, people are selling them and they're being bought by, other people. So we're reducing the rental stock. And but it's not necessarily reducing the cost of the house or the value of the house. That hasn't really changed. So I think that there's that war on investors. That's but that's problematic. And that the government should really focus on the private sector. The fact that most of the rental stock is actually from investors and encouraging them to be able to do that. And if they want to help, they should really focus on changing how municipalities handle Their processes for allowing new rentals, it takes way too long to build and develop in Ontario as compared to let's do a comparison Edmonton to Toronto as a comparison. How long does it take to, to build like a six unit property in Edmonton? You can get it approved, built go go from idea to completion in 18 months. How does that work in Toronto? It doesn't, you're not even building in 18 months. You're still in the Approval process between three to five years. So that's really the problem. The other problem is the costs to develop how and there was a really interesting piece that was put out by the builders association. I think built the cost of the actual fees and charges and just everything that goes into, to to building people don't, Realize that yes, you charge the builder, but that's not who pays for it. It's the people who buy the properties that pay for it. That's who pays for it. So and you know focus, on If you really want to increase the rental stock if you truly do get rid of those fees force the municipalities To to fast track development and stop all this, this, I don't know this attack on investors because you're really not helping the, what people need all the new immigrants that are coming into the country and, there's it's quite sad, but really what we're seeing is a pushback from the population on new immigrants because we're just not, we haven't prepared our infrastructure and, we're not allowing that development to happen fast enough in our country and it's pushing back on the new immigrants that are coming in and, they will eventually Leave if they can't get a job and they can't, do what typical new immigrants do to the country. So we want to make sure that we are not doing that. And really, the government again, and I hate to say it is responsible for changing the way that Who enters the country and who doesn't and and that's what's been happening. We used to have a system where you could there was a points based system that you got in based on the needs of what's going on in our country. And that's really changed. And that's that's really a federal thing. And unfortunately, I see that those issues are. Part of the problem right now.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 26:30

Yeah, no, for sure. And anecdotally, I'm seeing the same thing. I've, I was mentioning before we started recording that I've, sold a few properties in the recent years and. I know for a fact, these were rental, smaller residential rental properties and the people buying them are not buying them to rent out. They're buying them to live in them. Yeah, anecdotally, I've seen that change in, in, in how people are acquiring these properties and how they're using them as well. Yeah, it's it's something the government should be paying attention to and they should be encouraging landlords to provide quality. Housing for rent out there and it's it's, I agree. It seems like there's a battle going on there that doesn't need to be there.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 27:12

No, the blame game is what the government seems to be doing instead of solving problems, unfortunately.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 27:19

yeah, for sure. Okay. So I wanted to keep it on with that theme about the market and what you're seeing based on the conditions now, do you see strategies changing for sort of the smaller, Residential, we'll call them mom and pop investors who maybe were able to be a lot more active before because just being able to acquire properties and rent them out and making the numbers work and there was always, the opportunity in previous years to get some cash flow from these properties has, have those strategies change such that. Maybe it's pushing people to a more passive investment model versus being quote unquote active and acquiring portfolio properties. And now it's really, a strategy of investing more passively or becoming a limited partner or something like that. What are you seeing from from people that you talk to, or maybe people starting their sort of investing journey and getting into real estate investing?

