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The biggest fear that real estate investors have in getting into larger residential units is that they will be intimidated by the size of the investment. However, our guest this week, Seth Ferguson reassures us that as long as we have a repeatable system in place, the intimidation factor goes away.

He talks about his journey as a real estate investor, including the advice he received to invest in bigger deals. He attributes his success to his boldness, which has allowed him to do things that others may be afraid to do.

Seth is also the founder of The Multifamily Conference – the crazy guy who put together the first event in the middle of a global shutdown because a) he is stubborn and b) he is a firm believer that face-to-face networking is the foundation of real estate.

To get your ticket to this amazing event order your seat here
https://multifamilyconference.ca/ref/theREITEclub/  

He specializes in multifamily real estate investing. In this week’s podcast episode, he discusses the benefits of investing in larger multifamily units as opposed to smaller units. 

Larger deals are less risky and better because of 3 factors; 

• Better debt options
• Increased cash flow 
• Economies of scale 

He discusses the value add strategy for commercial real estate investing. This strategy involves buying an underperforming asset, making improvements to it, and then selling it. 

It is possible to compete against the big guys when buying larger apartment buildings, but it depends on the niche that the investor is in. It is also possible to build a portfolio of smaller buildings that do well.

Seth also mentions that syndication is a good option for investors looking to acquire larger buildings. Syndication is a way for passive investors to pool their money together and invest it with a general partner, who then manages the deal to earn a return. He notes that the syndication model offers many advantages over traditional real estate investing, including the ability to participate in larger deals and the protection of passive investors’ initial capital.

He also outlines three steps that someone interested in large multifamily real estate investing should take. They should;

1. Determine what type of portfolio they want to build and research investment markets.
2. Assemble a team of experts and figure out how to structure deals and raise money.
3. Underwrite deals and create a deal flow.

It can take a long time to go from deciding to invest in real estate to actually making an offer on a multi-family property, depending on various factors. Seth Ferguson teaches people how to successfully invest in their first apartment deal. He says that the first deal is always the hardest, but that it gets easier with experience.

A 14-year real estate veteran, Seth is the host of a cable TV real estate show, the host of a real estate investing podcast, and the founder of Moguls Mastermind: an invite-only collective of the top real estate thought leaders from across North America.

He is the CEO of the real estate investment company Multifamily Real Estate Investments Inc which provides investment opportunities for high-net-worth individuals by acquiring and improving underperforming apartment buildings.

Get in touch with Seth;
seth@sethferguson.org
www.SethFerguson.org
https://www.instagram.com/sethfergusonofficial
https://www.facebook.com/sethfergusonrealestate/

This episode has been brought to you in part by
BM Select/Butler Mortgage – https://bmselect.ca/

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Jamil Rahemtula is a real estate investor and agent based in Hamilton, Ontario. He helps clients invest in various types of properties, including residential and commercial, and he focuses on student rentals specifically. He markets himself to clients by doing extensive due diligence on properties and screening them for value-adds that align with his clients’ needs.

He highlights that it is important to find an agent who is willing to do research and provide information on properties, rather than just selling based on emotion. It is important to be aware of what is happening in the market and to find an agent who is willing to do their due diligence in order to get the best deal possible. Asking the right questions is key, and investors should be aware of all expenses associated with a property before making an offer.

Jamil also talked about his own portfolio, which includes student rentals, multi-family properties, and commercial buildings. He suggests that landlords should focus on upgrading their properties to attract tenants who are willing to pay higher rents.

He shares that to attract certain tenant profiles he works by furnishing and decorating the rental units in a certain way. He mentions that they used to offer furniture rentals for a dollar a day, but they stopped because it became too cumbersome. They also mention that they sometimes offer to paint an accent wall for tenants who sign a lease at the right time.

Jamil’s first real estate purchase was a student rental property in 2008. He paid a premium for the property, but he still owns it today. He bought the property because he had been reading Don Campbell’s books and wanted to get into the real estate investing business.  

He discusses how he handles student rentals and market turmoil and offers three tips for landlords of student rental properties: 
(1) ensure good internet service by testing in every room; 
(2) offer appliances like dishwashers and freezers
(3) consider hiring a maid service. 

The cleaner can also help landlords keep an eye on the property and report any needed repairs or illegal activity. 

Contact Jamil Rahemtula
Email: jamil@rockstarbrokerage.com
Phone: 416-275-7819
Web: https://www.rockstarbrokerage.com/jamil-rahemtula/

This episode has been brought to you in part by
Private $ 4 Mortgages – https://privatemoney4mortgages.com
BM Select/Butler Mortgage – https://bmselect.ca/

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Real estate investors, are you aware that some of the recent Federal real estate laws could have tax implications? 

One that is catching many investors off guard is the Underused Housing Tax. 

Did you even know that in certain circumstances there is a requirement to complete a new tax form for each investment property, and failure to comply will result in a $10,000 fine per property?

Daniel DiManno, Partner at Capstone LLC Chartered Accountants outlines what to expect for filing this April 2023 and subsequent years, what your obligations are, and the implications of not filing or filing incorrectly.

The Reite Club recently hosted an event with Daniel DiManno, CPA, CA, discussing the implications of the Underused Housing Tax Act. Daniel noted that there are severe penalties for failing to file for rental properties by April 30th and that the act could be expensive for investors who are unaware of it.

He also touched on the new anti-flipping rules stating that if you sell a property within 12 months of buying it, you will have to pay business tax on the entire profit, rather than just 50%. There are exceptions to this rule for those who have to sell due to life circumstances.

