Canadian Real Estate Investing and Brokerage with Sandy Mackay | EP72

51m ·

Canadian Real Estate Investing and Brokerage with Sandy Mackay | EP72

Sandy Mackay is the Founder/CEO of MacKay Realty Network. Sandy is an Experienced Realtor and Investor. Sandy has Worked on Hundreds of Real Estate Transactions since 2011. Sandy is also One of the Hosts of Breakthrough Real Estate Investing Podcast.

 In this episode we talked about:

  • Sandy’s Bio & Background
  • Legality of Wholesaling
  • Pivoting from Real Estate Wholesaling to Building a Buyer`s List
  • Brokerage Model
  • The Importance of Taking Actions
  • A comparative framework for commercial and residential markets
  • Real Estate Changes in Terms of Technology Companies Entering the Space
  • Dealing with Real Estate Broker
  • Real Estate Market Outlook
  • Mentorship, Resources and Lessons Learned

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Speaker 0 (0s): Welcome to the working capital real estate podcast. My name is Jesper galley. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you're looking at your first investment or raising your first fund, join me and let's build that portfolio one square foot at a time. Hello, welcome to working capital the real estate podcast. I'm your host, Jennifer galley. And today we have a special guest. His name is Sandy Mackay. Sandy is the founder and CEO of McKay Realty network.

He is a, an experienced realtor and investor. Who's worked on hundreds of transactions since 2011. He's also host of the breakthrough real estate investing podcasts. Really awesome podcasts. Check that out if you haven't heard it already, Sandy, how's it going?

Speaker 1 (49s): Awesome, man. Happy to be here. Excited to share some great content.

Speaker 0 (54s): Absolutely. Well, we're excited to get into it. I thought would, would be a bit of a treat for listeners is to talk a little bit about what we normally talk about, which is real estate and maybe zero in a little bit on the focus of what you do in brokerage in the companies that you've built. And I take it today. You're joining us from Hamilton, Ontario, Canada. Is that correct? Yeah.

Speaker 1 (1m 16s): Nailed it in Hamilton, Ontario.

Speaker 0 (1m 18s): Perfect. For those that don't know, that'd be a, I guess a pretty solid one hour west of Toronto, great area to invest. Well, Sandy, you've worn a number of different hats over the last few years. You've done some pretty impressive things on the real estate investing side, as well as brokerage. You were actually introduced to me by, by my partner that I work with in commercial real estate. And what we do with most of our guests is take a step back and talk a little bit about how you initially got into real estate. So how did it all start for you?

Speaker 1 (1m 49s): Yeah, I mean, I got, I got, you know, got when way down the path further than I ever thought in the real estate world starting out. I mean, we kind of reached out for that as a book in my life and my, my, my whole outlook on life and my path, my, my wife now girlfriend at the time we kind of were working together actually. Yeah. Give or take 10 years ago. And, and, and somehow got came across that book. It went to a weekend seminar thing with the rich dad, poor dad programs, never didn't buy into the whole big, expensive ticket item there, but like just got a lot out of it actually changed my whole outlook on things.

And then being more of a, you know, that business owner sort of mentality, and then working for self versus, you know, how we're trained in life to kind of just work for the, the big companies I guess, out there. And then that was my upbringing too. It was just like being trained to, you know, go work for a big corporation. So that book changed my life. And my past got a little interested in real estate side. We started to look for ways to make money in real estate without having any money cause we had none. And so how do we get creative to buy or invest?

And we started doing wholesaling. So we started like looking for deals that were, that were hard to find, but there's so much good content in there still is around how to do that. And you know, we started to look for distressed properties, motivated sellers, people that were eager to get out of their property for whatever reason. And, and so we started building out kind of two less like our in our investor list, people who were gonna buy these properties and then the sellers motivated sellers. And it was didn't really think of it this way at the time.

But looking back, it's like we are building out our, our, our, our, our database of clients essentially. And really it really turned out well, we building out our investor list was probably the best thing we ever did cause we, you know, gravitated towards the realtor side, eventually got their licenses, joined up with a great mentor of mine on his team at the time. And that kinda, he kind of pulled us into the real estate realtor industry and we're building out our list of investors at the time, which turned out really well when the real estate side, once we got our licenses, those are our pool of potential buyers.

And, and, you know, we kind of realized we were always looking for the really difficult to find deals. There's a lot of other deals out there to sell to. They don't have to be home, run deals all the time, but you know, so we got our license, we started selling more properties and doing more deals. We, we, we did have some success in the wholesaling side of it bought our very first property because of the $25,000 wholesale fee that we made on a, on a deal in Burlington, Ontario, right in between Hamilton.

And Drontal, that was, that was the literally the, all of the funds we had to buy our first property for like 260 grand, which you've been Oshawa, Ontario, other side of Toronto, literally the 20, it was 5% down. I did, I did some hands-on work there, which I'm not very good at doing, but they had a bit of hands-on work. It's been about 10 grand on a credit card to fund some materials and whatnot. Look at YouTube, watch YouTube to tell me how to lay floors and put trim on and stuff. And first and last time I ever really did any version of that.

And yeah, from that point forward, like kind of luckily in a way that property was worth 400 grand, like two years later, parlayed that into more properties started raising money for deals, started working with lot of joint venture partners. Yeah. Just soak up so much knowledge that was going to have so many courses and events and things like that to network and grow our education. And, and people just started asking us about like, what are you doing? And all of a sudden, you know, over time, a few years went by and money started to kind of coming our way.