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 28:21

I'm seeing I'm still seeing some of what I've seen in the past, but basically people are moving out to smaller areas to do, to be able to do those sorts of strategies. So we're seeing people do basement conversions, but they're out in Belleville or Peterborough, and they really have to be careful at the purchase price of those properties. For them to, for the numbers to make sense, but they're still, able to do that, or they're increasing the density from one unit to two units. So instead of just doing a basement suite, you might be doing a basement suite with a top up or a basement suite with like a garage suite or something like that. We've seen a lot of That happening. I also see that there has been a number of people who are partners within, I would say different larger projects. So they're becoming partners in order to participate. but not necessarily do any of the hands on stuff that they were doing before. So they would be like a joint venture partner or a limited partner. So people are getting involved that way in and still being able to participate in real estate, but they've always done that. I think I don't know if they would say there'd be more or less, but I definitely think that there is in, The greater Toronto area, there's a lot less people investing in real estate than there was in the past. I would say I would say that there's been some real damage. That's that the condo market is in right now, and it's going to continue to be for the next two years. I don't know, year to two years. We've got a lot of product that's still coming on the market and the prices of those units are less than what the value of the unit is, and people still have to close on them. And there's. There's a lot of issues with that. And that was if you looked at maybe if you, if I asked you what you thought the strategy of the Ontario government or the federal government's rental strategy was, you might respond to me, Oh, it's like condos. Like investors buying condos so that they could have these rental units. That's not working anymore. And that's and so on top of that not working and forcing out financing your, it's making it more difficult for it. any strategy to work. But I do think that this is cyclical, it always does get harder before it gets better. And we're in a cyclical phase because of interest rates. Really we've seen two cuts of a quarter, Point a quarter percent, and we probably need to see at least another percent to a percent and a half to really see those effects help the market, but there are going to be, I think, some systemic changes, particularly when you look at condos because people were. Negative cashflow, 500. Now they're negative cashflow, 3, 000 per month. And if you're speculating, which does that's what I would refer to condo investment is speculating on a future appreciation, then if you're not making any appreciation and you're losing 3000 a month, you're going to be hard pressed in the future to go and buy those same investments in the future. So I think that in itself is going to drive away a lot of the current investment in that. In that space. So that's that'll be very interesting to see in the next few years. How that plays out. I do think that the detached home market is still going to be quite strong in the future, just because I think it's very challenging to actually own those properties and continue to I think it's always better to own land and air, which is one What I consider between a condo and a detached house. So I think that there will be some value in those, but it's going to take, I see that as coming back faster than the condo market. And so if you're going to look to what is going to work in the future and what's going to, what's working right now, I would say again, some of those conversions and I'm also seeing apartment buildings again, working like in the last. I don't know, year and a half. I haven't bought a, I think the last building I bought was a 17 unit building about a year and a half ago. And the numbers worked because the financing worked at the time and over the last year, I would say, Let's say about a year and a half ago to about six months ago, prices didn't change very much on apartment buildings. People were still pricing things very similarly, not there was some price decreases, but people were trying to use cap rates that just didn't make sense. And now I'm seeing some capitulation in the apartment building market so that I am starting to look at deals again because. The numbers are starting to work. People are saying, okay let's add a seller, like a VTB onto this. And then the numbers start to work on on this apartment building. And so now I'm starting to look at opportunities again, because I wasn't for a while because the prices didn't make sense and the financing didn't make sense, so why would I buy something like,

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 33:54

yeah. No, and that's true. And I think it speaks to the fact that in this type of market. You just have to get creative. And it's the VTB is one example of it. Private lending might be an example of it. Working with the seller to do some sort of a, an arrangement where you could acquire the property you may be over a longer period of time. Yeah, I think there's opportunities in every market, but yeah the real creativity needs to come out in these types of scenarios and in order for you to get

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 34:21

And again some of the rules that CMHC came out with financing It blew my mind and they got rid of it, but why would you even put that in there? Like they had controls over how you were to use the funds from a refinance. You couldn't use, you couldn't move from a private lender into CMHC. You had to go with a CMHC approved lender first before you could go to CMHC. Like all of these rules that they seem to arbitrarily. And they may have had some sort of, I don't know, philosophical reason why it makes sense to do it. It doesn't financially make sense. And you know what? This is a business. It's not just a philosophy. And if you're not going to make money, why would you do it? And you, the more and more this, the federal government is making, Changes, the less and less investors are wanting to invest in a market where they can see the government make these changes. They would rather go somewhere else and spend and, invest their money and they've, they're driving out investors by making those changes. Types of changes. CMHC is supposed to be like, and okay. So just from a, I don't, from a listener perspective, CMHC ensures basically the best financing you can get on apartment buildings is from CMHC and they can give you 35 year amortization, 40 year amortization, 50 year amortization, depending on how old the building is the quality of the asset, the debt coverage ratio, all of that. But what they. So if we didn't have CMHC financing, a lot of the deals that you see don't pencil. They don't make sense. And that in itself is a challenge. But it's also What happens is CMHC is supposed to insure mortgages, but now they've become a policy arm of the government, and they're basically doing what the government is asking them to do in their own way. They're not an independent organization, and they're uncompetitive, because you're looking in the residential space, you have three other insurers, right? You have CMHC, you have what is it, Canada Guarantee, you have a couple of different insurers that compete for business, right? In the multi family plan, space, there's only see me see, and they're not allowing. It's not that those other insurers don't want to participate. They have the, there is the default rate for multifamily buildings is so low. They would love to be part of that space, but they're not allowed to be a part of that space. So that's a competitive problem, but it's also it allows. The government to create, to control policy in the country when it comes to multifamily. And a lot of people don't understand that's some of the connections that are happening, but it it certainly, makes for some challenges when it comes to, investors investing in, in, in different assets. Sorry, we went around.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 37:26

