Important Tips For Real Estate Investors | "Inspired To Invest" Ep51 with Eve Panaguiton

Ever felt trapped in the grind of a 9-5, yearning for a life where your time isn't directly traded for dollars? 

Welcome back to "Inspired To Invest" episode 51 with Eve Panaguiton.

To watch rather than listen, go to: https://youtu.be/pho9O8k8cTs. 

Eve Panaguiton of Aslan Investing shares her riveting journey from a stable bank job to the dynamic world of real estate investing, where financial freedom is not just a dream but an attainable reality. 

Tune in to hear how a seemingly off-course seminar spurred Eve to leap into property flipping and multifamily investments, and how her savvy moves in the market helped her escape the time-for-money trap.

Navigating the real estate seas can be as treacherous as it is rewarding, and this episode doesn't shy away from the stormy weather. 

Eve gets real about the challenges of managing a vast portfolio, from the financial acrobatics needed to maintain cash flow to the often-overlooked societal impacts of property investment. 

Discover the strategies that keep her afloat amidst the tumult of rising costs and the emotional resilience required to foster community growth, all while balancing the scales of profit and positive societal influence.

In our candid conversation, we also dissect the layers between financial independence and the elusive financial freedom, illuminating the path that real estate can carve to both. 

Eve shares her insights on leveraging equity for business ventures and weathering market fluctuations, all while keeping an eye on the prize—living a life unencumbered by financial worry. 

For those intrigued by the multifaceted world of multifamily real estate investing and hungry for success that extends beyond the financial, this episode is a treasure trove of wisdom and practical takeaways.

Tune into this inspiring episode on Wed., Jun. 19/24. 

To connect with Eve, go to @itsrealestateeve on social & https://evepanaguiton.com 

Thank you to Jordan McGregor from Property Cast for bringing us this month’s episodes of “Inspired To Invest? Learn more about this amazing program to help real estate investors underwrite properties. Go to https://propertycast.io?via=serena

“Inspired to Invest” is proud to support the Beyond Success Program, a not-for-profit financial literacy program for students, launched by More To Give & MAK Investments. Find out more at @more2give.ca & https://more2give.ca/beyond.

Join us again on Jun. 19 to hear from a guest who transitioning from hospitality to wealth management and has never looked back!

Thank you for tuning into “Inspired To Invest”, hosted by @serenaholmesrealtor & remember, "when you invest in yourself, the sky's the limit!"

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Transcript

Speaker 1: 0:02

Welcome to the Inspired to Invest podcast, where we're sharing stories from real estate investors and how investing has changed their lives. Thank you to PropertyCastio for bringing you this month's episodes of Inspired to Invest. Hey everybody, welcome to the Inspired to Invest podcast. I have Eve Panaguiton here with us today from Aslan Investing, and she's based in Toronto. Her real estate investing spans equity-based investments to cashflow generating deals, and the bulk of her portfolio is currently multifamily properties in New Brunswick. And right now she's focused on something extremely important, which is exploring and emphasizing the importance of finding cash flowing opportunities and profit centers during the current market conditions, which have been very challenging for a lot of real estate investors. So thank you so much for being here with us today, eve.

Speaker 2: 0:51

How are you? Thank you for having me. I'm doing well and I'm very excited to be here.

Speaker 1: 0:57

Awesome. So I guess, just to get started, I know you and I had the chance to meet, I guess coming up to maybe a couple of years back, and I got to hear about how you got started in real estate. But I'm sure a lot of people have no idea how you got started. So maybe we can start at the beginning and you can talk about what life looked like before real estate and how this really came into the picture for you.