And we started doing some bigger deals and, and yeah, just done like tons of deals over the, over the time. Now we ended up starting a few different companies. We, we were doing a lot of renovation projects realized that we needed some construction, help realized we needed to property management help. We started, my wife runs our private manager company now. So we have a company that we work with there and, and I run the real estate side of it, the realtor team, largely residential real estate. And, and then lots of brokerages here too.

So we have a brokerage, the realtor team, my wife does, my wife does run mostly the construction side too. We have a construction company, but she kind of oversees that more than I do. And she runs the, a property management company.

Speaker 0 (6m 34s): You've been keeping busy clearly in terms of there's a lot there. But in terms of the wholesaling aspect, you hear a lot about this, you know, especially from the Canadian and us perspective, a lot surrounding the legality of, of wholesaling, you know, what exactly is it? So for listeners, can you unpack a little bit, a little bit about what you mean by wholesaling?

Speaker 1 (6m 58s): Yeah, totally. We, yeah, so there's a lot, there's variations on it, but essentially, you know, the, the basic model. Yeah. You're, you're selling the contract, right. You're not actually ever buying the house. You're, you're, you're having an agreement to purchase a house on paper and, and unless otherwise stated in Canada, at least, you know, all, all contracts are assignable and so you can always assign it to someone else. So you can basically change the name into someone else's name. So we go talk with the seller, they want to sell their house for 200 grand.

Let's say, that's that? That's, that's, that's the way back numbers. Let's say 500 grand. Yeah. Let's say 500 grand. Yeah. A real actual house. Not a, not a, not a little chunk of, you know, 10 square feet, but an actual house. Yeah. So let's say you're going to buy 500 grand the seller once. And you know, they wanna, a lot of times it's, it's something urgent. Like they want to in two weeks or they want it this month, for whatever reason.

And going through the avenues of like hiring a realtor, maybe fixing it up, all the things that you might need to do to, to sell it. It's not really an option for them for, for whatever reason. And, and so, you know, you offer them, Hey, I could, I could bring you a list because I've built out my list of buyers here. I have a big chunk of buyers that would love to buy this place and I could bring them to you, you know, in two weeks they can close, you know, a lot of times those are cash buyers or, you know, putting a big line of credit, ready to go. They can, they can buy that 500,000 asset dollar assets quickly.

And so, you know, you go to them and, and you say, Hey, I'm going to buy this from 500 grand. You basically go to the investor database now and go, we have this place it's available for 5, 5 55, 25, 10, whatever you want to mark up. And, and, and you split it, you make the difference. So that's your, that's your kind of margin there. So you sell it to them for five 20, let's say they pay the 20 grand to you. They pay the 500 that you agreed upon with the seller. And that's it.

And pretty much some legal stuff in between all that, but it's, it's fairly simple at the end of the day, it's, you're taking that spread and not much different than putting on a commission on a deal, right. It's not too much different. You're just, you're the, you don't need a license for it. And it's, it is legal as much as it seems, almost kind of shady at times. And, and, and when you, when I explained that is fully legal and you know what, at the end of the day, you're, you are addicts value to some people like it done well, you're, you're helping that person out of a sticky situation that they're probably,

Speaker 0 (9m 37s): Yeah, for sure. I think part of the, well, ultimately if somebody's signing a contract, you'd like to think that there's a meeting of the minds and everybody is doing it voluntarily. I think part of the misconception of assignments, or at least part of the issue, there was a number of articles a year, a few years back that was a boat assignments. And basically the tax implications of them. Cause a lot of definitely a major Canadian cities pre-construction condos, you were basically assigning or selling the paper. And I think part of the issue was people were claiming that as capital gains, when it really it's its operating income, as far as I understand.

Speaker 1 (10m 17s): Yeah, yeah. We never scaled it up too big. I there's a, there's some huge companies, you know, I always back when we were doing it, I don't think I was oblivious. I think there just wasn't the exist a really proper business around this. Like I think people were doing it here and there they'd do it for bid and then parlay into some other things. I only saw so many videos on these American guys doing like such high level of this. They always selling hundreds of wholesale deals a year. And I was like, man, that's crazy. Can't find them.

I could never find them any opportunities. Now there's like, you know, there's, there's a, there's at least a handful or more of, of, of people around Ontario, for sure that are doing a ton of deals, wholesale deals and just growing into proper businesses. Whereas before it was kind of this, like, you know, under the, under the roof, nobody really knew about it. And it was kind of like a under the radar thing. And like, it was almost, you know, if you were actually wholesaling deals, it was like crazy. Like nobody could find real hook.

Now. I'm like, I open my inbox every day. There's a wholesale deal sitting there of some sort ready to go. It's interesting how that, how that stands. Yes.

Speaker 0 (11m 25s): I think under the radar is exactly it. It's one of those things that's mysterious until, until you know, a little bit more about it. Same thing with, you know, your first time you hear about hard money lenders, you're just like what people will be able to just lend you money. What is it a back alley? And you realize there's actually a number of these people in our, in our industry. So you started with a wholesaling and then what you said as you start building a list together. So how did that, how did that grow your business in terms of pivoting from wholesaling to building a list and that there's value in this list from investors that would be buyers and sellers?

