Health is priority number one. Sometimes we need a reminder about just how important our health is. Dave Butler got one of those reminders in the worst possible way – a heart attack. On this episode of The Your Life! Your Terms! Show, he shares what happened to him last year and what he’s done since. We also chat about Canadian mortgages and get the latest updates, and discuss private lending in Canada, renewing your mortgage, and things to think about when financing severed land. Enjoy the show!!
Hey everyone, this is Tom Karadza on this episode of the your life, your term show, we have Dave Butler of Butler Mortgages on for a Canadian mortgage update. So this is kind of broken into two parts. This podcast, the first 30 minutes of this are about Dave and what has happened to him recently, Dave, if you don’t know, has had a heart attack and he had a heart attack at 39 years old. We really weren’t talking about it too much, uh, when it happened, but now he shares his story. So, um, the first part of this episode is just about Dave and his life and, uh, I think it’s totally worth listening to, but if you just want to skip ahead to the mortgage discussion, you skip about halfway through this episode and we get into mortgages. But, uh, the, the beginning of this is all about just life and, uh, you know, what he went through, um, with, with that whole episode and we’re just thankful and grateful that he’s through it and he’s on to bigger and better things.
So, um, that’s why the episodes broken up like that. The first half is talking about what he’s recently been through. And then in the mortgage part we talk about um, getting mortgages on a severed severing lane and what you should be aware about, um, pulling equity from different income properties. How do second mortgages work in Canada or private lending in Canada in general? And there’s one thing that we talk, uh, we wanted to talk about that we didn’t get a chance to talk about and it was negotiating your rate at a time of renewal. So I just want to discuss that really quickly. When you are negotiating your interest rate, when you are automatically renewing with your existing lender. So for example, if you have a five year term on an income property and at the end of five years you get a notice saying, hey, we will automatically renew you and here’s going to be your interest rate.
You can negotiate with the bank at that point. The way to negotiate is called mortgage brokers, call other banks, see what the best rates are available and then call the bank that you’re about to automatically renew with and say, hey look, I’m getting these offers from other banks that are much better. Can you please at least match what I’m getting from these other banks? And usually with a little bit of leverage on your side by having that information, they will match. Now the downside of pulling a mortgage away from wherever it is right now and going with a different bank at time of renewal is that you have to requalify. So when you’re with an existing bank and when you stay with an existing bank, it’s typically just an auto renewal. You don’t have to go and re qualify. If you actually want to move your mortgage, a time of renewal to a new bank, it’s a bit painful because it’s like applying for a brand new mortgage at another, another bank on an existing property.
So it’s, it’s typically much easier just to stay where you are, but you don’t want to accept the first mortgage rate that you’re offered. You do want to go shop the market a little bit and then use that as leverage and negotiate a better rate for yourself before you automatically renew and extension on your mortgage. So hopefully that’s useful. Um, so uh, with that, I just want to mention if you are listening to this and you want real estate information of any sort, whether it’s books, look, we have a brand new book that we rarely talk about and I can’t believe we rarely talk about it, but we have a book called the real estate investing blueprint. We’ve taken some stuff that we’ve used over the last 10 years that actually works here in Canada on the streets. We’ve condensed it into a book format.
You can get a free copy of that book at Rock Star, inner circle.com forward slash books. So rock star, inner circle.com forward slash books. This is on the streets. Real world information. This isn’t theory, something that we kind of just read about ourselves and are repeating. This is stuff that’s all been tried and tested here with investors. We’ve worked with hundreds of investors at this point. It’s gotta be thousands of investors at this point. I’m trying to be as accurate as possible. It’s a, I’ll say hundreds until I have that confirmed, but it’s many investors on over a billion dollars worth of income property. Um, here at Rock Star real estate. So this is coming from on the streets experience and knowledge. So we’ve put that all together in a book. The real estate investing blueprint, you can get a free downloadable copy of that at Rockstarinnercircle.com/books. It is available on Amazon. If you want to buy it and get the physical copy, you can all of course go to Amazon and search up our last name or a real estate investing blueprint and find it that way as well. I think that’s it for now. With that, let’s get on with the show.
Are you ready to live life on your terms? Is it time to take charge real estate business building the economy, health and nutrition and more? It’s the your life, your term show with Tom and Nick Karadza are you ready? Let’s go.
