Episode 12: Who Should Be On Your Team? Hurdles to Buying Real Estate Investment Property – Part 4

Kyle Pearce: Welcome to the Canadian Wealth Secrets Podcast with Kyle Pearce. Matt Biggley and Jon Orr.

Matt Biggley: Get ready to be taught as we share our successes and failures encountered during our real life lessons learning how to build generational wealth from the ground up.

Jon Orr: Welcome, welcome, welcome, invested students to another episode of the Canadian Wealth Secrets Podcast.

Kyle Pearce: Yes, my friends, we are coming down the stretch with our hurdles to buying real estate investment properties series here, and we're really excited to dive in because we're going to start talking about those key pieces on your team that you should be thinking about. Now, something that we should keep in mind right away is that you may not necessarily have all of those pieces completely decided upon as you begin this journey, but you really want to be thinking about, hey, who is it that I want to try to have a long-term relationship with? Who can I build these relationships? Who do I have trust and who can I really just lean on as I begin this journey?
But before we do, if you haven't checked out our last episode, we dove into the technicals. Now, that happens to be probably my favorite part of this whole process because we get to look at the numbers, we get to kind of decide which properties fit our criteria and which ones don't.
But guys, as you probably know, some of the people who've been reaching out to us, they were a little disappointed that we just didn't have a hard, fast rule on this property works and this one doesn't. What we discussed was the fact that everybody's different and everyone has different needs, which means the technical analysis that you do on each property is going to also be different depending on who you are, what your risk tolerance is, where you are in your life, and maybe even how much capital you have or that maybe you're sitting on and want to get deployed into the investment game.

Jon Orr: Yeah, and I think we gave a lot of great insight into those numbers. Kyle, even though we didn't give hard and fast rules. I think there are still a lot of rules that can be followed with looking at the numbers and looking at say what your rate of return is going to be and look at what the three big silver bullets, what that comes out to be after you put in your numbers into the analyzer. So I think there are a lot of great takeaways from that episode. So if you have not yet gone back to listen to episode 11, please do that. You will thank us later. But I'm really excited to dive into this one, because as a new investor or someone who's first getting into investing, I think lining some of this team up can relieve and make those hurdles kind of disappear a little bit.
We talked the big hurdle of analyzing the numbers in that last episode, but if you gather a well running team, some key players they can make, I think, your life as a real estate investor much more passive and therefore much more enjoyable and also make it seem very doable on your part. So I think I'm really excited to share this one with the audience and also learn a little bit from the two of you as we go into this. So Matt, let's jump into this. Let's talk about some team members that you think are super important to be on your investing team.

Matt Biggley: In no particular order, and call me biased here, but we're going to talk about the realtor first. We'll kick it off with the realtor. Listen, without being able to find and identify the right properties, you are going to be stuck on go, right? So here's my thinking around the realtor, and forgive this as pitch to use me, because certainly I'd love to be able to help people with finding their properties, but I want to talk a little bit in general about maybe finding a realtor and some questions to ask a realtor. I think inaudible is that I was an experienced investor prior to becoming a realtor. In fact, one of the motivations for becoming a realtor was so that we could have one of us, Kyle and I, as a partner that had that experience and expertise in being inside a real estate and being able to service ourselves at the highest level possible.
So my advice when it comes to finding a realtor is not to use your old high school buddy or your cousin or someone in your family. Use the best realtor. And why? Why use the best realtor and not someone that you just know or you heard about through the grapevine? It's because the stakes are simply too high. This is for most people, one of the most expensive financial investments they're ever going to make, so you want to make sure you have the best. Investing is a niche of real estate. Every realtor's going to tell you they can help you with investments, but you want to ask that agent, how many units have you owned? How many units do you currently own? How many investment properties have you helped people buy or sell in the past 12 months? You want specifics. One of the things I help investors with in another niche is Airbnb investing.
Now, that's another topic for another episode, but again, as an example, you'll see all the time properties advertised as great candidates for being Airbnbs. Well, what qualifies as an Airbnb. Again, I run an Airbnb, I own an Airbnb. But with investing, with multifamily residential investing, you want to make sure you have someone who's experienced and who is an expert in their field. It doesn't cost you anything, in about 99.9% of the cases, to use a realtor to purchase a property.
So don't go talk to the listing agent. The listing agent on properties is contractually obligated, has a fiduciary obligation, to represent their seller. So a lot of people say, "I'm going to get a better deal if I go right to the listing agent." I'm going to say that is the vast majority of cases wrong. In fact, if you come to one of my listings, and you're not my client, I am obligated to tell my sellers everything you've shared about your motivation, your willingness to pay.
If you become my client as a buyer on one of my own listings, then the relationship changes a little bit. And I can certainly expand on that. But essentially, I want you to know you need a great realtor, you need an expert realtor, and you need an experienced investor as your realtor.

