Scott Dillingham: 00:21

Welcome to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. Today, I have Andrew Kim with us from Share, and I'm really looking forward to chatting with you today, Andrew.

Andrew Kim: 00:31

Likewise. Thanks for having me.

Scott Dillingham: 00:32

Yeah. It's gonna be awesome. We're both kind of in this new world and of investing in the states. And, I mean, it's not a new world. It's just a lot of, Canadians don't do this.

Scott Dillingham: 00:41

Right? So, I'm excited to talk about this. But I guess before we do, if you could share with us a bit about yourself, maybe some trials and tribulations that you've went through, to get to where you are now. Right? Like, why the US, that type of thing.

Scott Dillingham: 00:55

And, we'll go from there. So I'd love to hear your story.

Andrew Kim: 00:57

Yeah. So, you know, I've always had this entrepreneurial spirit, but also very cautious at the same time. And I think knowing that I was a bit of a risk taker, I had to have my sort of downside protection, and that's what always got me into real estate at an early age. So I was a really bad investor in Ontario back in 2010, but then was introduced to the US single family rental markets in 2011 when I moved there for my first, technology company. So I'm as an entrepreneur, I'm I focused in tech.

Andrew Kim: 01:28

And then, yeah, I got into the US market. You know, fast forward 10 years, you know, I didn't really invest much, moved sold my company, grew my family, was super busy, and then, you know, moved back to Canada. And, you know, 2020 comes, and I'm wanting to do another startup. And, you know, the pandemic hits and realized that my portfolio really hasn't grown ever since I started having kids and having the first startup and realizing, my gosh, like, the only person really responsible for growing my real estate portfolio is me. But if I'm super busy, who's gonna do it?

Andrew Kim: 02:01

And that's kinda what brought me to building my current company, which is, you know, how do we actually grow your portfolio? And so it's the intersection of technology and real estate, and, you know, happy to unpack that further.

Scott Dillingham: 02:12

That's awesome. And so when you first got started though, what what was it that made you think the states instead of Canada?

Andrew Kim: 02:18

Yeah. You know, I actually didn't even think about the states because I was in, you know, doing BRS in and around, like, the Greater Toronto Area, well, well outside the Greater Toronto Area. We're talking, like, Ajax, Barry, you know, 70 plus kilometers from Toronto. And at the time in 2010, it was, like, 300 k a home, which was still a lot and then when I went to the States, my current business partner was also sort of advising my start up in terms of how to do cross border taxes because we're a team of Canadians building a company in the US, so she was doing us a favor And by doing so, we somehow segued into the conversation of real estate, and she was, like, well, what do you buy? And I kinda shared her my details, and she was kind of chuckling and kind of embarrassed for me and was, like, look, you can buy homes for a third of the price for double the returns.

Andrew Kim: 03:07

And I was like, that's nuts. But, like, look, I don't have time. I'm living in California. Show me these homes. Like, well, they're in Florida.

Andrew Kim: 03:14

I'm like, well, I can't do that. And then she showed me the numbers and, you know, we were they used cap rates as a which is a measure of sort of returns after your operating expenses. And what I realized is that they all had this weird line that I've never seen before, which is property management, and it was still cash flowing after property management. So that was a game changer, you know, price point returns and the fact that I can hire a property manager to see it oversee it was a game changer and a no brainer for us so that was sort of my foray into the US market. I sold my Canadian stuff and then started deploying across the US.

Scott Dillingham: 03:45

Nice. Nice. Yeah. No. It's it's awesome.

Scott Dillingham: 03:46

I I have a lot here too. I mean, but my my story, it's not the same as yours, but it's kinda similar, like, from from the overarching theme of things are better in the states. So, like, I was born in Maine and actually Lewiston, Maine specifically. And, I still have family there, and I would go and visit. And what I noticed over the years was they dedicated Lewiston, and I'm sure you've heard of this for in different areas.

Scott Dillingham: 04:12

But Lewiston is one of those section 8 hubs, like government funded hubs. So they have them all over the states. Obviously, section 8 is kind of everywhere, but they have these hubs where they'll literally bus people to and get them to set up there. So, that was happening there. So I was sitting back, and I'm just looking at the numbers.