no, that's fine. No, it's interesting to hear your perspective on that because, obviously I don't invest in, in multifamily and, but I hear from a lot of investors who are like yourself doing these multifamily deals. And the. The different factors that CMHC is putting forward and, how that all relates to maybe affordable housing and things like that. So there's a lot of requirements need to be fulfilled. I'm an advocate of the government really just getting out of the way and letting us investors, do our thing making it as easy as possible because I think in the end, it's Everybody wins if we do that. If it's a fair market and you just let the government get out of the way and let the investors do their thing, it's going to be competitive and at the end of the day, you're going to provide a quality product to your tenants, which are your clients, right? Because those are the people that are going to be dictating the terms. So yeah, so I agree with what you said there. I wanted to maybe just switch gears here, Quinn, and talk about Looking forward, talk about, what you see coming on the horizon. Things have obviously changed. We've talked about, strategies and people who are maybe doing certain types of investing and active versus passive and things like that. But, we'd love to get your thoughts on how you see the market rolling out over the next few years here in Ontario specifically. We've got a huge number of people coming here through our immigration programs. Our population base is growing, here in Southern Ontario by leaps and bounds. And you've mentioned some of the challenges we have, right? We've got a lot of red tape when it comes to Building new developments. We got a lot of red tape when it comes to getting permits and approvals and, that pushes things back and ultimately makes it more expensive. Be great if you could just talk about, how you see the, the market in the next few years. I know you don't have a crystal ball, but we'd just love to get your thoughts on, maybe some of the changes coming down the pipe or opportunities, even for people to to invest in going forward.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 39:29

Yeah. Okay. So a couple of things that people need to keep in mind with regards to interest rates. So interest rates do have an effect on the price of residential properties and the speed at which interest rates decline. Versus the speed at which interest rates increase is a much higher speed that rates decline than they, they usually increase. So if you look back in, into the past and you look at the rate of decrease, it's usually a lot faster than what they've increased. And if you look at what we've had in the last couple of years, we've had a huge increase over the over a period of time and then a hold. So I'm expecting interest rates to decline probably faster in the next year and a half. I would expect to see, at least two quarter point cuts, if not a whole percent cut before the end of the year and another Probably either a half or full percent next year, and that's going to affect the underwriting of deals and also the affordability component.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 40:50