Kyle Pearce: I love it. I love it. You brought up so many key points there. And Matt, I'm pitching myself because I have been this person that thought that if I just go in by myself and I go to the listing agent, that I'm going to get a better deal or whatever that might be. But in reality, at the time I thought I knew more than I did. Even now knowing what I know, I now realize that that actually is probably not that helpful, especially if it's coming down to if commission is the thing that you think is going to save you that much money, it's probably not that great of a deal in the first place, right? So maybe you're sniffing in the wrong place anyway. But something that you mentioned I think is really important is finding a great realtor. Here, we're talking about for investment properties.
But the same is true when you're finding your forever home or the next home or whatever home you're looking for, you need to find the right realtor who's going to take the time to learn or help you learn what you want. Because as humans, oftentimes, we actually aren't clear on what it is we want. And if you go into a realtor relationship and your realtor isn't asking you good questions to try to get to the goal, to try to get to what it is that you are after, they cannot be as helpful as they possibly can be.
And Matt, you and I, before you were a realtor, when we were trying to find realtors to work with at the time, we were just reaching out to people hoping they would just find us good deals. But what is a good deal? We discussed on the last episode that a great deal in South Windsor for an awesome duplex that's way higher than some of the other prices for other areas that might be a great deal to someone.
Is it you? And what you and I found was that at the time it was sort of like we didn't have enough clarity around what it is that we were looking for, and therefore the realtors that we had reached out to weren't able to help us find what we were looking for.
Now, I'm going to put that on the realtor. Because Matt, I know that if you were on the other end, you wouldn't have just said, "Hey, I'll just set you up with some property listings and that's it." You would've dug with us and you would've been asking us questions about what is it that you're after? Are you mostly after cash flow? Are you mostly after keeping your leverage down, so you want to be in a safe neighborhood and hassle down? All of those things are so important, but you need to make sure that you find the realtor that's going to help you figure out what you really want. And I'm going to argue that you might think you have clarity as a buyer, but especially if you're new in this journey, you probably don't have as much clarity as you could or should, and a great realtor is going to help bring that out in you.

Matt Biggley: I think Kyle, all the more so for people who are maybe new or novices to investing, we encounter this as teachers all the time, students don't know what they don't know. So a good realtor can help you. You may never even appreciate this, but it's going to help you avoid some of the potholes, some of the failures that even we as investors ourselves experienced. And you may never know that because they've helped you avoid them. So as a novice or new investor, all the more reason to make sure you're connecting with a great realtor, not just an okay realtor, because it doesn't end with buying the property.
You might need help finding property management. You might need help finding contractors. And so a good realtor is also going to be a connector. They're going to be able to connect you to all kinds of different people that we're going to talk about today. We're going to talk about lawyers and accountants and trades and all those things. And a good realtor already has a network that they've worked with that they trust and that value in being able to access their relationships and their recommendations is immeasurable.

Jon Orr: Awesome, awesome there, Matt. You mentioned about choosing the good realtor. You gave us some great questions to ask a realtor, like how many deals have you owned? How many investment properties have you owned? Are there other questions we should be asking? I'm thinking, is there a question as a realtor, Matt, if this client asked you this question, you're like, "This person's an investor. They know what they're talking about." If I wanted to come to you, what kind of question is a great one that you should get asked to make you go, "I want to partner with that person because hey, they got the right head on their shoulders. I think they know what they want and they've come to me to see if I should represent them or I can partner or help them find that right deal." What might be that one question?

Matt Biggley: I think for me it's about meeting people where they are on that spectrum of learning. So a lot of times my first step when I begin working with clients of course, is to have an in-depth and lengthy conversation to understand their goals, their motivation, their experience levels. And at that point, I want to help give them some great resources for educating themselves, because as we've talked about in so many episodes, your investing journey could look so different. So it's about differentiating that for people. So my first step is to understand the client and understand what their goals are, their wants are.
Second step is to help fill in some of those education gaps. Now listen, some people want to just jump out and go see properties. We talked about that before, and that's fine too. I'm always happy to go on property tours. But I really want people to have a strong foundation because once they start making decisions, the magnitude of decisions they're making are hundreds and hundreds of thousands or potentially seven figure decisions. So I want to make sure they have those strong foundations. So I think for me, it's about a series of questions and about understanding. It's just like we do in our classrooms, just understanding where that person is in their journey and how to help move them forward.

Jon Orr: Got it.

Matt Biggley: Guys, that's part of the reason we started this podcast. It was so we could help educate others on the things we have learned and experienced in our investment journey.

Jon Orr: And just think, if you find that realtor and you trust that realtor and they've come to understand what you're looking for, you understand how they operate, think about that as part of your team member. We're trying to build a team here that you can consistently go back to. If you find a realtor and that realtor, you help work with them on a particular deal, but then you're just like, "Ah, maybe that wasn't the right one," hey, don't worry. Go find another one that is the right one. And when you find the right one, the one that you feel like you jive with the most, then that person could be part of your team where you can keep going back to them.
And because I think knowing and that know, like and trust factor with a person to go back to them repeatedly can save you a lot of hassle and it overcomes that hurdle of finding that right property. So slot them in as a team member, even though all of our team members here are going to be, you're not personally paying them out of your own pocket, but they're your trusted team member that you can go back to.
All right, so it was great for us to start with a realtor because I think that's a great starting point when you're thinking about starting the process. We're going to go look for some properties. But another one that we talked about back in episode nine as a team member, we talked, a hurdle, back in episode nine was about finding financing and kind of overcoming that. So a team member that could be great once we've kind of thought about your financing is the lender.
I think if you're a new investor, your experience is I'm going to head to the bank or my credit union, wherever I do banking, and I'm going to ask them for pre-approval on financing or I'm asking for a mortgage on a new property. I think that's the extent of probably a new investor experience. I know it was for me. But then you guys also introduced me that, hey, you can find a mortgage broker that they're going to go out and search for the best mortgage for you. What are some of the options here do we have four finding a lender who can be a consistent member of a team moving forward if we're going to build a portfolio?