Scott Dillingham: 04:28

I'm looking at the purchase prices and and Lewiston, it's it's, there is a lot of single family, but there's a lot of, like, big houses that are, like, 3 or 4 stories tall that just they've made each floor kind of be its own unit kind of thing. And, so really cool setup. I'm looking at these numbers, and you can get something for dirt cheap, and the section 8 rents is, like, so high. And I'm like, wow. They don't have this thing changed.

Scott Dillingham: 04:52

And then over the years, just seeing it expand, I'm like, wow. Like, I really gotta get into this. And then, obviously, here we are, doing that. But, no. That's it's really exciting.

Scott Dillingham: 05:02

So I know for Canadians, they they get sort of this I wanna call it a mental roadblock. I don't know if that's it, but let's just call it that. And as they start looking towards investing, they get caught up on different things, and then they end up getting cold feet, which I find, like, you know, if they had somebody holding their hand, they would move forward just like a kid. Right? They're scared to make that first step.

Scott Dillingham: 05:24

But when you as a parent guide them, then they're open to it. And I think that's really cool with Cher is you are like their guide and you help them to get established in the state. So can you talk about that a little bit more and how that helps people who are a little too scared to take that first step?

Andrew Kim: 05:43

Yeah. So, you know, we're trying to really implement the concept of an asset manager for everyday sort of retail investors. Everyone always assumes, like, an asset. Or they they think of asset management as, like, oh, okay. You put in money in a a joint venture or let's call it a private equity firm or a REIT, or even, like, a mutual fund.

Andrew Kim: 06:02

Right? Somebody is taking that money and behind the scenes, deploying it across different investments. They're making sure that, you know, we're maximizing your returns to get whatever risk return profile you're aiming for. So same concept that we're trying to do, but for your personal portfolio, which is, look, we are acting as you, but with lots of institutional and industry ties. So everything along the way, every single thing you need to think about from entity structure, tax, bookkeeping, all of the actual things to set up and scale your portfolio.

Andrew Kim: 06:35

We already know and think about all the time helping our clients can think about these things and help them formulate, you know, a perspective and calculate your returns on every single step, so that, you know, all they have to do is really focus on their personal professional careers. So, literally, it starts with understanding sort of their risk reward profile, educating them on the different types of houses, regions, price points, returns, risk, reward, all of that before we actually start any work, which is them starting to set up their entities, their bank accounts, and then doing an active search across landlord friendly and tax friendly states, and then once they acquire the home, we're doing the renovations and the leasing activity, and once leased, they're we're your single point of contact, and every single year, we're helping you say, well, what are your sure market rent rate? Is it a good time to refinance, rinse, repeat, etcetera? So really trying to put your growth your portfolio on autopilot.

Scott Dillingham: 07:32

I love it. I love it. And it it shows too. Like, I've spoken to your clients and they really like the service. Now a a question that I hear all the time whenever there's an event or just even people ask me, what's the difference between an asset manager and a property manager?

Andrew Kim: 07:48

Yeah. So the way I always put it is, like, look, if you had a portfolio of homes and you had a property manager, in 10 years, just like what happened to me, that portfolio is gonna be the same size. They may be running away with your budget, but, you know, I love property managers, but their core responsibility is to be an on call maintenance provider, right, to collect rents and to assist with the leasing, but they're not responsible for understanding your financing, your tax strategy, your bookkeeping, your actual lending, and how what you know, how are you thinking about lending and your returns, your rates, and tracking the growth of your home. Whereas, an asset manager is looking over every single thing that contributes to building your portfolio. So that's even down to the pricing you're paying for, your accountant or price you pay to set up your LLC, and then helping you maintain all of that, and then giving you insights into, hey, look.

Andrew Kim: 08:42

We can tap into, like, 60% of your equity right now and pull that cash out, and this is how much we think you can get, and we can buy another one for you, and here's a good lender for you. So thinking about everything we need to do to grow your portfolio. So if you wanna think about it from a hierarchy, you know, so you got your property, you have your property manager, then you have us, the asset manager, where typically would be the investor. But that investor is time starved.

