Scott Dillingham: 0:22

Welcome back to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. We've got an awesome guest with us today. His name is Ming. He's the president of Volition Properties, he runs a team in Toronto, real estate agents that work specifically with investors, helping them to solve all their issues in Toronto as far as making sure that you can find cash flowing properties and, and you can still make lots of money in Toronto. So Ming is gonna touch on that. But before we dive into that, I would just love to hear your story on how you kind of got to where you are today.

Ming: 0:56

Yeah, I started when. My roommates were watching Oprah. This is a long time ago. I was 21 at the time. Just graduated, just starting my first job. I was working at Research in Motion, if you guys remember that company.

Scott Dillingham: 1:10

Yep. Yep.

Ming: 1:11

and yeah, so they were watching Oprah and Robert Kiyosaki was a speaker and he was talking about his then brand new book, rich Dad, poor Dad. And that, that's what got me started. I mean, it took me down this whole path of real estate and real estate investing. It's funny, my, my mom is a real estate agent. My dad's super handy, had a contract in business for a little while, but they never really leveraged that in terms of becoming real estate investors. They kind of understood flipping a little bit, but they never really made a proper business out of it. So it wasn't until you know, reading that book that I got started I did a lot of investing in, in Waterloo.'cause that's what I knew. I was a student there, well, I guess graduated at that point in time. Got up to like 21 doors and it was not the dream, right? Like I think we all get pulled into being taught or told maybe that real estate investing is this passive income. You know, dream sunshines and rainbows, right? But it, it is not at all. And I was spending like evenings and weekends and you know, dragging whoever was unfortunate enough to date me at the time up there to like paint rooms and fix doors. And it was just a nightmare. And about, oh, I guess it's almost 10 years ago now. I was like, I want out. Like I, I don't wanna do this anymore. This is, this isn't what I had signed up for. And, but, but before I did that I said, okay, somebody must have figured this out. And I just. Networked as much as I could. I, I looked up every single meetup I could find online and went on meetup.com. I like made the radius like a two hour drive radius from where I lived and just tried to go to every single meetup and meet as many people as I could. And actually that's how I ended up at Rain, which I know you're quite familiar with Scott and met a whole bunch of other investors and realized that. I was not doing this strategically. I was very simplistic. I was looking at just individual properties. If they cash load, great, I would buy it. And I wasn't trying to understand scale or operations or leveraging expertise that I had in both market as well as, you know, operational expertise in, in building a team. And that's when I met my now business partner as well, Matt. And we started consolidating our portfolio in Toronto because we came to this realization that we were getting better yields. One in Toronto, and two, it was a much more sustainable business. I wasn't running CLTB to fight with tenants. I wasn't you know. Fixing broken doors because, you know, they had a big party or something like that. Like, it was just a, a very different experience. Plus I was, I was making actually better money at the time too. So it became a bit of a no brainer, and we developed volition sort of as this company that follows that investment philosophy. Looking at blue chip investments you know, a plus plus neighborhoods a plus plus tenant profiles and trading returns for risk. Like we're not gonna return like Sarnia or some place, you know, in rural, in rural Ontario. A much more sustainable model, at least you know, for myself and for our clients. So, yeah, that's kinda the origin story as they, they kept, they call it,

Scott Dillingham: 4:44

I love it. I love it. It's saying, you know what, similar with me, I was living in Sarnia I didn't see

Ming: 4:50

did I just pull out Sarnia?

Scott Dillingham: 4:52

Yeah, I was I I didn't see him on tv, but I, I heard about the book. I bought it. I read it, and I was like. I need to do this. And I I really feel like it was the same as you. It was like, get as many doors as you can. And I got so many that it actually became a full-time jg, but I actually made, I was still making more.'cause it was, you know, doing mortgages, right? And, and with mortgages and, you know, with real estate, right? You can make some really big paychecks. So, it didn't make, like, I was like, what do I do? What do I pick here? And I just wanted it to be more passive. And it could have been if I had set it up properly. Right. But I didn't know what I didn't know at, at the time. And so now I, I know a lot more and it's obviously much more hands off now, but funny that I, the stories are, are so similar all from Robert Kiyosaki. That man changed so many people's lives. It's

Ming: 5:49

Yeah, I mean, I, I still recommend that book to people as a great shift in mindset, right? Like, if, if you're looking for a place to start and looking to get the right, you know, mindset in real estate investing, it's still a great place to start.

