Rent To Own Homes And Passive Income With Paul McAllister & David Pereira
So welcome everybody to another episode of the Wisdom Lifestyle Money Show. My name is Paul McAllister. I'll be your host today. If you don't know me, I'm a real estate investor, a real estate coach, and a mortgage agent at Lend City. We focus strategically on, in mortgages for investors and growing peep growing portfolios for investors.
Paul McAllister:We offer some unique things that other mortgage agents wouldn't offer, which is, like, we have a Lend City Investors Hub with 600 investors. We have we will actually do a real estate portfolio investment business plan with you. So those are some unique value propositions that we offer. Today, our special guest is Dave Pereira. Is that correct?
Paul McAllister:Pereira? Pereira? He's his company is Rent to Grow Homes. Their mission is helping deserving families earn their way to homeownership while providing passive investors with a target annual return of 20%. 20%.
Paul McAllister:So we're gonna get into the 20% behind that. Dave, how about you give an introduction, and, yeah, let's get into it.
David Pereira:Thanks for having me, Paul. I started listening to your pod in the the last little while, and I love the the pace of the interviews, the fact that you guys get into it quickly, and there's always a couple of good nuggets that I get out of every episode I listen to. So thanks for putting out amazing content, and I think I messaged to Scott Dillingham that his is one of the few newsletters I actually read. I get a ton of emails and don't necessarily I might open a lot, but I don't read a lot. That one, I actually will make time for and and take a couple of minutes.
David Pereira:In terms of myself, yeah. So I've been an investor for about, 10 years now. You mentioned Rent A Grow Homes. Started that a couple of years ago. And and like you said, our focus is really around helping people who are helping good renters with good incomes get to the next level of homeownership.
David Pereira:A lot of them will get rejected by banks for a variety of reasons, typically not enough down payment, not enough credit score. So we provide that bridge to help them get into homeownership. So I've been doing that for a couple years now. I was an investor in rent to own before becoming an operator, so that's how I cut my teeth in that. And it's been incredibly rewarding to see family succeed.
Paul McAllister:That's really cool. Yeah. So it's I love the investment side of things when you can actually make change in community society. Makes total sense. It's greater purpose.
Paul McAllister:Okay. So Yeah. That was start off actually
David Pereira:really important for me. I just like to point that that was actually really important for me because whenever we're like so, yes, I like to make money. I like to make money for my family. I like to grow wealth. But for me, it's not necessarily a scorecard thing.
David Pereira:Yes. We want financial security for my wife and I, for our children. But sometimes we make these investments, and they're completely into the kind of this black box. And I could invest in Apple stock. I could put money into a REIT.
David Pereira:I could do a bunch of things where I put money and later on get some more money back, but I haven't really made any impact on anything. Even with buy and hold, yeah, we're nice landlords. We take care of our stuff, but we're not necessarily really helping like, I don't think we're really helping anyone or advancing society whatsoever. Whereas with rent to own, like, you actually are seeing a family who has you're helping them with their spending habits and their saving habits, and you're seeing progress over 3 years from not being able to get qualified by the bank to being there because they've saved more money, and we've helped them raise their credit scores. And at the end, they get they're already living in the house, but now they get the keys to their home, and they're just a moment of pride.
David Pereira:It it's really cool. And, yeah, it's one family at a time. We're not a big scale business, but it's something. And it's it's a nice little legacy to to leave.
Paul McAllister:Yeah. It's really cool. So I said we're investor focused, but we still have a lot of investors like yourself would be sending us deals to get them on the other end. And I have a deal right now that it's rent to own. They got it about it was, I think, a 4 year.
Paul McAllister:I think usually they're shorter. We can get into kind of the specifics, but I think they saved they were paying an extra 12 or $1300 for that time. They have about $60 down payment saved. And the cool part I thought of this deal was, like, they they've all worked. So mom and dad worked at the same place for 3 years 9 months, and the son the sons are in on the deal as well.
