Welcome back to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. I've got an incredible guest who has an awesome story. Her name's Araceli. She's gonna touch on how she went from being in Canada to a full time investor, working in The States, doing all these things, and you guys have to hear her story.
Scott Dillingham:And she's gonna share also how you can get involved, which is super cool. So welcome. I hope I said your name correctly. Did I?
Araceli:Yeah. That is, yeah, that is correct. Thank you so much, Scott.
Scott Dillingham:Because You're welcome. Just wanna make
Araceli:can't pronounce it right.
Scott Dillingham:Yeah. Yeah. So so thank you. I'm glad. So, yeah, let's let's hear your story.
Scott Dillingham:So, I mean, starting in Canada, I'd love to hear kinda how it transitioned into The States and, you know, what you've built up over there and just yeah. Like, what's going on?
Araceli:Well, I'm gonna give you kinda, like, the five minutes version of it. I am a mechanical engineer by profession, and I've worked in the aerospace industry for seventeen years. But like any job, my job was really good, but it always has a ceiling, not a lot of time, lots of responsibility. And I think a lot of people can feel the same way about their job, whatever the job is, right? It doesn't matter what it is, whether you like it or not.
Araceli:So the thing that triggered everything is when I got divorced. So now you have two incomes, and all of a sudden, you lose one, and the bills are still the same. So not enough money. It doesn't matter. My job paid really well, but still, I didn't have a lot of time and not enough money coming in.
Araceli:So the first thing that I did is I basically was looking for something that could help me pay for a portion of my rent or my mortgage. And I found a property in Hamilton, Ontario. And I divided up property in three units. And I had no idea what I was doing at that time at all. But I just wanted to have some kind of income coming in.
Araceli:So I learned a lot about contracting and things that we needed to do in order to get it going. I finally finished that house in 2016. So I bought it in 2014. By the time I had two renters, I was living in one of the units. Everything was paid for, and I was taken home about $400 And that something kind of clicked, and I said, hold on a second.
Araceli:I live rent free, and I'm taking home $400 Right? So that was kind of a dream for me. I didn't really expect to get those results, And that was fantastic. But in 2016, well, after 2014, everything has started to go up in Canada, like dramatically. Sometimes they had offers 50,000, 75, even a $100,000 over asking.
Araceli:So I said, okay, can't keep up with this. As soon as I was ready to buy another property, I was looking and looking and nothing like I had existed anymore. So I bought the property at that time for a 180,000.
Scott Dillingham:And that's in Hamilton?
Araceli:Yeah. Anything Okay. Anything that was similar condition for me to rehab and get tenants in I couldn't find it anymore for less than $300,000 So with those numbers, now the cash flow wasn't there anymore, and I had to put it out of my pocket. So I started looking. And I went to different meetings and talked to people.
Araceli:Where can I go? I go to St. Catharines, Niagara Falls, and so on to see if there was something similar. Because the first property really showed me a whole lot of things about cash flow, what kind of numbers I was looking for, and so on. And then somebody told me, he says, Well, have you ever looked at buying it in The US?
Araceli:And I said, Well, no, I know nothing about The US at all. But what clicked to me is that when I was working as an engineer, I worked in Cleveland for six months. So I knew the area a little bit, not much. And then he said, Well, can you take a look at Cleveland? And I said, Okay.
Araceli:So when I was there in the 2000, the city was really in bad shape. And I said, I don't think so. I think that's a pretty bad city. I says, well, I have two houses, and I ended up buying one house for 17,000, the other one for 22,000. Wow.
Araceli:When That's crazy. When you hear those numbers, you know, coming from Canada, I'm going like, what can I buy for 17,000? That's a really expensive. So I went there. I looked at the house.
Araceli:Of course, you know, the houses are a 100 years old, but it's still a house. It's a single house that you need need to do some work, but the price is just, like, unbelievable. So I ended up buying two properties. And what happens, it was all good. So he put a tenant in one, and then I had another tenant that he put on the second one.
Araceli:So the first one, the tenant ended up getting the house in bad shape, didn't pay. But I was thinking like, why is this happening? Because it's not happening to me in Canada. So I went to see the house and this guy was not doing the right job. This is one of the things that I wanna tell people that if you have a good property, no matter what it is, if you have a bad contractor or a bad property manager, then that property could turn out bad pretty quickly.