Scott Dillingham: 6:02

Yep, yep. And then he had a few other

Ming: 6:04

I.

Scott Dillingham: 6:04

I think one was called the Cashflow Quadrant. I don't know if you read that one with the

Ming: 6:09

Yep. Yep. I did.

Scott Dillingham: 6:10

employee

Ming: 6:11

Yeah,

Scott Dillingham: 6:12

Yeah.

Ming: 6:12

I, I was that guy going out to cashflow games, like they would set it up'cause it was a really expensive board game, right. So some people like set it up and get people to come over and play that. That was me. So

Scott Dillingham: 6:23

I

Ming: 6:23

was very into it at one point in time.

Scott Dillingham: 6:26

Yeah, I actually have six board games.'cause I think they stopped making them. I might be wrong, but there was like this

Ming: 6:32

Oh yeah.

Scott Dillingham: 6:34

'cause I think you're right, they were like a hundred to 150 bucks and I got them for like 20

Ming: 6:39

Yeah.

Scott Dillingham: 6:39

So I was like, awesome. So I

Ming: 6:41

Oh,

Scott Dillingham: 6:41

of

Ming: 6:41

deal.

Scott Dillingham: 6:42

I, yeah, yeah. But I have some, so you know what? Maybe next time when we're all in Toronto at an event, maybe we should bring it and

Ming: 6:49

Yeah. Well, we'll have a, we'll have a board game party'cause yeah, we're, we're cool like that.

Scott Dillingham: 6:54

It's a great game.

Ming: 6:56

Yeah.

Scott Dillingham: 6:56

no, that's awesome. So you've got a team now. You guys are rocking it in Toronto now. I I know lots of people right now, they're. have concerns, right? And, and, and not everywhere. So I don't wanna make this as a blanket statement, but some people are concerned, you know, with, with various markets. But I know you guys are rocking it in Toronto, so I'd love to hear like your strategies or maybe what you teach investors and, and how you can actually make money. Because Toronto is such an attractive market. Obviously it's, it's got a higher price, but. I've seen it appreciate over the years every single year that I've been in business doing mortgages, so 15 years now. Someone was always saying, oh, Toronto's gonna collapse. Toronto's gonna collapse. And I heard it all the time and it never did. Right. Obviously there's soft landings and corrections with different things going on, but it's never crashed. Right? And it's got so much awesome market fundamentals. I would just love to hear from you guys, like, what are you doing to make Toronto work?

Ming: 7:58

Yeah, I guess there's a couple of things. So the first thing is. You know, really being an expert in what you invest. And this is not just a Toronto thing. I believe this fundamentally as an any investment thing. I. My mom called me up one day and she's like, oh son, I am, I'm buying semiconductors today. And I was like, mom, what's a semiconductor? And she's like, I don't know. And I was like, what business do you have investing in a semiconductor company when you don't even know what they make? And it, you know, it leads me to like. There's no, you know, I, I, I, I believe you can make money in almost any market out there, but it really comes down to fundamental understanding about it. Right? Like, I, I like to joke, if you don't know the difference between Hyde Park and Victoria Park and Moss Park, and you just think they're parks, don't invest in Toronto either because you don't have the expertise to make money there. Like, you really need to know things at a street by street level or have a team to supplement that knowledge, like that's very important. One, invest in what, you know, I think is more important than cha chasing a sh a shiny object. And I'm born and raised Toronto, right? So like I know the city very well and I know, you know, garden suites just changed again. So they're adding angular planes back in. Like you really have to understand to that detail because that's the difference between having a nice second floor and now just having a little loft upstairs and that would impact your investment. So. Truly being an expert in your market. That's number one. And then two, taking a risk-based approach to things. So, you know, after my stint at rim, I started making my way into the world of finance. And the biggest difference I found in finance was. They won't make a single move unless there is a litany of risk management behind it, right? Risk frameworks and, and SWOT analysis and all this kind of stuff that's done. But here in real estate, I don't know what it is. We just take this very simplified approach. Oh, a cash flow is great. Buy like, nobody else would do that for any other investment. I don't know why we do it in real estate. So we come up, we have this ma framework that we use called time. It stands for tenant investor, market and estate. And basically we evaluate our areas, our properties, our tenant profiles against that framework to reduce risk. Like that's very much what we're about. So, you know, a lot of the concerns that I know people have with high prices or tenant profiles or whatever, they're, they're valid concerns, but we have. A risk mitigation strategy around it. We don't. Buy a property that cash flows on paper and then try to fill it with a good tenant. We look where are the best tenant profiles living in the city, and then we buy a property there. Right. We, it's, it's a, it's a very different mindset. Always with risk first. Always with,

Scott Dillingham: 10:53

Yeah.