Paul McAllister:So 2 sons Mhmm. Grown children, and they both work at the same place for the exact same amount of time, and they all make around the exact same amount of money. It's like the stability of the this family. Like, I wanna meet like, a lot of stuff is online already, but it like, I wanna meet them because it's like, how are you so stable? And but it's cool that they went to rent to own.
Paul McAllister:They've made it work, and it definitely would be like a success story of somebody getting making it happening, and their credits are all above 700. So it's And
David Pereira:now they they look great in the eyes of the bank now. Right? Because stable jobs for 3 and a half years, 4 of them on titles, so the combined income will be great. They've worked to increase their credit score over 700. You said they've saved over 60 k with option credit payments of 1200 a month.
David Pereira:Like, it's Yeah. It it real it's a month by month thing. Like, the progress is slow. Right? It's a really, like, flat slope.
David Pereira:But over 3 years, over 4 years, it's like, the difference between point a and point b where you wind up is is huge, and especially for these families.
Paul McAllister:Yeah. Especially, you could be paying rent and you then you're still trying to save it. It's cool that it's structured. It's structured, and and you're getting benefits of, yes, the space. And then from an investment standpoint, I think it's really cool that they're gonna obviously take pride in their space because they know that their goal is to get that.
Paul McAllister:Right? So you're getting people I was just talking to one of my friends who's an investor, and he was saying, I don't know why how people do this renting stuff. He's people are so disrespectful because he's just getting into it now, and there's this one guy just telling the like and he's he's so disrespectful to me, and he leaves the he has a 1,000 it's all inclusive rent, and he has a $1,000 electrical bill. And he's I don't know how somebody even can have that big of a bill. And he so it's but when you're doing a rent to own, it's not something you're gonna you're gonna run into.
Paul McAllister:They're gonna take more pride and respect for
David Pereira:totally different because it's an owner mentality. Yeah. Just as you said, they the tenant buyers with what we call these temporary renters, tenant buyers, they absolutely have an owner mentality. And there's a couple of things there. Number 1, the contract that we have them have with them basically states, hey.
David Pereira:You are in charge of maintenance. You are in charge of cutting the grass. You're in charge of snow. So all that stuff that typically a landlord has to do, that responsibility has shifted to the tenant buyer. So contractually, they're obligated to to take care of the place.
David Pereira:But more importantly, it's a mental thing. So they aren't seeing this house as, I'm gonna be here for a year. Let's whatever. If we leave it trash, no big deal because we're gonna move on to the next place. That's not their mindset.
David Pereira:Their mindset is this is the house that we wanna put roots in. This is the house that our family is gonna be in for some years. We're gonna get the keys in 3 years and have our own mortgage and be on title and be owners. This is the house we take care of, and it's a totally different mindset. We do inspections of our places every 3 months or so, And it's more of a courtesy call, but I do wanna make sure there's no grow ops or I wanna make sure everything is going the way it's
Paul McAllister:I did the same thing.
David Pereira:And then inevitably, it's the houses are are great. Like, they there's they've usually enhanced the home. They've spent their own money to improve the home. And every time I go like, in the way we do it, they need to let me know so I can approve it. But I'll always say yes unless there's a reason to say no.
David Pereira:If I know it's gonna raise the value of the home, it it it makes sense. And Yeah. You can see every now and then there's this incremental improvement, a new fence, or they're working on the basement and they're doing something there, or they're, like, putting in flooring in the basement. Right? Like, it's one step at a time.
David Pereira:They don't have huge budgets, but it's so cool to them so cool to see them investing in their home.
Paul McAllister:Yeah. It's usually when the wife gets an idea, she's gonna do the idea. And, also, like, even the outside, like, I see the exteriors. I have rentals where people, like they're like, can we do the landscaping? Can we have a garden?
Paul McAllister:Can we so when you have those people, those are people that are gonna be long term, and you're automatically, I think, getting that with the rent to own vibe. I think one thing is for the I do the inspections as well. I do the because I have interconnected fire alarms in all my places, so that's my excuse to go in on a quarterly basis and make sure I check off that box that I'm testing the fire alarm, and I'm also making sure there's nothing crazy going on in there. It helps me make decisions on certain things If I wanna keep the tenant or strategically not, or those types of things. Okay.