Speaker 1 (12m 1s): Yeah. I mean, we, you know, I, I joined, I joined up with a team originally. That was, that was my first realtor side of a business. I, I had, you know, it was a great mentor of mine at the time for awhile. And he just, he was, he was someone I met through real estate investor circles and kinda convinced us, my wife and I both to get into the realtor world. And, and I was really thankful that went down that path, learn so much working with him alongside them day to day, opened my mind up significantly to what was possible and, and just, just thought so much bigger after working with him.

And yeah, we, we, we got into that side of things. We, we were living in Bon. So just north of Toronto, Hamilton was the like hot up and coming city. And thankfully we, we just kind of went all in on it on Hamilton and moved out this way, kind of for a few reasons, just timing made sense. It wasn't the very, very sexy city to move into at the time, you know, 10 years ago it was, or we're not, we're not quite 10 years here, but getting, getting there, it was, it was not a cool place.

Really. It was kind of like the really, really ugly thing that you bypass over the bridge on the way to the Buffalo and then the U S then it would be like, you know, it's all, it's all steel city, right? It's like very, it's not the most dealing working city as you drive past it. And it's transformed so significantly in the last 10 years, it's just gone from like this really dirty, ugly place to a really kind of cool hip place. You know, a lot of gentrification, cool restaurant scenes, all that sort of stuff. And it's, it's, it's been really cool to watch it.

A lot of it's Toronto money coming this way and, and, and coming in the city and developments and all that. So, you know, over time, we've, we've kind of read that, rode that wave to an extent, you know, it was really good timing. We brought a lot of our contacts from Toronto area this way and did a whole bunch of deals, bought a lot of, a lot of deals ourselves, you know, went from kind of, we kind of started with that niche of real, like real estate investors and then, you know, kind of branched off and diversified into just typical residential sales and, and, you know, typical stuff buying, selling real estate.

So we build up a network here of people, not investors per se, just, just everyday people and, and yeah, built up the realtor business eventually that led to opportunities to open a brokerage within the Keller Williams world. So we opened a Keller Williams franchise in, in what, nine months ago in bond back where we came from. And so I'm kind of in between there again now. So I'm commuting here and there and living the dream London, a brokerage, which is like a whole nother topic. Probably we won't get into too deep, but, you know, brokerage models are like just evolving a lot in real estate worlds is really ensuring all the different prop tech companies out there.

And just a lot of, a lot of what's the word, just a lot of things shaking, getting shaken up in that industry with, you know, the traditional brokerage model is kinda fading, I guess, in, in, in terms of the value it offers. And so it's just a lot of, a lot of different things happening in that world.

Speaker 0 (15m 17s): I think we should talk about that in terms of just the, the model itself. I always say real estate is an informationally challenged business. If you're not on the inside, it's really challenging to find information and that's slowly changing, definitely on the commercial side. If you're not in the loop, you're not connected with brokers, it's just very opaque. And it's something that I think, you know, I think generally people think that brokers prefer that, but not me. I really think that we should be opening up our industry and have more communication and more transparency.

I want to talk about the, the brokerage model, because instead of starting a boutique brokerage, you went instead to a franchise model. So what was that like basically starting a business with a little bit of help from a, from a franchise head. How does that look in the real estate world?

Speaker 1 (16m 10s): Yeah. I mean, we like a lot of the kind of path for any successful. Let's say realtor generally is like, you know, you build up their book of business, you start scaling it and then eventually you go, well, do I need this like franchise that I'm under? Or do I just start my own or do I, you know, am I going to be the broker running? So there's a lot of different ways that that could look right. You can be, you can run your own boutique shop. You can, you know, do you want to tack onto one of these big franchises and open up something like that? A lot of options, I guess, that are there.

I, I, you know, I, I got into this kind of Williams world. They eight plus years ago now, and just, it's a really easily scalable model, which I like the system, the models are kind of built in to, to, to run it really well, to a point where like, like we were talking before the show, you know, nine months in here, I'm not like spending every waking second running this business. And it's, you know, we're only nine months old. So it's to get to that point on my own, starting from scratch would be very difficult if I was having to come up with all these different models myself.

So, you know, for me, and I've never opened a franchise before. So this was a new experience in a sense, we have some other businesses that we've started from scratch and we're kind of trying to figure it all out as we go. Is there a sense, a lot easier running a franchise, as long as the franchise has good, like, you know, models and systems to, to, to run with? I don't know. I think I've learned a lot of a business actually in, in running one and opening. It is just the importance of operations and models and systems and, you know, for scalability of any company and you really need to focus on the models and what, what you're going to, where you're going to systematize.

You know, it's like a McDonald's thing that you can just like, that's why are they there? They're running a systematic, scalable business. That's the, every franchise is very, very similar. It's all the same. McDonald's university Keller Williams is very similar. On the brokerage side, we have a Keller Williams university and they teach how to run, how to run the business of a brokerage. You know, how to recruit people, how to run the books and everything. It's just like, almost like a masters in business is how to run that business.

This is what I've enjoyed a lot about. It is just, I, I can now implant the same sort of thing in our other businesses. I've learned a lot about that through the franchise side is just, you know, in our property management business, we use the same sort of models to run that and, you know, running the administration, which is not my like Bordeaux by any means, you know, having the right people to run that I can train and lead them through the same models that Keller Williams teaches. So yeah, I've, I've, it's been a fun experience.