Speaker 2: 1:16

And I think it's really important because I think a lot of people have different transition of whether it's career or just even strategically pivoting investment strategies. It actually started when I was around 24 years old, when I realized that simply selling my time for money wasn't going to be a good long term plan, especially to calculate percentages and you know how much more hours I need to work on families growing you know what I mean. We need to figure out more, more ways of creating other streams of income where it's like I mean, if I were to write down how many hours I have in a day, it would be no different than everybody else, so it would be what's the most efficient way of being able to do this? Be what's the most efficient way of being able to do this? And to me, the first step was stepping away from my nine to five job only because I needed mental clarity in understanding and making the right decisions. And so, at 24 years old, I've kind of had to ask my parents for permission and I said Look, I work in the bank and the bank is a rotating door and I have a really good portfolio, like in terms of, like, my resume. I could always go back if I need to. But I've realized that right now is the perfect time for me to associate myself with risk. I'm not married, I don't have children and I can always just move back. And it's not so embarrassing at 24 to be moving back home right Like. This is the perfect time. I really want to be able to explore this opportunity, and at that time I didn't even know it was real estate. I just knew I needed to figure out how the world work. Yeah, and my parents absolutely supported me for it and they said Go ahead, it makes, it makes the most sense that right now.

Speaker 2: 3:03

Yeah, so I did quit my full time job and at that point I said I just need to make sure that you know, my, my cost of living is like sustained. So whatever I need to do to keep that up with my car payments, as long as those are paid, everything else is on top right. And so I actually was working for a renovation project management company, and that was when I started making a huge chunk of commission for renovation project management, where I was getting a percentage of every renovation that we were working with, and because of that I had that renovation experience Number one project management experience, dealing with contractors and clients as well, and like making sure those deliverables and expenses are met. So I was like, okay, this is, this is interesting. We're going to keep this going.

Speaker 2: 3:54

And then all of a sudden, I got invited to a seminar called Rules of Renovations and I thought it was absolutely for renovations, but it turned out to be a real estate conference and I had no clue and I walked in and this guy started teaching me about wholesaling and it opened my whole world on what different types of ways of making money within real estate. And from there I was like, okay, well, I'm game, like how do I register so that I can learn more about this and and and do this? And so that was when I registered for a three-day workshop. I had, I think I'd spent about $2,500 USD just to be there, and we had it at a hotel conference and taught pretty much everything at a surface level, as much as they could, like private lending, rent to owns, like like different types of lease option, buying multi-families, fix and flip homes, finding deals and it was such like it was such an overwhelming weekend. But that was when I knew that if I already have the team for renovations and I'm already, you know, established on understanding how it all works. Yeah, only thing that's missing is really acquiring the funds for me to buy the properties, then keeping those profits to myself, right.

Speaker 2: 5:15

And so that was really where we pivoted and we were planning on um like.

Speaker 2: 5:20

At first we were planning on wholesaling the deals, but then when I realized how much profit you could really make on flipping them, I just I ended up kind of just buying it with an investor.

Speaker 2: 5:30

At that point we ended up buying our first property up in like, like northern Ontario, and then we purchased it for two hundred and thirty thousand, we put in one hundred K worth of renovations and we ended up selling it for 550,000. And then since then it kind of just it started, you know, money started attracting to us because the I guess, the skills and what we were able to accumulate, and because of that we started saying, okay, we can keep doing this and we can continue our momentum. Yeah, and then we slowly pivoted within multifamily only because we realized that it is the most tax effective strategy that, as opposed to liquidating the asset, realizing those capital gains and paying um taxes like huge sums of capital gains taxes, especially now yeah, and then then allowing those gains to be crystallized in the form of debt and just understanding how to manage debt from there is the new challenge, and that's really where we really transform a strategy into buying multifamilies, stabilizing them and then taking out that equity by way of debt as opposed to capital gains.

Speaker 1: 6:47

Yeah, yeah, no, that makes perfect sense. And how did you end up in Moncton specifically? Like, obviously I know it's a popular destination for a lot of real estate investors right now for a number of different reasons, but can you talk about how you specifically came to start investing there?

Speaker 2: 7:01

Yeah. So we started actually like, if you really think about it, when I was doing flips in Ontario, I started looking at risk, right In terms, if we are unable to sell this deal for whatever happens, what is our alternative exit strategy? Let's put a tenant in there, right? So that was our strategy. For me, I always have to think exit.