Paul McAllister:For our listeners, most people are listening. I know we're on video, but most people are listening. So I thought anywhere like, where is your graph like, where's your geography? Like, where do you focus on these rent to owns? Is it all Canada?
Paul McAllister:Everything's just Ontario?
David Pereira:No. So we actually decided to focus in Eastern Ontario. Well, truthfully, if a good opportunity comes up in well end or in kind of Southwest Ontario and the numbers make sense, for sure, we'll operate we'll look at it. But in terms of where my marketing effort is, where I have a team set up, and where I've just tried to establish a presence, it's really been Eastern Ontario. So Cornwall, Rockville, Ottawa region, anywhere in that area.
David Pereira:Couple of reasons for that. Number 1, we actually wanna buying some rental properties in that area. So before we did that, I did a fair pretty deep analysis to justify to myself why do I put my family money into this, and why do we have skin in the game and want to actually buy rentals in that area. So I did that analysis back in 2021. The reason we went up there is my wife's from Cornwall.
David Pereira:So she knew the area. Relationships were there. That was the reason. Go to Cornwall on Christmas, to visit family there. And then start discovering holy like, home prices were reasonable.
David Pereira:And when I say reasonable, they were in the 3 100, the 4 100. Like, you can get a home today in Cornwall for 3.50. A 3 bedroom, 1 to 2 bath, absolutely livable. While that home for 3.50, the rents are 2,02100, 23100. So put that into our investor calculator, and all of a sudden you realize I can cash flow here.
David Pereira:So that was the justification for me as an investor to do the buy and hold there. And then as I started meeting renters and just talking to real estate agents and mortgage brokers there, I started to realize there is a huge potential for rent to own here because of incomes. So there's a lot of people there who work at Walmart, the Walmart distribution center or the Ollie Mall factory. There's there's a lot of sort of large corporations with tons of people making, let's say, 50 k. 50 to 60 k per year.
David Pereira:But as a couple, they're making a 100 to 120. If they are making that much money and they just need time to save a down payment and they need time to repair their credit, And in small towns, and a lot of people I'm talking to, like, they weren't necessarily trained in terms of how to maintain their credit score. Financial education just wasn't a thing, and those of us in our thirties and forties know that. We just didn't learn enough of that in school. So I talked to a ton of people in Cornwall who apply, and there's always, like, lots of stories as to why their credit scores are so low.
David Pereira:And the ones that we wound up working with, you can see that they've changed their habits. You can see there's motivation on their part onto why, like, they wanna be better. They've already saved money with the hope of buying a home. So they've got skin in the game on day 1. And so just realized there was a lot of people there where it made sense.
David Pereira:Now when I say a lot of people, for every 100 people that I talk to, we probably will let 2 to 3 in the program. Unfortunately, there's a lot of people who would love the idea of owning their own home, but they just don't have the incomes. They're they have way too much debt. They're on ODSP, and, unfortunately, the bank will never recognize that as a source of income for a primary residence. So we cannot solve it for everyone.
David Pereira:The reality is we probably are able to help 2 to 3 percent of the inquiries that we get or the forms that we get on our website. But still, those 2 to 3 percent are thrilled with with the process and how we work with them. And yeah. So we've decided to stay in that market, Eastern Ontario. We'll probably expand to Welland, Niagara.
David Pereira:Look at those areas where, again, if cash flow is possible, then we can make it work. If cash flow is way too tight or there's no argument for appreciation in that area, if I think I think GTA could come down further. And GTA, it's impossible to cash flow already, so I would never touch GTA for rent to own. But in these smaller tier 2, tier 3 markets where there's a case for appreciation and cash flow is is available today, those are right for rental.
Paul McAllister:So I guess, one, I've got a deal done before with ODST somehow. I forget the lender, but it was a while ago. K. But there will be there is some lenders that will take that income. There's a lot of parameters on how, so I understand why to stay away from it.
