September 13, 2022

Ipromised more stories from Part 1 so here is another recent one. Thank you to your constant feedback and behind the scenes interactions with me, I’m happy to share as many as I can throughout my writing journey.

From Part 2 of this series, you recall that I’ve just recently acquired 11 properties in the US using a “straight-up” VTB. I will share with you a VTB that I also proposed back in May this year (2022).

Background/Context

Wehad been shopping around for a personal winter home for about a year within North America. Frankly, our list of criteria narrowed the locations down quite quickly — Southern California, Arizona or Hawaii.

At the beginning of this year, we took a very indulgent and luxurious 5.5 weeks long trip to celebrate turning 40. One of the stays was at the Ritz-Carlton on Waikiki in Honolulu.

In 2021, we spent nearly a month in Oahu (the island Honolulu is on) and naturally explored the real estate market again to see if there are any viable strategies. It came as no surprise that very few would work on the island of Oahu other than development and Serviced Accommodations (aka STR: short-term rentals).

After some further digging in 2021, we also learned that the STR restrictions are so great that the numbers wouldn’t work. And we do not typically ‘build or develop’ from scratch in markets that we don’t have a primary focus on. So, the idea exited our mind and we were happy at the Ritz, the Four Seasons and Disney’s Aulani during our subsequent visits.

Atthe Ritz-Carlton, we learned upon check-in that there’s complimentary gelato by the pool deck everyday at 2pm. (Hello, diabetes!)

Okay…before going any further, I’m just going to make a couple of disclaimers here:

1. This is definitely not an endorsement (I wish it was…lol), and
2. This is a semi-personal/emotional buying decision unlike 99.9% of our other business-driven purchases.

Back to the story…

At2pm on the first day, we went for gelato and met this incredible couple. Through our casual chats, we learned that the Ritz-Carlton Residences in Waikiki is what they’d call a ‘condotel’ — a branded condo that can be managed by the Ritz-Carlton and the Marriott group. Long story short — we could buy a unit here and have revenue coming in like a short-term rental. Because of the brand, a high level of maintenance and marketing standards are kept (and yes, the expenses do reflect in the pro forma). However, it was perfect for the lifestyle we’d like.

With that said, I will share that the biggest hold back is still the fact that it’s a ‘condo’ and we do not ‘invest’ in condos as professional investors. I will elaborate on that later. This factor was quickly removed when the main driver is to have our winter home with little to no headaches to maintain it. Then I remember saying this for years: condo living is a lifestyle choice. For personal use, it’s 100% acceptable. Just don’t call it investing.

So, the due diligence began (don’t worry, I still had a decent time there for nearly 3 weeks).

Depending on when you’re reading this, just recall for yourself what May 2022 was like since one of the largest global pandemic in human history started…the world seemed to be almost back to normal.

Honolulu/Oahu, Hawaii has relied heavily on tourism as one of their main economic drivers for decades. The pandemic wiped out 70% of SMEs (small to medium-sized enterprises) during the lockdowns and 50% would gone forever. Hotels were deserted. Shops were closed. Beaches were empty.

I remember driving past Waikiki Beach in February 2021, I could count the number of people on it in one hand. ONE! While the detached market was booming like it was everywhere else in North America due to lockdowns, the condo and tourism markets were completely slaughtered and depressed.

To get to the heart of the story, I’ll fast forward some facts and the share with you the different offers made based on the findings:

Seller’s motivation/situation:

• Purchased during pre-construction for USD ~$1,280.000
• Market comparables came back at ~$750,000 — $860,000 (depending on the floor it’s on)
• Seller is from Asia and bought it to ‘park’ money (which I really learned that it’s just a typical buy rent and pray)
• Seller’s parents had already planned to visit and spend a month in July 2022
• Seller wanted to sell because they were just watching the value go down

After this, here are the offers made (remember: always make 2 offers when you are working with a realtor — those who don’t want to or haven’t had the experience to are likely not someone you’ll be a successful long-term working relationship with. #truth) —