Speaker 2: 7:25

And if the exit is to put a tenant in there, with the current landlord and tenancy laws in Ontario, it is very difficult to get a non-paying tenant out of your building. You'd be lucky you can get them out on a year, right, and if I were to calculate those costs, my burn rate would be very high. And so when we looked at strategy of worst case scenario for acquisition, which is long term buy hold, we've quickly realized that the biggest benefit for us is to be able to have the risk of landlord control, meaning that if a tenant is non-paying, the same way if we're non-paying for our mortgage or property taxes, things don't turn out as well, right? So we realized that there are provinces in Canada that have more favorable landlord laws, whereby if you don't pay, we don't play. You know, it's just, it works.

Speaker 2: 8:27

And so we started looking at, you know New Brunswick, saskatchewan, edmonton and and all in like Winnipeg and all those markets, and we could well. For me, honestly, I quickly realized that what's what's the cheapest cost for me being in Ontario to get to if I do need to go and visit the property. So that was my next thought process. Well, how much is really a flight to Edmonton? If we're really thinking about how much is a flight to Winnipeg, how long is that flight? How much disruption in my life if I were to make accommodations, to do and to go to those places to necessarily to invest? And that's really where we looked at New Brunswick and we said this is only a two hour flight you can literally fly out of there Kind of drivable right.

Speaker 1: 9:13

I'm pretty sure it's drivable too, yeah yeah. It'd be like 10 hours, but you can do it if you had to.

Speaker 2: 9:18

And it's not the worst, because I think at this point I've driven a lot back and forth from Ontario to New Brunswick and, to be honest, I truly enjoy stopping at Quebec and Montreal. It becomes such a nice road trip in between, um, and I get to finish a book, uh, that I would normally finish anyway, but we get to do it in between, right? So, uh, that's why we figured New Brunswick was like really a good stomping ground for us to say let's put our shovels into the ground and let's build a foundation of a strong portfolio out here and go from there. So, until we build up enough liquidity so that we have more accessibility and be like, okay, yeah, we can go to Edmonton or Winnipeg now because we have a little bit more of a and we can afford to do that even more.

Speaker 1: 10:08

You know what I mean? Yeah, and I think it's something that's really smart, because a lot of people here in Ontario feel like they're priced out of the market, they're afraid of LTV rolls and stuff like that, and I think it's something that everybody just needs to stop being so attached to the fact that you you don't have to invest in your backyard, like there are a lot of opportunities and there are ways that you can go about managing them from afar. You just have to be strategic and do your due diligence, just like you would in any situation. But at least it helps you get started right, and I think that's the main thing is just getting your foot in the door. Um, so, in terms of like moving over now to Moncton, what does your portfolio look like today?

Speaker 2: 10:43

Yeah, so we have, we have a pretty decent sizable portfolio, but it's it's really, even with that comes with risk, right. So even with you know, a lot of doors that we're managing right now, there's, like I'm quickly learning that like there's so much more variables to consider. Like, like last week alone, we got three leaks in three buildings and that was already stressful enough, never mind the um, the frozen pipes in the winter. That we deal with um, with the portfolio that we have. It's to be honest with you, it's, it's great and but I do think that when people want to get into multifamily is to really understand that it's good to scale, but it's good to do it in in a, in a good, I would say good, good pace, a good pace to do it. And really understand let's say who you're working with and your partners, because at the end of the day, you know, I've sometimes like I have some partners that are unable to cough up the cash calls if required, right, some of these leaks and we're gonna have to wait for insurance, but we need to deal with it right away.

Speaker 2: 11:58

A lot of these financial setbacks that comes with having a like a portfolio, right, whether whatever size it is, and um, as much as people like the idea of having like a plethora or like hundreds and hundreds of of units and buildings, it's, it's quite it's, it's a lot of pressure, um, when it comes to it, because then you're going to start quickly realizing, especially if you're the managing partner, it's my cards on those bills, right, so my cards on those utility bills and stuff like that, and so they quickly can add up if those finances aren't managed or money isn't coming quick enough or investors aren't coming in to help with any of the costs. But you know, sometimes distributions are great, but I think people need to kind of reflect a little bit more on those worst case scenarios and understand what is your risk profile of getting into it or who you're raising capital from, like are they giving you all of their money? Because if that is the case, you're going to be trapped if something happens to the building and both of you guys are going to.