We've, we've built it out from scratch to 75 or so agents right now, and, you know, it's as more and more agents come on and there's a lot more stuff that gets thrown out you, but, you know, being systematic, running with that in a, in a systematic way becomes all the more important.

Speaker 0 (19m 14s): Yeah, that's great. I think from a business point of view, I've always been a big believer that 80 or 85% of the success, you know, whatever success I've had has been due to taking action. And it's one of those things that you think it's sounds so simple. Take action. But so many people don't make the first step or don't take action on, on something that they totally can take action on in a given time. And that's where you see, I think you see people that, you know, they're not the, maybe not the smartest person in the world, but they're super successful.

And really, they just, they didn't question certain things. They just said, okay, if we need to buy this, we gotta buy this. Okay. If I need to invest in this, you, you know, we'll figure out a way to do that. And all of the behind the scenes stuff that needs to be done at the end of the day, you don't see that stuff. You just see, you know, the final product and you really don't understand how they got to that point. But I think action's is a big thing.

Speaker 1 (20m 10s): Yeah. It takes, it takes, yeah. You know, we were talking about that, like three kind of the fun part of it in a way is all those different things and no business, any business is just, it's chaotic at times, for sure. There's so many things to do. I think people get scared of that, right? They get scared of all the unknown and that's one thing I'm real estate. I can be really thankful for once we, like we going back to the start of this, once we just took action on that first property we bought, we actually just went to that weekend seminar.

We went to, and like the amount of most people, you know, it's kind of almost that almost has a negative outlook on it, going to leads and weekend seminar things. Cause they're all upselling on all these courses and whatnot, but the simple act of going there, like literally the path and we got a lot more action oriented from that and changed the path of our life in so many ways. And you kind of get used to taking action over time. If you just one simple decision, right. It can change your life. Just take an action once, you know, it's like, it's just like waking up earlier every day.

Like it takes, yeah, it's uncomfortable for the first couple of times. And then it starts to get just in rhythm and in a habit. Right. So yeah, one of the best habits you can get into is taking action consistently and no ready, ready, ready, aim fire. I guess this is kind of ready. Fire aim, ready? Fire aim. So to an extent you obviously, you know, there's obviously a bit of a dichotomy of that, but you know, taking an action, you learn so much through that, that you, you could spend hours and years or days trying to figure it all out beforehand, but eventually you just gotta jump in and, and go and, and, and kind of figure it out as you go.

And you're going to screw, screw stuff up, and you're going to have some big losses, but got to get comfortable with that. Right. You got to get comfortable taking some risks.

Speaker 0 (22m 2s): Yeah. I couldn't agree with you more. I, it's funny, just circling back to the, you know, that action oriented stance, it's usually the smarter, younger or less experienced brokers or people in our field that they look at very successful people. And they're just astonished, like how, you know, how did this person do this transaction or as a part of this deal. And a lot of times it's somebody that, you know, thought that they could do something that maybe at that point, they probably shouldn't have even been thinking at that scale, but they took action and it, and it panned out for them.

So anyways, Sandy, I want to talk a little bit about the, kind of the dichotomy between commercial and residential, because you went and you started a brokerage shop, and I'm curious of the kind of mechanics of that in terms of the hat you wear, whether that's a managing director hat, are you, are you kind of passively a part of it now, because we talked a little bit before the show, how this is something you might want to do in the future open different franchises. So maybe you could talk a little bit about the framework that you're currently in.

Speaker 1 (23m 4s): So we have like same way. I look at my realtor team side of things, you know, I, I always look for, I'm not the administrative person. I'm not going lead that out. I, you know, we're looking for us, we have a, we call it a market center administrator there, they're running our admin side. They're, they're owning their like business within a business is leading the admin team and running the operations. That's not me, but I'm leading that person. They're, they're leading that whole division. And then we have a growth partner team leader or whatever, like in many brokerage operations, they would be like a broker manager, but they're not necessarily that in our world, but that would be kind of what most people would think of them as I'm managing the brokerage, they're running the whole growth side, helping to train the agents on growing their businesses, et cetera.

So they're doing a lot of the recruiting side and they're, they're kind of like our CEO, which is, it's not really me doing that role, which is why I'm, you know, most businesses, if you're starting out, you're the owner, you're usually the seal for awhile in this model. I I'm kind of able to, to, to not be the CEO more of like a chairman role, I guess, like kind of overseeing the vision for where we're headed, but not getting into the weeds of day to day. And so I have a CEO as most people would think of it as, and she kind of runs the day-to-day does all the hiring and the sales growth side of things for the brokerage.

So we have two different towns, the girls side recruiting sales side, and then they'd been side and, and those are really, for me, those are the, I lead those people and they lead everyone else, which allows me to, to not be in the weeds of day-to-day there as, as if I was starting my own brokerage boutique, I would be in there everyday. I'd be the CEO, for sure. So it's, that's the difference, I guess, franchise versus, you know, boutique style and, and big brand, I've got to, I get to feed off their models and, and, and, and step aside a bit quicker than I would have otherwise.

But yeah, we have 75 agents who are, you know, running their own businesses within our business. And, and so there's a lot of, you know, there's a lot of training and education that goes in line with that to help them grow. They obviously need to be successful if they're going to hang around with us, they're not going to hang around if they're not successful. So we spent a lot of time on that training, helping them run their business and be better business people. And, and yeah, and then it's, it's, it's all sorts of fun along the way.

