$3,600 a year of new revenue. N o i times 10. You added $36,000 to (···2.5s) the, to the value of your property. That's a good
investment. So you see why I walk into basements? I say, wow, this is exciting. I don't tell my seller, I say, oh, I say, what a mess.
I go to the seller. What a mess. Oh, we gotta pay to this stuff taken away, right? It's all negotiation. But as soon as I get that,
that property under contract or I've had students I've worked with that look in the basement, they're ready to walk away. I'm
like this, this is a money maker down here because it's an opportunity. And as real estate investors, anytime we see an
opportunity, can we monetize that again?
Someone else's problem could be our game. So how do you, how do you add the value to property, laundry and storage in the
basement too? My favorite ways like to do stores in the basement for a couple hundred dollars in a trip to hardware store. A
handy person could probably do that in a few hours. Like, I couldn't probably take me weeks to do it. I'm not very handy, right?
But again, I would hire somebody that down there in no time, that's like a Saturday project to do a basement, the laundry. Add
that in later too, obviously. (···0.6s) Alright, let's move on.
I can spend enough time on basements of fourplexes, but I do definitely enjoy that. See a lot of opportunity there. What else can
we do? Solar panels. Can we add solar panels to the roof or to the property maybe? I know, I know years ago solar panels were
a very big thing and a good revenue generator. Um, maybe look into your area. Of course we've got, you are watching this
recording from all over the country. Different areas. If you can get some revenue from your solar panels, um, to buy solar panels
are obviously a good capital cost. Um, if you've got a newer roof on your property, maybe, maybe solar panels are an
opportunity.
I know a couple years back, the work companies in my area who would actually, (···0.6s) they'd come up, they'd actually put the
solar panels on the roof and they would rent the roof from you. So that was pretty cool because they would actually pay for the
installation. It was their solar panels. They would collect the money off the hydro. They collect the revenue from the solar panels.
They'd basically pay your rent of a couple hundred dollars a month for your roof. Well, if you've got a new roof up there and is
not doing any, if you got $200 a month off your roof or whatever number it is, obviously right?
Even a hundred, $200, whatever it is over the course of a year, that's $200 is $2,400 a year for (···2.8s) your roof, which o
otherwise doing nothing. So look into solar panels, talk to other investors in your area. Doesn't make sense to do that or not, but
it's a pretty lucrative thing when you've got no cost involved, there's gonna basically rent your roof from you. So now you're,
now you're getting rent from your tenants. (···0.8s) That's great. That's nothing new. Um, you're getting rent from, you're
getting, you're getting revenue from your basement. If you're laundry and storage, that's pretty cool. And now you get revenue
from your rooftop for solar.
Again, $200 here, $200 there, a hundred dollars there. (···0.8s) It all adds up. If you can get extra $500 a month, your costs are
are next to zero. And that's actually 100% profit and goes right to your bottom line. So a lot of landlords talk to me, say, so
Steve, I, you know, the, there's no money. Or, oh, Steve, what do I do? O Steve? Like, like my tenant didn't pay rent. Or O Steve,
you know, I'm not making any money. Well, if you're, it goes back to cash flow. If your property's not cash flowing, if you bought
a property and expensive market, or your rents don't cover your expenses or whatever, maybe you get some vacancies.
Anytime you can bring new revenue to your properties and make you a better investor, anytime you add cash flow to your
bottom line, it's gonna make you a better investor, solid investor. You see people buying more and more properties. And I've had
other, other investors say, well how do they do that? How are they buying more and more properties? And maybe that person is,
is struggling. Again, thinking outside the box, people say, oh, laundry's a pain. That laundry's a headache. I don't know if you just
hired out to a contractor and let them, or a company that actually does rentals, who's got the headache?
If the laundry's out say, okay, well just call the company and say, come fix it. You gotta pay the bill. Maybe you wanna take that
headache on yourself. We start to see with property investors who wanna take these headaches on, right? They want to buy the
laundry themself to save a few dollars. They want to cut the grass themself to save a few dollars. They wanna manage the
property themself to save a few dollars. I'm actually talking about how do we increase (···0.6s) revenue? How do we increase the
value of property? How do we increase our N o i, how do we increase our cash flow to pay for that property manager to pay
somebody to cut the grass to pay for these or recover some vacancies?
You to have that. These are all ways, this is how you can buy multiple properties when other people are selling. You can be
buying 'cause your, your property's going very well, okay? Uh, vending machines, if you've got the room, depending on the size
of your property, if you've got like a landing somewhere or a common entrance, vending machines, you know, what can you sell
in there? Um, it's up to you. Um, I would, I would sell laundry cards in there. If you've got the cards for laundromats, I'd definitely
put laundry cards in there for sale and they have to top those up online.
But, um, again, maybe you should give those laundry cards away. Again, vending machines, maybe you got room for that,
maybe you don't. But just the snack items, pop chips, that kind of stuff. Um, usually in a bigger property with that. But vending
machines are a great source of revenue. Again, you can do it yourself. You can stock it yourself. There's companies that will
maintain and stock that for you for a fee. Maybe just rent the space from you. But again, a little bit of hydro and some space
and entryway vending machines. Yeah, if you make 50, a hundred, $150 a month off it, why not? You're just trying to revenue
gen generate the revenue from your property.
And, um, again, I would put it in a visible area. Maybe the entryway has people coming and going. I would never wanna put one
in the basement, but a laundry machines are just because you don't want people trying to get into your vending machine or find
some money in there. Get a free chocolate bar. I put it in a, a visible area, like a, like a, an entryway on property (···0.9s) parking.
Um, this is, uh, a topic that some people (···0.8s) have a hard time charging for parking. Some people love charging for parking.
It just depends on your area. Is parking in demand? How much parking do you have in your property?
Um, how much pro, how much parking does the city make you have? And what do you have proper parking for your property?
So these are all things parking. Maybe you can, maybe you can't. But, um, I've had before tenants come up to me and say, Steve,
I've got three vehicles. Oh, they'll just take up three spots, but I've only got four or five spots. Okay, no problem. So I allow this
one a common thing. So if you've got a fourplex or a duplex, let's say, you know, it depends on your parking. Look into that.