Speaker 2: 13:07

It's going to be difficult to service any of those costs.

Speaker 1: 13:10

Yeah Well, I think we're obviously seeing that trickle down effect with a lot of real estate investors right now. That did scale probably too quickly and not conservatively enough for some of the things that now we're facing, and now there are situations where we've seen people going bankrupt, going to receivership, insolvency protection and things like that. So I think you have to be very careful, especially if you're a partner and using other people's money. Yes, we want to grow, but I think you have to understand and learn how to do things and manage things appropriately so that you are growing at a safe pace and that you're not, at the end of the day, like risking what you're working for and risking what other people have funded the portfolio for. Now you talked a lot about those different challenges and stuff like that. What would you say is probably the biggest obstacle that you've faced in the last little while and stuff like that. What would you say is probably the biggest obstacle that you've faced in the last little while?

Speaker 2: 13:59

I would say, because everything had shifted realistically and I think everybody is feeling that, with the interest rates quickly going up, cost of property taxes have gone up, cost of heat have gone up, electricity bills have gone up, and so it's really just that pressure, that increased immense pressure of everything shifting and the cost. I've already experienced the costs have gone up when I was doing those flips, even during COVID, right, but when it comes to holding, you now have variable of expectations because you now have families living under these homes that are experiencing these interruption, not just you anymore. Yeah, so the biggest thing that I would say, it's not the actual issues itself, because they do show up and they are there, it's it's the fact that I have to mentally pivot myself and say I understand that these issues are happening. However, I need to mentally pivot myself and say I understand that these issues are happening. However, I need to be mentally like, okay to constantly strategize my next steps, because otherwise the issues will always exist in any form of life investment.

Speaker 2: 15:15

But for me, it gone to the point where I was like I have. I feel like there's a lot more people that I'm that are relying on me. There are these doors, there are families in these doors, right these costs that needs to be covered and making sure that, um, if you know, like if, if we've uh confirmed that we're paying for their heat or we're paying for lights, make sure that those are on all the time. Even though these costs have gone gone up and as well as the interest rates have gone up, we need to continue to be providing these services, and a big part of the challenges that I have as an entrepreneur, as someone who has been independent in this business for quite some time, is that I can't call in sick. I can't simply say I'm too stressed to not to not think about it. I can't call in sick. I can't say I can't pick up anyone's phone call. I have to consistently be always on my A game.

Speaker 1: 16:29

And that was the hardest part for me was that to always think of solutions when I wasn't feeling my best. You hear about those slumlords and the people that have water turned off for not even days but in some instances like months. Like can you imagine that as a tenant? Like you know, there's a lot of those different things. It's refreshing to hear from someone that does take concern with that level of responsibility. But, on that note, we're just going to take a really brief break for a word from our sponsors and we'll be right back.

Speaker 1: 16:53

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Speaker 1: 17:41

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Speaker 1: 18:36

Looking to buy, sell or invest in Durham region or Toronto? Let's chat. Hey everybody, welcome back to Inspired to Invest. I've got Eve here with me talking about her illustrious entry into real estate investing several years ago, starting with some renovation sales, flipping the borough strategy and now multifamily in Moncton, new Brunswick. So before the break we were talking about some of the challenges you know escalating costs of taxes and interest rates and all the utilities. I guess one thing I want to really understand is what would you say is the craziest thing that's happened to you as a real estate investor so far.

Speaker 2: 19:10

The craziest thing that has happened to me. I feel like I feel like I would have more of an answer of what, the what not hadn't happened to me, because I feel like a lot of crazy things had happened in real estate. You know, I've I've had um, a contractor, um break in to one of like a previously like a finished renovated units and um take everything he just installed and uh, like all six units, take in all the cabinets off the wall, and walked into the actual store where he bought it and tried to return it. I mean, that's, if we're looking at a scale of crazy, I would say that's a pretty scary scale, right. And so we went back to insurance and we're like, what are we covered for with what had just happened? You know, this is at least $60,000 worth of damages that was made.