Paul McAllister:From a lending standpoint, when they get to the end, is there a certain lender that you find is are doing these rent to owns? Like, I know I have a list of about 15 or 20, but is there one that particular that you're seeing your clients get financing final financing with, or is it it's just spread out? Are you involved in that process, or you just go get approvals, or how how does that work? Do you stay away from it? Or
David Pereira:No. I don't I see my job as risk management, and part of the risk I need to remove is making sure that it they're not stuck at the end. So I will typically let them work with so I have a mortgage broker who has qualified in the very beginning. Of course, with the partnership I have with him, he will ideally work with the tenant buyers to to to place them. Realistically, one thing we've tried to do is avoid even saying rent to own to the lenders.
David Pereira:As much as some lenders just don't wanna touch it even though the King government has come out and said this is part of our housing strategy. The banks haven't totally bought into that yet, and they're still remembering the scam stories and all these sort of horror stories. And their risk management people are saying, do not touch rent to own. So there's some banks where we just don't even bother. But, overall, we try and structure things and make things set things up so that the word rent to own or the phrase rent to own doesn't even need to be mentioned.
David Pereira:It's simply a sale between a a seller and a buyer. That buyer just happens to be living here already, and here's where their deposit is. Yeah. That's what we just talked about. Kind of open.
Paul McAllister:Yeah. No. I think I've literally called around 5 lenders yesterday to ask about rent to own me. Rent to own, no rent to own no. Right away.
Paul McAllister:Just not even a thought. I'm like, these are good. I have to say that people I just told you, but they're like, no way. And then I found 15, but still it's people didn't even usually BDMs wanna talk. They're like, no.
Paul McAllister:Yeah. So I find that interesting. But one thing that I realized, cause I had submitted to a deal and got it declined. It can't you have to like this cool thing that you have going is meeting up front when you're making the contract with the mortgage person, mortgage broker. They're gonna know the guidelines.
Paul McAllister:They're gonna know how to set it up. For example, like, one of the declines was the mom and dad signed the rent to own, but the kids weren't on the rent to own agreement. So that doesn't meet our guidelines? No. That's the reason.
Paul McAllister:And that was, like I was like, they're they're these are above 700. I have everything going, and they're like, no. It doesn't meet the guy then because so if you went to the mortgage person, they would know where they're gonna go, and they would know how to structure it, and they would make sure that those things happened. So I think it's really smart meeting that mortgage person upfront.
David Pereira:Yeah. I'm someone I'm someone who thinks that common sense should be applied in most situations, and what I've learned is the bank doesn't agree with that philosophy. So Yeah.
Paul McAllister:And this wasn't even a bank. Like, this yeah. Right?
David Pereira:Or any lenders. Right? Like, again, get their job as a risk management. And so I understand that. But if if they just looked into the story and saw that these are people with good saving habits, and they've done everything they're supposed to do to get to the finish line.
David Pereira:And you're gonna nail them on a technicality of, like, their name wasn't here. Really? But to avoid all that stuff, that's why I get the broker involved in day 1, and he's the one who says, here is the appropriate budget for this family. So in terms of just quick process, like I said, maybe 2 to 3% of the people who apply make it to the starting blocks. And what we have to do is I have conversations with them, understand motivation, understand what's their story.
David Pereira:I'll collect some quick numbers on them. But more importantly, my broker will then get the actual paperwork and really do a validation of is what they said? Is that true? What is their real credit score? What are their pay stubs look like?
David Pereira:What are their tax returns look like? So then we do the hardcore, k, what is their financial story? And if there's stuff that we see in there, we wanna talk to them to help have them explain to us and make sure that we feel comfortable with that explanation. I'm never going to do a deal unless I feel comfortable. Because if I don't feel comfortable, I cannot give it to an investor.
David Pereira:So I need to feel good. My broker needs to feel good. He'll give me a limit. He'll say, k. In 3 years, these guys can safely afford this number assuming rates are at this point at at this level, and we're gonna do the 2% extra for the stress test.