Scott Dillingham: 09:05

Yep. No. That's I think that's a good description. I think it it becomes clear. And, you know, I'm curious on on your end.

Scott Dillingham: 09:11

Right? So what do you think the major I'll let you know what I think mine is. But what do you think the the major roadblock or when Acadian calls you and they wanna move forward or American, just anybody who wants to leverage your system? What's the major hurdle that usually stops them that you guys overcome?

Andrew Kim: 09:33

Yeah. I think it's the the uncertainty of where to invest. Right? Like, you know, the US is a huge, huge place. Right?

Andrew Kim: 09:41

And so they're like, I'm trying to understand what is a good neighborhood, what is a bad neighborhood. But to be honest, when they look at the homes on the site, we have different profile of homes that have sort of different risk reward profiles, and I think everyone always gravitates to the highest cash flowing loans. But we're like, look. There there's a nuance to all of this. And then they kind of get they're, like, I don't know where to go.

Andrew Kim: 10:02

I hear this state. I hear that state. So it's mainly, like, the concept of not being close and remote investing.

Scott Dillingham: 10:10

Makes sense. That makes sense. That's interesting that you say that. I don't see a lot of that because we're not realtors. Right?

Scott Dillingham: 10:17

We do the mortgage financing. So

Andrew Kim: 10:19

Right.

Scott Dillingham: 10:19

The investors will either reach out to you guys or maybe they've kinda built their own team and they're kinda going off on their own. So I don't hear that. I find on my end, which you guys solve this problem, which is great, is the entity setup. I find a lot of investors get stuck on, I don't know how to set this up and going to different tax professionals. One person's, you know, reasonable at a couple grand, the other person wants 10 grand.

Scott Dillingham: 10:47

Why? Right? Is there a difference? Am I getting something extra for the 10 or is it just, you know, they're charging me more?

Andrew Kim: 10:52

Yeah.

Scott Dillingham: 10:54

And you guys, like, kinda do that as part of your package. I realize there's cost involved, but, like, it's all there. Can you can you talk about that a little bit?

Andrew Kim: 11:02

Yeah. So it's pretty good. Like, we spend on average 60 minutes with a bunch of homework in between. So it's usually 2 phone calls, 2 to 3 phone calls before you get the referral comes to your inbox. Okay.

Andrew Kim: 11:15

And usually, the 3 topics are the different types of homes, the regions, the risk reward profile, the financing strategy and options, and the returns. So we share a bunch of numbers and sample properties. And then, yes, tax and entity structure, you know, what is your annual tax obligation? How does it work between Canada, US? And how do I protect my assets?

Andrew Kim: 11:33

So we go through all of that together. We share share a lot of material that has cost us a lot of money to produce just because I think where a lot of Canadian investors get spotted, and you mentioned it, you know, they'll go talk to a lawyer, they'll go talk to a tax account or an accountant, or they talk to a US accountant or US lawyer, and all 4 of them will say different things because you do need to find a happy middle ground, and I always tell everybody the happy middle ground is where you can get tax alignment, liability protection, and asset protection, and lender friendliness. Right? So all 3 need to come into play. So we've given, you know, my business partner, she's a CPA on both sides of the border and with over 5th 70 units under her belt at this point, she's quite versed in real estate and tax, so she, you know, along with a lot of consulting dollars, we've come to a conclusion and it works well with our lenders and coincidentally enough, a handful of other, 4 national seasoned investors all kind of landed in this very similar structure, and we, you know, we walk our clients through that, and we will set it up for them.

Scott Dillingham: 12:36

Yep. Which I like. I really like that. That's that's awesome. So, yeah, that that's what I find is the biggest challenge, but I just again, I really like how you guys kinda do that whole process for the investors.

Scott Dillingham: 12:48

That's that's really cool. Now for Canadians, right, because one of the things that you mentioned was the locations. And I realize a lot of things need to be considered when you pick a a location. But do you mind sharing you don't have to necessarily go into the cities, but maybe the states. Like, what do you find is the most popular states for Canadian to invest?

