Buying Investment Real Estate Is So Yesterday!

Like building 110 property portfolio in the last seven years. And you mentioned it was last four years when you really accelerated the investment journey. Was it possible to do it alone? Was it possible to do it with a team of joint ventures? One of the things that we get from our clients all the time as feedback is at Cerblo, we've been building cash values. We've been practicing IBC for several years. We paid off all our debt. The cash values just keep growing. I need to know where I can deploy this capital and create more wealth today while I'm alive from cash flow standpoint, but also create more wealth for my family when I'm gone in terms of intergenerational transfer of wealth. And real estate has always been in the back of their mind. They always want to look into buying more properties. Now we are going to discuss today that buying investment real estate in Canada is so yesterday. And in this video I'm with Francois. Francois is a an experienced real estate investor. So Francois, share a little bit more about yourself. I know you're an experienced real estate investor. You've been investing in real estate for several years and you've been doing that not just in Canada, but outside of Canada. So may I ask, how many investment properties do you own right now?

Well, I'm at 110 doors now and yeah, it's been about seven years very actively that I've been investing. I took a bigger sprint, I guess you could say, in the past four years or so. And I like the title of our conversation that investing in Canada in real estate might be. Well, it's kind of yesterday's news. So there's still great opportunities. I'm not saying don't invest in Canada, but also consider other markets, especially if you have the access to unlimited capital through infinite banking. I mean, now the sky's the limit. And there are some really great markets like Costa Rica, Asia, Europe, where you can invest and have diversity of currency. That's a big one for me right now. If you're investing in Canada and you're Canadian, it's great. But you only have Canadian dollars and Canadian properties. If you're able to spread and become more global as an investor as part of balanced portfolio, there's some huge opportunities in markets that are not accessible to everybody. So Costa Rica as an example is very much a cash market. So it's a place where you have to buy with cash. Yes, there is some financing. It's limited. Usually it's like a builder that offers some sort of builder financing and There are some banks that lend, but it's extremely, extremely complicated. And you can also use your registered funds, things like that. But if you have ibc, you're the bank. So you could lend yourself the money and make money on that money, because it's not free. I mean, ibc, there is interest. Starblue, you're the expert. Like, right now, what's the going rate for a policy loan?

Well, but based on the insurance company, it can vary anywhere between 5% to 6.25%, simple interest. But the real power in IBC is not really about the rate. It's about what happens in terms of accessing the capital. We still are able to access capital without interrupting the growth of our own capital in the policy called cash values. Now, going back to investing in other countries.

I know you, me, we've known each other for a few years now. And then it was last time, last year in October, November, when we connected and you were like, yes, airblow. I'm going to be traveling to Costa Rica. It's going to be more like vacation for my family, plus an opportunity for us to look at Costa Rica in terms of opportunities to buy and invest. And then I think you didn't even land in Costa Rica. And I saw a post from you on Facebook saying, hey, I bought a property and it's. It's on Airbnb right away. And. And I connected with you within a month after that. I said, hey, how did the experience go? So to talk about that and the property that you purchased, and I know you put that on Airbnb, so how's that working out for you so far?

Yeah, it's been great. And just going back, sorry, to my interest thing is that in Costa Rica, if you were to borrow at a bank over there, it's about 10% for a mortgage. That's the interest rate, 10% and more. And same with builder financing. But yeah, you're right. I thought about Costa Rica. I was going the builder route. I'm like, this is great. We're going to get financing and you have to wait a year. I'm not a patient person. So waiting for a year did not work for me. I backed out of that deal and I bought an existing property and we closed when we landed. So three days after landing in Costa Rica for the first time, I was signing the paperwork for my very first property in Costa Rica, and I had to pay it cash. So I lost big time. But anyway, I was still learning about ibc. Now I would do it very differently, but as I said, I'm not a patient person. I know, yeah, that's it. So I'm like, okay. But it's a great, great business and there's been some interesting things happening. I thought the people that would rent would be a lot of Canadians, Americans, Europeans. Most people renting my house are local, which is surprising. So to me that was kind of reassuring with the pandemic and things traveling was hurt quite a bit. So this is interesting. I mean, if ever something else happens, I hope not, but something similar happens. The locals are traveling and they're renting my house. So I feel this is very recession proof. And yes, I'm getting Americans and Europeans, but it's great. And the returns are huge. And if I was able to back then, able to borrow from my own policies, I have started, but I'm not quite there yet at buying a whole house, cash from my policies, it would be way better. I mean their return would be huge. And there's other countries. So let's say Costa Rica, you can get a condo for $150,000 U.S. really cute place, probably two bedrooms, two bathrooms, walking distance to the beach. But let's say you're not at that 150k mark with your policies. Why not look at Spain or Portugal where you can get a mortgage for the remainder and then use your policy loan for the down payment, which could open up the door for something else and then eventually recapture. Well, you're the expert, but recapture that other mortgage, you know, somehow. But at least that could get you started. So Costa Rica, that's the advantage I find. It's, it's also cash market. So Canada right now we are seeing ups and downs with mortgage rates, mostly ups and it's scaring people. In a cash market, most properties are cash, so there's no, no banks like doing foreclosures or things like that. In Costa Rica, places are bought cash so you can't really lose it except for property taxes.