David Pereira:So we know what we're working with. So it takes a long time for a tenant buyer to get to that level. But going back to your point, yeah, I want my broker to set those guidelines, and then also tell them here's what you need to do to repair your credit score. And then I'll talk to them about, okay, what's the right way to structure this? Who's on title, and how do we do this so that in 3 years, in 4 years, we get to the finish line?
David Pereira:It's an easy transaction.
Paul McAllister:Yeah. No. It makes sense. So I think from all of that, I understand some of the process. I think we got the profile of a tenant buyer.
Paul McAllister:It's somebody with good income that's trying to improve their credit. I'm assuming like new immigrants, divorcees, anyone like that. And then even young couples or families that they're trying to state they're trying to pay off student loans, and they're trying to build that down payment. So to me, that's, let's say, your profile of tenant buyer in your situation. So what is the profile of the investor?
Paul McAllister:Because a lot of these are investors listening right now. So how do let's get into the profile of an investor, and let's get into how does an investment work when they're actually, investing in this type of thing.
David Pereira:So the profile for investor for rent to grow homes or even for rent to own in general is someone who wants to be passive. So number 1 is they're not looking for hands on management. They don't wanna be tinkering at the house. Literally, they wanna say, here is some money. In 3 years, give me more money back.
David Pereira:And over the course of those 3 years, give me a bit of cash flow. But I don't wanna hear anything about this house. I don't want a tenant ever to call me. You let me know if there's something I need to know, but I expect this to be pretty my easiest investment for the next 3 years. So that's really how we try and tailor this is because our investors are looking for that experience.
David Pereira:They don't want to deal with tenants, toilets, any of those things. They literally are saying, hey, take my money, give me more money back. In terms of who those types of investors are, there's a lot of first time investors where they want to get involved in real estate, but they don't necessarily feel like they have the knowledge to to buy and hold. And they they don't wanna they don't wanna jump into the buy and hold and the risks associated with that and the tenant management and the property management and all that stuff. They but they want involved in in real estate.
David Pereira:However, we have a couple investors who have 2 or 3 properties and they, but they have extra money. They don't wanna take on more responsibility of managing a thing, but they want to deploy more money into real estate, and they love the idea of 20% annual return. So we actually do work with a couple people who also have some buy and holds, but they just want to diversify. For me as an investor in rent to own, it's honestly been the easiest money we've ever made in real estate. Not necessarily the most money, but the easiest.
David Pereira:So if you think about the return, like, we so we promised 20% annual. If I compare that to my buy and holds that I have, if I did the spreadsheet ahead of time, I might be able to get 25, 28, 20, 30% if I with certain appreciations, cash flow, and all that stuff. If I bought a good house, put in good tenants, and ran the numbers with, like, occupancy at 8% or whatever it is, you might be able to get 30%. What I've learned as a buy and hold investor for the last 10 years is it always these unexpected expenses. And there's always stuff that comes up.
David Pereira:And that's what always when I do my taxes at the end of the year, like, where the $2,000 come from? Like, what is this? And I have to go look at the receipt. I'm like, oh, yeah. The air conditioner conned.
David Pereira:We replaced that. There's always this stuff that happens. And so the nice thing about being a rent to own investor, nothing happens. The whole idea about rent to own is it's predictable for the investor, predictable for the tenant buyer. We know the price of the house today.
David Pereira:We know that what that price is gonna be in 3 years' time when they buy it. We know how much cash flow every month that investor is gonna get because we the mortgage is locked in. It's always a fixed mortgage we do. The only other two variables that we have to worry about are insurance and property tax.
Paul McAllister:3 year fixed? Is that usually the terms?
David Pereira:So yeah. We often do yes. We often do 3 year fixed. And then if we need to extend the deal to a 4th year, then we'll do that. Okay.
David Pereira:But, typically, we look for 3 year fixed. And so the nice thing about rent to own is everything is generally predictable. There's just no if we do a proper home inspection before the purchase, and we always do a conditional purchase on inspection. So then I have my inspector who I trust. He goes in.
David Pereira:He knows what I'm looking for. I don't want any major expenses in the next 3, 5 years. Check the roof. Check the water. Check the foundation.