Araceli:So I ended up finding him. I sold one of the properties, and then I kept one. And after that, I said, Well, I can't really do this going back and forth and me trying to manage everything from far. So I said, I'm just going to sell it. And I talked to the tenant, and I said, Listen, I'm going to be selling the house.
Araceli:And she said, No, no, please don't sell it. We really like it here. It's close to everything. And I said, well, would you be open to buy the house? And I said, well, but I don't have a lot of money.
Araceli:My credit is not good. So making the long story short, I put her on a lease to own.
Scott Dillingham:Okay.
Araceli:And that was the best thing that I did because I didn't have to worry about the maintenance of the property. It was as is. I increased the rent. And that property, when I bought it, it was 22,000. I put about maybe $20,000 in repairs, and she ended up paying a $10 a month.
Araceli:Like, it was unbelievable cash flow for me. Right? She stayed there for three years. So I paid the house, you know, at least once with that money, with very minimum maintenance cost to me. So that's how I got started.
Araceli:Then I had a partner coming from Canada, and we started buying houses at auction. And that was actually really fun. We raised some capital and did that until the pandemic happened. Right? We could not cross the border.
Araceli:So we were going back and forth, and it was pretty good. And then the pandemic changed everything. We actually ended up doing a couple of transactions that we had on the go remotely because we already had a team of people that sell the property, all of that. And so we ended up having only one property left. So by the time we came back in about 2023, he said, You know what?
Araceli:I have some personal issues. I'm not going to be able to continue the business. So I bought him out and I starting to do flips and renovations. Lately in 2024, then I applied for my E-two visa and I got it. And now I am full time in Cleveland doing renovations.
Araceli:And the one thing that I added at the 2020 well, last year, at the end mid twenty twenty five was the renovation company. And the reason is because there's so many, so many contractors out there that they don't show up. And I'm telling everybody, I'm better than anybody because I know I'm gonna show up. So with that alone, it's what what is happening right now. So I'm I am pretty excited because there's a lot of business.
Araceli:There's a lot of need for having a good reliable contractor in the area. That's almost five minutes.
Scott Dillingham:That's yeah. So that's that's incredible. And and just for those listening, because I know you're talking about buying houses for $17 and $22, that was between $20.16 to $20.18, you said.
Araceli:Correct? Yes. That's correct.
Scott Dillingham:Yeah. So the the prices have went up and and we still do get some investors that can find in in around the Ohio area, you know, houses for $30. So you I'm assuming you bought these cash. Right? Because I know on the lending side to get a a loan on properties that small, it's it's not really possible.
Araceli:At that point, Scott, when I first got to Cleveland, everything had to be cash. There was no way because I had no credit, no absolutely nothing. So you couldn't really buy with a mortgage. As we went along, after the pandemic, everything changed. So a lot of lenders started to come in for out of state and out of country investors that wanted to buy in Cleveland.
Araceli:And now there's a lot more opportunity for people to come in. They don't even have to come. They don't even have to have status in the country to get lending.
Scott Dillingham:You're right. You nailed it. And for those listening, so before there was ITIN mortgages, right, which you have to get a US individual tax identification number. That's what that is. And then you could buy, but now they have it's flooded with DSCR loans, which you don't even need a US tax ID.
Scott Dillingham:You know, it's suggested to have a US entity to close in. And I I will say just for those listening for the financing because I know a lot of people hear this. Right? And especially if it's a Canadian. Right?
Scott Dillingham:Now you talked about buying in Hamilton for $1.80 to 300. Now you're 500 and above. Do you know what I mean? So, hearing these numbers, they they get excited. But I think, if you're gonna buy in Cleveland, I would suggest a minimum purchase price of 100 if you wanna get a loan on it.
Scott Dillingham:If you've got enough cash or line of credit in Canada where you could buy the property cash and obviously buy anything. But if you wanna get a US loan, cause usually for foreign nationals, the minimum loan size is 75 k. So a 100 like it it works. But just to share that insight, but that's that's incredible on your story. So you've talked about two things that are really cool.
