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.
Scott Dillingham:He runs a team in Toronto, real estate agents that work specifically with investors, them to solve all their issues in Toronto as far as making sure that you can find cash flowing properties and you can still make lots of money in Toronto. So Ming is going to touch on that. But before we dive into that, I would just love to hear your story on how you kinda got to where you are today.
Ming Lim: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.
Ming Lim:I was working at Research in Motion, if you guys remember that company. Yeah. 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.
Ming Lim: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.
Ming Lim: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 because that's what I knew. I was a student there.
Ming Lim: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?
Ming Lim: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, I guess it's almost ten 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.
Ming Lim: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. I went on meetup.com and, like, made the radius, like, 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.
Ming Lim:I 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 flowed, great. I would buy it.
Ming Lim: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 TLTB 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.
Ming Lim:Plus, 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 Toronto in rural Ontario, but 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:I love it. I love it. It's saying you know what? Similar with me. I was living in Sarnia, and I didn't see
Ming Lim:Oh, did I just pull out Sarnia?
Scott Dillingham:Yeah. Yeah. I was I I didn't see them on TV, but I heard about the book. I bought it. I read it.
Scott Dillingham:And I was like, I need to do this. And 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 job, but I actually made, I was still making more because it was, you know, doing mortgages, right. And with mortgages and, you know, with real estate, right, you can make some really big paychecks.
Scott Dillingham: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 the time.
Scott Dillingham:So now I know a lot more and it's obviously much more hands off now. But it's funny that the stories are so similar, all from Robert Kiyosaki. That man changed so many people's lives. It's crazy.
Ming Lim: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:Yep. Yep. And then he had a few other ones. I think one was called the cash flow quadrant. I don't know if you read that one with the EBS side.
Scott Dillingham:So employee business owner. Yeah.
Ming Lim:I was that guy going out to cash flow games, would they set it up because 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 Yeah.
Ming Lim:I actually have into it at one point in time.
Scott Dillingham:Yeah. I actually have six board games because I think they stopped making them. I might be wrong, but there was, like, this massive blowout sale because I think you're right. They were, like, a 100 to a $150, and I got them for, like, $20. So I was like, awesome.
Scott Dillingham:So I bought a bunch of them. Deal. Yeah. Yeah. But I have some.
Scott Dillingham:So you know what? Maybe next time when we're all in Toronto at an event, maybe we should bring it and just Yeah.
Ming Lim:We'll we'll have a we'll have a board game party because, yeah, we're we're cool like that.
Scott Dillingham:It's a great game. Yeah. But, no, that's awesome. So you've got a team now. You guys are rocking it in Toronto.
Scott Dillingham:Now I I know lots of people right now. They're they have concerns. Right? And and not everywhere, so I don't wanna make this as a blanket statement, but some people are concerned with various markets. But I know you guys are rocking it in Toronto.
Scott Dillingham:So I'd love to hear your strategies or maybe what you teach investors and how you can actually make money because Toronto is such an attractive market. Obviously, 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 fifteen years now, someone was always saying, oh, Toronto's gonna collapse, Toronto's gonna collapse. I heard it all the time and it never did. Right?
Scott Dillingham: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 Lim: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.
Ming Lim:My mom called me up one day, and she's like, oh, son, I'm I'm buying semiconductors today. And I was like, mom, what's a semiconductor? And she's like, I don't know. I was like, what business do you have investing in a semiconductor company when you don't even know what they make? And, you know, it leads me to like, there's no you know, I I I believe you can make money in almost any market out there, but it really comes down to fundamental understanding about it.
Ming Lim:Right? Like, I I like to joke, if you don't know the difference between High 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. So one, invest in what you know, I think is more important than chasing a shiny object.
Ming Lim:I'm born and raised Torontonian, 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 2nd Floor and now just having a little loft upstairs, and that would impact your investment.
Ming Lim: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. Difference I found in finance was they won't make a single move unless there is a litany of risk management behind it. Right?
Ming Lim: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, the cash flows. Great.
Ming Lim: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 main framework that we use called time. It stands for tenant investor market and estate.
Ming Lim: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 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?
Ming Lim:It's a very different mindset. Always with risk first, always with yeah. You know, like and and that was me. Like, you know, twenty 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.
Ming Lim:Like, literally writing on a napkin with my parents, oh, like, 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.
Ming Lim:So, applying those two things, I think, 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 is a more sophisticated market and you need to have more sophisticated business models that work within that market.