Kyle Pearce: I love it. I love it. First thing you want to do is really start thinking to yourself, "Hey, if I'm on my first property," and if it is your first property, you probably are thinking I'm going to buy this thing personally under your personal name. We aren't going to get into the corporation stuff here in terms of when is time. But if you're scaling up, then a corporation makes sense, right? And I'm not going to tell you a number here, but if you are scaling up, if that's your intent, then starting from day one with a corporation makes sense, but it limits some of your lending options. So that's something to think about when you join or start this journey.
I think going to who you have a relationship with first is probably a great option. That might be the big bank, or maybe you've used a mortgage broker in the past. But ultimately, you want to figure out who knows you the best and who can help you decide on what might be a great move forward.
Now, if it's your first, we're going to recommend that you do kind of spread your wings a little bit. Don't just go with that first thought because sometimes you just think this is the way it works. Who knows? Maybe you're not getting the best service with your big bank. For me, I'm a big advocate for mortgage brokers, but also look at your credit unions, right? Credit unions are super flexible. They're super local and community focused, so oftentimes they have some things that they can do as well. And what you're going to find on your team as you grow this team is that you might do a deal or two or maybe a handful of deals with one particular person or organization. For us, for example, there was a particular credit union here that we did a lot of business with, but then also over time, we realize that sometimes they can't help you in certain situations.
So you don't want to just sort of keep your head down until you run into a problem. You want to have options there. And for me, my buddy, good friend, and I'll call him a colleague because we both were doing mortgages together, Hussein Saad at the mortgage center here in Windsor. He has helped me in so many ways and he's a great guy because in certain scenarios I'll just call him up, I explain the scenario and he goes, "Listen, I got the guy for you." And then he just passes you along. You don't feel like you're trapped with him. Whereas if I do go to the big bank, all they can offer you is what the big bank can offer. Oftentimes, they don't even have a recommendation. It's not that they don't want to give you a recommendation, they just might not be aware of what's actually out there.
So I would say finding a mortgage broker... One thing I would say is what you don't want to get into is just going around and trying to rate shop and just constantly cutting people. If you're just constantly undercutting people, you have to think about that when you come back and you have an issue where you're going, "Listen, I've got a really hard deal. Can you help me?" I don't know about you, but if every time you've sat in front of me you've gotten a rate and then you ran off and you took my rate and tried to get somebody else to beat it, I'm going to be maybe less motivated to really try to push for you. So build those relationships and try to figure out, hey, at this moment in time, this particular deal might be best suited for this particular person or organization.
Or, maybe over here is where I might go with this particular person or organization. So the one thing you'll find is that they're not going to hold it against you as long as you're not doing something like going in there trying to convince them that you're going to go with them and then taking them and their information and trying to use it against them. That would be the only practice I would recommend you don't do. Try to find what makes the most sense, but then also remember that you're building a team and these people have to be in your corner when you're coming in so that, hey, I've got a quick close. Are you able to work late on a Friday night to help me get this thing done? Or, are you going to maybe put some other client ahead of me? So you want to keep these things in mind as you go. A rate is a rate and that's great, but you don't want to necessarily make your decisions purely based on the lowest rate.

Matt Biggley: Kyle, you have such a cool perspective on this given that you had your mortgage license at one point in time. So I love that you kind of got this insider's take on what lending looks like. My question to you is that as potential investors, or learning to novice investors, what kind of a package of information can people prepare so that when they go to a lender, they can get kind of a quick look? Yes, you're a good candidate for lending. No, you're not. What kind of things should we be preparing? And if we can prep this once, then maybe that helps us establish these relationships in with a quick getting to know, without having to say, pull a hard credit check or something like that. Can you walk us through that?