Speaker 0 (25m 39s): Nice. So to circle back on this, just the changing landscape, the technology and, and data that's out there in real estate. I recently had a friend of mine. They're looking for a house in, in our market, which is very, very competitive. And there was a frustration, and this wasn't even an investment property, but there was a frustration about just the lack of transparency. Obviously there's a wrinkle with the fact that there's multiple bids on many properties, commercial real estate, and residential alike wanted to get your thoughts on how you see real estate changing in terms of technology companies entering the space and how data will play an impact.

And just the model in general. Do you think it's it's broken or do you think it's just something that we need to improve on?

Speaker 1 (26m 27s): Yeah, I, yeah. That's, that's like, that's what everyone wants in the tech world data information, right? That's, that's, that's the big play with all these companies. I think long-term and scandal. I don't know. I, I w w one thing I like about being partnered with Keller, it's an American based company. I kind of feel like we got a little bit a heads up on things coming, because us is always a little bit ahead of us. Ken has been very like, like that was the real estate industry for so many years. Right. We have the information you don't, you need to pay us to get the information.

And that was it now disruption in tech world. Right. They're a little more, a little more freedom of information, a little bit more, not fully, but some more out there, like how Sigma you mentioned right there showing data around how sales and things like that, that, that is open to Republic. They're also a brokerage. So like, they're like, I always look at like, what is that? What is the place for these tech companies? You know, sometimes. Yeah. Yeah. Whereas, I mean, and you can look at like a lot of the U S ones that are there.

For some reason, I'm surprised haven't really grown into like a Zillow would be a very easy example in the U S that's a massive company. Not, not even really doing anything in Canada, or very minimal, if anything now, but they're also a brokerage. Like a lot of them are brokerage oriented. And I think ultimately there's a billions of dollars in commissions that are out there. And, and in real estate world of sales that are happening. And surprisingly, it took so long for the tech world to try and get a piece of that.

But now everyone's trying to get a piece of that, right. So how do we, how do we, how do they, how do they get a piece of that it's it's information and sharing information and being able to control the, the lead of the buyer or seller, or at least there are less, less, or whatever, whatever someone's trying to do in real estate, whoever controls the lead controls, you know, they have the power. And so they're all, you know, you control the lead, you can get all the information through the process. There's so many different plays out there, but ultimately it's about information controlling the leads.

And ultimately they're trying to get a piece of the commissions, which are so there's, there's so much money there. I don't blame them for trying to get a piece of it. So I think the little bit of a battle, right, between the, the tech world and the traditional brokerage shops, kind of wanting to maintain their value, but, you know, the tech world's really taken over. So I think, you know, a lot of realtors are kind of battling with that now, and are they going to be like relationship based or tech based or some version of in-between and, and you have to utilize what's out there, like you guys, a realtor, and if you're going to run your business, you've got to utilize the text as much as you can with the caveat that like, you know, just kind of thinking about where your information is going, where, where is the data that you're, you know, you're there almost a lot of times as a realtor, you're kind of giving information to these tech businesses, but they're actually not trying to help you.

They're trying to take over your business. You're like dying a slow, slow death almost by giving them this information. No, it's really interesting. There's a lot of like things that play with that. And obviously me being a brokerage owner, I'm, I'm trying to battle in a way for the broker, for the, for the realtors to maintain their business, but also got to keep in mind that inevitable, that tech is going to be taking over a lot more as we go. And, and so trying to kind of utilize what's there and what innovations are happening.

But also, I, you know, real estate is very still relationship based. I think there's, there's not a, maybe a one day, there'll be a time where like, there's no in-person version of real estate, but I think for the foreseeable future, there's still, you know, a lot of people trust and want to deal with the person eventually and not just be totally automated. Like, you know, like you're buying your, your, your, your, your dinner or something on Uber eats like you, you can pretty much be okay with just not having a person involved in that.

There is a person there, but you don't really need to communicate with them. I don't think, I don't think that's necessarily going to be buying or selling or leasing houses or space. I don't think that's quite there yet if ever might be.

Speaker 0 (30m 48s): I don't think we're quite there yet. I think it's generally at the end of the day, I think it's the complexity of the deal, whether it's commercial real estate or residential real estate, I think there is nuances in these deals. And oftentimes it's those things that, you know, people think that it's, it's not that complex to put together an offer or to have certain items in the offer, but, you know, state by state province, by province, there is different nuances. There's different representations that are made. There's the legal aspect of this stuff.

So ultimately, you know, at the end of the day, I think that you see a lot of these companies, I think don't quote me. I think one was called 42 floors, or you see other companies. I think that was based out of New York, where even in commercial leasing, you know, they put in the parameters, you put in the size office, the type of plan you want. And then it spits out, you know, you put your email in, but then eventually they connect you with a broker, right? So even though the technology's come so far, you still need a sales professional or broker, at least right now.

And at the end of the day, for most people, if it's not an investment, it is the largest transaction you've probably ever done in your life.

Speaker 1 (31m 60s): That's the thing, it's the biggest asset that people have in life. In residential side. It's generally the biggest size of that. I know commercial might be a bit different maybe for businesses and whatnot, but yeah, they're our biggest asset. I mean, Canada, look at how the wealth is made in light and life it's real estate, right? Like that's, people's life, life. That's how Canadians make money in life. They had to have their jobs, but their wealth is built through owning their own home. And, you know, that's, that's the American dream owning your own home, but it's Canadian.