Scott Dillingham: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 you didn't catch it. But the fact that you buy where your tenants are, I think that is so crazy because 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 going to avoid, you know, issues with tenants.
Scott Dillingham:You're going to be going after people with money, right? Because you're specifically targeting them. So I love that. So how does one get to that point? Now, obviously, don't tell us your deepest secrets for Toronto, right?
Scott Dillingham:We don't want to share that. That's what makes you you. But like, how does somebody start to find their ideal tenant like that?
Ming Lim: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 earn more, awesome. They don't own a car. They commute into work, so they're TTC or Uber reliant.
Ming Lim:Like, know a lot about our tenant profiles. And we know where those people like to live. So it's, you know, some of the neighborhoods in and around the city, Little Italy, Little Portugal, East York, stuff like that. These a lot of folks are like, why don't they live in condos? They do.
Ming Lim: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 COVID 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 on people, especially on 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, in condo land, that's hard to find.
Ming Lim:And that's where our product has a niche.
Scott Dillingham:I love it, I love it. So for you guys, obviously, you're you're realtors, but what are your services like? What do you do beyond helping someone buy and sell?
Ming Lim: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 want to 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 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?
Ming Lim:What are you trying to accomplish out of 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 cost as a condo. Right? If you rent out one of the units and live in the basement, rent out the upstairs, not without sacrifice, on a cash flow month to month basis, you're actually ahead buying a duplex than you are buying a condo. Your your outlay is less every month.
Ming Lim:So that may be the answer for somebody. Right? Getting into duplex first. So taking it just beyond a place to live, but taking their place to live Or maybe it's a turnkey triplex, right? There are absolutely triplexes out there right now which are cash flow positive.
Ming Lim:People just assume because 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.
Ming Lim:A 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. Market prices are high because they're reflective of the risk in markets. You know, there are though turnkey triplexes.
Ming Lim:You can just buy them, rent them out in cash flow. So it really depends where somebody's coming from. Mean, we go all the way up to development. If somebody wants to do four plus one development, we guide our clients through that process. You know, I guess almost maybe four plus two coming soon.
Ming Lim:So, yes, you know, like there there is there's absolutely you know, we we do the gamut, you know.
Scott Dillingham:Yeah. No, I just want to add on this because I think when people hear 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 want to outline.
Scott Dillingham:I mean, there's there's two ways that we can improve a customer. One is based on their income. We're looking at all the income, and then we're looking at the property's 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 amazing for those investors that don't have the income, is we do the property approach.
Scott Dillingham: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 from someone who's headquartered in Toronto. You can make a quarter of somebody in an outside 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, resources.
Scott Dillingham:So I just wanted to outline that for anybody who's listening who might be thinking, oh, it's great that it still works, but I don't have the income to qualify. Well, we don't necessarily need that. So I just wanted to add that. But no, I love that 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?
Scott Dillingham:They think of it as like, well, there's little maintenance. It's new, right? So it's going to rent for top dollar. But I'm sure you've seen it. I've seen it a lot.
Scott Dillingham: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. So They're like, oh my god, what worked in the beginning is no longer working now. And that's the only variable with condos that you can't control, right, is the maintenance fee. And so you just gotta watch that.
Scott Dillingham:But no. I love it.
Ming Lim:Absolutely. I mean, we've we've been pretty anti condo for a long time. We've got a long history of every meetup that we've had recorded and put on YouTube. 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 because we knew the developers.
Ming Lim:But other than that, like, we have told people to stay far away from them because 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? That just doesn't make sense. So
Scott Dillingham:Yeah. I agree. And then you throw in things like rent control. Right? Like what if you bought an existing unit and you can't raise the rent, but the condo fee has to go up because they need a new roof?
Scott Dillingham:Or do know what I mean? Like, you just Yep. Rent control wasn't there, right, then it makes a little more sense, but it is what it is. So awesome. Well, I really appreciate you.
Scott Dillingham:We got to wrap up because we try to keep these short, but for somebody who's listening, how do they reach out to you to get going to purchase properties or sell properties in Toronto?
Ming Lim:Yeah. You know, 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. If you are interested in working with us, we've got a website, volitionprop.com.
Ming Lim:We're on Instagram and YouTube under Volition Properties and you can always email us infovolitionprop dot com.
Scott Dillingham:Awesome. Thanks so much for coming. I really appreciate it.
Ming Lim:Awesome. Thanks so much, Scott.