Andrew Kim: 13:10

Yeah. So, you know, I'm gonna start off with my pain point. The thing I hate hearing the most, and it really drives me nuts, is when somebody picks a location and it's like because it's this many hours of drive time. Look. If you live next to the ideal location, fine.

Andrew Kim: 13:26

That logic makes sense, but that shouldn't be the primary metric of why you're investing in that area. Drive time should not be the metrics for success. You should be best investing in the best area. Now when I say best, it depends on the profile of homes. So we have, like, a profile of a, b, c, d type homes.

Andrew Kim: 13:45

We will pick different metros to look at look at for those because you could pick any state and find their equivalent of the a, b, and c's. You know, you wanna make sure that the surrounding economics are making sense, meaning, like, job growth, population growth, economic growth, at the various highest level. But in terms of which states, we could technically go to any, but we try to stick to sort of the landlord friendly and tax friendly states, which is all the sun belt states, which think, you know, south as far west as California, excluding California, going across the southern state parts of the US and up the southeast, as well as the Midwest or what they call the rust belt states. But right now, we're not in we don't push clients to all of them because I think a lot of them still are recovering some from some post pandemic bubbles or the numbers are kind of being slightly affected. So we're tiptoeing around a handful, but those are the major regions we're in.

Scott Dillingham: 14:40

Nice. Now we're recording this early December 2024, and, we've got a new presidency in January. If you look at the map right? So I know traditionally, the red states and this is not like the rule. It's more of like a high level guideline, but traditionally, the red states are more landlord friendly, and the blue are more tenant friendly.

Scott Dillingham: 15:05

Again, you know, there there's some overlap there where that's not the case, but generally speaking. So if you look at the map at the states, right, and and you look at democrat versus republican, and not to get political, but right now the map is, like, almost completely red. Right? Like, it's almost completely red. So do you think that that's gonna have any impact on certain areas?

Scott Dillingham: 15:28

Do you think areas are gonna open up and be more landlord friendly?

Andrew Kim: 15:32

I don't think you'll get more landlord friendliness from, let's call it, the blue states. I think they're trying to hold strong on their sort of tenant friendliness, and if anything, maybe going the opposite direction, right, going deeper into being tenant friendly. I do think red states are typically and will continue to be landlord friendly because, you know, they're, you know, typically, you know, the the Republican party is just very capitalistic in nature and, you know, that's, you know, the investor dollars. And also, what you don't see of a lot in Canada or at all in single family is institutional dollars. You know, there are large REITs and private equity and hedge fund, big firms that are buying up 1,000,000,000 and 1,000,000,000 of dollars of single family homes.

Andrew Kim: 16:18

They couldn't do that without sort of the the legislation necessary to be in control of their investments. So, you know, they're deployed across the same states. So, yeah, we don't see that changing anytime soon.

Scott Dillingham: 16:32

Okay. That's good. Yeah. I just I just didn't know, like, you know what I mean? Because change change is coming.

Scott Dillingham: 16:38

Change is coming. So we'll have to see.

Andrew Kim: 16:40

Yeah. I mean, if if if I think if the election went the other way, then possibly. But I think the election went the right way for re real estate investors. But, you know, I I could always I could sit here for an hour and argue both sides of the coin, so I'm interested to see I'm following a few different policies and a few different, yeah, there's a few different malt policies that upfront don't seem like, hey, this is gonna negatively impact real estate, but I could see that having a trickle effect down the road. I would say if I had to split it, I would say probably 6040 in favor of real estate investors.

Scott Dillingham: 17:15

I you know, I think so. Donald Trump, he made, an announcement at the start of his campaign, and I haven't heard it since. But if he does it, I think it will be great. But currently, the states, like, the the federal tax rate's 21% for entities. Right?

Scott Dillingham: 17:31

And he talked about lowering that to 15%. And I mean, hopefully, he does it. So I think he does. I think that would be awesome. So you're gonna see.

Scott Dillingham: 17:43

But if he does, I'm looking forward to that. I think great for investors.

Andrew Kim: 17:48

Yeah. Yeah. Definitely. Yeah.