Scott Dillingham:So obviously, you've you've built this up, but then you've built a contractor team too. Can and I think that's important because a lot of investors, that's the hardest thing is them taking the first step. And I know we discussed this, you know, prior to even recording this. It's that first step because they they, you know, they could be lacking trust in their team. They could be lacking information that they need to move forward where, again, if they had a proper team that have that information.
Scott Dillingham:So I love that. I don't know. I don't wanna ask you questions that maybe you're not comfortable answering, but how how many properties have you worked on in The States? Do you mind sharing that?
Araceli:Right now, I'm in my number 20.
Scott Dillingham:Okay.
Araceli:So I had one rental, and I've been doing most of them flips because I was going back and forth. So I didn't really wanna have a rental until I was in The US full time. But I wanted to actually add something to what you said about the minimum 75,000 mortgage. And what I recommend, if people want to come in to the Cleveland area, the very first thing that you need to know is be familiar with the areas. There are a ton of places that you can buy for 50,000, 45,000, But this is what the problem is.
Araceli:You need a ton of rental. And now the biggest thing in construction is that the material has grown up exponentially, almost double after the pandemic. So that is what people don't really grasp anymore. And if you are going to buy a property that is in the area, like if you are familiar with the grading system, D and below, you get a house for very cheap, but you still need to put a lot of money. And sometimes that money doesn't even like, you go past what the ARV is, which is the after repair value.
Araceli:So in my opinion, from what I've seen, I don't recommend anybody to buy anything less than a 100,000. 100,000 and above is kinda like the sweet spot for rentals because you still cash flow, you still have a good area where it's going to appreciate instead of going into the areas that are really dilapidated, that it's going to take forever to appreciate, and it's going to cost you a whole lot of money into repairs. So if you want to sell within the next two, three years, you're actually going to be losing money. So that's why I'm kind of you kind of have to go in that sweet spot.
Scott Dillingham:Yeah. And I, you know, I love that you mentioned that because we didn't rehearse that. We're both coming out saying a 100 k should, you know, be be the value. So that's that's cool. The other thing too that you mentioned that I I will touch on, right, is we we have a lot of investors that do the fix and flip loans.
Scott Dillingham:Even our staff is doing that. Mhmm. Like, as we speak, we have deals going on. Like, this is this is our our world. Right?
Scott Dillingham:So and we okay. So what you described with that low purchase price, but then really high renovations, the lenders call that an upside down loan. And that's where your renovations are more money than the purchase price. And, you know, fix and flip loans, especially if it's a first time investor, it's harder to find them in The States. Once you've completed a deal, you know, the world opens up and there's tons of lenders, but those upside down loans, there's only just like I could probably count them on one hand, the amount of lenders that will approve it.
Scott Dillingham:Uh-huh. So if that is something that the investor's targeting, then, you know, their rates, their fees, like, all that stuff, it's gonna be really, really high and not attractive. So I love what you're saying. Buy something a little higher. Right?
Scott Dillingham:Don't put in as much renos. Right? Make sure you're under the ARV. You're gonna get best terms on your mortgage too because it won't be an upside down flip loan. It'll be just a regular one.
Scott Dillingham:So it's all the way better around, like, every angle if an investor wants something a little bigger.
Araceli:But there is you know, if somebody's listening here that they are they don't know where to start, there's basically just two things that you really need to be good at. First of all, understanding the ARV. That is one of the things that if you are there's a lot of wholesalers, even realtors, right? That they say, Oh, buy this house. It's really cheap.
Araceli:Cheap in what sense? Right? Everything is relative. So you really need to understand that maybe it looks cheap to you because in Canada, the prices are really high. But a house that is $50,000 where is it?
Araceli:It's worth $50,000 or not, right? So you really need to kind of adapt to the area and make sure that you understand the ARV, which is the after repair value. And you can work from there. Because if you're very good at determining the ARV in that area, then you can work your way backwards. So now the second thing that you need is obviously a good contractor that is gonna give you the right repair, right amount of money, and that doesn't go over budget because that will blow it out of the water.