Obviously you gotta maintain the code from municipality you're in. But if somebody has three vehicles, do you have room for
that? You may have to say no, right? I allow one, one vehicle per unit.
If I've got a fourplex and I've got six parking spots and everyone in my tenants has three cars, that's a problem. So rate the lease
I put in there, parking for one vehicle allowed. And that's, we have room for that. That's fine. Parking for additional vehicles, um,
to be, to be a case by case basis. Second vehicle, $50 a month. That's just the way it is because they've got limited space. Um,
I've had tenants actually park at the neighbor's place down the road. They've got a friend. Um, what we're trying to do is
minimize, obviously collection of cars not being used.
So if they've got two cars, hey, I allow it, it's an extra source of revenue for an extra 50. Maybe it's $25 a month. Um, maybe you
only have four spots or four cars, maybe there's no extra money. But if you're in a, if you're in a popular area, maybe a
downtown area where parking's at a premium, you can definitely charge for parking. One car, $50 a month, a hundred dollars a
month. If you're in a busy downtown area in a city, you can definitely charge for parking. Say, Hey, to rent my property is a
thousand dollars a month for your, your one bedroom apartment parking is additional a hundred dollars or whatever it is.
It's all supply and demand. (···0.8s) Don't be afraid to charge for parking for second vehicles. Don't just give the spot away. If
you've got room for extra, extra vehicle per, per per unit, or maybe summer units are allowed to have extra parking. Don't be
afraid. Whatever you can get for it. Do tenants like it. But again, if you've got a tenant living there, you just introduce, we're
gonna suddenly start charging for parking. That's gonna go over bad upon turnover in your property. This is a unit unit's a
thousand dollars a month. You know, utilities, maybe not, I'm not sure. It depends.
They include it or not. It's up to them. But a thousand dollars a unit. Let's see the basement. You've got storage down here for
$25 a month over here if you want the other one. It's, it's $50 a month for storage over here. Um, oh, do you want park parking's
included? If you've got a second vehicle or a motorcycle, scooter, whatever, that's an extra fee for your second vehicle. So would
just be parked it over here. So what would you like? It really becomes like an a lock cart. I would never want to price yourself out
of the market. If you can do the research. See other properties aren't charging for storage or aren't. Well, I would charge for
storage regardless. Given loan for $25 a month is a non-issue.
Um, but again, charging for parking, you gotta kinda look around and see what you're doing. (···0.9s) All right, cleaning services.
Can you offer cleaning services if you're in a, like, in right below those furnish departments? So let's may go hand in hand if
you're, if you're dealing with professionals furnish departments, (···2.3s) I would definitely offer cleaning services. Number one,
cleaning service. One, you can send a, a maid or a cleaner of some sort in there and just check on your property. If you're talking
furnish departments, a lot of times you need a nice, maybe executive furniture department's got nice leather furniture, nice
amenities, nice, everything in there, right?
This is this expensive. We wanna maintain, we wanna protect our investment. So could the cleaner go in and be your eyes and
ears for you? Yeah, I've had cleaners say, oh wow, Steve, those tenants are not taking care of this place. Really. Thanks for
letting me know. I'll, I'll go knock on the door or send an email or text the tenant. Hey, um, you know, how's, how's everything in
there? Um, is everything okay? Like, I know the cleaner just told me this, but do you need to handle with anything? Um, I wanna
basically say if they're not maintaining the place, why have a conversation about that.
And cleaners can be a great eyes and the ears for that. Um, clean services, simple. If the cleaner charges me a hundred dollars to
go clean that property, I'm gonna offer that for is $125, $150, (···2.1s) I'm pass that cost along and a little fee for myself. Now,
you may think, well, it's extra $25, but (···0.7s) I gotta schedule a cleaner. Well, I've gotta hire cleaner, schedule a cleaner. I've
gotta find a, I've gotta be the liaison between the tenant and the cleaner. I've gotta be the liaison afterwards if something
happened. Um, I've had tenants before tell me, oh, the cleaner stole, that's a cleaner broke that.
Really? Okay, well lemme call back. No, they didn't. Yes, they did. (···0.6s) So I wouldn't do it for $25 per clean. I'd more 50 for
my time in trouble. I gotta pay the cleaner. I gotta collect the money. So there's a bit of work back and forth. But if it's
something that's valuable and offered, once you have that routine of, um, if you got furnished units and you get long-term
tenants, it can work out quite well actually. And if you're making $50 or $25 every time the cleaning goes in, once you got longterm
tenants, appreciate that, then it can be a little bit of extra revenue for you.
Your, your tenants are happier because a cleaning service, if they're new in the town, they may not know where to hire a
cleaner, may not Hulu to get, you can do that. Make a bit of money for yourself too. (···0.9s) Cable and internet services. Um,
some people love this, some people don't love this. Again, just an idea. I've, I've never done this myself. I, I know some other
investors have done this. Some people have great experience with it. They make a bit of money at it. They, they control. Um,
who, uh, the, the internet providers and their property. A (···1.1s) few years back when the, the s satellite dishes, like the satellite
dishes were big and they're still around now too, but, uh, a lot of investors didn't want their tenants putting those satellite
dishes on the roof or drilling into the roof or the siding or hanging them.
So they said, we'll offer the, we'll offer the cable satellite we'll offer ourselves. You just pay us for it. (···0.5s) Fine. They can make
a bit of money. They control who actually has that. I like that. What I don't like is I talk to other investors who are now suddenly
tech support for their tenants because when, when their internet didn't work, so the tenant calls 'em up, says, my internet's out.
What are you gonna do about it? Well, rightfully so, because the tenant's paying the landlord or the investor and the investor
controls that. So they suddenly became tech support for all their tenants. And that's why I never did that. Uh, other ways to
increase the value of property. What about cell towers (···2.4s) for a long time there they're putting cell towers. Um, again,
different things like advertising for billboards. Is this something you can do or not? Advertising for billboards. Um, I've seen a lot
of properties where they, I guess the backyard of the property goes on to maybe a drive through for, could be a coffee shop or a
Starbucks.