Kyle Pearce: I love that. I love that. If you're a salaried employee, I'm going to guess... Remember, our avatar of listeners for this podcast are those people that have that weekly, biweekly or whatever salary coming in. So you probably have T-4 if you're here in Canada. In the US you probably have again, that actual... Oh shoot, I can't remember the name of the slip. But you're actually getting a slip from your employer saying you earned this much a year. Having that information, either just knowing it or having a package that you can offer can be really helpful.
Now if you're self-employed, so Matt, you're now in this world and you've experienced it that when you do have that T-4 here in Canada or that, whatever the heck that slip is called in the US, where it's saying you have a salary, a massive advantage because lenders look at that as more guaranteed. They like consistency. Even though Matt might make more than a salaried employee, they are harder on Matt, and they're going to go, "Hey Matt, you're self-employed. I want to see the last two years of your income tax return.
So knowing that, if you are self-employed, you want to have that ready. You don't necessarily have to bring it just for that first conversation, but if you know your top line, what did you earn and what did you actually claim, what did you actually have to pay taxes on, that can be really helpful for them when they're trying to figure out what you qualify for. Now, on the other hand, you should also have a list of your current expenses. Do you have a mortgage already? Do you have a car payment? There's things that they just sort of keep standard, like heating. Heating's usually $85 a month. That may have gone up with inflation. I'd have to double check.
But ultimately at the end of the day, they want to know what is routinely coming out of your account every single month. The one thing they're not going to ask you about is how many times you go out a week to dinner, or do you like to gamble, or any of those things. That's on you. But what they do want to see is they're like, "Listen, if we know..." Remember consistency, they know consistently this money's coming in and this money's going out, they really want to see and make sure that, hey, if we were to add another mortgage or another payment to your monthly load, your debt load, are you able to cover it?
Now the magic number for that debt load is about 34 to 37 at some cases percent. But again, I would say you want to try to stay lower than that. And keep in mind that different lenders use the rental income differently. So some lenders will say, listen, if you're expecting a thousand dollars of income from this rental property," they might say, we're only going to allow 500 of that to add to the regular income of your particular personal income.
Now, if you're on the corporate side, the corporate side's a little bit different because corporations are businesses, and what they want to see typically is that you have at least 20 or 25% additional revenue in order to cover those debts. So that 1.2 ratio, they often call it, or a 1.25 depending, they want to make sure that you have more money coming in to pay the debt. Now, they typically will use all of the rent, however, they will have some standard deductions off of that like vacancy repairs and maintenance and so on and so forth. So bringing as much information about you if it's on the personal side or your corporation is really important for them to be able to guide you and to know exactly what is possible and whether they're even a good candidate or whether maybe you want to move on to somebody else.

Jon Orr: Matt, do you recommend having this in digital format or you're bringing a portfolio actually like a folder with all the supporting documents to prove this net worth for yourself or for your corporation like Kyle had said? Or is it like, hey, I can arrange all this for you, but having it up front is probably the most useful thing, walking in saying, "Hey, look, I've got all this. I'm ready to go and here's what I have. Are we the right partner and then we can move on to find a new person?" So I would say organizing it in a nice kind of package isn't appropriate here?

Matt Biggley: Yeah, absolutely. I mean, let's keep it simple and organized. I think create a Google Drive folder, put it in there. You can update it that way. And it's easily shareable. I mean, listen, the myths I think a lot of people have that I work with is I've been dealing with the same bank since I was a kid. I'm going to go in there and get it loan for my first investment property only to be summarily shot down. This is nothing against, say, the big six banks here in Canada because within each bank it's really about the individual that you're dealing with. I had a great RBC mortgage person that a client just dealt with and works and miracles, a TD one before that. We personally have used credit unions a lot because we've been able to develop some really great relationships. Someone once told me that people move paper, paper doesn't move itself.
And for me at the lending, this means that even though they've got their numbers in front of them, they can build a case for you around what that looks like. So I love having this information in digital format, but as Kyle has spoken to so much, that relationship part means the world because that might help you squeak through, get over a line or get some, I'm not going to say preferential treatment, but have some context to that. So being able to almost have the numbers but also a little summary of who you are, what you're all about, so that you appear professional, knowledgeable, heck, you could even include your power team as part of your conversations with lenders.
I'm working with Matt Biggley, an experienced investment focused realtor. I've got my lawyer on retainer ready to go. I've got my property management queued up. This is going to help you come across. It's almost like having a business plan in a sense, much more informal than that, but I think that's going to present the best front to any potential lenders and allow you to vet all of them quickly at the outset as you decide which one you're going to work with.

Kyle Pearce: And you know what, Matt, just to hop in there and just sort of articulate as well, again, it comes back to the people you're working with, I love that. Because you might be at a big bank and you might have somebody who is looking at your numbers and the number comes out bad and they're like, "Sorry, we can't help you." But somebody else might go a step further and go, "You know what? I see that you have this line of credit here and you have this car payment. This car payment is five or $800 a month and it only has five grand left on it. You've got this line of credit over here. If we take that line of credit, we pay off your car loan, that payment goes away and now you have an interest only payment on this line of credit over here, which is going to bring that payment all the way down to whatever the number is, a couple hundred dollars instead of $700."
And all of a sudden, numbers worked. So again, coming down to the people you're working with can really help you. Again, you said it, drag you across that finish line to just look at the numbers a little bit differently. Again, something I will advocate is that most mortgage brokers, I say most, because in every industry there's people that don't do a great job at certain things, but great mortgage brokers know those things and it's like almost like a go-to playbook that they go, "Oh, this is easy. I'm looking at your file, done this a billion times before and we're going to go boom, boom, boom, boom." And at the end of the day, they're doing it not to trick anybody, they're doing it to make sure that you fit across that line, that the bar is there for you so that you can do what you need to do. And again, build your portfolio.

Jon Orr: Guys, one more thing. I know that when I deal with the big banks, every time I go into a big bank to meet with someone, it's always someone different. So if I'm building my team, this is what we want to do. We want to build a team that of reliable folks we can go back to so it's quick, easy. You've mentioned mortgage broker, other types of lenders here. Do you have a recommendation? Should we go back and try to recreate a relationship with a brand new person every time? Or should we try to find someone who's a little bit more stable?