Okay.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 40:51

We also have the opportunity to change amortizations for Residential in particular, so I could see that amortizations again, increase for the ability to finance properties and make the actual ownership costs come down in order for people to be able to afford More like I could see that as happening. I also see the stress test as an impediment, I think, to the qualification. And I think that there was a good time for the stress test, and it made sense at the time when you had 0%. Interest rates. But that's not the case anymore. And we're overcompensating, I think, with the stress tests. So I think that this stress test needs to either be removed or get reduced because it's affecting the ability for people to qualify. And there the. If you look at the actual default rate of Canadian mortgages over, even periods of high interest rates, Canadians pay their mortgage. They'll go and get another job in order to pay their mortgage. They will pay. And we have a very low default rate. Even with higher, if you go back to the 80s and 90s and you look at default rates, we still don't have huge default rates as if you were to compare that to the US, which is a much larger market. We, we have a very, Small default rate. So I think we've overdone it when it comes to tightening on financing and qualification. So I see that as a cyclically changing right now. I would say bank purses are quite tight and lending is quite tight and monetary Policy is quite tight. I see that as loosening over the next couple of years. People being able to borrow more and being able to, again, help the the market move in a different direction. And I think that will bode well for residential real estate, particularly 1 to 4 unit properties. I think they will do well. I invest in apartment buildings and my reasoning for investing in that is a little different. But the way that I see that market is shifting is that cap rates are a function of three things, their interest rates, the quality of the building, like the building type and the location of the building. Those are the three things that make up cap rate. But if interest rates decrease by, one and a half percent. And really, we're looking at the bond rate when we're talking about either the five year, the 10 year bond rate when we're talking about multifamily buildings, that is going to change the value of the buildings again, you're going to see some cap rate compression. We've seen some cap rate expansion. We're going to see some cap rate compression again when it comes to those buildings. So I think that buildings will do well, particularly if you're purchasing buildings now, Because nobody's buying buildings now and if the numbers really make sense on those buildings, like what I'm seeing if you can buy those buildings now, you're going to be doing well in a year from now or two years from now. But really like I'm a cashflow investor. I want to buy properties that are cashflow positive and I want to buy buildings that are cashflow positive. So as long as that, that makes sense and you can hold onto the asset. For I'm a long term investor. I want to own it for 10 years at least if I can do that, then I'm going to do well because I know that the value of money is going to, the value of the dollar is going to go down over time, right? So that's fundamentally part of one of my beliefs that helps me To continue to want to invest in real estate because their assets and I hold the asset and the dollar that that asset is numerated in is going to go down in value. Therefore, the value of that asset will go right. But not a lot of people think like that. And, but I think that if you own assets over the long term you'll do well. And it doesn't actually have to be like real estate. It could be like gold and silver. It could be like other assets assets that that are like intellectual assets it could be like Bitcoin, it could be, commodities. It could be those things, but owning those things over a longer period of time, like a 10 year horizon, the value of the dollar is going to go down. And therefore the asset value will be worth more, or at least retain the actual value of the dollar. Purchasing power. And that's how you do well over time in real estate.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 45:39

right. So I wanted to ask you a bit more about your personal sort of investment strategy looking forward over the next few years. So you talked about, the fact that you're investing in these larger multi unit residential buildings, and you also mentioned that you've started investing in the United States as well. Could you talk a bit more about maybe how your strategy is evolving? Are you still looking at deals here in Southern Ontario, or are you focusing in on other markets now? And how do you see that rolling out?