If you're kind of backing onto like a maybe busy area, a drive through or some other thing, maybe, maybe a highway or other
busy road. Could you put some sort of billboard back there? It (···0.7s) doesn't have to be like, it doesn't have to be a big
traditional billboard. It could be, right? If you've got that much space, that much exposure, you could do that and definitely
charged out for rent. Um, it could be an electronic billboard. I've seen that before too. Anything with the message you can get
revenue from. I've even seen it just where people kinda had a welder kind of drop some or well welder kind of build up some,
some, uh, vertical signs where you basically put your, it's almost like a realtor sign, like for sale by owner sign.
Um, so maybe like a two feet high by, by three feet wide. And they just kinda slot these signs in there and they're like probably
15 feet high beside the drive through. You can do whatever you want. If there's a way to drive some revenue from your property.
Again, advertising billboards, if you've got these small signs, there's a bit of turnover in people are chasing people down. If
you've got 20 signs up there of 20 like realtors or mortgage brokers and chiropractors and massage specialists, that's usually
advertises on those.
Gimme a great source of revenue. If you had a hundred dollars a month (···0.6s) and if you had 25 of those up there, it's 2,500
bucks a month in advertising from a little, from a little bunch of signs up there for a hundred dollars a month, it's actually pretty
cheap advertising. And for you, it's 2,500 bucks a month or whatever number it is. It's good revenue for you. Good revenue for
them has been of work for you maybe. But again, if you do annual renewals, $1,200 a year, you get your space here. If you're a
little two by three sign, if you wanna do a great big billboard, if you've got that kind of space back there, you've got the kind of
traffic going by maybe near highway or something.
If your city allows that, first of all, you're gonna still allows that, again, it can be a great source of revenue. So you're starting to
see there's definitely, well, what I want you to see, what I hope you're seeing, there's a lot of ways you can add value to the
property. (···0.7s) And when you look at a property, if, if the rents are low, we haven't even talked about that. If, if the rents are
low and the places a bit of work, you easily, you know, raise the rents, bring the value up to the property as you bring the value
up.
And you can put different, we're talking about different amenities in the property too, but like, we didn't even talk about just
raising rents, but why are rents low? Usually mismanagement, tired landlords, uh, that the building is tired, the units are tired,
maybe the tenant mixes all wrong. Tenant mixes. Next we'll talk about next actually. So how, how do you add more value to the
property and, and just making it nicer. I recently did, uh, did a deal, uh, just not far from where I live, actually, closer to Toronto.
And it was, um, it was, uh, two multi-family buildings.
Two, yeah, two multi-family buildings side by side. (···0.6s) And the tenant mix was a lot of people on sort of government
payments. Um, um, and we actually bought this, bought the property, renovated the property, and the, the tenant mix is now
young working professionals. So it went from the tenant, the tenant building where people didn't, you know, they're kind of like
around the building all day long. They didn't go anywhere. They're doing like laundry at two in the afternoon. And then we
started putting nicer amenities in the building, like inside the, inside the un input subway tiles, like quartz prep, quartz
countertops, uh, in the, in the, in the kitchen.
We did the, the washing machine had the washer dryer combo all in one washer dryer combo, all in one there. Nice, clean, new.
So for a while there it was actually we had, we had a mix of the old tenants in the building. It had a mix of the new tenants in the
building. So kinda this yining and yang, it, it didn't really make sense, but over time, and actually the building is still actually
being in transition, so it's actually going very well. But, but tenant mix and other things too. So just, just improving the building.
And when you buy a building and the pro, the rents are way down here. And after you start putting in, you know, nice new
countertops, nice and clean, start investing back in the building your rent's in, in the right, in the right area.
I'll say it in the right area. Your rents can go up significantly if you've got the, the, the tenants that wanna pay for that. (···0.7s)
And again, like location is it near? And this, I'm just thinking this building, this building had so many check marks, right? Like it
was, it was the ugliest building in the street when we took possession. It's the ugliest building in the street (···0.5s) and it had,
um, old land, like tired landlords that say, um, from the curb it didn't look good.
The, the units were not nice. The rent's not been raised in years and years and years. So rents were below market value and the
city it's in actually just announced we're gonna put in a, uh, a transit stop, a block and a half from these, these two buildings.
And so it's just like check, it just got better and better and better. So, um, of course that's a three to five year deal, but just
improving the building itself, we didn't even touch on that. It's the most obvious one. So I'm trying to find other ways to add this.
So, so tenant mix in locations. Can you move certain tenants within a building to allow more income? So why would you wanna
move certain tenants?
(···2.5s) Well, many reasons. Um, again, tenants live there. Maybe they don't like their neighbor, they like the building. Um,
maybe as people age, if you've got, if you've got tenants that live there for year after year, decade after decade, maybe get
older, maybe stairs are an issue. Maybe they, now, now maybe they need like a handicap accessible unit, right? They don't need
stairs, need a shower. That's kind of like rolled maybe a wheelchair. Now again, mobility issues as people age. So, so can you
charge more if you've got like a, a, a walkup, (···0.7s) can you charge more for your main level floors?
(···0.8s) Maybe if you've got that kind of demand for your property because somebody, uh, somebody wants a main floor
property, um, they could maybe pay if they can't do stairs or don't wanna do. It's just more convenient. So more stairs equals
usually less revenue. So can you move people around? (···0.6s) Absolutely. And if we want to pay a bit more money for it too.
And of course if you got an empty unit, I'd always suggest update the flooring paint. Um, maybe time to update the kitchen. Like
kitchen cabinets can be painted. You can add so much value with paint these days. Painting kitchen cabinets or just change 'em.
Um, it's not that expensive. I would never say spend a ton of money on kitchen cabinets and doing all that. So, um, why don't we
take a break here. We'll, we'll stop at tenant mix and locations. We'll stop the recording here. We'll come back, we'll continue on
with this slide. I'll see you soon. (···6.2s)
(···5.6s) Hello and welcome back. Let's continue on with how to increase the property value. Okay, so we just talked about tenant
mix, tenant locations, moving tenant around with the same building or a different building you own, perhaps, uh, guest suite. So
this is little uncommon guest suites. Um, if there's demand for that and need for that, again, it's up to you if you can (···0.7s) fulfill
a tenant's, um, need with that. Make a better of revenue.