So just before I explained to you this how this gym thing, crossfit thing works that you’re wearing Toronto Raptors yet jersey are we w like how far the raptors going to go? Like what words are we going to, the conference is a conference in and basketball I think conference finals. I think we literally talked about this. Exactly. Yeah.
Good, good. That was I think now we have good salt. Yes, we were going, we were in trouble with Lebron but with no Lebron I think. I think there is a, there’s a lot. I didn’t even know what’s going on in that way. All I know is Lavar ball came out and said his son doesn’t want to leave la, but if he does he can’t go to wherever Anthony Davis is. Right. I can’t go to, is it Memphis? No, not Memphis. I forget. I don’t even know. Was very drunk, but listen, are we going to the conference finals? We’re not going to, are we going to take out my, it is. We need we, if we’re going to end up finishing second, I think we really, really, really, really need Indiana to finish third because I think if that way, if Indiana makes it through their first round and we make it through our first, that’s our best matchup in the second round.
It’s Indiana. We do not want to play the sixers in my opinion, don’t want to play Boston. Don’t want to play those two in the second round. Yeah, it goes a tough teams. Right. So wow. I feel like you’re putting radio voice on. It’s Dave Butler. It’s mortgage talk. It’s mortgage happy talk with Dave Butler. I almost had to call it calling a flyer on this podcast because uh, I had no voice last Monday. It was gone. I literally couldn’t talk. Okay. So we’ll get, listen, I’ll do a little bit of the talking. You asked me right and I’m sure someone listening to this is like, can you just get to the stuff, listen, you can skip
ahead and just get to the mortgage stuff. You don’t want to listen to this, but he asked. So I’m going to answer the question. The way this crossfit open thing works is people from all around the world, I think there’s like a hundred and some odd thousand this year that might just be more men. And then there’s like a whole bunch of women as well. I don’t know the total amount, but there’s a whole bunch of people all around the world. You do the same exact workout all around the world. Five weeks in a row, once a week, and then you’re, you’re ranked on how you use time. Well, like some of it could just be time. So like for example, last week’s workout was um, oh yeah, I didn’t do very well at this one at all. It was a, you did 25 toes to bar, so he grabbed the bar and then you put your toes to the bar 25 times, then you do 50 double unders Skip’s.
Then you go to a bar and you clean, which means taking a bar off the ground to your shoulders, 135 pounds, 15 times. And then you go back and you do that again. But by the time you get to the bar of the second time, it’s not 135 pounds, it’s 185 pounds. And then if you do it within eight minutes, you keep going. If you don’t do it within eight minutes, you’re done. And everyone’s just kind of ranked. Right. And there’s a cap, like I think the highest weight at the end was 315 pounds and, and there’s a time limit. So then you, everyone’s ranked around the world. So everyone’s ranked around the world and uh, that’s how it works. The first day, the first week was, um, a certain amount of calories. It was 19 calories on the rower and then 19 wall balls.
And just repeat that as many times as you can in a 15 minute time cap. Yup. So every week’s a little bit different. Okay. But everyone around the world competing at the same thing. Nick’s doing really good. What did he just tell us in his age group? Nick probably doesn’t want us to tell this, so we should. He’s 19th in Canada in his age group. I’m like in Canada, I think I’m like 200 and something in my age group or something like that. And Mike, Mike and I are in the same age group and he’s destroying me, double unders aren’t my thing double unders just destroyed me. No, that’s my excuse. My double unders are brutal. They’re laughable.
Well, 200 in anything in a province or a country or across.
Yeah. Yeah. It’s not that many people doing it and it’s not the greatest thing, but I’m happy. It’s fun. I like it. So, but what, I don’t, I can’t remember if we discussed this last time you were on, but yeah.
S you had a heart attack lounge because I didn’t have the heart attack then. Oh, you didn’t? Yeah, so we actually, believe it or not, I think, I think it might’ve been, it might’ve only been three weeks because I think we had the heart attack. I had a heart attack April 1st of last year on a Easter Sunday. Um, and we had done the podcast, it must’ve been a first week of March. So yeah, I, I was, I had just, uh, I had quit smoking cigarettes in February. I came back from Europe, um, in February and these two kids, two little tiny kids were on the plane right behind us, my wife and I, and um, they were sick as a dog. Like you, they were just sniffle and cough and everything. We were in a tiny little pod, like it was in a business class section of a KLM flight from Europe.