Speaker 2: 20:09

And they're like, yeah, this isn't covered for whatever reason you know, that's one of them, and it doesn't even change the fact that for he, he still keeps coming back. He would, he would call the city about the properties. He would, oh my gosh, knocked on my, my tenant's door, ask for me, um, and then there was this one time, um, one of my business partners were outside of the the properties. He was knocking on his window, going like where is where's eve? Where's eve, you know? Like, um, I mean, those are just one of the crazy things that's ever happened to me. Yeah, I did. You know, we do our best to kind of not like not have that allowed, like kind of create that chaos within our mental space because, again, we need to have our head together every single time, continuously strategize things, um, but I would say, aside from that, and finding dead kittens in a unit, um, yeah and uh, feces all over the wall, like yeah, I think you, I think it's, anything can happen in real estate, I'm gonna going to be honest.

Speaker 1: 21:17

Yeah, no, absolutely. I had an interview that I recorded a little while ago and they talked about going to unit and it had been abandoned, but basically it was full of like all these children's toys all over the place. But then they also found like needles under the couches and all these things Right, and it was just like so heartbreaking to think that there's a family that was there. But there was also like addiction at play and stuff like that. And you know, at the end of the day, obviously things happen and you just gotta gotta get through it, um, but obviously it's not all. It's not all bad.

Speaker 2: 21:46

So maybe we can talk about some of your successes and what you would say you're most proud of yeah, um, the fact that we've been able to really get those values and understand on how the numbers work really in multifamily and understanding the value add that we provide, not just on the actual investment returns per se, but obviously being able to contribute in terms of affordable housing we have a lot of units within affordable housing as well, yeah and also energy efficiency. It's something that we've been aiming to do for a lot of our buildings and converting that. So all the good stuff there is just the ability of being able to create a much larger impact because we are creating larger moves In terms of investment strategy. As an investor, we've obviously seen significant and substantial returns within our investment, you know, with a capital gain between $200,000 to sometimes $700,000, of being able to just optimize those you know performance, that net operating income, being able to take that out as either capital gain or a refinance right, that out as either capital gain or a refinance right. Just buying a property at six figures and then having it appraised over like seven figures is obviously very satisfying as an investor. But being able to understand, now that we have these funds, we have a responsibility of allocating these funds for good meaning, reinvesting it into the property, being able to make sure we have those energy efficiency components in place, reinvesting that into other means or maybe helping other investors get into the market as well and being able to understand their strategies so that we can work together, partner up and, you know, helping others kind of come to their full potential when it comes to real estate as well.

Speaker 2: 23:38

So the wins there really on the investor side, is money is there? Money can be made. As long as you're tactical and strategic, you can make really serious capital gains within every deal that you touch, obviously. And then, number two, there's a huge social impact that you can create. But it's just a choice that you're willing to make of creating that social impact in any means necessary. And I feel like sometimes we may or may not talk about it enough, but it's really important to recognize that not every investor is just in it for the profit. There are things unsaid or undone. You know I don't really post about anytime we make our donations or anytime we do give back within our communities, but it's really important for to see that and like we're not we're not the top of one percent in Canada, for sure, but we're working in order for us to give most back to our families and our friends and I would say that that's the biggest reward and being able to say, hey, um, you. There's a huge life shift and it's OK because we're able if we were able to make the money that we were able to make in the past. We're OK with this life shift.

Speaker 2: 24:49

You know, with my father having a recent heart surgery and open heart surgery where he may or end, a stroke where he may or may not go back to work, surgery where he may or and a stroke where he may or may not go back to work. Um, if this was 24 year old me, before I'd quit my job, I probably wouldn't have quit my job. I probably would have been like, no, I have to, I have to go to work because I don't know what my death situation is now. Yeah, but for me, now, knowing what we were able to do, it's it gave me confidence that it's like. This is just a bump in the road, similar as contractor breaking in you, you know what I mean. This is something that we can work through, so that's another big plus.