Ming: 10:53

You know, like, and, and that was me like. It just, you know, 20 years ago I was buying, just, I remember I was sitting in this place called Mel's Diner. I don't know if it still exists, like literally writing on a napkin with my parents. Like, oh look, this looks like it works out. And that was it. That was my due diligence, like, like five lines of math really. And that's, that's can't be, can't fly. So, you know, applying those two things, I think. It is really big to making Toronto work one, but two, using business I guess three, using business models that actually work, right? Like you can't take a business model which you would apply in Sarnia and expect that to work in Toronto. Toronto's a more sophisticated market and you need to have more sophisticated business models that work within that market.

Scott Dillingham: 11:39

Yeah, yeah. No, I have a question. So I actually think that's a really great. Breakthrough that you said, and I'm gonna highlight it for, for those listening in case they didn't catch it. But the fact that you buy where your tenants are, I think that it's so crazy'cause most people just buy and then cross their fingers and hope to get someone good. So with your strategy, right, you're going to. You know, nothing's perfect, but for the most part, you're gonna avoid, you know, issues with tenants. You're gonna be going after people with money, right?'cause you're specifically targeting them. so I love that. So

Ming: 12:14

Yep.

Scott Dillingham: 12:15

how does one get to that point? Now, obviously you don't tell us your deepest secrets for Toronto, right? We don't want to share that that's what makes you you, but like, how does somebody start to, to find their ideal tenant like that?

Ming: 12:29

Yeah, so I mean, first understand who your ideal tenant is. For us, our ideal tenant is 25 to 35 young professional, graduated from university, earning anywhere between like 65 to 85,000 a year. If they were in more awesome. They don't own a car, they commute into work. So their TTC or Uber reliance, like we know a lot about our tenant profiles and. Be, we know where those people like to live, so it's, you know, some of the neighborhoods in, in and around the city, little Italy, little Portugal, east York, stuff like that. These, a lot of folks are like, oh, why don't they live in condos? They do like about 60% of them, 70% of them live in condos, but there's a good. 30%, 40% who don't want to live in another box in the sky. And that number has been growing since COVI because many people are working from home. Many people are hybrid right now. And you know, living in 300, 400 square feet live work. Is very tough when people, especially on their, their mental health. So they're looking for outdoor space, a balcony which they can use an extra bedroom which they can turn into an office. And that's, you know, in, in condo land that's hard to find. And that's where our product has a niche.

Scott Dillingham: 13:45

I love it. I love it. So for you guys. your, your realtors, but are your services? Like, what do you do beyond helping someone buy and sell?

Ming: 13:58

Yeah, absolutely. You know, one of the things that we, we really pride ourselves on is if somebody comes to us and says, Hey, I wanna buy an investment property. I think 90% of the people out there will be like, oh, go buy a condo. And maybe that's the right answer, but I. For the most part, it's not right. So we really layer on financial planning along with what your goals are. So like the first question is like, why are you even looking at real estate to invest? What are you trying to accomplish outta that? And develop a whole plan behind a client to say, okay, maybe we start you in a duplex because you need a place to live. And we can make, you know, right now actually, with some of the changes in CMHC rules, you can buy a duplex. And for, and have the same carrying costs as a condo, right? If you rent out one of the units live in the basement, rent out the upstairs, not without sacrifice on a cashflow month to month basis. You're actually ahead buying a duplex and you are buying a condo. You, your, your outlay is less every month. So that may be the answer for somebody, right? Getting'em into the duplex first. So taking it just beyond a place to live, but taking their place to live and turning into investment. Or maybe it's a turnkey triplex, right? There are absolutely triplexes out there, which right now, which are cashflow positive, people just assume'cause it's expensive that. You know, it doesn't work, but you know, nobody looks at at a stock and says the same thing, right? Nobody's like, oh, it's an expensive stock, therefore it doesn't work. And matter of fact, when it's cheaper, you're like, oh, it's a cheaper stock. There's risk. That's the same in real estate as well, right? Market prices are high because they're reflective of the risk in markets, so, you know. There are though turnkey triplexes, you can just buy them, rent them out in cash flow. So it really depends where somebody's coming from. I mean, we go all the way up to development. If somebody wants to do four plus one development, we guide our, our clients through that process. You know, I guess almost maybe four plus two coming soon. So,

Scott Dillingham: 16:00

Hopefully.