So we were upstairs and like it’s just 25, a small pot. So it’s just who’s this year? Just like you fly first class I and nick and I fly economy. You know what our first class is, if we can get the exit row, you know, if we can get the exit row, that’s our first. The one thing I do too is I’m very, I am frugal. I do wait like I wait for the sales to come around and you flew to Europe first class. I don’t know if he wants to do that and being frugal in the summer. Well, when you can, you’re able to write it off through a company. I mean these are, there’s, there’s certain things I try to tell myself, calling my cra right now, I was out there looking at property, so everything is good to go. Um, yeah, no, I came back from Europe last year and got these, I must’ve just eight these kids a sickness for six and seven hours or whatever it was.
And within 24 hours I got home, I immediately was sick, turned out I had pneumonia. So, um, when you have pneumonia, I couldn’t even really breathe the oxygen, let alone think about having a cigarette. So I, after I smoked and I was 20 years old, so 19 years, I just said, screw it. I’m quitting. This is ridiculous. Can’t breathe oxygen. So no point in smoking. So I thought of it as an opportunity to quit, which was cool. It was awesome. Uh, a quit and just cold Turkey, which is not that hard, believe it or not, when you have pneumonia. Um, and then my problem is to put on like 30 pounds in five weeks. Literally. So like when I came, oh point of my story. It’s just now, as I was saying, I was calm when I was here. You’ve lost the whole probably I was probably two, three weeks after I had quit smoking.
So I was starting to put on just even, it’s not like I was skinny before I was already fat. I was, I was 225 pounds at five six which is very round. So imagine what happened was by April. Is that what you got up to? Well, no, I got up to two 55 I was doing, I was, I had been walking around I’d probably to 20 to 25 for the last couple of years. I mean just completely out of shape and not, you know, just living, living the life as, as, as some people would. I Like I lost the weight is cause I was rushed to the hospital right. Multiple Times. And that kind of changed my whole physical fitness and my diet. I’m following in your footsteps cause yeah, the a heart attack definitely, um, scares the shit out of you. So, um, that was, you know, you’re not supposed to have a heart attack at 39.
So, I mean, long story short, I was, I was eating, we’re having Turkey dinner on Easter Sunday, April 1st. And uh, I went down in the basement after I was done this where I hang out in my house. And uh, you thought you were just going to have a nap? I was, I was actually, I think we were just getting ready to play video games with Dan and a buddy of mine and we’re going to get some video games in before doing some work at night. And, uh, I, uh, one of my vices when there’s drinking these fricking red bulls. Right. So I came down, went downstairs, cracked open a red bull and uh, I started drinking it and then just about to get on the video games with Dan and my buddy. And, uh, I ended up getting this weird, really intense pain on the center, right of my chest. Like it was right around the center center. Right. Which was really, so that was, you know, I’m, cause this isn’t your heart center on your left. Yeah. So that was actually what really tripped me out was, it’s funny cause like in a weird way, I had always thought if I’m going to die, I’m going to have a heart attack. Just drinking
two red bulls a day, smiling. Well, I’m calling, I’m just calling it. If I go down, it’s going to be a hard time. I’m pretty realistic. And you know, how am I, and I’m sure people that I’ve, that saw me for the last couple years, bro, he like, yeah, if he wasn’t gonna die, he looked like he was gonna die of a heart attack as you’re dying. Like Kay, my wife told you today, my wife, Shit, we shouldn’t joke about that shit. I could joke about it.
No, I mean it’s over with. But uh, yeah, so long story short, um, just got a really weird pain in the center, right in my chest. I knew your heart was on your left, so that was so I kind of just let it go. I saw it. I remember it was weird, like I just sat on my couch kind of battling this odd warm, weird pain. Felt like maybe a really, really, really bad case of heartburn. I, I kept thinking maybe because you just finished having Turkey dinner and gravy and thing and all kinds of things you’re going to have here now that I have my red bull. So I mean I, I’m just thinking something went down the wrong tube. I can’t believe you’re a Washington and Turkey dinner with our run as, and it was sick individual. Um, in that sense. I mean, but my whole, my whole thing was, the reason why I was on the Red Bulls really was I would sleep, I would work like 15, 16 hours a day, and then I go to bat, it’s like five hours.