It's win-win party rooms. Kinda the same thing. Party rooms. Um, I'd say definitely talking about a bigger building here. We're
not talking a duplex or fourplex. And, and I guess with these, these, uh, this whole section we're gonna do here, increasing
property values, decreasing property values, better use, um, creatively financing. These are all, it could be a duplex, it could be a
fourplex, it could be a commercial property. I (···0.5s) think the bigger the property, the more choices and options you'll have.
But a lot of these definitely apply for smaller properties too. So I just want you to start thinking outside the box here.
So, party rooms a bigger, bigger property. Um, I don't use the word party, but you know, banquet hall, uh, meeting rooms, stuff
like that. If it gets revenue, there's demand for it. Why not? Uh, supplying amenities to attract specific tenant types to charge
more. So examples, upgrade cabinets and flooring. I touched on this earlier. Um, supplying amenities. Again, could be
wheelchair accessible, um, could be special interest, that kind of thing. Just nicer, more modern property and can bring up your
bottom line.
Again, if there's a demand for that, like we could, we could talk endlessly about that. How to research that, how to talk to other
investors. Um, it, it's a mix. You want to have nice, nice amenities, nice cabinets, nice flooring, nice hardware. But again, it's, it's
easy to overspend. And if you overspend for the area or your building, you might not get that money back. So it's definitely, uh,
definitely you wanna do your research there and, uh, do your homework on that. Spend your money wisely to maximize your
return on investment there.
(···0.8s) So I, I hope you enjoyed, uh, uh, can the property increase or can we increase the property value in any way? We
touched on a lot of topics. Some easy, the basement, the easy stuff, like the low hanging fruit, other ones, you know, a cell
tower. Again, that's, that's a little rare, but I don't want you to, um, not consider all these things. There's an opportunity
whether solar, solar panels, cell tower, laundry, big and small. If there's a way you can increase the property value, just makes
you a better investor, puts more money in your pocket day after day, month after month.
So let's continue on here. The next slide, Uh, (···1.6s) maybe there we go. Uh, can property expenses be decreased? So the
opposite, we want to increase the revenue, decrease the expenses, no question there. So let's talk about heating. Heating also, I
guess, uh, cooling, if you're a warm climate. Heating versus cooling. Um, many ways you can do this. And this is a, I'm not gonna
spend too much time on this is a big one. I'm sure you've already looked into this different ways, but I guess what what I like
doing is when you, uh, have the, what do you call it, where the, the, that sliding door or the patio door, when it opens like the,
the heating and cooling clo, it shuts off.
So a little connector, a little circuit breaker on there. So anytime the doors are open, the heating, cooling shuts off. Basically just
encourages people to close, close the, uh, the, the doors we don't want to heat out. And the cool exactly with that. So that's
pretty common. Different ways you can do that. Lots of contractors handymen, lots of government incentives. Government
rebates. Ask around, see what's current in your area. Um, what you can do to save a bit of money there.
I gotta see heating costs, utility costs, those are always sending, we wanna be aware of water, uh, low flow toilets. Um, a lot of
regulations with toilets. What you can do, uh, the, the, the gallons per flush. Um, so low flow toilets, um, I put them in all my
units long, long time ago. Uh, depends, uh, some, some areas I've invested in, actually the water is actually not expensive into
other areas. The, the warm climates. Water is very expensive. So just depends where you invest. I know some people are
surprised saying, you know what, in this one area, particularly the water's not expensive as surprisingly, but (···0.6s) it's not.
So it's calma water is expensive, getting more and more expensive, especially investing the, the south where it's warm, while
there's a huge challenge there for cost. We all know that landscape. Um, outdoor landscaping there, uh, a lot of people I've seen
it over and over is put stone instead of grass. With grass, you gotta pay somebody to cut it. You gotta maintain it. You're into
pest or, um, pesticides or is it pesticides fertilized or that kind of stuff. So a stone replacement, if you know you're gonna keep
this property for a number of years, um, people say, well, stone's expensive.
Landscaping expensive. And some people just don't like the look of it. But if you, if you do it properly, um, with landscaping, less
is more. If you overdo it, it's cost you more money. It's more maintenance gonna be down the road. If you do like a minimal
landscape, look, make it nice, make it, make it make it attractive because you wanna see your tenants have a nice place to live.
It looks nice from the road, but the money you save by not paying for lawn care and, um, weeded control, fertilizer, water
perhaps like you can quickly pay for stone landscaping outside pretty quickly.
And a lot of areas just naturally stone anyway. So, uh, stone removal, um, do snow removal. If you this caters to you, uh, do you
pay per, per push as they call it? Do you pay an annual? I've often found that paying annual, it gets a better price. Um, I find
snow air areas it's cheaper because, you know, in a snow area they expect to get snow. Um, so it's gonna be a cheaper, lots of
snow removal companies. Is it part of the business? They know what to do. It's not expensive.
Where I live, we get a little bit of snow occasionally. So it's actually more expensive, um, to have snow removal 'cause it's, it's
kind of like we get some snow some years, some snows other. Um, so it's actually a little bit more expensive where I actually live
and sometimes invest too. So snow removal, just on a good negotiation, I find, uh, in my experience paying annually, it can be,
um, a better buy than just paying per push. But every year's difference too. Uh, uh, um, other utility costs. Look at the insulation,
go up to the attics. If your buildings have attics, any insulation.
Insulation is cheap, I think. Uh, oh yeah, hot wrap, hot water tank, same thing. The last point there. Wrapping hot water tanks.
Again, a little bit of insulation. If you're gonna have this property for many years, you have this hot water tank for 10, 15 years.
A little insulation goes a long way. Doesn't cost you a lot of money to (···0.7s) deal with some insulation put in the attic or
around a hot water tank like that. I I say the hot water tank that'll wrap the actual blanket, the proper wrap for that hot water
tank. It just saves you some money in the long run. Not a lot of money to buy it, but could save you money down the road.