We actually have made so much money in the last 30 year run of a, of a real estate where it hasn't really gone backwards at all. So that's where all our wealth is made. It's a huge asset. So having, I think, yeah, people still want that personal feel with it. I think it's, it's gone away a little bit maybe with the way that tech has, it has disrupted, but it's not going away fully. It's just changed the way things are running and, you know, yeah. The millennials and younger are so technology savvy that they, you know, they're finding information, it's changed a bit in the residential world has changed a bit to an extent where you're, when we're meeting with clients, buyers or sellers, they have a lot of information already.

They already know like roughly what their houses were like. They used to know people that had no idea what their houses were worth at times. Now they know they know what the neighbors sold for. They know, like they know all the, they know a lot more information. So it's just changed the way that we add value to people and, and what the business model looks like. We have to come up with more creative ways that value, ultimately just having the information of what a house is sold for or what it could sell for is not enough. We have to, we have to, we have to be better ultimately at delivering the service and value.

Speaker 0 (33m 47s): Yeah. That makes a lot of sense on the commercial side. You know, when we deal with institutional landlords, whether they're pension funds, real estate investment trusts, or the like people almost don't believe that landlords generally speaking, they want to deal with a broker on the other end because they feel that at least from my experience, not dealing with a representative, they're basically walking through and teaching really the, potentially the entrepreneur, the owner in a leasing, a transaction, basically how to walk through an APS or walk through a letter of intent or offer.

I'm curious, how do you deal with that unrepped situation in the residential space?

Speaker 1 (34m 31s): Yeah. Interesting. Cause there's, you know, in the, in the greater Toronto area, for example, right, there's 60, 60, 60 5,000 realtors. Now, I believe it's the biggest real estate board in the world actually are in north America. So many realtors, cause obviously they're attracted to the potential financial benefits they get from the industry. And so there's so many that, you know, represented or not even, even even represented, it's often we're training the other side on how to do a deal because they do one deal a year or, or they do no deals a year.

And so even, even when they're represented at that time, it's a lot of work for like, if you're experienced and they're not often, you know, you're doing some of their work for them or helping them through the process in some way. And, and most people are represented, I would say here and there, know we do, we do deal with people that aren't, but fewer and farther between, I think it's a lot of education and training. It's not the most fun thing I would definitely, you know, we definitely prefer dealing with that.

We've dealt with before that we'd like, and trust them just like anything, right? Like anyone hiring a realtor in general is going to deal with someone they know like, and trust we like dealing with on the other side of the deal, people we know like, and trust just makes for a smoother process in general. It's funny. It's funny. There's a, there's, there's more, you know what, this seems like. There's more, I think unrepresented, if you were to ask the general public, probably I don't think it's true. I think there's actually maybe more representative than ever.

Speaker 0 (36m 10s): Yeah. And I think there there's a statistic, don't quote me on this, but it's something like of the board members and I'm sure this is similar for other boards, like 25%. You didn't sell one thing in any given year. So a lot of them just have the license and then something like, you know, you'd go up to 50%, didn't sell more than, than 10 assets or 10 homes in residential. But yeah, it's pretty, it's pretty amazing how many we do have in our board.

Speaker 1 (36m 36s): I just, I just probably have 20,000 of the 60,000 that I mentioned there. It was 20,000 sold zeros houses. So a third, a third cell, literally zero. Yeah.

Speaker 0 (36m 49s): And I think one thing I do think has gotten better, at least in our market that they have increased the barriers with how long it takes to get a license. You know, it's, it's just, it's not something you can just in one weekend. Okay, there you go. Your license. And I think that's important to kind of limit how many, how many people that we have just jumping into it and not necessarily, you know, committing to, or wanting to really be in there. Long-term

Speaker 1 (37m 13s): I know you asked some states where you can just get it the next week, you know, just like, you know, it's like a couple hundred bucks or maybe, maybe a couple of grand at most, and I'll just have my license in a week and I'll, I'll, I'll, I'll just, I'll just represent myself because then I'm going to go sell my house this month. I'll just, I'll just grab the license and go somewhat sell it. Yeah. It takes one a year. Maybe, maybe less, probably last six months to a year to get your license here and maybe five grand. It's still, it's still relatively low barrier of entry, considering that we're representing people on their largest, if not one of their largest assets, it would be awesome.

I guess once, once we're in it, you know, it'd be awesome if others could get in as easily, but at the same, to the same extent, you know, I got in real easily and maybe I would never have gotten my license. I got into this. Or maybe, maybe either of us were never invented this. If it was more difficult. I don't really know part of the reason that I got into it because it was kind of easy. I think they say like 80% are out of the business in two years, you know? So it's, it's a very high interest rate, very high partially because it's so easy to get in.

And because people want to collect quick, quick fat paychecks, and it's not the reality once you can get in and like any business, right? Anyone starting a business, it's going to be, I want to be a business owner. It looks so fun and exciting. It's grueling for the first couple years. Typically often make no money for a couple of years. And so it's, it's a lot harder than it looks that's for sure. A lot harder than it looks.