But the main focus was the “Underused Housing Tax” which is a 1% annual tax that is being imposed on the value of residential real estate in specific circumstances. The tax is meant to target non-primary residences that are left vacant for long periods of time. The tax applies to properties that are not the primary residences of the owners, and that is left vacant for more than six months out of the year.

The new UHT return applies to foreign or domestic non-public corporations, individuals who are non-residents or non-citizens of Canada, trustees of trusts, and partners of partnerships. These people are required to file the return if they own residential rental property. Canadian citizens are not required to file the return unless they are part of a partnership.

This episode discusses the types of property that are exempt from the UHT return, as well as the types of property that are included. It also explains how to determine whether or not a property is considered residential under these rules.

If you own a property that could potentially be considered residential, it could be advisable to file a U H T return in order to avoid any penalties. There are various circumstances under which an individual would be exempt from paying the 1% tax on secondary residences in Ontario. These include if the property is the individual’s primary residence if it is rented out for at least 180 days of the year, if the property is seasonal or inaccessible, if it is undergoing renovation, or if the owner has recently purchased the property. If the owner of the property dies, the executor is also exempt from paying the tax for one year.

The new tax will be 1% of the value of the property, and the value is determined by the most recent sale price or the assessed value based on property tax assessments. The penalties for not filing the return or for not paying the tax on time are quite substantial, and they increase based on the number of months that the return is outstanding.

The Canada Revenue Agency will penalize individuals who do not file a UHT return for each unit they own. The penalties will be multiplied if the individual owns multiple units. The deadline for filing the U H T return is April 30th.

There is some debate among tax experts as to whether or not joint tenants or tenants in common will be considered a partnership for the purposes of the UHT, but it is generally believed that they will not be treated as such. The filing deadline for the UHT has not yet been announced, but it is expected to be sometime in the near future.

Daniel DiManno provides valuable information on the requirements for filing for the CRA  including the need to get a RU number, including the need for businesses to call the CRA and obtain the number. He also discusses the implications of a husband and wife owning property jointly with a third party, and how the joint venture would be required to file.

Contact Daniel DiManno
daniel@capstonellp.ca

This episode has been brought to you in part by
BM Select/Butler Mortgage – https://bmselect.ca/

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This podcast interview with Andrew Choubeta was eye-opening as he outlines the real estate portfolio he is building in Ethiopia. He talks about how he saw potential in Ethiopia as an investment opportunity, and how it has turned out to be very lucrative for those who have invested there.

Andrew is building a diversified portfolio between agricultural land, apartment blocks, and duplexes/triplexes. He mentions that leasing land is common in Ethiopia and other African countries, and can be for a significant period of time, which gives some reassurance to investors and that it is usually possible to renew the lease.

Some key takeaways include;

• The importance of learning the local language when investing in a new country
• Benefits of getting on the ground and experiencing things first-hand 
• Networking and connecting with people in the country
• The importance of finding a business contact who can help with the nitty gritty details of investing in a new country.

Some people are choosing to invest in Ethiopia, despite the perception of the country being unstable and dangerous. They believe that Ethiopia is still a great investment, due to the low prices of properties and the increasing number of tourists.

The government is very welcoming to foreign investors and offers a number of benefits, including guaranteed loans. Additionally, the cost of living is very low and the laws surrounding property ownership and rentals are not as strict as they are in other countries, making it easier to invest in Ethiopia.

Because it’s getting harder and harder to find good investment opportunities locally many people are looking at other options outside of Canada. Andrew suggests that new investors look at Africa as a potential safe investment and that the biggest hurdle to overcome is the language and cultural barrier.

Contact Andrew Choubeta
andrew@caveatllp.com

This episode has been brought to you in part by
BM Select/Butler Mortgage – https://bmselect.ca/

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When Mathew Frederick, an investor of 38 years, faces looming recessions he tightens up, seeking efficiency and increasing revenue, but when COVID hits, he finds a new way to leverage the situation to his advantage, creating a compelling central conflict between his need to survive and his goal to make life better for himself and those he loves.

“What I’ve always done in these times is to tighten up. So a lot of people look at how I make more money. I first look at how I make everything more efficient. And then at the same time, I’ll actually look to increase my revenue as well. So again, I don’t worry as much about the situations I cannot control. What I can do is control me.”

Mathew Frederick is an experienced real estate investor who has been investing since 1984 and has gone through three recessions. He specializes in commercial real estate investments, including multifamily, strip plazas, and self-storage.

Having experienced three recessions in various places Mathew could be cautious, but rather than worrying about something he could not control, he chose to focus on what he could. He tightened his budget and used the time to learn, investing in himself so he could be prepared for the next recession.

He started out small, investing in two to three units, but then grew to thirty. He learned how to be efficient, and how to make his investments recession-, internet-, and pandemic-proof. After 38 years of investing, Mathew had become a master of knowing his expertise and adapting to survive any situation.

In this episode, you will learn the following:
1. How to survive and thrive during a recession by controlling your own actions and taking the time to learn.
2. The pros and cons of investing in different asset types such as multifamily, strip plazas, self-storage, and warehousing.
3. The importance of creating a system to delegate tasks and maximize your skill set.

Contact Mathew Frederick
Mathew.f@rccsol.com
289-440-2335

This episode has been brought to you in part by
Legal Second Suites – https://legalsecondsuites.com
BM Select/Butler Mortgage – https://bmselect.ca/