1. VTB Offer: $750,000

• Downpayment: $445,000
• VTB Loan: $305,000
• Proposed rates: 5% interest only = $1,270.83/month
• Term: 5 years
• Balance of $305,000 due after 60 months in full
• Open term for 6 months after 5 years at original rate
• No prepayment penalty after the first 2 years (or after 24 months)
• Will pay $10,000 in realtor commissions (will add to purchase price)
• Will pay seller’s legal fees (up to $2,000 — will add to purchase price)
• Will offer Quit Claim Deed for extra security (90-day clause)
• 7 nights stay per year subject to the following windows: Sept 10 — November 30 every year (US Thanksgiving weekend blackout for +/- 5 days), January 10–30, May 1–31
• For as long as the Buyer owns the property or up to 5 years
• Valued at approximately USD $6,000+/year
• No rollover or banking of nights
• Reservation must be made min 4 months or 120 days prior (subject to availability)
• Must be in 1 reservation per year
• Possession/closing date is July 10, 2022
• Buyer agrees to start paying property tax on closing date
• Seller agrees to pay maintenance fees till August 10, 2022
• Seller agrees to vacate the property (check-out) of the unit on August 10, 2022 the latest
• Sellers agrees that the 1st mortgage payment starts August 11, 2022

2. For Cash Buy –

• Offer/Purchase Price: $745,880
• Possession on/before July 1
• They can pay us $18,000 directly for the parents’ stay in July (50% based on quoted rate directly from the Ritz-Carlton website)
• All other additional offers in the VTB offer applies
• Additional nights beyond the 7-night stay in the same reservation will be billed at 35% off of Ritz’s published rate (as per website quote at the time)

Ihope to have demonstrated a few things here with everyone:

1. Those ‘seller may want’ clauses don’t always have to just be included in a VTB offer. Remember, any deal happens with conditions and needs (sometimes even wants) align.
2. “Always make money in the buy” is still Rule Number 1. As a result, I would negotiate on terms that the ‘performance’ can bear as opposed to going up in prices as much as possible during a negotiation process.
3. It’s about aligning the seller’s intentions and conditions to sell while working out internally on the numbers. Either of these offers would make this a great short-term winter home while making money during the time it’s not for personal use.

Here’s what happened: The Seller said YES…at first. Then their inexperienced realtor and traditional lawyer made them change their minds. Oh well! I moved on. 1 week later, when the reports on inflation, rising interest rates and the looming global recessions started happening, they came back and said they would take my offer again. Sorry, too late.

I do believe that everything happens for a reason. In this case, I dodged a bullet. The value dropped and tourism slowed down. While emotionally, it felt like a loss, financially and logically, it concluded the way it was supposed to. I ended up pursuing the deal shared in Part 1!

Tomy dedicated readers, I thank you for your support and feedback. If this is the first time you’re reading one of my publications, I hope you’ve enjoyed it and learned a thing or two.

For those of you who are in and close to Toronto, ON —Trust Your Talentis running a 2-dayLIVE IN-PERSON Real Estate Investing Bootcamp on September 24 & 25where you will dig into this particular strategy amongst many others. You can visit theBootcamp Registrationpage ortalk to a Strategy Coachfrom Trust Your Talent Academy to learn more. Take action now if you’re serious about thriving through the tough times and come out better at the end of all of this!

Ifyou’re wanting to be a part of a community of real estate investors from around the globe, here is the T.A.L.E.N.T.ed Investors Facebook Group. It’s a place where people come together to share experiences, knowledge, successes and challenges, and money making opportunities!

For those of you who prefer watching videos, here is the YouTube channel where some of my work (very raw) has been shared.

October 11, 2022

Information

Information is often times just facts about something — sometimes with more vivid descriptions of what’s happening. This is the starting point of the formula. As you can see, personally, I have nothing against it. I’m only concerned when most think that’s enough — especially when it comes to making investing decisions. If you are sensing my passion and amped up energy about this, I’m glad. This is the stage I was stuck at that caused my entire life savings to evaporate at the beginning of 2010. Imagine having just made some aspirational new year’s resolutions and personal goals to achieve just a few days ago, and learning that my hard earned (and “saved”) money vanished without a trace just like that?