Speaker 0 (38m 45s): Yeah. A hundred percent. I always say it's a, it's a five to seven year business. I mean, you really have to commit, I don't know if you know, probably a little different for residential, but I always say in commercial, you got to put in five to seven years to really get there. And it's funny in our industry, a lot of times people are like, oh, people in commercial real estate, they, you know, if you're in commercial real estate or you must make a lot of money and it's that kind of survivorship bias. It's like, no, no, no, no. Like the, the guys have just hung around the longest. A lot of people have left earlier, moved to, you know, in our world on the landlord side or just switched careers.

But yeah, I think five to seven years, Sandy, generally speaking, I'd love to get your thoughts on the market, the real estate market right now. Let's maybe talk locally and then broaden it out to, to a larger scale.

Speaker 1 (39m 32s): I mean like, yeah, it's I, you know, and this is all over north America, if not the world where people have gone away from a little bit away from being like urban life and a little bit more into the rural life. And then there's a bit of an attraction to that. I think millennials younger, especially, right. We're a little more attracted to, we're not as much attracted to money as, as traditionally, like our other generations have been, we're more like attracted to lifestyle and what that looks like. And a lot of people that's not living in a 500 square feet, a condo with a concrete jungle.

It's more like let's go have some land or some space. And so that's been honestly a little more available or a little more of a real life reality with, with COVID right. You can actually work more remotely. So a lot more of those opportunities where you don't need to live in downtown Toronto to, to work. So we've seen that all around outskirts of Hamilton and Toronto is just people looking for more land, more space, more, more value too. And then the property values have gone up based on that line demand.

Pretty simple there, but Canada everywhere across Canada basically is just such a shortage of supply, super high demand. We're in an election month here. So we'll see if that changes anything. It probably won't, but there's, there's, there's extreme demand because we in Canada, we have such high immigration, right? Good quality immigrants. So it's their homeowners within a short time and, or want to be homeowners. So the demand is through the roof and we can't build homes fast enough.

And so supply is very, very short on supply. I don't see that changing anytime soon. And so, you know, based, based on those two simple concepts, when money is cheap to tack on, you know, to throw an extra, extra spur on the fire, their money is dirt cheap. So it's, you know, the better, the best time to buy a house a hundred years ago. The next last time today, you got to buy as many as you can. I'm throwing on my investor hat on. I always tell people this just buy houses. You got to take action.

You got to buy houses, buy as many as you can. And then you're never, you cannot go wrong. If you have a long time, you might next year. Sure. The market could drop slightly. I don't think it's going to collapse by any means. It could drop slightly if, if money gets more expensive than, yeah, it could maybe just taper off a bit, but don't see anything drastic happening. And yeah, like if you, if you don't own a home right now, or you don't own multiple homes, you should, you should be definitely getting into the market.

And the Canadian market is just so robust and there's incredible market, probably the best in the world. So it's, yeah, it's silly not to be involved in it as much as it can be buy as many properties as you can. You're you're going to, we don't, I think we're also, you know, one other thing, look at Europe anywhere that's been around, like we're a really young country. So we have a few generations worth of like actual, not even a few, like one or two generations of actual wealth in this country.

Whereas like Europe has, you know, hundreds and hundreds of years worth of wealth filled up. So we're very young in that sense. So, and just look at, I think you can't, you're not really buying houses in, in, in really developed European countries. They've been around forever. You're inheriting properties. You're not going in and buying that many properties yourself. So we're going to be like that too. Eventually we're running out of space to an extent. I know we have a lot of space in Canada, but we're running out of where we can build in and actually people want to live. So if not for yourself, you have to buy houses here.

Kids are not going to be able to afford this stuff, but you can argue about that all day, but affordability is not going to, I don't think it's going to change anytime soon.

Speaker 0 (43m 22s): Yeah, I agree. That's good though. Best time to buy as a hundred years ago next to time is now. And, and you know what, I think it's the, it's still the case today. I mean, ultimately I think specifically with Toronto and Canada, can't remember the stat. Exactly, but it's something like 90% of the Canadian population lives within a hundred miles from the U S border. So although we are a huge country, our populations are pretty densely packed. And I remember about five years ago, you know, there was this thing where they were talking about how overvalued Canadian real estate was, how bubbly it was.

And I really think the, the counterpoints now that are, I think are a little bit clearer, obviously with COVID a little, you know, has changed somewhat, but I think we'll get back. There is immigration and in, in professionals, moving into our cities and generally speaking, like our cities are quite populous and other parts of our country, they are just not areas that majority of people live. I mean, Ontario itself, you go seven, eight hours north in Ontario. There's certain areas that you'd probably still need to take a ho a helicopter to.

So yeah. I couldn't agree more with you that

Speaker 1 (44m 33s): Whether it's not very exciting. Yeah.

Speaker 0 (44m 35s): The weather doesn't get much better. All right, Sandy, we have four questions, little rapid fire we do with every guests at the end of the show. So if you're ready to go, I'll shoot

Speaker 1 (44m 46s): Them at. Yeah, let's do it. All

Speaker 0 (44m 48s): Right. Perfect. All right. First one. What is your view and advice regarding mentorship for people trying to break into the industry or that are already in the industry and want to get to the next level?

Speaker 1 (45m 1s): I joined it. I joined the team when I got into real estate is the best thing I ever did. You got 10 plus years of knowledge in a couple of years, I was with that team all, all based on mentorship and guidance. And, you know, I think the biggest thing is we hang around with is really important in life. And, and, you know, being in an environment that's going to help you grow is, is it's really underrated. It's like it couldn't be more important. And, and, and you know, what comes with that is mentorship and support and guidance and training, et cetera.