Scott Dillingham: 17:50

Just politics. You just never know.

Andrew Kim: 17:52

Yeah. It's it's definitely good for investors. You know, like, I'm I'm curious to see how, you know, the immigration policy works out and all of the like, him being such a nationalist and having bringing manufacturing jobs here, like, in theory should work out well. So yeah. No.

Andrew Kim: 18:06

I'm interested to see which way the economy goes.

Scott Dillingham: 18:09

Yeah. Yeah. No. I'm I'm excited to see. Same with Canada too.

Scott Dillingham: 18:12

Right? I think Canada needs a refresher, and I know we're here talking about the states, but it's just you know, we both live here in Canada, and it's just yeah. I wanna say

Andrew Kim: 18:20

I think it's a timely conversation because if you think about it as a Canadian, now that, like, Trump has won and he's threatening these 25% tariffs, it's like, you hear a lot of Canadians, like, well, Canada needs a reset. So they're they're all gung ho. I would say they're all there is a there is a sizable portion of the Canadian population that is, like, going for Trump. And I don't think they realize that that has a negative like, potentially strong negative impact on the Canadian economy. So it's like a double edged sword here.

Andrew Kim: 18:52

Right? You know, they want him as a front runner, but, like, it could hurt our economy, and could put us in a downward, you know, spin. Who knows? We'll we'll we'll have to see how the how how we react.

Scott Dillingham: 19:06

Yeah. Yeah. No. I mean, that can be taken 2 different ways, right, depending how you ride the cycle and how your mindset is. Right?

Scott Dillingham: 19:13

You could take that as this is the perfect time to invest in the states now because of that, or you can take the other approach for Canada. But, again, they don't have the other stuff like the landlord tribunal. All that's not fixed. But I know investors in Canada will look at it like, okay. Well, now there's a buying opportunity in Canada if the market crashes.

Scott Dillingham: 19:30

Right? So you do see both ends, but still the fact that even if the values reset, the fact that it's very tenant friendly, it does push away some people for sure, depending on, the locations and stuff. So it's really it's really interesting. I don't like to talk politics, but I think this election and just sort of everything that's going on kind of I think it actually really affects us more than a lot of the previous ones. So Yeah.

Andrew Kim: 19:56

No. I I agree. Like, I I remain politically neutral. I just talk either Canadian dollar or US dollar, and the other question is always like, 4 x.

Scott Dillingham: 20:04

How much is going in my account? Yeah. Yeah. I

Andrew Kim: 20:06

was like, well, they're like, well, what about the 4 x? I'm like, well, it's so funny because everyone's so concerned before you make your investments into the US, but then as the day after they invest in the US, they're like, Canadian dollars sync, US dollar go up. You know? Like, it's you just all of a sudden switch teams. It's interesting.

Scott Dillingham: 20:23

Yeah. No. It's it's crazy. No. That's awesome.

Scott Dillingham: 20:25

So okay. Well, we're coming to the end here. We're gonna wrap up the show. Is there any final tips or thoughts that you would share with somebody who is is considering investing into the states to help maybe more

Andrew Kim: 20:38

Yeah. And I actually want to touch on this is because this is seems to be another common barrier. But I always tell Canadians that US single family is actually indeed the most Canadian investment you could possibly do. Because I think what a lot of people don't realize is that US single family rental SFR is like a bonafide asset class. Right?

Andrew Kim: 21:01

It's not just any single detached unit. There is this price point, price range, these regions, these economic policies, these legal policies that kind of all wrap it, which the reason why these large institutions are dumping tons of money is because it's super resilient with least amount of sort of fluctuation. So if you look at major price point fluctuations and everyone's like, oh, well, you know, if I invest in GTA, I'm gonna have this crazy appreciation. I'm like, but you're gonna be funding this thing out of pocket month over month, so you're losing money. And it actually is quite price volatile.

Andrew Kim: 21:34

Like, tell me your house is the same price it was a year and a half to 2 years ago when we were in the bubble. Right? Whereas the the US SFR, like, the price point we're in, they stay pretty stable. So, you know, rents tick up modestly and appreciation tick ticks up modestly. So it's not like it does this.