Speaker 1: 25:24

Yeah, no, I think that makes sense.

Speaker 1: 25:26

I mean, I do know someone that he actually kind of left real estate investing because he really wanted to focus on the giving component and he's really focused on working with businesses to create that philanthropy and giving component in their branding because it does attract. You know people attract like-minded people, right. So people know that you have this social good aspect to it. So you know you want to sell yourself short and necessarily like hide behind it. You don't have to put it out there in people's faces, but I think it is something nice if they see that you're taking a certain percentage of the rent money and putting it towards whatever. That is right and that could be a great way to attract future joint venture partners or investors because they know that you have this, you know giving component to your business. Now I guess, moving ahead in terms of things like how real estate investing has changed your life and financial freedom, would you say that you've hit your financial freedom goal? And if not, like what is financial freedom ultimately look like for you?

Speaker 2: 26:22

I've reached my financial independence goal right. But in terms of financial freedom, I think freedom really comes from not having the that thought or afterthought process To me, that thought or afterthought process To me. I love real estate when it comes to setting up your financial goals right now, because it's realistic, it's tangible, it's risk-free. It allows me to say, hey, I have substantial enough equity for me to start a different business or to join venture partner with someone else's actual business, because I have enough equity. In case something happens, I can be accountable for whatever losses a business could occur. Or to join venture partner with someone else's actual business, because I have equity. In case something happens, I can be accountable for whatever losses a business could occur Right. So for me, the way it works is this I see real estate as a good platform for people to get into and get started. However, I don't see an absolute freedom when you actually own real estate for rental for a long time.

Speaker 1: 27:25

You're a working partner, so you're completely detached from it.

Speaker 2: 27:29

And even if I was a passive partner let's just put it into perspective, perspective as a female if I knew that there was some bills unpaid because you know the tenant couldn't pay it or whatever. For whatever reason, they're going through some financial hardship. Um, there have, there's a business aspect to it and there's there's a decision aspect to things as well. Right, there's a decision that's like how would you strategize these bill payments with the tenants where because that's still thought and time investment and at the end of the day, no matter what, you'll still have to do some kind of of that decision making for as long as you own a property, no matter what, yeah, there is because of that. There is no absolute freedom. Yeah, yeah.

Speaker 2: 28:16

Always thinking of what can I do? How can I strategize this? What's the best way to go about this? Only because there's always that tangible hard asset Me. The way I see financial freedom is this it's to not have to worry about anything else but your immediate family and friends. And if you can get to that point where the worry is not let's say, if I were to have a business and have employees, the worry is the employees. The word is to make sure. Do we have enough money to pay our employees? That's that's. You're still have a problem.

Speaker 2: 28:54

You still have that um you know, that dependence, like you, still have to think of other people. So, unless people have substantial enough liquidity, where they have some kind of passive investment that pays them in some form of dividends, where that money comes into as a interest in the money, which is very much aware because you're in private lending, that's where you could become passive and, as you utilize a vehicle that you know can guarantee and secure your principal, that you know, those are the vehicles that can actually give an absolute freedom.

Speaker 1: 29:32

Yeah, and again, there's pros and cons to anything, right, like, yes, I have been passive for about six years and for the most part, everything had always been fine up until maybe four months ago, and now it's been like the absolute opposite of passive.

Speaker 1: 29:44

And you know there's a lot of uncertainty and fear in terms of the market and you know hundreds and hundreds of investors that have been impacted. So I think you know there's pros and cons to different things, like, for me it was having that time and this gave me the cash flow, but for other people they want that long-term equity and things like that, right. So you're not necessarily growing your equity if you have it placed in a vehicle like that, right. So I think you just have to be mindful of the season that you're in and what your objectives are. But when you look at where things are right now, like, what would you say is next for you? Obviously you focused on the multifamily market in New Brunswick, but do you plan to expand out of there and into other markets, or is there a different asset class you'd like to focus on?