David Pereira:Check all the things that are going to be the pain in the butt things to solve for. So we've sometimes we've said no because of an inspection.
Paul McAllister:Or you I think we
David Pereira:we had a little Go ahead. No. Sorry.
Paul McAllister:It glitched a little bit. I heard pain in the butt.
David Pereira:Yeah. So, basically, going back to the theme of predictability, we wanna make sure the house we buy is a good house. That's not gonna incur issues in the next 3 to 5 years, and that's the whole point of inspection. So if you can remove all those major issues, you remove major expenses. And so that's what allows us predictability.
Paul McAllister:Okay. So I'm giving you a $100. Then when you the contract starts, you're automatically giving a percentage of something per month. That's cool. And then the end of it, you'll at the end of the whatever the difference is at the end, that's when you're gonna get a big payout.
Paul McAllister:Right? Is that my understanding? Okay. Perfect. Alright.
Paul McAllister:That makes sense. And then in terms of reporting, is there, like, a monthly, quarterly, annually? What kind of I know these are hand off investors, but is there, like, an email they're gonna get? How does that look? Makes sense.
Paul McAllister:That's really cool. So I think an investor is satisfied. Now I'm thinking from the investor standpoint of all the questions they would wanna ask. I think before we close, I wanna hear some I see something that, for poker. So I'm a poker player.
Paul McAllister:I used to play semi professional online tournaments, for about 4 years or so. Like, I, I kinda floated around Central America. I lived in I've lived in poker houses with some of the best in the world, literally. And so I see that you like poker, and your wife. You and your wife both play poker.
Paul McAllister:What kind of poker do you play? Because poker is a broad thing. Right? So I say I'm I'm tournament poker, but it's the reason I bring it up is in front of me now, I have, 2 cash tables set up, because we're playing poker tonight. So what kind of games do you play for in terms of poker?
Paul McAllister:And then it's investing. Right? So to me, poker and investing, that's what it is. Yeah. What kind of poker do you play?
Paul McAllister:Yeah. Okay. Oh, you paused again back. Oh, great. We're getting into the good part.
Paul McAllister:So I could sit here, and I'll wait and see if he if he's frozen now, Peter. But, yeah, I could talk about poker forever. It's something that I play a lot or I used to. And, yeah, it's all numbers. It's math.
Paul McAllister:It's logic. It's science, and it's really closely related to real estate investing. Right? You're always hedging your bets. You're always wanting more information.
Paul McAllister:You're always wanting to use that information against your opponents. I like that you're not playing the house like you're playing the house in every other game. That's why I don't play any other game, but I play poker because I'm playing people, and I know I can beat people. It's the same thing with real estate investing. I know that I have an edge over the market based on my strategies.
Paul McAllister:The same thing with poker. So if you're getting emotional, you're gonna mess up. And it and then that, it will lead to it it compile it compiles. But I I think mindset is important in both real estate and in poker, but I don't see it as luck. When I get it in on the all of my job is just to get it in good and anything else.
Paul McAllister:Like, it's not many times, even if you get it in preflop or even on the flop, there's still always usually a 4% runner is still a 4% chance. So to me, that you think, oh, it's 4%. That's not much. But is it, like, still 1 in what is the exact math on that forward? Yeah.
Paul McAllister:1 in 25 is still happening. And then just going up 8%, people like, oh, it's only 8%. Now I got 1 in 12. So it's still 1 in 12 times, 1 in 12 times. And it's not just like it happened right then, so it shouldn't happen the next it's 1 in 12 every single time.
Paul McAllister:So it's, to me, I don't get mad when people win. I get excited. I I I don't honestly, that's my literally, I don't get excited when it's online because I can't see the people. But if it's somebody that I'd see, I actually get excited for them. I'm never gonna be like, bam, or it's because I'm planning to make the better decision.
Paul McAllister:I know over the long run, I'm taking all their money, And if somebody wins, it's good. Because when I lose, I usually lose little when I win big, and I usually win often. So it's you can't get mad at those things, and and I I tie it to real estate. I don't make emotional decisions. Like, I don't get emotional when a tenant kicks in your wall, or those are things that do not impact me because my mindset is ready and aware.