Education

Now, education is usually information that has been interpreted and presented in a RELEVANT way to guide and increase the understanding level of whoever is receiving it. This is crucial because comprehension is key to maintaining a clear mind to process what’s to come. This is why we all hear the phrased “educated decision” these days. To me, it also speaks to personal accountability.

Knowledge

Then we get to the knowledge stage. This is when education has been internalized and has become integrated into our thought and decision-making process.

However, the old saying of “knowledge is power” is no longer the anthem people sing these days. There’s a new saying in town that rules now:

(Picture from Pinterest)

Or, to be more exact, what personal development guru, Dale Carnegie said:

October 18, 2022

This is a question that I get asked a lot during podcast interviews and Q&A at stage events. Plus, some of you have started asking me this very question over the last few months now so I thought it’d be fitting to share, not to mention timely in today’s world.

Before I get going on this, I should clarify that I’m cheesy as hell when it comes to viewing all versions of the word “fail”.

I do not believe in failures.

I believe in growth and learning.

I believe in never giving up. I believe in “fall 7 times, get up 8.”

So, let’s dig in!

Here’s the first and BIGGEST reason that I’ve experienced and witnessed:

. Old & Outdated Money Blueprint

I remember half-way through my Real Estate Investing Bootcamp back in June 2010. Having made the decision to get financially educated, I just needed to pay the tuition now. The only challenge is: I had just lost all my hard earned savings (as shared in previous articles). We had just moved to a brand new city and house 4 months prior and incurred a lot of surprise expenses through bad debt. How are we going to make this happen?

Both of us started calling our family and friends to share this new “business venture” that is real estate investing with them, and how we would treat them as our very first angel investors and pay them back tenfolds when we made it.

A couple of 28 year-olds went nowhere with those conversations.

Side Bar

If you’re reading this and you are a young entrepreneur, I’d love to hear your business ideas if you’re looking for private funding/angel investors. I have a soft spot for you because I was you. Over the years, we have backed and supported various small ventures to get started — some went well, most went bust and it fuels our souls to see how they all grew from the experiences.

Asa last resort, I called my parents who have been wanting me to pursue a MBA (Masters of Business Administration). I gave them my best“accomplished 28 year-old, middle-management title, earning-6-figure-income, and managing-50+-people across Canada”pitch at the time. Their response was the most awful and the most awakening.

During the Bootcamp, I had so many ah-ah moments that directly targeted at the heart of all my limiting beliefs when it comes to money. These ah-ha moments ripped many of the limiting beliefs out of my mind and my heart like poisonous weeds preventing a beautiful, fertile garden to blossom.

First thing I do have to say is this:my parents didn’t know what they didn’t know. They were only wanting the best for me. And here I am already thinking:If I want something I’ve never had, I’ve gotta do something I’ve never done.This includes breaking free of so many outdated money blueprint given to me by my parents. They refused to support my journey to be financially educated and yet were willing to remortgage the house to send me to grad school. The two people that rarely agreed on much and THIS they aligned on. This madness had to stop.

I refused their offer to get another degree. The bank of love was no love at all — or so I thought. I was angry — at them and at myself.

For people my generation especially, the last 2–4 generations all were raised in the industrial age where if you work hard, budget excessively and save, life will work out just fine. And it did — for them. I was born in 1982, the year where mortgage interest rates in North America were documented at 18% or higher. THINK about that! As a real estate investor and Mentor today, I teach everyone to conduct extra due diligence when someone’s offering double digits on a private lending deal.

Myconversation with my parents was one that burned me deep. Watching them struggle their whole lives to have a semblance of a comfortable life was the biggest lie they fed me growing up — unintentionally. Fortunately, my fears and self-doubt in the moment also got torched and turned into the fossil fuel I needed that night. The fuel that gave me the courage (or perhaps temporary blindness) to take the leap of faith to bet on myself.