And, and you grow into the people you hang around. So, you know, you should audit that circle regularly.

Speaker 0 (45m 39s): What's something that, you know, now that you wish you knew when you first started in real estate

Speaker 1 (45m 48s): In this business, I would say like 50 plus percent of it is just getting the business in the first place. A lot of people forget that, or don't realize that and getting into it. And I didn't either, you know, I didn't realize that that is like, that's like 50 plus percent of it is just getting the business in the first place. So becoming a lead generating machine in some way, shape or form is, is, is really what you need. Like that's the whole business until you, because you don't even have until you get that. So it's a big part of it. It's something worth educating yourself on and learning a lot about,

Speaker 0 (46m 19s): Yeah. Number another good answer. The lead is our business. You feed what? The lead. Okay. So what are some podcasts books or resources that you're listening to right now that listeners should hear about? Obviously we'll talk about your podcasts, but yeah. Feel free to plug whatever you'd like here.

Speaker 1 (46m 38s): Yeah. I'm interested. I brought a change. My life. I've mentioned that one. Yeah. Breakthrough real estate investing podcast. You can go listen to, we've got a hundreds of episodes. Now, the, the book I like recently that I found, maybe I'll look back on it a few years and say, it's changed. My life is not how I really liked that book. Who not how, which is, was the author. And I'm losing my, my thought on that. Who not, how D not be in Jackson. It's the

Speaker 0 (47m 7s): Blue in the yellow book, right.

Speaker 1 (47m 11s): It's doing yellow, Dan Sullivan, Dan Sullivan, Dan Sullivan. And it adds a coauthor. I think he's with someone else, but that changed my life in terms of it might've changed my life. It changed my, a lot of thoughts that I have around, around leverage. And, and also just like, you know, freedom, I guess, different aspects of life and what we're doing this for it. So it's a, it's a great book around leverage for sure.

Speaker 0 (47m 35s): Alrighty. Last one here. First car, make and model.

Speaker 1 (47m 40s): Oh, I had Pontiac grandam had these two, like hood scoops on the front or I'm a, I'm a Denver Broncos fan orange is my favorite color. It was, it was, it was a nice, like, not, not, not neon, but a nice flashy orange.

Speaker 0 (47m 59s): And that's awesome. I know exactly the one you're talking about. I really liked that guard back in the day, my cousin had it, it was laced like wide bodied, pretty beef, your car, then the Sunfire is, are the smaller cars you saw around that time. So that was probably around the Elway and Tarell Davis days.

Speaker 1 (48m 17s): DV Joel Davis was my, it wasn't my man that got me on the Broncos train. They're in the mid nineties. Yeah, that was probably, it shouldn't be a lot of, most people would say that. I say all the way I, it was trial David's for me.

Speaker 0 (48m 31s): Unreal. Well, thanks so much, Sandy, in terms of how people can reach out to you getting contact, whether they wanted more information on the broker gen or on the investing side, or even here locally, if they're looking for properties, selling or buying a site from a quick Google search, what's the best way for people to reach out to you,

Speaker 1 (48m 52s): Instagram and Facebook, easy to find me, just look up my name and or email me, San Diego Mackay, is pretty easy. And yeah, definitely. I love to connecting with anyone in the real estate world in, in, in any way, really, especially if you're looking to be in the realtor side, you know, we're always looking to connect with people around that. And I can certainly point people in the right direction if they're looking to build a career in real estate, do a lot of investment stuff. But if you really wanted to actually full-time run a career of any kind in real estate, I'd love to chat with people.

Speaker 0 (49m 25s): Perfect. And just before we wrap up, I want to tell listeners, I think we're okay. We're 70 something episodes. And right now in the reason working capital exists in part is because of the conversations Sandy, you and I had a, what is it now a year and a half ago? And you were just very helpful and, and talking about the details and the setup and everything. So really appreciate that.

Speaker 1 (49m 49s): Yeah. You know, it's, I think we were kind of the first Canadian based podcast to be honest, the invested investor in podcasts, like that actually stayed on for more than like a couple episodes. So that was a, we've been doing that show for seven, almost eight years almost, which is crazy to think. But yeah,

Speaker 0 (50m 10s): When you first started, I was like, I don't even remember listening to podcasts back then. Yeah.

Speaker 1 (50m 17s): That was, that was, that was why we were really early adopters, I guess, in Canadian space and yeah, I guess we're like, I don't really call him the godfathers of that space or something. It's funny to go back if someone's listening and wants to go back on some really, oh gee like investor talk. It's pretty funny to go listen to our early episodes. They're like sold. And so like comical now compared to like the products that, that you and others put out now, it's like we were, we were not very good, but there was some good, good value of getting information.

I think

Speaker 0 (50m 51s): My guest today has been Sandy vacay. Cindy, thanks for being part of working capital.

Speaker 1 (50m 56s): This is fun.

Speaker 0 (51m 6s): Thank you so much for listening to working capital the real estate podcast. I'm your host, Jesse for galley. If you liked the episode, head on to iTunes and leave us a five star review and share on social media, it really helps us out. If you have any questions, feel free to reach out to me on Instagram, Jesse for galley, F R a G a L E, have a good one. Take care.

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