Speaker 2: 30:25

Yeah. So that's a great question because right now, as we know it, any type of buy hold multifamily. So let's say overall high level perspective, you'll look at investments in Ontario. Nothing's going to cash flow unless you obviously get that money in the buy and you have tenants Like. The best way to cash flow in Ontario is to get into multifamilies and you actually get those rents up. Maybe get a good loan, get a better interest rate, longer amortization on that debt where you can actually cash flow. However, if investors are looking to do that, I highly, highly, highly suggest you do it in a syndicated way so that if there are any costs associated to holding that property in the long term, you are not 100% liable for all those costs. You are only a partial percentage but you get the benefit of that long term equity play Right now.

Speaker 2: 31:21

If you were to look at other and other markets, other markets will have more allowance for different exit strategies, but what we've been able to do in out in New Brunswick is that we were able to look at our current existing portfolio and say, hey, look, we have a couple of turnovers right now where tenants are leaving and in New Brunswick Airbnb like short term rentals they don't have regulations for it yet and I don't foresee them having any regulations for it, because it does. They do have a huge influx of migrants, whether it's from a different country, like war torn countries, or just from Ontario to New Brunswick because the cost of livings are so high. So we've noticed that with our existing portfolio of short-term rentals that we've seen an influx of from our 61% occupancy to sometimes between 75 to 80% occupancy, and we're renting these units between $100 to $160 a night. Right, so it's been an extremely profitable business venture and it's actually it's. It makes more money than the long term rentals, if I'm going to be honest with you. So what we've been able to do is that we were able to kind of look at those units that we were turning over and says, okay, if we bring in an investor, the same way, how we're doing this, an investor comes in with a lump sum of money to furnish the units and put it up on Airbnb or VRBO. What are your cash on cash returns for that investment? Because technically, they're paying us rent as well.

Speaker 2: 32:51

So I always put it into context such as this if you had a salon and you wanted to rent a commercial space, you're still going to be responsible for your rent. You're going to be responsible on anything that entails in a salon and you wanted to rent a commercial space? You're still going to be responsible for your rent. You're going to be responsible on anything that entails in a salon and you just pay for your own utilities. Whatever profit you make after your rent is yours. Airbnb arbitrage is the same thing. So whether you're using Airbnb or VRBO, whatever platform, as long as rent is being paid to the landlord, whatever profit for that cash flow, rental is yours to keep.

Speaker 2: 33:26

And we found a way where we said look, this is a good niche for investors that maybe has between 15 to $30,000 to invest and that's looking to make, you know, maybe at least 33% on their money per year, because that's usually within like a 60% occupancy rate, even though we are experiencing more. If investors are looking to have something that's more like, that is an either an entry to real estate that's high cash flowing or, alternatively, something that, if they are refinancing money at a six to seven percent rate, you want to put that anything over that, because if you're going to make into a real estate asset, buy a multifamily at a five percent cash on cash and you're getting a loan for six, seven, eight percent, right now, the math doesn't work out. You're losing money every single month. So if people wanted to be able to diversify their investments and say, okay, I think I can take a 33% minimum per year, I can put some money in here from the refinance that I was able to do. At least, that's generating higher in cash on cash than I'm paying for in cost. So what's the benefit within the landlord there? The benefit is that the landlord can even charge higher than market rents.

Speaker 2: 34:43

Number one. Number two these costs that are typically associated with long-term tenants are now insured by a separate platform. So if, like, say, I had a stove or a fridge that breaks and I'm the landlord and I'm renting it to someone who wants to run an Airbnb business, airbnb can cover that like fridge or that stove, whereas if I was just doing it as a long term rental, if that stove is broken, I just got to go buy a new stove, right? No choice, no choice, no matter, right? So?