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 46:14

I've been investing in Tampa in the U S since 2018. So I've got four properties there two duplexes and two single families. And I bought those in 2018 and 19 and 20 and they cashflow after all my expenses, probably about 3, 500 a month now after, cause I've been able to, so that is, A little separate thing and it's for me, it's a hedge against the Canadian dollar and the Canadian economy because I own assets outside of Canada in another court currency and basically that helps for traveling, Right? It's good travel money, right? But it's not really and it gives me that hedge. I am a bullish on. Multifamily real estate in Ontario in particular because of the problems with developing in Ontario. I know I can tell you how what the solution is, but nobody's going to listen to me so I can keep saying it. Nobody seems to listen. But rent control is is one of the problems in Ontario. And I don't think that's going to go away. And that, that problem is why you don't have the type of development that You would want to see nobody wants to hear that. Even though new developments aren't rent controlled, it's just one government away from being rent controlled, right? Like when the liberals came in, they got rid of the the exemption and a whole bunch of project, rental projects were canceled. And then the conservative government came in and added it back again. And then all of a sudden we started to have more rental projects. So I think that the prob like, I always see the obstacle as the opportunity and I see the opportunity is that if you can multifamily bit multifamily apartment buildings is really a business. And if you can increase the income or decrease the expenses, you're increasing the value of the asset. And that's what I do in My business and, I own 25 apartment buildings. The largest is 94 units. I like to, somewhere between 10 and 25 units is a sweet spot because the reeds aren't pretty large. Usually in there, but now I'm starting to see some reads in the 20 unit space, which is interesting. And there are a lot of other investors that are creating these mutual fund trusts and raising capital in order to invest in different projects. That. That could affect the, my strategy, but I'm always being flexible, right? I own a lot of the buildings that I'm invested in. So I own at least 25%, sometimes 50 percent or a hundred percent. And, I do not have to buy another piece of real estate for the rest of my life. There's, Not, it's not necessary for me. I own 125 million in assets. I don't need to, but I understand what I'm doing and people always are looking to talk to me about partnering on different assets. So I'll continue to do what I'm doing, but I'm going to be very particular about what I'm buying in the future. So that's, it allows me to be a little bit more particular. Particularly, but I'm still buying multifamily buildings as long as the numbers make sense. And I've learned in the last year and a half that taking on the right partners is really important. I like you need to have partners that are in it with you through the thick and thin. They need to understand that interest rates went up all of a sudden, we're probably cashflow neutral now. And then, you have a big turnover of a unit and you have to bring in capital in order to renovate the unit in order to increase the value of the property. If you don't have the right partners that are in it and understand that you're going to be in trouble. And I have a feeling that a lot of people are in trouble because of the partners that they have. So I'm going forward. I am very particular about the partners that I have for sure, because I have if there's a capital call on a project, I have to put just as much capital in as somebody else. But if they're not prepared to do That's where the problem is, right? Then and if you don't have any way in your agreements and to be able to do that, or if you have a limited partnership, and you don't have a structure to be to bring in additional capital what happens to those projects, right? There, there has to be those outlets and and it's going to be very interesting to see in the next little while what's happening. We've seen a lot of. Projects go, a lot of investors go under. This is the time when the tide goes out where you see who's swimming naked, right? People who have 40 million, 120 million in promissory notes and, just bad things happening. That's, you're, you've seen it. And I think we're going to continue to see that also with, in the condo market in particular, but. Just I was in I just came back from Ireland for two weeks and I was in an Uber and I was driving from, we were getting a ride back from the Toronto airport to home, and I was talking to the Uber driver and he was telling me that there has been so many more new Uber drivers that have been coming on that are professionals, like professionals, like engineers, and like people who are typically. You wouldn't think would be Uber drivers and they're. They're more competition for him. I said, why do you think that's happening? He's they can't afford their mortgages and they have to be able to, they're working in order to pay for their mortgages in order to continue to do what they're doing. So those are definitely challenges that I'm seeing in the market as well. And also, unemployment is also one of those issues that I think is going to be coming to the forefront sooner than later.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 52:19

Yeah, no, just to pick up on something you said there, Quentin, about partners and, people that we speak to understanding, that these markets go up and they also can go down. And what are the implications of that? I think we've been spoiled here in southern Ontario for a long time. With real estate values, just going up and up and being able to make deals work and, just picking any random property and saying, Hey, I'm going to invest in this and what could go wrong. And you really you really see some of the challenges in these types of markets. And I think it speaks to the fact that if you are going to invest with somebody, like you said, you want to make sure that they're going to be. In it for the right reasons, but also being able to handle themselves in the good times and the bad times, right? You want to be able to weather those storms,

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 53:10

Yeah, and this is when, it matters most when there's challenges. It's every, everybody's hunky dory when they're getting all their capital back after a year and a half, but then it's when they don't and they have to stick into the deal for another two years or three years, right? That, that's where you start to see, who is a good partner and who is not, right?

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 53:35

Okay, I wanted to switch gears a little bit out of the sort of real estate side and the business side and ask you a bit more about some of your I guess we'll call it personal development, some of your health and fitness goals. Over the past few years, I've seen you put a lot more emphasis on this, or maybe you've just been more vocal about it. I don't know, but I'd love it if you could just talk a bit about some of those things that that you've been doing, some of the travels you've had. I know you've been doing a lot of mountain climbing, things like that. And yeah, it'd be great if you could just share some of those experiences and maybe some of those goals that you've had along along the way.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 54:13

