Welcome back to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. Today, I have an awesome guest with us, Carlos Rodriguez. Welcome, Carlos.
Carlos Rodrigues:Thank you very much. It was a
Scott Dillingham:nice intro. You're welcome. You're welcome. So, Carlos, I've actually known him for a long time. Started out as a Canadian investor, and then he sort of transitioned his whole portfolio and business to The States and has built something that I think is quite groundbreaking for Canadians that are maybe a little scared to take that next step to get their investing started in The States.
Scott Dillingham:So Carlos, I'd love to hear about your story and then what you're doing to help Canadians and even Americans, right, to grow their real estate portfolios.
Carlos Rodrigues:No worries. So like you said, I got to a point where financing here was next to impossible if I wanted to build a portfolio. And it was actually when I I think you were probably the the catalyst to all this. Okay? We were trying to refinance my my house at the time to get a better deal.
Carlos Rodrigues:And it was the year that I had done probably the best I've ever done, you know, as far as income was concerned. When you came back and you told me that you couldn't get me mortgage through, you know, a b lender or through the the banks or whatever, and the only the only mortgage that I could qualify for was a a reverse mortgage, Like, what? You know? And it I that was the straw that broke the camel's back. I had had an you know, with the struggles constantly with that an investor goes through trying to get financing to get the next project to hold, you know, a project long term, you know, whether it would be a burr or something along those lines.
Carlos Rodrigues:You know, I so I'd I'd had enough and I decided to start looking elsewhere, and I ended up discovering, you know, the know what? Let's see what The United States has to offer. I mean, it's just across the border. You know? Let's see what it would take to invest down there.
Carlos Rodrigues:And anyway, so I started looking down there and I found the Midwest, which is, you know, Ohio and a couple of those other states there, Michigan and and so on. And I started looking at the price point that they had down there and it was just because it was so inexpensive. You know, at the time when I started, probably what, five years ago now, the price points down there and, I mean, still some of the cities down there are still the same, but Cleveland, where I'm I'm focused, has has bumped up in price in value anyways in the last little while. But so anyways, I found the Midwest, I ended up going to Cleveland, checking that out, and was amazed that, you know, half of their population rents. And I mean, it's a population, the Greater Cleveland area anyways, is a population of about, just shy of 3,000,000.
Carlos Rodrigues:And so with 50% of that population renting, you know, most of what they had already in properties, you know, the type of properties were already purpose built rentals, duplexes, triplexes, quads. Even when you get into the commercial side, I mean, the the price point was inexpensive. It was old and and, you know, most of the stuff that we end up purchasing, end up renovating, but, you know, it was the numbers were beautiful. And, you know, I ended up focusing more on subsidized housing, which is the Section eight program down in The United States. It's it's basically, the the government is paying a portion of the tenant's rent.
Carlos Rodrigues:And so, you know, I pulled the trigger on a couple and was the first one that I bought in Cleveland, I mean, I couldn't make any more mistakes, I think, than I did and, you know, had the problems that I did. As far as, you know, setting up the corporations and everything that if you're gonna be a long term investor, you should set up, that was piece of cake. I found a lawyer, you know, he did ended up being probably the the best lawyer in The United States for setting something like this up, probably the most expensive as well. But, nonetheless, you know, set that up and, you know, bought my first couple of properties down there. The first one in Cleveland, I mean, was a duplex, and I bought it for $35,000 US.
Carlos Rodrigues:So Wow. Now, you know, with that price point, I mean, I ended up purchasing it in probably the the roughest neighborhood possible. You know, it it needed $60,000 worth of work, you know, to get it up to to the standards that I was comfortable with. And, anyways, by the time we were done, it appraised for a $150,000, but I had also, you know, had a project manager that stole a bunch of my money, you know, contractor problems, you name it, I hit it face first. You know?
Carlos Rodrigues:And so anyways, it was a a big learning experience on that first one. And so from there, I decided to, you know the I saw that the the fact the writing on the wall was that there's gonna be more Canadians coming down this way, given the price points that we're dealing with in Ontario and, you know, just landlord tenant board issues that I mean, it's just unfriendly where it is in Ontario and when people start hearing about Ohio and how landlord friendly it is and the price point, the cash flow, you're going to see, it's already happening, right? And I think part of the uptick in the value of properties that I've seen in in Ohio or in general anyways, has to do a lot with, you know, with this the the wave of Canadian investors that are coming down. You know, I don't have any numbers to prove that or whatnot, but I it just in the the curve that I've seen in Cleveland alone, I mean, it's you know, every week every week, I get an email from my my realtor down in Cleveland. Says, yeah.