So you mentioned something really important, that when we look at buying properties in Costa Rica and you mentioned, you know, Dubai and Spain and Portugal and the cost of acquiring property is not as much as buying properties in Canada, but no, so, so it's just much inexpensive to buy or invest in in these countries. And the, the rental is about the same whether it's money that you can charge from rent. It's probably the same in Costa Rica, Spain, Portugal, even Canada. I think it's very similar. Right. So the rents really don't change much. But since the cost of buying is so low you'll be producing a lot of cash flow out of these properties. You know one thing, when I got into my journey as a real estate investor, I was always looking for that one person rule.

Yeah.

In Alberta and Saskatchewan, like I couldn't find any property achieving that one person rule. But I'm guessing Costa Rica and these other countries that you mentioned, there's an.

Opportunity to achieve that and much more. Much, much more. Just as an example, I looked at a condo in Spain. 100 meters from the beach. So beautiful near Barcelona, so near international airports. Beautiful beach, all the, all the conveniences. 3 bedrooms, 2 bathrooms, €169,000. Imagine in Canada if you're that close to the ocean, you're not paying once. 169. How much? Like in Vancouver you.

A few zeros to that.

Yeah, just add a few, a few zeros. So. And then you can rent it quite well. It's not going to rent for hundreds of dollars a night, but maybe €150 per night which is very good for a place you've paid 169 and you can leverage it. You can do mortgages, you can use your policy loans, you can rent it to family, you can go live there. There's all kinds of options. So that's what I love. Dubai, that's a different beast. So that one I wouldn't say is as affordable. Townhouse you're starting probably in the $750,000 range. But for someone from Vancouver that's probably a bargain.

It's all relative, right?

Yeah, that's, it's relative. Like in, in Edmonton, 750 for a townhouse would be kind of in the higher end townhome, Ottawa. You'd be in a kind of basic to average townhouse in Dubai. I mean a world class city, no income tax, no personal taxes, which you could reinvest that money in something else instead of paying taxes. And what's nice is that's a more risky adventure but in, in Dubai it's more speculative. So. So you could buy the place pre construction and then sell it before it's ever built. And usually they come in with a built in payment plan. So normally when you hit the 40% payment you can assign the property, sell it to someone else. Imagine if you had a policy loan for 40% of that purchase and the house like I said was 750 by the time it's built it's probably worth $1.4 million, I think US dollars as well. So you could make massive profits and never actually own the place. Which is another interesting strategy.

So, yeah, so there's a lot in real estate that people haven't considered outside of Canada. Outside of Canada, Right. And then, you know, the properties that you have outside of Canada, you know, mostly it's Airbnb. So. So in terms of managing those properties, I know you're not there managing those properties, but you have connections there and you have property manager people on ground doing all the work for you. And then Airbnb, you leverage that platform to get the people in to those properties. So it's, it's pretty much hands off as an investor think so if you're.

A busy professional, you can hire out everything they'll do depending on where you're buying. Like in Costa Rica, they do everything. They buy sheets, if they're stained or towels, all the supplies. They do an inventory before anybody guests checks in and out. It's really turnkey. As an investor, you can just put the money in, sign the documents and get the money, which is great.

And you know, one thing, you know, as we were discussing before we started recording this video, that in joint venture is one of the ways that people could get in, get into it. And one question that I get asked all the time, as I said, you know, I don't have $20,000 in my policy yet. I know that's a thousand dollars. Well, you don't need to have all the money to make it happen. You just need to collaborate with the right mindset and together build things together. Right. So find your who, you know, who, who else you want to connect with, who else that you can actually that you want to build a joint venture relationship with and do it together. Like I've done joint venture deals all the time. And Francois, so have you like building 110 property portfolio in the last seven years. And you mentioned it was last four years when you really accelerated the investment journey. Like share with the viewers, if you don't mind. Like, was it possible to do it alone? Was it possible to do it with the team of joint ventures to build wealth in terms of abundance for everybody? Right. That's the whole idea.