Yeah, so I, I've written a book that I call the action taker real estate investing planner, but it's more of like a goal setting tool and I've always been a goal setter. But the way that I've done it is I do what I would call tenure goals, but I do it in different parts of my life. So not just finances, but physical relationship. All spirituality, all of these different areas. So there's a wheel of life that Tony Robbins uses and I every quarter I look at it and I say, okay, this is how well I've done. And, at one time. Back in 2018, my finances and my business section was like an eight or nine and my physical how I felt physically was like a one. And I was like, wow, this is not good. And I just used that as a way to refocus. And what ended up happening is like my, I focused on my fitness and my business actually doubled. So like my portfolio size doubled. So it actually was really helpful. And, I just did the same thing as I did with real estate. I hung out with other people that were losing weight. I joined programs to learn about them. I I made a commitment to be consistent around exercise and diet. And, I was able to so back in 2000 and when I did my last goal setting, it was like 2016, let's say. And then I had put down in 2016 to run a marathon. I was 330 pounds. That was not going to happen. And in 2018, I had decided to make that change. And then by the time 2019 had happened, I had to run a marathon and it was, before that I'd done a 5k, 10k, half, and then I'd run a marathon. And I, you just, you set these big goals and you try to visualize what it's going to look like. But then every quarter I work on the goals that I've set. I and I have it up on my desk here right beside me and I have a weekly plan right here and I work on it every week and then I reflect on what I'm working on each quarter. That takes me to my. My big goals. And so I've always connected those three together. And that's really helped me to succeed in all like different areas of my life. Would love to say that, climbing the mountains and the trip was just You know, for me, it was also like, I've taken my kids with me on these trips. Like we've done my oldest, I've done Machu Picchu with him. And we just did Everest base camp together a couple, and he went, he turned 20 this year. And just before he turned 20, we had completed Everest base camp together three weeks in Nepal. And my younger one, we we did the 110 kilometers of the Camino together. Now, If I was my weight. Back in 2017, none of that would have happened, right? I would never have been able to do those things. And because of that, I'm able to do these trips and also spend that one on one time, which is also related. The reason why I can do that is because I have the freedom from my real estate portfolio. So it's all, And that's why it's important, I think to do this goal setting and continue to work on different areas of your life, not just finances, not just business, but they're all interconnected and they all help you to do what what you want to do. And it's good to reflect, right? I've been looking at my own real estate portfolio, particularly my one to four unit properties. And I really don't want to leave. Tons and tons of millions of dollars to my kids. It's not what I want to do. I want them to build their own portfolio. So I'll probably look at selling some of those smaller properties over the next year, like a next 15 years, like maybe one or two properties a year. It's gonna, I'm going to get some pay my capital gains higher. Thanks to. But I'm going to do that each year, I'll release capital and then I will go out and, enjoy that capital with my family. And I'll make experiences that will help me to get to the other goals that I have. And so it's all interconnected. I am really a big fan of personal development. I constantly read Napoleon Hill classic but I would encourage anybody to read any Napoleon Hill books Jim Rohn, again, another author that I would highly encourage everybody to read. They're all help to improve your mindset. And. I guess when I started this journey I thought mindset was like a foo kind of thing that doesn't really matter, but it matters a lot. Your mindset is really important. So it's goal setting and having the right mindset can really change your life. It's the difference between, having control of your life or being a victim. I would rather have control of my life than being a victim.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 59:40

Yeah, no, that's awesome. That's great advice. And I agree with you. It's mindset is a huge thing. And if you can combine that with the physical aspect of your physical health, that's an amazing thing because it's going to help you in all areas of your life. You're going to have more energy for your business. You're going to have more energy for your family. You're going to have more energy to just interact with your community and your friends. So yeah, it's all important.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 1:00:04

Yeah, and we all have challenges like, if I were to look back at my past, I had a, I would say that I've had a rough childhood and it's always compared to what, but there was a lot of familial violence and all that stuff. And I could have let it go. I could have said that I'm a victim of it and, and I just want to be who I live and that's it. But I decided to push myself to do more And be more and and help as many people as I can to do the same. I think that's a, that's important that you have control over your life and, we have the opportunity here to be able to do that. And that's not the same in every country in the world, traveling with my kids, I like, I want them to see that. In other places, they don't have the same opportunities as they have in Canada that they have, but they, because they can't compare it to something, they don't know that, and that's why travel is important, for people to be able to, even like travel outside of your city, travel province, travel to a different, small town or a different place, compare, see what it's like. I think that's why that's important because it helps people to, especially kids, to see that there's something else.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 1:01:26

Yeah, no, that's awesome. I wanted to ask you about your kids. Do you see them continuing on in your footsteps getting involved in real estate or entrepreneurship? How do you see that going forward?