I’m sure there’s more to this list as I’m only sharing some of the points they made that I still remember (honestly, a bit fuzzy now). If you have more to share, please feel free to comment as it may help others relate to this topic better:

• Money is the root of all evil and you don’t need much to live.Misquoted by them and I didn’t want to just live and survive through this lifetime, I wanted to thrive and have options in life — especially after 2 heart attacks at a young age, a heart surgery at 20 and an autoimmune disorder that I have to manage daily.
• You have a good job (good pay, ok benefits, company stock options, pension, extra play money) and just keep climbing the ladder.I just knew I was made for more. If for nothing else, I want to build my own ladder in life, not just for a job or career.
• You need money to make money. You’re just a kid, who’s going to give you the money (after sharing with them the idea of OPM — other people’s money).I was now armed with knowledge — and soon support through mentorship — that would prove anyone at any age can succeed with a strong why and proper guidance.
• It just sounds too good to be true (how to create cashflow and higher returns than savings and stocks was a subject them and I had never heard of).Maybe…and what if it isn’t? Numbers don’t lie. I love the saying (forgot the actual quote): “All you need is one way to make it work.”
• How are you going to find time to learn and do this?I would time block. I would cut out some bad habits (notice not all). I would do whatever it takes.
• The market in Edmonton is bad right now, isn’t it?Financial education through real estate investing goes beyond the city/town we live in. Educated investors are performance based investors. Most people that buy stocks in Tesla, Amazon, Nike, Facebook or Google care if they are going to yield good returns. This is not different.

No offence to my parents. To be completely clear — I love my parents and have a lot of respect for them. They did their best based on what they knew. And I remember this thing my Bootcamp Trainer said: “Often time, the people who love and care about us the most are the ones that stop us from achieving our full potential the most. They also tend to share the same last name.”

I took it all in.

That night, I decided that I needed to break the mold.I needed to break free of my old money blueprint.

The next day, my husband and I invested ~CAD $50,000 in our financial education. 3 credit card transactions and a promissory note on the contract later, we walked away with a used Cashflow Game and a branded padfolio.

Did we just get hyped up?

Could we do this?

Were we just young and naive old hanging fruit for these ‘seminar people’?

The overdosing amount of self-doubt and fear crept in night after night like an excessive daily binge on junk food. In 2010, CAD $50,000 was a nice Mercedes-Benz PAID IN CASH. It was a healthy downpayment for a condo in Metro Vancouver and Downtown Toronto (yup, you heard that right).

Our only antidote at the time was a concoction of believing in ourselves and the new tools that we had gained at the Bootcamp. Interestingly and unsurprisingly, these tools are the same that we still use today when we experience the same two emotions that have destroyed more dreams and aspirations we know: fear and self-doubt.

Today, I know my parents are proud of what I’ve accomplished. For that, I’m grateful. Grateful for their rejection and grateful for their limiting beliefs. From that, I got stronger and better.

All along, I’ve wanted to create something timeless with my writing. This is not about the market conditions, or interest rates or even inflations. Yes, they are important facts to know and they are not the first thing any of us need to know.

Proper financial education allows any of us (yes, you heard that right again — ANY OF US) the ability to expand our means through growing our income streams and wealth in any market conditions. Even the perfect sh*t storm that we are all living through right now.

I hope this is offering some light for you. This ‘reason’ does not need to be as reason as long as you choose different. So that you can become different.

Tomy dedicated readers, I thank you for your support and feedback. If this is the first time you’re reading one of my publications, I hope you’ve enjoyed it and learned a thing or two.

For those of you who are ready and or curious about how to create your personalized financial success plan, you can visit the Bootcamp page or talk to a Strategy Coach from Trust Your Talent Academy to learn more. Take action now if you’re serious about thriving through the tough times and come out better at the end of all of this!