Um, so economies of scale, uh, economies of scale. What that means. So if anybody doesn't know what that means, as as you
grow, you basically, you, you, you scale your business, you're able to get better buys. So if you've got a property manager, um, if
you've got a property manager and you're paying the property manager 10% of collected rents, okay? If you're doing that, if you
got one single family house with one income, it could be more, um, economies of scale as you add more and more properties.
If, if, if you have, if you had, if a one single family house and you had a 15 unit apartment building, I guarantee the economies of
scale in the 15 unit apartment building, you'd better, the property manager would do it cheaper per door for the 50 units you
would for the single family. So, so cognitive scale, your buying power, your purchasing power, how you buy things, right? If
you're, if you're buying toilets for a property, you gotta buy 50 toilets. You get better buying if you gotta to buy three toilets, just
the economies of scale. So as you grow, um, you should be getting better and better buying power, get better deals coming your
way, your property management, all these things become a better investor.
Um, one thing I will, I will never say can, can property expenses be decreased? Um, I don't actually have it on the list. I don't
think, um, it should be decreased in the property manager. Um, a lot of people, first place they go is the property manager to
give 'em a better rate or I'll pay less. Well, you know, you can do that, but the property manager is the key to your business. The
property manager is saving you time, trouble, effort. They're running the business for you. They're the ones screaming tenants,
meeting tenants.
They're the one handing the phone call, maybe dealing with some plumbing issues. They're doing the work for you. So I, I never
suggest to, to minimize the paid your property managers. I always suggest take care of your team, take good care of your
property manager, maybe pay them more, give 'em a good bonus, then have a good month or the holidays, whatever. It's take
good care of your team. A lot of people I, I've seen, I've actually worked with other investors, I've worked with other students. I,
the first thing they do in trying to cut costs, um, they, they go to the property manager because a property manager, usually a
independent, sometimes a small business, sometimes they really need the money and they will give you a discount.
(···0.7s) But if you get a discount from the property manager (···0.6s) and the property manager, they, they probably manage
more tenant, more, more units, right? If you've got three or four ties, you hire a property manager, manage them. That's not
their only, you're not the only customer they have. Obviously they gotta make a living. They've got other units, other places. So,
(···0.7s) and other people needing their time. So if you need a favor and you ask them if you undercut their pay, are they really
gonna help you? They might, but they might, would maybe help someone else first.
If they've got a great tenant, say, oh, somebody calls 'em up. Oh, like premium tenant maybe got their, the best tenant ever. Like
you meet all the criteria, good tenant, are they gonna put this tenant in your building? Maybe you wanna put this, this tenant in
this other building. Maybe they get paid more money or they just like the owner more. So I always say, treat your team well. Pay
your property managers fairly, maybe, maybe above average, right? (···0.9s) You know, when, when, when tenant and property
managers, this is a whole nother topic here, like we go on for property managers are days, I don't wanna do that, but property
managers, when you have an empty unit take, how do you pay them?
Do you pay 'em a flat amount month after month after month? Where's the incentive for the property managers to rent your
unit? Because if you pay 'em the flat amount every month, whether it's vacant or fully rented, they get the same amount.
There's actually not much incentive. (···0.5s) But if you say, well I'll pay you a certain percentage of collected rents, which is
pretty normal, right? That's pretty normal. So the incentive of the property managers to have people in there renting that
property. So if you pay 'em 10% or 6% or 12 per whatever percentage of collected rents, um, that means rents has to be
collected to get paid.
So property manager's very aggressive, very, very, um, interested to get, get money paid by the tenants, paid on time in full,
makes their job easier. Um, is there a placement fee or is it cost for the property manager to put somebody in there? Maybe.
Depends. It depends what you, what you negotiate depends what the property manager works by. It's not hard when you're
looking at property managers. Someone, we're gonna have topic care. (···0.6s) When you're looking at hiring a property
manager, just interview some, interview someone in your area. 'cause where I invest the property managers could be slightly
different than where you invest.
It could be much different. I've seen it, it's kinda like region to region, municipal to municipal. The property managers kind of
have how they price, how they do things, even the rates. Um, I've seen property management as low as, uh, 5% of collective
rents. I see other markets is 10, 11% of collected rent. So it can range. Do yourself a favor and just call around interview property
managers. Ask 'em how much they charge. What do they do for vacant properties? Is there a placement fee for new tenants?
What's included with the base rent? How much for, um, you know, how much for showing a property, how much for fixing a
leaky tap?
How much for, um, you know, do they, do they clean carpets? Do they paint how much? How much? What's included? Um, do
they collect rents? Um, do they make deposits? All the, like what do they do? Like how many, what do you do? What do you do?
What do you do? How much, how much? How much? So? But going back to my point, I, I don't like discounting payments to
property managers. 'cause they're the life blood of your business. They're, they're within your property manager. I guess you'd
have to go in there and do it or scramble. Find their property manager.
(···1.2s) Property manager is one of the toughest things in this business. 'cause finding a good one, you might not find that the
first time. So you might have to go through two or three. Screen them, try them. Just see, uh, definitely one of the challenge is
finding a good property manager, especially if you're remote, because now you're rely on them a hundred percent. So anyway,
economies of scale, property managers, that whole thing there. And actually what, what, when I've talked to property managers
in the past, I've, I've kind of said different things to them and different results with each. But something I said when, when my,
when my unit is empty, I may pay you slightly less than the market.
I may pay you slightly less. 'cause I, I've, I've got no, I've got no income. I, I've, i times are tough. If I've got empty units, maybe
we're renovating the building or may just got some vacancies when the, when the unit's empty, I'll probably pay you a bit less.
But I said, Mr. Property manager, when, when my unit's rented or I've got people in these, these units, I'll pay you actually more
than the average by doing that. I wanna actually incentivize them to give me good tenants, keep my building full because my
building is full. I'm making money and I'm gonna afford to pay them more. But I want 'em to know when my building's empty or
lower, I gonna vacants, I'm gonna pay 'em a bit less.
But let's get some people in there, get some good tenants and have them stay. Can you incentives to have people stay longer?