Kyle Pearce: Well, it's interesting because I think if you're noticing that, I see that a lot at the big banks sometimes, especially if you have somebody new to a position. If they're really good, what you might see happening is if you're like, "Wow, this is exactly who I want," what you may find is that they're not there for long because then they get plucked and they go somewhere else.

Jon Orr: They go somewhere else.

Kyle Pearce: We talk about this in education a lot, right? Great teacher, amazing teacher. And then next thing you know, they're off to a different position to do something else because hey, they're perfect for that job too. So they get pulled away. So that's something to keep in mind. Then also I think something on the other hand is if you're finding that once again, I don't think you want to be settling in, even if you do like that person, that might be the person that maybe you start with. But like I had already mentioned with lending in particular, is you want to reach out to people and you want to frame the deal for different people, even if it's an outside chance for that person and what they'll do instead, as long as you're open and honest.
So we do this, Matt and I have been doing this for years, where we have relationships in a few different spots and we're not doing it to try to get them competing. We're anti-compete. It's like, are you a good fit for this deal? And we do the same thing as we get into insurance, we have a little story about insurance that we just did recently. But with lending, you want to tell them, "Hey, here's the overall of this particular deal. We're not sure if this would be the best fit for you guys, but I wanted to toss it your way and see if you can get creative on it."
It's like what you're trying to do is you're trying to get people to go, "Hey, here's an opportunity and if you can get creative, let's go for it." And of course at the same time, they're going to try to give you a good rate or good terms alongside. But again, don't just get comfortable just because you like the person at the bank or just because you even like the mortgage broker, you do need to make sure that you're kind of out there so that you understand who's out there and who's going to take care of you in that future deal. Because let's be honest, even if it's the mortgage broker you love, what if they retire? What if they move away? What if they just decide to leave the industry and now you've sort of put all your eggs in that one basket. Now you're kind of feeling like you're starting from scratch.
So really keeping the relationships open, sending it, being open and honest with people that, hey, this isn't like a lock for you. I just want to send it your way and see what thoughts you have. And we are the type of people that oftentimes when people come back and you can tell they put time and effort into it, we're more likely to go with them just because we feel like they've stuck their neck out for you a little bit. So you want to be reciprocal to that work and that effort that they've done.

Matt Biggley: And Kyle, I love the points you made, and this makes me actually think of a quick anecdote to share with us. We had used the same lender for the majority of our properties and we had a really frustrating experience when we went to purchase a property and we found out that new clients to that lender would get better treatment than we got as repeat clients. My goodness, were we ever frustrated.
So the point I want to make is even with a good relationship, it ultimately comes down to business. So you want to keep these people sharp. When we found out that we were going to get better treatment by being new clients at another lender, we couldn't make a business case for ourselves. We went back to that lender and said, "This is what we're getting elsewhere. We've got this great track record card and a great relationship with you. This is what the offer is elsewhere," and they couldn't match it. That to me was frustrating and aggravating, and I know it was a point for you and I that we continue to be frustrated about and make tonight original lender. What business sense does that make? We're going to treat our existing customers more poorly than we are our new clients. That's a business model that is completely screwed up if you ask me.

Jon Orr: Sounds like when you call your cable provider or your cell phone provider.

Kyle Pearce: I was just thinking that.

Jon Orr: It's always a better deal when you join, and then they argue that, well, you did get the better deal when you joined. Now you're with us. So now you get the crappier deal. But good point there, Matt, to watch out for it because it is business. It is not about friends. We do want to make those relationships, but it does come down to dollars in the end if we're here for investment purposes.
Gentlemen, let's move on here. Let's talk about another team member that we recommend as a consistent member of your team, which is your lawyer. You're going to need your lawyer to help close this deal. And I guess when you think about as a new investor and being this hurdle, here's my wonder is I used a lawyer to close the deal from my personal home, your home that you have now, is that the same lawyer that I should use to buy an investment property with? Should I use the same one? Is it not? Is it the same idea as a realtor? Should I be grilling them about what they can offer me? Is there certain questions we should be wondering about, guys?

Matt Biggley: Yeah, Jon, great questions to ask and I think the answer is perhaps, maybe. With lawyers, and I get to deal with a lot of great ones as a realtor and refer and recommend a lot of great ones as well. In fact, we're going to have one of my favorite, Sebastian inaudible on a future episode to talk to us from a lawyer's perspective about real estate investing. So I think lots of value to come there, but I certainly get to deal with a lot of great ones.
And in this case, it's not only about having someone who can complete the deal because, while I'm not a lawyer, I think real estate law is fairly straightforward when things go well. But certainly in the market of the past 12 months, we have had the need for real estate lawyers who are perhaps more knowledgeable, have more expertise and can help troubleshoot and problem solve.
It's very common in a real estate transaction for minor issues to come up. And part of my job as a realtor is to work with my clients' lawyers to navigate those issues and those challenges and lawyers are so different, just lenders and just realtors in terms of being on that spectrum of are they problem solvers or are they problem creators? So we want a lawyer who is going to be adept and able to be able to help problem solve.
I love lawyers who get back to me any time of day. I've got a couple on speed dial. I literally have called Sebastian on a Saturday night to ask him a pressing question because of course I was in the middle of a deal negotiation. There is so much that can go wrong with a real estate transaction and if you've ever actually read through the fine print on a deal paperwork, it's absolutely frightening. So you want someone who can interpret that very complex legal language into understandable terminology and who can help protect you. It's all about protecting you and looking out for your best interest. Your realtor is there to do that, but in cohort with handing it off to the lawyer so that transaction closes successfully.