Paul McAllister:That's a part of the game. It's just a part of the game, And the longer and the bigger and bigger so, Link, we're gonna talk about your portfolio to close it off in the next 10 minutes. So I have 16 doors. And when I get to a 160 doors, all the little things that it's just to me more and more things are gonna happen, and there's gonna be no surprises. Right?
Paul McAllister:And then you can't get emotional about it's I don't know if the Four Agreements. I live my life by the Four Agreements. And don't make assumptions. Don't take anything personally. Don't take anything personally.
Paul McAllister:So, like, before I used to live in Toronto, and I'd be in traffic, and people giving me the fingers and doing all screaming at me. And I used to scream back, and I used to like, oh. And then I read the Four Agreements, and it changed my life. And I realized, like, that person doesn't know me. You don't know what that person went.
Paul McAllister:They could've lost their whole family that week. You don't know what they're going through. They don't even know you, so don't even take it personally. It's not personal. And too much, too many times, even that renter, you might think it's personal too because it's your property and you've met them or whatnot, but I don't take actions of others personal.
Paul McAllister:And I think that's in poker and in real estate investing, that is my advice to all the listeners when you're getting into the game. After you've been into it, you grow that thick skin. But I I think it's very important mindset and emotions, like poker, is very important for real estate as well. A loser. Yeah.
Paul McAllister:Yeah. Yeah. No. I totally agree. How I learned poker is through asking questions to poker players, and it's really cool that in in investing, it's the same way.
Paul McAllister:Right? You look at people who not saying that you're gonna do what they've told you, like, how they've done it, but at least you have that kind of that point. And I find investors definitely very open to talk about their trials and tribulations. And, like, having those conversations with people who's been through it, very valuable. So it's really cool that you've done it from the rent to own perspective.
Paul McAllister:I've done it myself in in terms of my burrs. I'm a burr guy. I love burrs. So I've reached out, and I've done the same thing on my journey. So for your portfolio, we have 5 minutes.
Paul McAllister:What kind of portfolio do you have? Where do you like to be, I guess, right now in this current market? Yeah. Do you wanna we can finish with that. This year will be change.
Paul McAllister:It will change this year. Yes. Yeah. So the US Lending is really cool. I've actually just done my first couple in the states.
Paul McAllister:So we do US Lending. I I think I don't know if you've seen it on there. As long as you're Canadian investing in the states, we can do lending in all states. And so for myself, I'm the same way. I'm headed to the states.
Paul McAllister:I went to Dallas about 2 or 3 months ago. I'm planning to check out, he's oh, I went Dallas, Fort Worth looking at properties. I I just need to put my boots on the ground too. I've done a lot of research, but I need to put boots on the ground. So Dallas and Fort Worth, go into Houston, Austin, and go into Florida.
Paul McAllister:Any basically Florida, as long as it's not outside of kind of the hurricane area where you can still get insurance and, like, it's less risk. And then I've even heard of Ohio and even Georgia. Like, those are, like, different places that I'm looking at myself, but I get what you're saying. It is a lot to set up. We do have, I think on our, our, in our investors hub, we've had a, a company that does it.
Paul McAllister:I don't wanna drop their name here. You can contact me and I can give you the information, but, yeah, it makes a lot of sense. They provide a lot of value. Right? You can find those companies that they've done the research.
Paul McAllister:They the reason that I like this one particular company is they have property management set up in almost there in all the states I just said. So that is invaluable to me. Yeah. I think it is too. Starts with an s.
Paul McAllister:Yes. So it's a yeah. Same line. We could in our line, so they the reason that I like them so much is because the biggest thing is when you buy a property, I can sure. I can get a realtor.
Paul McAllister:I have investor focused realtors in a lot of states already establishing, and I'm actually gonna get them onto the hub. And, I mean, they're providing me so much value. I don't see realtors here providing me as much value as some of those American investor, focused realtors. Like, they're providing me all the numbers. They're providing me, like, pages and pages of great information to make decisions on investment properties.