Carlos Rodrigues:I've got, you know, five more people from Canada that need need your help to, you know, get going down here and they need some some mentorship, blah blah blah. So, anyway, I decided to to start helping other Canadians get set up. You know, the the fact is is that once people get set up down there and they might have one, you know, or or maybe trying to do it on their own and live their life here, It's it's a lot of work. Even if you have a property manager down here, I find myself going down to Cleveland almost every other month. I'm actually leaving tomorrow, you know, for another trip to to Cleveland, and I'm gonna be staying a month this time to to find more or to see them, you know, because I like to put eyes on the the the quality of construction down there.
Carlos Rodrigues:It's old construction, right? So it's very difficult to have enough trust in your contractor to do it from up here unless you're willing to, you know, let them or have those headaches come up and deal with them as you you go forward. I like when I renovate something, I like to get rid of any any future headaches for at least the next five years, you know, and Yeah. And bump the value up through those renovations as well. But, anyways so I help, you know, other Canadians come down to The United States, get set up.
Carlos Rodrigues:I've gone as far as getting my e two visa, so I have some some input. I can help with with that as well. I have contacts and and whatnot that are fantastic and helped me get my e two visa. And you know, whether it be through joint ventures or, you know, other avenues of investing in my projects, people can get involved with my own projects as well. I have a mentorship program that essentially I help somebody go from start to finish on at least one house, know, and divulge all of the details that they'll need as far as finding good contractors, finding the appropriate professionals in there.
Carlos Rodrigues:And now, you know, something that you and I are working on to for the financing. I'm excited about you know, we're I think we can do a bang up job. I mean, guys have some phenomenal resources as far as the the the, you know, the lenders, right? I don't know if you wanna dive into that. Yeah, fine.
Scott Dillingham:Yeah. No, for sure. And yeah, I mean, this is not necessarily about me today. I wanted to share your stuff, but yeah, you're right. I mean, have over 25,000 lenders.
Scott Dillingham:One of our loan officers that is on the team, he actually owns more than 20 properties in and around Ohio already. And he just won, right? We've just hired a guy that lives in Florida. So he's from Canada, moved to Florida just like you, a few years ago, and he's been building his portfolio there as well. So we're really, like, boots on the ground.
Scott Dillingham:And and I think the thing that's important too with us is that we're all investors. So I think that's really important. We're not just some regular broker or lender saying, yeah, we have these products. Right? We're investors, we get it, we can help.
Scott Dillingham:So super cool stuff. Now for somebody who's listening, right? And they're hearing this and they're thinking like, I love what Carlos is saying. How do I get in touch with them? How do I partner with them?
Scott Dillingham:Do you have like a directory of all of your resources or how should somebody reach out to you?
Carlos Rodrigues:If people want to reach out to me, the first thing that I would suggest is signing up on my email list at cash flow carlos dot com. It's just a a, you know, landing page that I've set up. But if you wanna get in touch with me, you can call my office at (419) 318-8424. That's a I mean, it's it's an American number, but, you know, I'm I'm back and forth. You'll get me whether I'm in The United States or in Canada.
Carlos Rodrigues:But that's my office number. Sign up on the email list is the best way to get information on what I'm doing. Trying to get better at, you know, TikToks and Instagrams and all that stuff, but it's it's a lot of work to to edit that stuff and, you know, get it the way that I want. You can hand it off, but, you know, I like to get my hands dirty. So but as far as, you know, comparing the GTA, for example, you know, investing in the GTA and investing in Cleveland or maybe anywhere else in The United States for for that matter, it's the same, but it's it's different.
Carlos Rodrigues:You know what I mean? Like, in the GTA, we've we've been spoiled for the last, what, twenty five years, twenty, twenty five years, something like that. You know, we're closer to the end of that period. It didn't really matter what you were buying, you know, you could hold it for a little while and it would appreciate. You know, you didn't have to really do a lot of renovations to a rental property and you could still increase the the rents over a period of time, you know, when when tenants would would would leave.