Araceli:Right? So
Scott Dillingham:Mhmm. No. And that's smart. And I I I think that's where you come in. And I I think the last point that I wanna mention here, and then we'll touch on, you know, how people can reach out to you and and what you can provide.
Scott Dillingham:But I toured one of our client's properties. She did some some videos and stuff, and we did some walk through. So if you're listening to this and you wanna check it out, it's it is on our YouTube and all the other stuff. It's it's there. But he was he was highlighting the fact that he purchased in a in a really nice block on that street, and just we took a drive in two blocks down on the same street.
Scott Dillingham:It was a really, really bad area. So I think that's something to take notice of is that even on the same streets, like, one block can make a big difference on if it's a nice area. And I found that to be true with Cleveland after he highlighted it to me. I toured the neighborhood alone, like, just to see. And, yeah, it's nice section, bad section.
Scott Dillingham:And it's it's like that all over the place. So
Araceli:So that's why it's so important to go and look at the borders. Right? So one of the strategies that I use is I use the grading systems. So when you know the borders, then you can buy maybe on a C plus area that is adjacent to a B area because it just it shows that it's so close to it that you think that you are in the B area instead of a C plus And that's how you get the best value. But if you are on the opposite, and you're in C plus and you're on the other side with an F area, then now your property looks worse.
Araceli:And now the value is a lot less. And you're totally right. You know, we have properties that are in certain areas that you can sell for $300 You go just across the road, and those properties are not even $70,000. Right? So that's that's another thing that people have to be aware of and they have to be careful of because that something that is close by sold for that money, that doesn't mean that the property in that area will sell for that amount of money as well.
Araceli:Right?
Scott Dillingham:That's right. That's right. And this, like, I mean, I don't know the area like you do, but after seeing it, like, this property was, I think, in a pretty good location. I mean, it was within three minutes from the hospital.
Araceli:It was
Scott Dillingham:kinda wedged in the middle, so it was also three minutes from the riverfront, like, the really nice, area with all the restaurants and, where they host concerts and stuff. So it was like the in the hub. Right? And so even in those areas where you think it's preferred, yeah, to to check that. So I love that.
Scott Dillingham:So for for you, Araceli, I mean, there's there's two things. Right? Like, you help investors that want to get started, but maybe they need a little bit of hand holding and they wanna partner with an experienced person to flip properties or, you know, whatever. So I know there's there's that that you do, and then people can tap into your crew if they're looking to build something. Is is that right?
Scott Dillingham:Am I missing anything here?
Araceli:Yeah. No. That is correct. So one of the things that I do, and I've done with several Canadians as well, is that sometimes they don't have a lot of time. You know, they work.
Araceli:They have the full time job, family, and all of that. So they don't have a lot of time. And to me, you need to have either yourself looking over, or you have to have somebody that has some vested interest in the deal in order for it to make it happen. So I do a lot of deals with people that they have they are the money partner. So they say, I'm I have the money, but I don't have the time or the skills to do that.
Araceli:So I'll take the money, we'll purchase the property, and I will do everything. So I will take care of the crew, making sure that everything is paid, utilities, everything. Right? And then at the end of the day, we'll split the money, like the profit, the people. Right?
Araceli:So everybody has a vested And so far, everything has worked out really well that way. Now, if they are ready if if there's an investor already that is in Cleveland and does not have someone to renovate their house or has had problems, that's another thing that I can do. I can come in, give you an estimate for what you need, and then help you out with renovations.
Scott Dillingham:That's perfect. That's perfect. So for somebody listening to this and they're like, that's exactly what I want. How do they how do they get ahold of you?
Araceli:Well, they can give me a call or they can send me an email and just let me know that, you know, they hear this on your show. And then we can talk, find out exactly what their situation is, and go from there because I believe that, you know, you need to be a good mesh. Right? So we need to be together because we, if you're becoming a partner, then we need to like each other. We need to know that we have the same, you know, philosophy.
Araceli:And if they like what they see, you know, they can come out to Cleveland. We kind of, give them a tour, some of the areas that are good, that are bad, what I look for, how I work. They can come and take a look at some of the properties that I'm working on to see the quality of work, and then we can go from there. You know, we can discuss how we can work together.