Well, you always have to work with people. Whether it's a joint venture partner or you get owner financing a vendor take back, which again, you're working with someone, maybe they're not part of the deal directly, but you are working with that person. So you need people. Real estate investing is the, is in the business of people. Just like infinite banking, it's all about people. Yeah, there's policies and loans, but it's people if you don't have people, you can't insure them, you can't get policies, you can't get loans. Same with buildings, you need people to live in them, to rent them, to manage them, all that stuff. So yeah, joint ventures, you have to find someone that you resonate with and that you're aligned as well. So if you're a more analytical person, then maybe at someone who's a bit different, that's going to bring a different side, but that's still comfortable as well. So I tend to be a little experimental. What I do, I do push boundaries. So if someone's very analytical or very set on certain numbers or things like the 1% rule, I'm sure that kind of held you back on some deals. And maybe not saying that's the case, but maybe you missed out on some deals that were like 0.9% rule. Yes, that could have been good enough. But I know some people, no, that's a deal breaker to me. I'm willing to go to 0.7% because I see further down the road, where's the potential? So you have to align with people and yeah, joint ventures, like you mentioned, Maybe you have 20,000 in your policy loan that you can pull out. Well, again, going back to my example in Spain, maybe you need three people now to finance it. You get a mortgage for 60%, you get those 60k, $20,000 each investor and now you share a beautiful condo near a beach in Spain. I mean, wow, think about it. I want to go there right now. And now you're growing your money and again, you have more money to flow in through your infinite banking as well, because that income can flow back into more policy loans and, well, more policies, policy loans. But again, everybody's got to really work well together. It's a bit of a marriage when you're, when you're doing a joint venture, it's long term, like five years, 10 years, maybe more.

You know, there's, there's a book that I read, you know, a few months ago by a gentleman by the name Stefan. Money People and Deal. Yeah, and you know, fantastic book, right? So I was like, well, access to money people and deal or access to cash value. Many people and deal. So, yeah, so, so yeah, three things are required to do to make anything happen. One of the other questions that Franca, that I get all the time is if people want to know more about like opportunities in Costa Rica, because this is something new, they may not have heard about it, maybe opportunity in Spain, Portugal, like, like how do you get attracted to those opportunities, like, because people may have access to capital, but they're like, okay, how do we find those opportunities? That's always a question, right? So can you expand on how you presently are finding those opportunities?

Yeah, it's. It's, again, who, not how. So funny enough, Costa Rica. So I coach and mentor people, as you mentioned earlier, and I have. I'm involved in several real estate investing groups. And I asked, I'm interested in Costa Rica. Does anybody know a good Realtor? And I was referred by one of my students to this amazing realtor in Costa Rica. And I found out she travels a lot, so she's actually in Spain right now. And I asked her, can you maybe have a look at properties? So she sent me some deals. So my realtor from Costa Rica is looking in Spain for me and Italy right now as well. And we may end up partnering together as well. So we'll see where it goes. But it's asking. So if you don't ask, you don't know. So Starblow as well, I could ask you, where are you investing? It's really about people connecting and be bold. Like, ask questions. And if people don't want to do it, I mean, don't want to answer, that's okay. But most people are quite generous and will answer your questions. And so that's kind of how I'm doing it. And then leveraging their network. The. The realtor in Costa Rica, Tammy, she might be listening to this at some point. Is awesome. She's from Canada. She moved to Costa Rica. And she avoids the rain in Spain. The rain in Costa Rica, by going to Spain every year. Same thing with Dubai, I started looking. I found out a lawyer of mine invests there. If I asked him, how is it? Who do you know? How do you insure a property? Where do you do banking? And so again, banking comes up all the time. I mean, of course, infinite banking is not like you don't have a debit card. I've had that question asked before. I wish we could, but we're not there yet. But I asked them, like, how do you finance those deals? What's the return? And again, it's making those connections, just talking to people. And then, yeah, you should fly down and have a look, because those countries, it sounds great, it's cheaper. But again, a cheaper price also means less velocity in real estate. Places don't sell as quickly like Canada was. For a while, houses would sell within days or minutes, and now it's more like months. So it's the same in those markets. Could be months, could be a year or two before you sell a property. Yeah.

And real estate is a long term goal. It's something that we keep on building because we need access to cash till the end of time. So these investment properties are for the purpose of producing that passive income or whatever the strategy one wants to use with real estate, it's going to help us till the end of time is if someone wants to get into real estate investment thinking about instant gratification, then they're just going to be good fit.

You could do flips but I find the market right now is very tough for flips and if you're trying to flip outside of Canada, that's way tougher. There's huge tax implications for acquisitions in many of developing countries. I like Costa rica is about 4% of the purchase price for closing costs, which is high. Spain is 10%. You have to be aware of that Dubai is quite cheap but still you have to be aware that Canada flipping was easier for a while. Right now it's still doable, but I find it a bit tough.

And I know on your channel you've interviewed Tammy as you mentioned and you also interviewed, was it the lawyer from Dubai?

No, it's a realtor from Dubai. So Lucy, she's British and moved to Dubai 17 years ago and loves it and she also lived in Costa Rica so she was also telling me about great places in Costa Rica and she also lived in France, so she was telling me about deals in France. So it's all a network like it's people are very global. Elstar Blow. You're not originally from Canada either, so maybe you have your your eye on something somewhere else. I mean if you don't ask, you don't know exactly.

And you know asking question is how you're going to gain clarity on everything in life and there's no such thing as a stupid question. Question is a question, right? To learn more about how being your own banker allows you greater control when it comes to real estate investments. Well, make sure that you watch this video later.