Kyle Pearce: I love it. I love it. And just to that point, I don't want to riff on it too long. I took John your idea of like, Hey, who did I close for my personal residence? I just went to the local person in town. It was like, who has a sign that says lawyer on it? And that's who I went to. And then we began using that particular lawyer. It's all fine when things are fine, just like Matt's saying. But then later on if you find that maybe things weren't filed completely, or just because it's said it's done, doesn't necessarily mean it's done well. So definitely I would say doing a little bit of shopping on that, we have the unfair advantage of working with Matt. So Matt knows because his clients decide on who they go to and only recommends when they're asking of him for recommendations.
So he gets to sort of see where things were clean, where things were hard, where the communication was great, where it wasn't. And for Matt and I, we've done a lot of deals and in more recent years, we've actually tried a couple different lawyers with the intent of essentially just experimenting. So, oh, this one's a little bit more, but let's see. This one's a little bit less. Let's see, this one has a different structure. Let's see how that goes. And you really trying to figure out who works well with you because your personality once again, is going to factor in. So if you find that the personality, there's a clash there, then it might not matter how awesome they are as a lawyer, if you're not really seeing eye to eye, that might not make sense. So for us, yeah, we've found a lawyer now that we feel really confident with.
The same is true. I think we can almost blitz right through the next couple here when we talk about accounting. Accounting's a little harder because you can't just sort of go, let's try this accountant, let's try that accountant. There's a lot of work to be done. So I would argue that with an accountant or bookkeeping, or both, that you want to have conversations with that person. You want to see do they think the way you do. Are they able to make sense? And I feel like we're lucky to have found a great accountant locally who sort of speaks on my level.
I know sometimes Matt is not always like, yeah, he doesn't sort of align as well, but I handle most of that accounting piece. So I do a lot of the work work through that particular individual as well. So with a lawyer, you can do some experimenting. With lenders, you can do some experimenting. But with accounting you sort of have to do a little bit of legwork, which might mean going and interviewing a few different accountants or a few different offices that handle all of the accounting services.

Jon Orr: Yeah, I think for an accountant specifically, I think that what you're going to want to do is research a bit. Your accountant is supposed to be saving and finding ways for you to save in tax. So sometimes I think as a new investor you might think, I don't need an accountant to do that. I might be able to just do the books on my own if I have one property. As soon as you start to add more than one property, you might find yourself going, hey, are there ways for me to save and tax? I don't know those things, right? And a bookkeeper is also probably not going to be actively searching that out for you and finding those ways to maximize your money. And an accountant can do that.
And I think what you are going to want to do is find an accountant who is also an investor. I think that can also go a long way. You might not find one like that, but I think their job is to help you save in tax and thinking about structuring your business in a way so that it can do that, but finding one that is in the same field as you can help and go a long way.

Matt Biggley: I think Jon, my experience with accountants is to me, accounting... And you guys are the numbers guys, so you love this stuff, but accounting is incredibly intimidating. We're dealing with the CRA here, and I think that's an intimidating prospect as well. And as I've become a full-time realtor and incorporated as a realtor, I've had different accounting needs. And so I've shifted my accounting relationship to someone that I feel like can speak my language, and my languages in layman's terms, I've needed someone who can break it down for me, because again, got numbers aren't necessarily my thing. But I think the other thing you want to make sure is this accountant can keep it simple. So I previously was using a separate bookkeeper that I manually had to sort every single one of my receipts into these plastic sleeves, hand off a binder, get questions back.
I've moved to an accountant that is fully digital and online. I have saved myself hours and hours and hours of monthly bookkeeping. So I love also that relationship with this accountant because he's so innovative. Again, just like the lawyer, if I have a question, I shoot a text or an email and I get a quick response. Because to me, legal questions and accounting questions can be incredibly complex and very intimidating. And when you have an expert that can give you answers, whoof, that is so worthwhile to me to be able to know with certainty that I'm getting expert advice in both these categories.