Scott Dillingham:Well, that's that's great. And do you mind sharing your phone number and email here? Or do you wanna get it to me after the show and we'll put it in the show notes?
Araceli:Yeah. I can I can give it to you right now? You can either text me or call me. +1 62720163 or via email, which is my name, Araceli, racelih.re@gmail.com. And then just make sure that you tell me that you hear or saw me on Scott's podcast, and then we can go from there.
Araceli:And then we'll just have a chat and go from there and see if there's anything that I can do to help you. Because right now, the situation in Canada, it's just there's no cash flow. It's such a big amount of money to get started and buy property. And make it cash flow, you basically have to put more than 50% down. You know, a lot of people don't have it, and there's really no reason for it if you don't have to.
Scott Dillingham:Yeah. And I mean, like, I I will just touch on that. You're you're right. It's definitely a lot harder to cash flow. We do see people getting creative.
Scott Dillingham:We're seeing a lot of people adding additional dwelling units to their existing properties. We're seeing people switch to multifamily properties for cash flow. So, I mean, there there are still ways, but we are seeing a ton of investors. And I would say it's getting to the point where we're actually starting to do more applications for Canadians that want to invest in The States than Canadians wanting to do loans in Canada. So it is definitely increasing.
Scott Dillingham:I think there was something like and don't quote me. I I don't know the exact stat. I just saw it online, and I don't know if it's accurate either. But it was something like $60,000,000,000 they projected left Canada last year for investment into The states. Like, just a massive, massive number.
Scott Dillingham:So please fact check that. Like, if you're listening, like, I don't know if that is a number, but, like, that is what I read. And if that's true, I mean, that's just that's massive. And that's just one year. Right?
Scott Dillingham:That was Trump's first year of saying, hey. We have tariffs now. But he's still going. He's still pushing on it. Right?
Scott Dillingham:So who knows what's gonna continue to happen?
Araceli:Yeah. It's politics. You know? But right now, we really I I don't watch the news too much because sometimes they get distorted and it's not really a a good fact. Right?
Araceli:So what I need to do is just concentrate on what you can see, what you can control. Right? And what you can be good at. And I think the opportunity for Canadians is huge right now, especially because the lending has been open, and you don't even need a lot of experience in order to do it. You know, if you are able to know where to buy, how much to buy it for, and what kind of rentals to do, then you're good.
Araceli:Right? And the opportunity is still there even though the prices went up significantly just as well. But the opportunity is there. You can't find anywhere that cash flow in Canada or very little money. Right?
Araceli:So the last property that I bought is a multifamily that is a a a two unit. I added another unit in the attic, and my two units is paying me $2,200. So it's $1,100 per apartment. I bought it for 95,000.
Scott Dillingham:I see. That's awesome.
Araceli:So you can't beat that. Right? And, you know, of course, you know, it's an older house. You have to put some money in it. I put about $30,000 to get it up to you rent ready, But the numbers still work.
Araceli:It's just amazing. So and and those are the things that you need to look for. That's what you're looking for for minimum amount invested. Right?
Scott Dillingham:Yep. Yep. No. I I agree, and I think I think that's incredible. So we're we'll we'll wrap up for now, but I'll make sure your details go out in the show notes so everybody can reference that.
Scott Dillingham:If you're driving and you can't, you know, take notes of, Araceli's phone number or email, it will be in the notes. But thank you so much. I loved hearing your journey and your story. I think it's it's super cool. And it's one that believe it or not, it's it's one that is duplicatable.
Scott Dillingham:Like, someone else can do this. Do you know what I mean? It it's it doesn't take as much capital, like you said, that Canada would need. So, you know, we are having investors that are not qualified in Canada go to The States just because they can get something, right? And something's better than nothing.
Scott Dillingham:So, yeah, I love it. Thanks again for joining.
Araceli:Absolutely, Scott. Thank you very much. And if you do have any other question or you wanna know anything specific about the area, I'll be happy to come out and talk about it. You know, I I could talk about it forever.
Scott Dillingham:That's awesome. Well, again, thanks thanks so much. And for those listening, if you enjoyed the show, please like it, follow us, and obviously share it with your friends. Thanks so much. Take care.
Araceli:That's awesome. Thank you, Scott.