Speaker 2: 35:12

Number one we get higher than market rents by allowing investors to come in, furnish the units and they keep the profits after. Number two we make money on management as well, right. So it allows the investors to be fully passive within the actual investment whereby we're going to go in there, do the cleaning, the turnover managing, so that, after all those costs are paid, the investor still makes their money. And then, number three, we have the opportunity to either do it ourselves eventually and then create that additional cash flow for ourselves, right. So, and because of the higher than market rent, we get a better appraisal, better appraisal, equity takeout it's just an overall like a better scenario for a lot of investors.

Speaker 2: 35:57

And we've managed to kind of offload, I would say, about four units in the beginning of the year to investors and so far they've been getting a quick $18,000 booking within the same month of their launch, which is, I mean, investing between 15 to 30,000 from the get go and getting that on your first month of a booking. It's obviously a really good, decent return on investment. That's not even considering that actual 61% occupancy, right. So, yeah, I feel the need to be able to discuss these types of investment strategies for investors such as myself, who is in the position of equity takeout and who is looking to diversify their investment putting a little bit here, but seeing that money work for them higher than buying multifamilies and by the time you know you get that return on investment anyway, you'd be in a position to reinvest it into multifamily if and when it still makes sense.

Speaker 1: 36:57

Yeah, no, and I think that's really smart. When you're diversifying and in a market like this, I think investors have to pivot because they have to be bringing in the cashflow, even just to support the additional expenses and stuff like that, not even necessarily to bring in cashflow from a profit perspective, they just have to keep ahead of inflation. So I think it's great to be creative and you're in a market that does allow for that, right, because I think if you're maybe in a smaller market, like, say, pimmons or something like, there's maybe not some of the traffic that you'd be getting for where you are. But on that note, since the name of this podcast is Inspired to Invest, I always like to ask my guests what's a quote that inspires or motivates them.

Speaker 2: 37:36

There was this quote oh my gosh, I think the oh there are more money in this world than there are who knows what to do with it.

Speaker 2: 37:43

So that's a quote that I always say. Is that, like, like people know, if you want to make money, you can go take an hourly wage and you'll make money, but the problem is that people don't know what to do with money all the time and so they're spending it. It's either it's just either making it or spending it, right, and the word investing or the word of making that interest gain on the money, even that those are still like a very taboo, even generationally, right? People don't even talk about those. So it's really important that that quote really resonates with people and understand if, if I don't understand money, who does yeah, yeah and transition into. It's true, I have money but I don't understand it, and admitting to yourself is a problem, but, like you, at least you know where you're gonna go next. Because if you know that you don't know it, then all you got to do is find people who know it and be in a position to make better decisions.

Speaker 1: 38:46

Yeah, no, that makes perfect sense. I remember watching, like Dr Phil, many, many years ago, and he was talking about you can only change something once you acknowledge it. So I think, by understanding and acknowledging maybe your weak points or where you need to learn. So I think by understanding and acknowledging maybe your weak points or where you need to learn is really just the first step towards succeeding and obtaining your goals. But, on that note, what's the best way for anyone to get in touch so they can learn about these unique opportunities that you're talking about?

Speaker 2: 39:18

Absolutely. You guys can follow me at it's Real Estate Eve. I-t-s Real Estate Eve on Instagram real estate eve on instagram. And we have a lot of content in there inspirational contents and as well as I do in person and live workshops to discuss morbid investing, risk management, due diligence and everything under the sun when it comes to multifamily real estate investing awesome.

Speaker 1: 39:36

Well, thank you for your time for being here today. Of course, for anyone that's tuning in, thank you for watching or listening. Of course, course, if you have enjoyed this episode, make sure that you subscribe below and you're following along at Inspired to Invest podcast and remember, when you invest in yourself, the sky's the limit. Thanks again. Thank you to PropertyCastio for bringing you this month's episodes of Inspired to Invest. The views represented on this podcast are for general information only and does not constitute investment or other professional advice or an offering of securities. The host and guests featured on inspired to invest make no representations as to the performance of any particular investment. Should you decide to make an investment, you are responsible for conducting your own review and analysis. It is recommended that you obtain independent legal accounting and tax advice from licensed professionals.