Ming: 16:02

so yes. You know, like there, there is there's absolutely, you know, we, we do the gamut, you know.

Scott Dillingham: 16:08

Yeah, no, I, I just wanna add on this,'cause I think when people here of Toronto, and you mentioned it, right, they think it's expensive and especially if you're someone that works a nine to five. Right. You might be thinking, how can I even afford to own something in Toronto? So I just wanna outline, I mean, there's, there's two ways that we can improve a customer. One is based on their income, where we're looking at all the income and then we're looking at the properties income, and then we factor in all the expenses. And if the debt ratios work, you're good. Okay. But the other way, and this will be a amazing, for those investors that don't have the income. Is we do the property approach, so it's more of a commercial style where we analyze how strong the property is, and if it covers itself, then you can get a maximum leverage loan regardless of your income level. So I just wanted to call that out here, because it doesn't mean you have to live in Toronto and you have to have a job, you know, from someone who's headquartered in Toronto. You can make a quarter of somebody, area compared to a Toronto investor. So you make 25% of their income and you can still qualify there using the right tools, right. Lenders. Right, right. Resources. So I just wanted to outline that for anybody who's listening who might be thinking, oh, it's, you know, it's great that it still works, but I don't have the income to qualify. Well, we don't, we don't necessarily need that. So I just wanted to, to add that. but no, I, I love that you've, you've shared that, especially the condos too. I do see a lot of investors, and I'm sure you do too, that they like the idea of the condo, right? They think of it as like, well, there's little maintenance. It's new, right? So it's, it's gonna rent for top dollar, but I'm sure you've seen it. I've seen it a lot, right? Where new investors, they get these, these properties, and then two or three years later, once the property starts to need renovations or repairs, right? Those condo fees go sky high. At that point, they're like, oh my God, what worked in the beginning is no longer working now. that's the only variable with condos that you can't control, right, is the maintenance fee. And so you just gotta watch that. But no, I

Ming: 18:14

Yeah, absolutely. I mean we've, we've been pretty anticon for a long time. We've got a long history of every meetup that we've had recorded and put on YouTube, and you can go back and see like for at least six, seven years we've been saying don't buy condos. There was one condo project which made sense, but that was only because we were able to get it at this extraordinary price.'cause we knew the developers. But other than that. We have told people to stay far away from them'cause they just don't cash flow. And as a bank, why would you lend more and more money to a business where the bigger it got, the more money it lost. Right. It just doesn't make sense. So,

Scott Dillingham: 18:51

Yeah.

Ming: 18:51

yeah.

Scott Dillingham: 18:52

I agree. And then you throw in things like rent control, right? Like what if you bought an existing unit and

Ming: 18:58

Yeah.

Scott Dillingham: 18:58

raise the rent but the condo fee has to go up because they need a new roof, or do you know what I mean? Like you just,

Ming: 19:03

Yep.

Scott Dillingham: 19:03

if rent control wasn't there right then it makes a little more sense. But it is what it is. So. Awesome. Well,

Ming: 19:11

Yep.

Scott Dillingham: 19:11

appreciate you. We gotta wrap up'cause we try to keep these short, but,

Ming: 19:15

hmm.

Scott Dillingham: 19:16

For somebody who's listening, how do they reach out to you to get going to, to purchase properties or sell properties in Toronto?

Ming: 19:25

Yeah. You know Mo most of our business is actually regular real estate. They, they want somebody with an investor perspective doing that. So we're, we're always happy to work with non investor clients as well.

Scott Dillingham: 19:36

Okay.

Ming: 19:37

if you are interested in working with us we've got a website. Volition prop.com. We're on Instagram and YouTube under volition properties, and you can always email us info@volitionprop.com.

Scott Dillingham: 19:52

Awesome. Thanks so much for coming. I really appreciate it.

Ming: 19:55

Awesome. Thanks so much, Scott. I.