Carlos Rodrigues:But, you know, in The States, I mean, especially Cleveland anyways, I mean, it's changing because there's a lot of competition coming into the area. The if you're going to go down there, it's for cash flow. You're not going there for necessarily for huge swaths of value increase. Right? I mean, can happen if you buy right and, you know, there are circumstances where it is much easier to buy something undervalue in The United States.
Carlos Rodrigues:There's a lot more opportunity in in that type of scenario, you know, off market deals and so on and so forth. There's a lot more wholesalers that you can deal with. Obviously, you have to, you know, go through a few to find the right ones that, you know, are are they understand everybody has to make money. There's some wholesalers that will want to, you know, they'll find an off market property and then try to basically milk it of all the equity that it has through the sale, right? And try everybody wants to make $30,000 on every sale, which is kind of ridiculous.
Carlos Rodrigues:So but you you definitely have to know what where you're buying, what you're buying, because, I mean, you can go from one block to the next and just that that little difference can be the the, you know, the difference between buying something in a war zone and buying something in a war zone. I I mean, I use that very loosely. It it's not it's not as
Scott Dillingham:Like war type houses.
Carlos Rodrigues:Well, it's war type. I mean, it's older houses. You know, you could buy like, everything down there is there's a lot of siding and it's all wood. And then, you know, if you don't know about lead notifications and, you know, the renovations that need to happen beforehand, if you get caught with that on the back end, you could end up with, you know, a huge remediation bill. So it's you know, there's that.
Carlos Rodrigues:There's stuff like point of sale inspections. You know, the the different municipalities around Cleveland. Cleveland proper itself doesn't have the point of sale inspection yet, but all of the little municipalities around it have started implementing this. And, basically, it's a it's an inspection when if I wanted to sell a house down there, the city will come in, inspect for deferred maintenance or anything that they wanna see repaired before the next person takes over. And, I mean, it can be stuff like a cracked sidewalk or staircase that is, you know, it's never been touched, but now the the inspector has said, okay.
Carlos Rodrigues:Well, this is out of code. You gotta bring it to code and and redo your steps or something along those lines or, you know, they don't like the fact that there's, you know, holes in the screens or something along those, you know, they just they can nitpick, but basically they come in, they do an inspection, and some cities will give you, they'll estimate how much they think it'll be repair those, that list, and then you have to take, you know, a 100, a dollar 25 for every dollar that they've estimated and put it in escrow. And then go do the the repairs or somebody has to do the repairs, whether it be the the seller or the the purchaser before they'll release that money. Alright? So it's it can be a double edged sword anyways.
Carlos Rodrigues:But
Scott Dillingham:But that might be good when you're buying. Right? If you're buying a distressed property, that might be good.
Carlos Rodrigues:It it can be. I mean, it it can be a a a really great negotiating tactic, you know, to to come back and say, listen. The city's, you know, got $50,000 worth of work here. I mean, you gotta come to the table a little bit or whatever it may
Scott Dillingham:be. Yep.
Carlos Rodrigues:But, for example, one of the very first really sweet deals that I was looking at was 16 townhouses, okay, in one of the nicer municipalities of Cleveland, I think it was Cleveland Heights that 16 townhouses for a million 2. It would have cash flowed by the time we were done about $20,000 a month. And like, Finding a million too I mean, just the down payment and and renovation money wouldn't have been that difficult. But it was in Cleveland Heights. Cleveland Heights has got a point of sale inspection.
Carlos Rodrigues:They want a dollar 30 for every dollar that they estimate on their their point of sale inspection. The the list was about $250,000 worth of repairs. So not only would I have had to come up with the $202,150,000 plus 30% to put into escrow, but I'd have to come up with another $2.50 to actually do the the the work. You know what I mean? So it's just it just it built up very quickly and being one of the first properties I I chickened out.
Carlos Rodrigues:But
Scott Dillingham:Yeah. You gotta start a little small. Right? A little bit smaller and
Carlos Rodrigues:then grow into that. It it was definitely tempting, though. I mean, a beautiful townhouses in a in a really great area. It was right near next to an an elementary school. You know?
Carlos Rodrigues:I mean, literally around the corner from an elementary school. Anyway, I still it still hurts.
Scott Dillingham:Well, I'm sure another one will come up. But for now, we're we're gonna wrap up. I'll put your email list link and your phone number for your office into the show notes so everybody can reach out to you. And I do appreciate you for coming
Carlos Rodrigues:on, Carlos. And you