Paul McAllister:But furthermore, that's not the the struggle. I can get my own properties. I can find them. But then it's like, when you need to renovate them, who are you getting? And then placing the tenant, that's a whole another thing, and then maintaining it.
Paul McAllister:And so to me, having, you know, the investors there, the lending's there, because we had the lending, but then the property management to me is a missing that makes me the most that's to me, that's the most risk. Yeah. I live downstream. Yes. Agreed.
Paul McAllister:Makes sense. I think it's a good place to start to close is it's not always with the money. It's why are we doing it? We're doing it for a lifestyle, right? It's a lifestyle.
Paul McAllister:If you tell me that I gotta work 23 hours a day for all the money in the world, I'm not gonna do it. It's just what's life. So it it makes total sense. And I feel like in the beginning for you beginning investors, you wanna do everything. And I used to wanna do everything as well.
Paul McAllister:And then as you after you get seasoned, you realize that it's actually costing you more than it's I used to I used to do my own painting, and I have a good story. So I thought I was a good painter, and I still think I'm a good painter. But then I one time, I I got new drywall, new place, and I was like, I'm gonna I'm gonna save money here, and I'm gonna save $3,000, and I'm gonna paint myself. If I count how many hours I spent painting and then I how many roller marks I put on that brand fresh new ceiling. And then I called the guy.
Paul McAllister:I was like, how do I get those roller marks? I was like, you ruined that new drive off. You should be ashamed of yourself. And so I said, I'll never paint if I paint, I'll paint still, but I will never paint new drywall ever again. And so you realize that your time is worth money, and you've realized that.
Paul McAllister:I can tell. And it's those decisions of, oh, it's gonna cost you 10 hours. You need to have how much is it really costing you, and how much is your time worth, and is it worth you having a sore back for the next month or 2. So it's cool that you know that you wanna invest in the states and that's how you're doing it. Definitely consider the same thing.
Paul McAllister:But yeah, it's so that's your direction for this year. So Ontario, now you're gonna you're still going wide, though. But if you go wide with yes. That's definitely I agree. That would be a good I like that idea.
Paul McAllister:So it's
David Pereira:yes.
Paul McAllister:Yeah. And I think with that is and I'll tell people because a lot of people are coming to me right now about buying in the states, and I'm usually I'm setting the main thing I gotta do is set them up with a corp first. Right? So you need a corp before you buy. You don't need, but you should.
Paul McAllister:98% of the time, you should. If you buy in your personal name, you're gonna get double taxation. But buying an investment property is a corp first, and it needs to be set up correctly. Or was I going with that with the reason? Oh, yeah.
Paul McAllister:Your credit. So when you start a corp in the states, and I have a show on this now, February 15th, about how to set up the corp, the steps that are involved, how to set up the bank account, and all of those types of things. But the reason that I bring it up is you start off automatically with a 6 80 FICO when you open a corp. So as a Canadian, you start a corp, you start off 6 80. You're gonna access to certain rates.
Paul McAllister:They're not gonna be the best rates, but they'll be decent. We'll find competitive product based on where you are. But the main thing is after I have a client that's been done it for a year and a half, and now his FICO's up to 713. So in the over time, you're building your FICO, and so when you are willing to pull more triggers, even though you bought a little property, your corporation is building its credit and which will allow you to build your higher FICO means lower rates and let your money go further for you. So I like the strategy.
Paul McAllister:I don't know if you've thought about it that way, but it's not just about building the reserve of cash. It's also building the your FICO, which allows your cash to work even more. Yeah. Exactly. Exact makes lending a lot easier.
Paul McAllister:Yes. Yes. So that's something to consider. Peter, we're out of time, but it was really nice to talk to you and connect. Is there anything else you wanna say to the investors who have held on this long?
Paul McAllister:How do they contact you? Yeah. Thank you. We will have the information in all of the descriptions in the different platforms, where it goes. Thank you for joining.
Paul McAllister:Thank you for your time. Thank you for listening. And until next time on the Wisdom Lifestyle Money Show, I'm signing off Paul McAllister. Cheers.