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 1:01:39

I try not to, Influence them too much, but they get, they hear it from me a lot. And I know that my older one, what I'm looking to do is I'm organizing a trip to Tampa in November with Dora Mari. I, but I would like to see if I can purchase a property with my son down in Tampa. So to get him into the property ladder, but also because it's a place where he has the, he has enough money that he can bring it to the table that he saved up to be able to purchase something. I think that is that's something that I see him, he's already shown interest in it, but he has to also be committed, right? He has to put the money in. I don't, I'm not a person that just wants him to. To have it, he needs to commit himself to do it. My younger one, I think he's really interested in it. So I think he, he would be very interested in continuing on as well. But it's the commitment, right? Everybody's, everybody can say it, but I want to see the commitment and that's going to take some time. But I do see that they're both interested in it. I just don't see the commitment as much yet because think of yourself at that age. Like I was more interested in girls and

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 1:02:53

Cars and other stuff.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 1:02:55

And, And there's the special people that aren't, and they really focused on, real estate. And I've seen those people, but that's not the average person, right? We've had some of our Durham REI members. I remember there was a 19 year old Philippe, who he owned, I think he owned one rental property when he joined at 19. And then by the time he was like 20, Two, he had owned three properties and I was like blown away, right? But that's not the average, right? That's definitely

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 1:03:23

And that's the thing even if they're not going to go, full on and be a hundred percent entrepreneurs and start businesses at a young age. At least if they start doing a few things and let time do the work for them, that's huge. And that's what I always tell my guys. It's you have that advantage, of, if you can get a start in your twenties instead of your thirties with just making some good moves and making some investments, that's just so huge later in life.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 1:03:50

Oh, yeah, absolutely. It's really amazing that the opportunities that they do have instead of, and I think that, again, what I hear a lot of People say, and a lot of like young people in the twenties, I'm never going to be able to afford to buy a property. I'm never going to do this. It's, I'm never that's a mindset issue. That's not a real problem. We've all said that. Nobody has said anything different than that in the past. The difference is you have to ask yourself, How can I do that? How do I buy a property? How can I get on the property ladder? How can I own assets? How do I do that? And I think once that mindset Shift changes. That's when it will improve for them. Those people.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 1:04:39

awesome. Yeah. Very cool. Very cool. Okay. So as we're wrapping up here, Quintin, I wanted to just give you the opportunity to plug anything that you maybe want people to know about. And also if you could just share, what's the best place way for people to find out more about you and maybe some of the work that Jeremiah is doing and some of the things that you want to promote.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 1:05:02

Yeah, feel free to, go to durhamrei. com There's like a scoring system. There's lots of free stuff on there that you can grab to learn about Real estate investing and come out to a meeting if you mentioned this podcast I'll make sure that I'll give you a free guest pass to come out to the meeting if you have never come out before and I'd love to For you to learn about investing in real estate and continue to, grow you can get in touch with me through durhamrei. com or going to my link tree, which I'll give you the link to. And I've got all my social media on there. I post all my trips and, share some tips on Instagram around real estate investing. So if you want to keep track of me, it's QmanREI over there.

riverside_stephen_simpson_raw-video-cfr_stephen_simpson's s_0010: 1:05:49

Awesome. Okay. Yeah, we'll make sure to put all that that information in the show notes, Quinton. So again, thank you very much for being on the podcast today. Really enjoyed the conversation and it was great great talking to you today. Thanks a lot.

riverside_quentin_raw-video-cfr_stephen_simpson's s_0009: 1:06:03

Oh, thanks Steven.

1:06:04

Hope you got some value out of this podcast episode. I invite you to like and subscribe to the podcast, leave a review, leave a comment. Let us know what you think. And for any other information about us, what we're doing and the types of investments we're into, please visit focuscapital. ca, focuscapital. ca. And on there, you can find a ton of information, additional podcasts and a lot of free resources. That's it for this podcast episode. Bye for now.