Kyle Pearce: Love it. I love it. Yeah, couldn't agree more. So making sure that it makes sense for you. And we also, Jon and I, with our math business as well, we've gone to completely online bookkeeping, which has really, really helped us along as well. And we do the same for North Shore as well for our holding corp between Matt and I. So lots of things going on there. And when you're thinking about your first property, that might not seem like that big of a deal. If you're like me, I'm the type of person, I like to kind of do a little bit of that work to try to get a sense of what it really is. It's almost like I want to prove to myself that I hate my life when I do it and then I hand it over to somebody. But maybe you're different.
Maybe you're looking at it going like, listen, this is going to take a lot of work, or maybe this is the hurdle that's holding me back from actually getting into investing. It's scaring me. Get your team together then. Get them lined up so you can start from day one and trust their guidance, and you can ask them as many questions as you want, just like Matt had said.
We'll bring up one last part of our team, inspectors, contractors, all of those people are really important parts of your team. You're going to develop those over time. And I'm going to argue maybe on an as need basis, probably, right? You're not going to look for roofers when you don't have a leaking roof like Matt and I do at one of our buildings right now. So those are people that you're going to use over time. And again, you might want to maybe try a few people, make sure you get quotes from a few people, all of those pieces.
But that brings us to our last and maybe what we think is one of the most important is property management. If you don't want to, let's say, leave your full-time job anytime soon, property management is a great way so that you can get into this space of investing without really sacrificing your entire life. So everyone always talks about the middle of the night phone call, the toilet or the water backing up, or all of those things, property management's designed in order to deal with those pieces.
Now keep this in mind, for us for a long time, we wanted to know the process so we engaged in that process. But if it's holding you back and you're like, I can't do this because my schedule doesn't allow, then do the work now and start looking and go, hey, what property management companies are out there in my area?
Hopefully there are more than one. When you only have one, the problem with that is they could be good or they could be bad and you're sort of stuck. But when you have multiple, you can interview multiple. You can figure out who has the best system. And I'm going to argue that even with great systems in place, they may not align with the systems you want, which means you'll need to do a little bit of time or spend that time working with them to try to develop a system that's going to work for you and your family or partners if you're bringing partners into that particular deal.

Jon Orr: Question here guys, about property management. If I'm a new investor listening to the podcast, where does the property manager's role start? This can be helpful when choosing your property manager. What role do you guys still have in managing your properties versus what the property management does? Maybe just outline the two different kind of roles that are currently happening. Are you doing any managing of screening tenants and choosing that kind of stuff or do they handle all of that? And then where do you kind of come into a role to be a part of that process?

Matt Biggley: We started with fully managing, as Kyle said, fully managing all of our own properties. Actually, the one tip early on that I think saved us was not providing tenants with our personal phone numbers. So for investors out there who are thinking of managing themselves, we went and got, I think it was called grasshoppers. So it was a third party line. Tenants could call into that with their issues. Because listen, in the moments where tenants have gotten our personal phone numbers, it's been a disaster.
So that's a really key tip if you're managing yourself. It's well worth the 15 or 20 bucks a month for that. But we have now progressed to a point where we are totally hands off of being onsite at our properties. We no longer collect our own rent. We no longer place our own tenants. What we do do is we manage the property managers.
Listen, the first property management company I called, and we decided to try and interview property management companies, didn't even call me back. Needless to say, we didn't go with them. But that process of finding a property management company that met our style... You can see we're pretty organized. We're pretty hands on. We have some pretty strong ideas about how things should be done. So we ended up going with what we felt like was the best choice at the time. But even then, the relationship has really had to evolve and we certainly have to continue to check in with them to vet their systems. And I think their relationship is a good one. But just like with all these other relationships, just because we feel like we've had a good one doesn't mean that you don't stop holding them accountable for things.
So at this point in time, we are totally hands off. They answer all of the midnight calls. Now those are rare that come in. They deal with all the client facing stuff. If there's the maintenance request, it goes right to the property managers. If there's rent collection issues that goes there to fill out and complete the forms to follow up with those tenants. So we are really in a managing of the manager's role at this point in time. We have backed away entirely from...
And the nice part is I've gone to our properties and the tenants no longer know who I am, and it can be quite comical because the tenants always have some gripes. This isn't done, that isn't done. That's just part of I think the tenant landlord relationship. But having these property managers in place means we are anonymous to the tenants, which is I think most desirable. I mean, some owners really like being onsite and being hands-on. To me, this is about making it as passive as possible so, and especially as we scale this. So this has worked out really well for us. But as with all relationships, is a work in progress.

Kyle Pearce: Yeah, absolutely. And there's been times where when things aren't going exactly the way we would like them to go, because again, and this isn't on the property management company, it's just style or the way they see things happening, and that's for us to work with them on. Sometimes we thought it's like, ah, maybe we should just do this on our own. But then we start to think of all the work that goes into it and multiply that by all the doors. If it's only one door, if it's a duplex, you have two, you can manage that. And don't get me wrong, we don't throw hammers. Matt and I don't throw hammers. We had a third partner for the early years. He was very capable of throwing hammers, but we had made a commitment that he wouldn't throw hammers either not physically throwing the hammer like actually at someone, but actually doing the work.
We would still hire it out. So you just have to sort of decide again, where do you fit in that world? My uncle who's also into real estate investing as well, he takes pride in the fact that he does not pay a property management fee. He even sometimes takes me screenshots of how little it costs him to do something, but that's him. He wants to do it. And I'm like, I don't want to do that at all, even if it means I'm going to save X dollars on doing it. So it really just depends. But ultimately at the end of the day, you need to decide. And if this is a hurdle for you, then it's an easy fix for that hurdle.
So if it's not a hurdle, then maybe it's a non-issue for you right now. But figure out. I think one of the key takeaways here as we start wrapping up this episode for me is you need to identify where are the hurdles for you? Where is the hurdle, or is it multiple hurdles, and how are you going to approach those? And if you can deal with those and you can find, hey, if I got three hurdles here and one's property management or this idea of getting phone calls at night or placing tenants or those sorts of things, then you need to address that hurdle. And hopefully you've found from this episode some ideas on how you can overcome those hurdles so you can actually get to work and start doing this.