Sure. Again, we're gonna have topic here, but incentives to have tenants stay longer. You can (···0.8s) different things. And is this
a a decrease expense? Actually no, it's actually added increase or actually the expense. But if, if you've got tenants to stay kinda
year after year, month after month, could you take a percentage of their rent? They pay you maybe 2% of their rent or
something. Could you put that into a fund? And every, every, every month they stay.
Every year they stay 'cause you credit back to them. So it's, there's a little forced in savings for them. So when they stay with
you, they've got money kind of built in. There's different plans like that and, and we could kind of elaborate on that a lot more,
but what can you do to actually incentivize people to stay? Like 2% is not a lot of money, but 'cause look, what does it cost you
to have a tenant leave? (···0.6s) Got vacancy, probably gonna change some flooring, then do some paint. You gotta show the
place and you gotta advertise for, uh, uh, tenants. You know, um, if it's a hot, hot market and you can actually charge more
money for your rent, you might want people to stay or you might want people to leave.
If you're a down market, it's hard to find good tenants. You might wanna pay 'em to say like, give 'em some incentives to stay
2% of their money (···0.8s) into a little saving account for them or what have you. But like I said, in a hot market, in an
aggressive rental market, you might want them to leave so you can get somebody else in there and raise the rents. Again,
depends where you rent. Are you a a tenant friendly? Uh, are you tenant friendly, uh, place? Are you a landlord? I guess what do
you mean by that? Do, do you, does the government favor more tenant (···0.6s) or investor who has more rights?
The tenant (···0.5s) or the investor, right? I'd always suggest to invest in areas where the, the, the investor, the landlord has
more rights. There's certain provinces near me, there's certain states where the government allows more rights to the landlord.
Like Texas, Florida, Michigan, right? In Canada, Alberta, so many places you can actually pick where you own new business.
Where I live, where I live in Ontario, Canada, it's actually more favor to the tenant. The landlord, um, actually has less rights.
The tenant actually has way more to an eviction in where I live, to an eviction here. It can be very time consuming, very costly. It
can happen, but it's not fast. I can go to Calgary, Canada, you can evict much faster. I can go to Texas, Florida, Michigan, you
actually evict much, much faster. So again, just even investing in the right, in the right area is gonna be the start of where, um,
the whole system starts. Where again, let's get back to, I can get off topic there. Uh, let's, let's get back to decreasing property
expenses. So, uh, economies of scale, we covered that one.
We just kind of this whole outside topic of economies of scale, we could talk a lot about that. One. Property tax reduction, you
know, can you apply to reduce the property taxes? Maybe you can, maybe you can't. Um, if you can save the money in property
tax, why not? Uh, maintenance. Uh, so maintenance in your property. We wanna maintain our properties, but obviously
maintenance. Dealing with contractors, again, just getting good bids, dealing good contractors, people to do good jobs for good,
good prices. Um, again, add some value to your property. Let's not overpay.
I always, I always hire contractors. Try, try hire companies. I say I want, I want a good job, but I want a fair price. (···0.7s) I don't
wanna overpay. I do want a good job though. I don't want people to come in and cut corners. I don't want a cheap renovation. I
don't want a cheap anything, but I want, I want fair price or a good price. Okay? So it's just explain to people. I've actually had
contractors tell me, I said, I don't work at that level. I only do premium finishes, premium renovations. I said, well, I've got a
rental, I've got tenants. My last tenant paid in 18 months. I had to paint the entire place.
So if you're only doing work at a premium level, maybe to not rate the person for me, I need to find somebody. Um, I've, I've
hired people to paint an entire house. I've had a, I've had one fellow paint an entire three bedroom house in two days. That's
perfect because for a rental, right? He painted the roof the same clothes of ceiling, same clothes of baseboard, great entire
three bedroom, uh, one bathroom house in two days he was in and out because my tenants in there. I know I'll probably paint
the place again in a year or two because my tenants will come and go. I just know that that's just the way it is. So do I need
somebody to be meticulous and do this?
That's a small example, but maintenances can be really kind of extrapolated to many, many instances. So if you're thinking
(···0.8s) in your rental, um, and if your rental's an executive rental, it's a fancy get premium tenants, okay, maybe you want that
person. But if you're talking the average rental where your tenants stay a year or two, right? I'm not gonna spend a ton of
money on paint. It's gonna be clean, it's gonna be freshly painted, it'll look good. The flooring will be good, but I'm not gonna
spend a ton of money on paint. (···0.6s) If I can find somebody to paint the whole place for a good price and this new paint looks
good, I'll do it.
I'm not gonna go to premium services for a rental. Um, something I learned a long, long time ago is I'm not living in my rental
because when I live in my property, yeah, I want, I want the, the, the ceiling to be on like a, a ceiling white. I want the trim to be
like a, like a medium gloss, trim painted white and fresh. Um, maybe I'll paint my doors a different color than the wall, but I
want my walls to be a certain color and that's where I live. That's kind of normal. But in a rental, it's kind of like, kind of one
color everywhere. I'm just trying to keep my cost down. If my tenants wanna paint the walls a certain color, you know, maybe
have a conversation about that.
Maybe I allow that, maybe I don't. Great things. You can run your business how you want and I'll run my business how I want.
Alright? (···0.7s) Insurance deductible. (···0.5s) What I've done in my business, in my personal is I keep my insurance deductibles
high because with that, a high deductible means I'm probably gonna claim less. But at the same time too, it, it lowers my
insurance, um, premium year after year. So higher deductible, lower my premium. Um, talk to your insurance provider and I just
say, if I was to lower my deductible, how much would save every month or so If I was to increase my deductible, how much
would I save every year and actually a few hundred dollars a year by increasing your deductible.
Would I ever decrease my liability? Well, probably not. We all have insurance liability. But would just ask what's common for
investors. I would talk to other investors, say, what do you have for liability? What do you have for deductible? You know, who
do you insure with? I talked about that earlier. Who do you insure with? Make sure what the right investor friendly insurance
company. Okay, let's keep our talk about decreasing our expenses.