Andrew Kim: 21:51

Right? Whereas, Canadian real estate often does that, and it's highly driven by Ontario and BC. So if you want steady state, safe and secure, high demand, that's, you know, the US single family, and it's the most Canadian asset class in the world, I think.

Scott Dillingham: 22:06

No. I I agree. And I just just a note of caution for Canadians. I find and it hasn't, like, affected the deal or anything, but, like, I find Canadians, maybe because they're used to, like, properties in GTA, right, that you could buy for x price. And in a year, it's it's worth a couple $100,000 more.

Scott Dillingham: 22:24

So they have the same expectations in the states, and it's not like that. I think you just nailed it right. It's a steady, but it's a slow increase. It's not like a crazy massive one. Obviously, markets, some markets are hotter than others.

Scott Dillingham: 22:38

But I'd like to share that with the Canadians that because I I hear people say, okay. I'll buy it. I'm gonna hold it for 1 year. I'll do a prepaid one. So then after 1 year, I can refinance it, and we're gonna have all this equity because it's gonna be worth so much more.

Scott Dillingham: 22:51

And I'm like, woah. Hold on. Yeah. Yes. It's gonna be more.

Scott Dillingham: 22:54

Yes. You're gonna have mortgage pay down from your tenant. No. It's not gonna be as much as you think because some Canadians get really, like so I just think, like, the mindset. Right?

Scott Dillingham: 23:03

Just getting over, like, they've got appreciation. Right? They've got all those good things but it's it's not, like, a craze. We're over here. It's a craze.

Scott Dillingham: 23:11

Right? They we get into bidding war frenzies and people are overpaying like crazy, like Yep. That's not that doesn't really happen there. At least to to my knowledge in the markets that I've lent in. Do you see that at all?

Scott Dillingham: 23:21

Or

Andrew Kim: 23:22

Yeah. It's it's steady state. Like, you're gonna get growth. It's gradual, but, you know, you're gonna continue to tick up into the right. You know, even the US crash, everyone knows of, like, the price volatility.

Andrew Kim: 23:33

That is driven by the Toronto and Vancouver equivalents of the US. New York, San Francisco, LA. Right? Those are the you know, where the price points are north of a1000000. Right?

Andrew Kim: 23:43

You don't see that price volatility in the rural areas of Canada. Right? It's same principle, but there's more of that steady state piece in the US than there is in Canada.

Scott Dillingham: 23:54

Yeah. Which which I like. I would Yeah. I would rather have and I think a lot of Canadians would especially investing so far away. I'd rather have something that's tried true and tested that you know and it's predictable than something that you just hop into and then lose money.

Scott Dillingham: 24:09

Right? So you just wanna be careful. So

Andrew Kim: 24:11

Predictable. That's that's the word.

Scott Dillingham: 24:14

Just to caution Canadians cause, again, everybody gets hopeful that they're gonna make so much money and whatever, and I just wanna put that message out there that you can, but it's Exactly. For a little more than a year. Yeah. So, no, that's awesome. So then for anybody listening that wants to follow-up with you or touch base with you or your company, what's the best ways for them to reach out to you?

Andrew Kim: 24:34

Yeah. Create a free account, sign up, and then you can book a call with the team. We'll help you strategize, put a plan in place, and help you execute it, run numbers, walk you through all of that. Share s fr.com. Sharesfrasinsinglefamilyrental.com.

Scott Dillingham: 24:50

Yep. And I'll put the link in the, description as well so everybody can click that. So if you're in the car or whatever, you can't take notes, we'll we'll put it in there. But, also, it was great to have you on. I'm glad we could connect and chat.

Scott Dillingham: 25:01

Yeah. There's so much going on. And, yeah, it's, it's exciting. So Yeah. Definitely.

Scott Dillingham: 25:06

I guess I'll see you in probably a week. Right? Because we've got an investing event coming up.

Andrew Kim: 25:10

Yes. That's right. Yep.

Scott Dillingham: 25:12

Alright. Well, until then Awesome. Alright. Take care. Take care.