Jon Orr: And I think this is a big hurdle for most folks because when you have a conversation with people about real estate investing, that often is the first thing that they'll bring up that they don't want to get those calls. They don't want to have to run over there on Christmas day to fix something. That is probably the number one response we get when we talk with people about, would you go into this or not? And they're like, no, because of that. And it's usually about the property management side of things. And like what we said on our last episode in episode 11 where we talked about the technicals, we work in the price of the property management company right into the technicals so that when we do go to analyze the deal, we know that we built that right into our operating expenses so that we know that the money is going to work itself out, and it's part of that deal right up front.
So guys, lots of team members we've talked about here. Kyle mentioned there are some more that we didn't specifically get into but that you can bring on that are regular. We talked about inspectors and contractors and those types of things that were going to come up. But specifically I think what you're going to want to do is you want to look for a couple key layers here. One, Matt being outlining very detailed, some great questions on a realtor because that's going to help you find those deals and figure out if they're the right deal. We talked about a lender. How do we get the financing involved and what kind of relationship should we be building with our lenders? How do we kind of think about our lenders as that extension of our team? We talked specifically about the lawyer and how integral that piece is on your team because they're going to be protecting you.
We want to think about whether they're involved in real estate or not. We want to make sure that we are choosing a lawyer that is going to be the best for this business that you're creating. We talked about key ideas around accounting on tax savings, and we've been just finalizing our discussion here around property management as a key member of our team. So gentlemen, great takeaways here. I'm sure our listeners are starting to think about how they can start to structure these team members. And I know that the best part about grabbing your team or placing this team, and I know it will take time for that team to come together, but the team members themselves, I feel like are what removes so many of the hurdles when we're getting into real estate.

Matt Biggley: 100%. 100%. I think real estate investing is a team sport, and when you make that team, you want to have experienced all stars on your team. It's going to make your real estate investing journey so much smoother. You're going to avoid a lot of challenges and you're going to get yourself over some of the hurdles that prevent so many people from even starting.

Kyle Pearce: I think my big takeaway, as I mentioned, I think is really trying to identify which hurdles are you dealing with? If you haven't yet, if you're just like, ah, this is just too scary, that's too general. We've listed over these four episodes all kinds of potential hurdles. You need to notice them, you need to name them. Then that's when you can... It's like the 10 step program there, a 12 step program. You got to know that there's a problem, but then identify it and then work to overcome it.
Does that mean reaching out to someone? If you're concerned about, how am I going to find the property? Maybe that's the first hurdle you want to deal with. Reach out to realtors. Start talking with realtors who is in your world. Over the weekend, Jon and I were up skiing and I was inquiring about a rental property up there. I asked for the financials, and that realtor replied with a question, a one line question about, "Have you ever been up here before?," but didn't include the financials.
I'm like, that is not my kind of realtor. That person's off my list. Doesn't work for me. So figure it out. Figure out which hurdle you have and where you're going to go and how you're going to overcome it. And maybe that means even reaching out to us. We get all kinds of people coming and asking, "Hey guys, listen, I want to get in on a deal. I want to learn with you. Is there a way we can do that?" And actually the answer is yes. We've been compiling a list over. And this list has existed for well before the Canadian Wealth Secrets podcast was created, but we're extending this to others who might be interested in doing joint venture opportunities.
So if you're interested, we've got a short little form. You can go to investedteacher.com/jv, or investedteacher.com/partner, and you can insert or enter in a few details about yourself and essentially what you're looking to achieve. And we call it, what joint venture superpower do you bring? Are you someone who has capital, like access to capital or lending? Do you have access to something else? You get to articulate that. And then all we do is we just reach out to that list of people, especially for those who fit certain criteria.
When a deal lands in our lap and we're looking to partner with someone, we reach out to those specifically on that list that it makes sense for. If it doesn't make sense for you, we try to filter that out. Doesn't always happen, but we do our best. Try to target those who make sense for that particular opportunity. So head over to investedteacher.com/jv and you can enter your details there.

Matt Biggley: Thank you so much for joining us today for this episode. We would love you to leave a five star rating and review. We got some great ones this week from listeners, makes us feel good and helps others find this. Well please share it with your friends and family. Make sure to hit subscribe on all social media platforms. We are @InvestedTeacher on YouTube, Twitter, Instagram, Facebook and TikTok.

Jon Orr: And if you have ever visited our website, investedteacher.com, you'll get over there and you'll see that we have our blueprint, which is our five step process on how to get started with wealth building journey. So you can get head on over to investedteacher.com/blueprint and then rob our blueprint and download it. And you can start and get ready to start your wealth building journey. We also have our book list. All three of us are avid readers and I've learned so much of what we're sharing here through the books that we read. You could also go to investedteacher.com/books and start your book journey as well, because that will speed your process up on your investment dream.

Kyle Pearce: I love it. I love it. And of course, all links, resources, transcripts from this episode can be found over on the website at investedteacher.com/episode12. That's Canadian Wealth Secrets.com/episode12. All right, my invested students, class dismissed.

Matt Biggley: Reminder to our listeners that there is no investment advice contained in this podcast. It is for entertainment purposes only. The content is for informational purposes. You should not construe any such information or other material as legal, tax, investment, financial, or other advice.