Let's talk about hot water tank buyouts. Can you buy, you could rent the hot water tank, (···0.7s) but could you buy it? It
depends. Um, if it's a rental, you're probably paying premiums to rent that. Um, does that come come with maintenance and
service calls? Yeah, but once you, once you're in this business, you probably know plumbers. You probably know handyman can
work on hot water tanks. I know I do. I've, I've, I've bought a hot water tanks in the past. I still have some rent. It's kind of a mix.
Some it made no sense to buy them because the buy it was too expensive.
Others, as soon as the hot, as soon as that boiled hot water tank goes, I get rid of it. Send it back to the rental company. I I
usually buy them. I just buy it. I own it. I've got plumbers. I know, I know plumbing companies, they have them come in and
inspect it every year. A boiler, the inspection. Anyway, so these are things you just kind of do anyway. You're gonna meet people
in your team. A plumber is definitely one. 'cause you probably gonna need 'em over time. So don't be afraid to, to buy a hot
water tank because the rental, you just pay over time. The, I did some recent numbers on a hot water tank I bought in 2006.
So I bought this hot water tank in 2006. It was $650 and I had, I had a plumbing company put it in. (···0.8s) It paid for itself in the
first four years. (···0.7s) And so 14, so it's, uh, 2006. So it's been 10 years of putting money in my pocket, right? So that's just one
little residential hot water tank. Extrapolate that over every property you have, every hot water tank you own, it just suddenly
becomes it much more cost efficient to buy them, in my opinion.
If you wanna rent them, that's up to you. Okay? Insurance groups. Um, if you belong to real estate club of some sort or maybe
professional group for your work, uh, insurance groups, you can sometimes get some pretty generous rebates on insurance. Um,
look into, I'm sure you're, you're aware of those. If you've got some professional associations, you're probably aware of those
already. If not ask around or some real estate investing clubs. Usually fees associated with those. But if you get insurance
discounts, why not look into it? Light bulbs, that's an easy one. L e d light bulbs. If you've got any of those old, um, heat
generated incandescent bulbs around, get rid of 'em.
L e d light bulbs should be everywhere. Just cost du cost reduction. They're giving off. No heat (···0.8s) the way it is. Oh, uh,
reducing expenses, caulking. Um, you'd be amazed how much heat loss, um, for cracks in your cement. Um, just little holes in
your wall. All these little things. Uh, classic where somebody ran a satellite dish cable years ago, they were, again, back to
hanging satellites. We don't want that. Um, the, uh, satellite dish cable, they just drill through the wall. They leave the, the cable
comes in, maybe got a hole going through the wall.
Maybe the one side's got some mudding on it, they've painted it, but the outside still has a hole. So just caulking, caulking
around doors, caulking around windows, caulking around all these things. You'd be amazed if you have the right person go
around your house with some, a tube of caulking where they actually that it needs it and you actually save on your utilities and
heating costs with that. And then the last one there is hot water tank, uh, uh, wrap the hot water tank. So the point here with,
with any, anything we can do to decrease our expenses, right? (···1.1s) We talked earlier about increasing our, increasing our
revenue.
Now we're talking about decreasing our expenses. It's, if you can do that, you become a far better you investor. If you do this to
your personal life. This your business. I talked earlier about n o I times 10 and I didn't really explain that. Uh, the, the net
operating income of your business. So your revenue minus your expenses, right? If you collect a thousand dollars in revenue
minus your expenses, you know, maybe a thousand dollars minus $900, you go to a hundred dollars n o i your net operating
income's a hundred dollars.
(···0.5s) And n o i times 10 is a simple way. In properties. You're gonna in a 10 cap rate market, your n o i times 10, that a
hundred dollars becomes a thousand dollars. It's quick math. We'll spend more time on that at another time. Not right now. But
when you're thinking as a real estate investor, it always comes down to your net operating income, your net operating income.
'cause from that, you're gonna pay your mortgage (···0.7s) from your net operating income. So your income minus your
expenses because your n o i, your n o i minus your mortgage payment, your debt service is basically left over to your cashflow or
any money left.
You might have left over after your expenses. Of course, we want the highest n o i possible, right? N o i cap rate, gross rent
multiplier, all these buzzwords in the business. We start thinking like an investor, how do I increase my revenue? How do I
decrease my expenses? (···0.8s) And there's some big things you can do. And that's why when you buy a property, you buy an
old, when rundown property, um, it doesn't have to be old. Just buy a, a neglected property, an old property and maybe, maybe
even the landlord was tired, like a tired landlord.
Just neglected a lot of things with the property. The revenue was low, the expenses were high. You can get a lot of great buys on
properties just from tired landlords, tired landlords, um, just people that just, their heart wasn't in it. They got older or they went
through a tough situation in life. Maybe they got sick and this, this property just not their focus. And the property just got away.
The expenses got higher, the revenue got lower. They didn't raise their rent. Just they didn't know. And there's some great
opportunities out there, and this is how you turn properties around.
And you can do a lot of these things in a pretty short timeframe. We just went through these lists here. Um, you can't do all
these in every property, right? If you look at ways of increasing the property value, that'd be great to do all those. Just not, not
possible. But hey, as many as you can do. And this may take, you know, may, may take months, months, may take 3, 4, 5 years
to do all these, depending how big the property is and some challenges along the way and (···0.7s) decreasing the expenses as
well too. So lots of opportunity out there. I would encourage you to do more research on these.
Talk to your property manager, talk to your contractor, talk to your other investors. And any of these you can do, the more of
these you can do is to put more money in your pocket, increase your cash flow, make you a better investor. Alright, let's take a
break now here, we're gonna come back and, oh, this will be fun. We're gonna come back with, uh, can this property be
creatively financed? So hope you enjoyed this section. We'll see you soon. (···4.9s)
(···4.8s) Hi, welcome back. Let's continue on. What we wanna know about the, the next se section here is, can the property be
creatively financed? Uh, first we always look at, uh, we always consider traditional financing for the comparison of all these
other creative financing, creative financing, um, just doing more with less, using less of your own funds. And there's lots and lots
of different ways we're gonna touch on these here.
We gotta, like, it's a complete class on (···0.6s) creative financing. We go on for days. Once again, these are big topics. I know we
keep saying that, but let's touch on a few things we can kind look at. And these are large topics. These are great strategies.
Anytime you can creatively finance a property just means using less of your own money and more of somebody else's money.
And even, uh, even a traditional mortgage, if you're putting 20% down for a, uh, a (···0.7s) fourplex or a duplex, you're getting
80% for the bank.
Does that creative? Well, a little bit because actually using leverage, and we've talked before about leverage and leverage is just
maximizing your return or increasing your return, I should say, increasing your return on investment, putting more money in
your pocket, using somebody else's money to get a better return for yourself. So if you paid for a property cash versus getting an
80% loan to value, you're only using 20% of your own money to do that. So you're actually gonna increase your return on
investment that way. We always want a higher increased return on investment. So let's talk about some of the ways we can
introduce creative financing into, um, purchasing this property.
(···0.8s) First thing I always look at is seller financing. Seller financing is where we ask the seller to hold (···0.6s) all or part of the,
the mortgage. So we're gonna, we're gonna buy the property. We make an offer to buy the property, or (···1.1s) we're gonna
obtain financing one way or another to buy this property. The financing could be from a bank, it could be from a seller, it could
be a joint venture partner. It could be many, many other ways. But if the seller already owns the property, especially if the seller
actually likes the property, maybe they own it for many, many years.
Um, there can be many, actually. It could be many benefits to the seller for actually holding some (···0.5s) or all the, the
financing on the property. Um, there's lots of benefits to seller, there's lots of benefits to the buyer as well. For me, the buyer, if
I'm looking at a seller finance situation, let's say, let's say if I ask the seller to hold 100% of the financing, right? (···0.5s) It's, it's
the old saying, it's cash or terms. If I come with cash, I can probably expect, expect to get a discount.
If I come with cash, I've got, I've got a joint venture partner lined up, I've got bank financing lined up. I've got my 20% or 30%
whatever down payment money I need. I've got the financing locked up, I'm in there. So if I'm paying cash, I can probably expect
a discount in property. Not every time, but hopefully, um, if I don't have the cash, if I'm going for terms. So seller financing can
be concluded as part of the terms. In fact, most of these things we talked about here are considered terms I said before. I'll say it
again. Terms can Be more, more powerful than discount when buying a property.
I'll say it again. Terms can be more powerful than a discount when buying a property. Let's talk more about that. (···0.7s) So,
seller financing, um, I ask the seller to hold all the financing. 100%. Um, so probably a discounts of the question because the
seller, I'm asking them to do some work. I want them to take on some work by holding the financing. Uh, they're gonna take on
some risk. What happens if I don't pay? And you know, with this, so no discount. What if I paid full price for the property?
Anytime, depending on the market.
If you're in a, if you're into a buyer's market (···0.5s) and right away you start talking about seller financing, you probably got
their attention in, in a buyer's market, the seller, maybe the property's been sitting for a while. Maybe they hadn't had any
offers. Maybe the hell low, maybe they had all low ball offers. Sellers, you, they get tired of those after a while. But what if, what
if it's a seller's market? Or what, what if the buyer's market and you approach a seller's saying, you, Mr. Seller, I'll pay you full
price for your property. I'll pay a full price for your property. What I need you to do, I need you to hold some of the financing for
me.
So we do that. (···0.8s) You probably got their attention with a similar finance situation. I've heard of many cases where actually
the, the buyer pays more than asking price, (···0.6s) right? That sounds crazy. But we we're like, why would you pay more? Well,
if I've gotta come up with 20% down payment and I've gotta find buying bank financing or joint venture money, if the seller
offered to hold 100% of the financing or even a high percentage of the financing, would it be worth it for me to pay more than
asking price? Maybe I'm not saying yes, it's a case by case scenario, but we always think we wanna get a discount.
We wanna get this best price possible, the cheapest price possible. And that's great. But sometimes when the seller is often to
do work for us, the seller is offering to hold some of the paper. Uh, are they gonna take a bit of risk? That's the risks aren't that
much because I would just word the contract. I would just word the contract. If, if I miss, if the, if the buyer, which is me, misses
two consecutive mortgage payments, the seller can take the property back, um, no questions asked. And we put that in the legal
legalese or legal talk in the contract, of course. But the seller has basically become the bank and I've become the buyer.
The seller basically holds the mortgage for me. So this is a little bit complex. I'm hoping I'm doing a good job explaining it here.
But understand, anytime you hear seller financing or a vendor take back, as they call it here in Canada, um, with that, the seller
becomes the bank and completed seller financing on 5%, 10%, 50%, a hundred percent, whatever you negotiate, (···0.7s) seller
financing, the seller's, the banks, you negotiate the length of the mortgage, the interest rate of the mortgage, any special terms
of the mortgage.
And if you didn't pay deferring, like all these things, you basically negotiate. The great thing is the more and mortgage the seller
is to sell the property, the better deal you can get, the better negotiation you can do on the terms of this property as terms of
the sale. Um, advantages to the seller. Advantage of the seller of seller financing is number one, the property sold. Number two,
they may get some tax advantages. Talk to their accountant. Right now, I'm not an accountant, I'm not a lawyer, but they may
get some tax advantage. It's usually the case. Um, I won't get into all that too, but, um, um, it's sold.
Um, oh, they can make some interest, right? If they can make some interest on the property. If you're gonna pay them three,
four, or five, six, 8% interest, they make some interest. Rather than just getting a lump sum, paying some capital gains on that.
And then (···0.5s) hopefully making some interest. 'cause a lot of times I've asked sellers in past say, you know, I'm looking at the
property. I (···0.7s) just say, you know, Mr. Seller, uh, if I buy this property from you, what are you gonna do with the money?
(···1.0s) And they kind of look at me, kind of strange. They say, what are you gonna do with the money?
If you're gonna have three or four, $500,000, maybe a million dollars in your pocket, you might have some capital gains. Talk to
your accountant on that. But what are you gonna do with, do you need the money for another property? Do you need the
money to retire and move away? Like I, I've had many times sellers say to me, said, I don't know what I'll do with the money. I