So I’d wake up, I don’t drink coffee. So the first thing I would need, you know, for me that was my thing is I’d wake up and have like a red bull, you know, that was, that was my coffee basically. And then I’d have another one at about six o’clock in the afternoon when I would kind of need some energy to begin my second shift to work. So that was kind of the backstory of why it was drinking these red bull’s really, I mean, and I love the taste they were, it’s a lot of sugar and if you’re not thinking you don’t care what you look like and you’re not caring what your fitness level,
you’ll just drink anything or eat anything. I the first time I had red bull in any meaningful way with somebody, what are those shots where someone you pour red bull and someone drops a shot of vodka in the middle of it or something like that. I, it’s like a flaming red bull. Oh No, it’s probably not going to want to do this. There’s vodka rebel. I mean that was a big club. Maybe you’re dropping Jagermeister into it. I forget where you’re dropping into it, but then it fizzes a little bit and you drink it all with the shot glass in the class. And I had, I remember having three or four of those and I think I wasn’t running around downtown Toronto like, like sprinting, like you’ve seen bolt, it’s quick, the crashes, the crashes, it crashes real. Uh, okay. So you had the feeling and then, and I’ve, I’ve sought knock, knock. Do you? No, no, no, you’re completely, I mean, the whole situation of what I was having, the heart attack that I was having,
which I didn’t know at the time was, um, it, it’s, I mean that’s whole thing is you always think like, you watched the movies, you know, you see a guy having a heart attack, he liked clutches his chest and he drops and he’s either going to the hospital or he’s dead or whatever the case may be. Right. So that, you know, I’m, I’m just, I just have this weird pain, it very intense, weird in the right center of my chest and it’s not my life, so I’m thinking, no heart attack. So sat there for half an hour, just kind of breathing it out and trying to, again, not even knowing what’s going on, I’m just, I don’t want to go into alarm my wife just yet or whatever, but I know it’s, it’s not normal. Um, and didn’t even know it was that serious, but I knew it wasn’t normal.
It was like, oh, this is really odd. Um, half an hour later I go upstairs and you always weird this. So I’d been battling it for about half an hour and I mean, for some reason my, my, my brain told me get upstairs on the main floor because I’m in the basement and my, I live in 120 year old house. And how old is, it was not like they make the basements, you know, we finished the basin, but to me it’s not like it’s a big access or, Uhm, I remember my first thought, it was very odd. I remember going, you know, if I am having a heart attack then it’ll be really hard. If I, if they tell me out of this, Jason, I’d like, I’m like a big fat 255 pounds at five, six. I am just rotund and mass and a, I’m thinking there’s no way like this can be bad.
Like he’s going to be embarrassing number one, but number two. So I thought I’ll do these guys a favor. I’ll get up on the main floor, the main floor. My wife says what’s wrong? And I just, cause she could tell something was going on my face and I just said, I dunno, I get this weird pain center right in my chest and very odd, um, hurts, uh, not normal. And she’s like, do you want to go to hospital? And I said, Nah, I’m just going to, you know, I’m just going to wait it out a bit. I don’t want to alarm anyone, whatever. So then I started just doing weird stuff. I’m like, I remember I went outside of the front door just to get air because April, so the air’s nice and chill and I was starting to get like sweaty and stuff. So I like went out the front door and I remember that didn’t help it.
So then for some reason I decided, well I’m just going to walk to the back door then and maybe that’ll sell like I was, you start doing really odd stuff, delete. And then I was laying on like right on the kitchen floor. I just like laid on my back and I’m like, you know, you just doing things that are not normal but you’re just trying to ease the pain or whatever. So my, and my wife says, you sure you don’t want to go? And she started getting mad at me. She’s like, well you look, you look terrible. It was just going to hustle. I’m like, Nah, that’s cool. Yeah. So now an hour’s gone by and then I don’t know what it was, but I just decided I’m going to Google into Justin versus harder talk and just see what, so I’m now googling as I’m having a hard day, I don’t know it, but I’m googling and I’m reading this article about this thing called Gerts, g e R, t s
And apparently the symptoms of Gerd are extremely, like you, like parallel to having a hard time to sit for your indigestion, like in like a really hard heart pain means Justin really bad. Right? Like it’s some type of um, yeah, sometime it basically in really, really bad oh, question. So I’m reading the article and I remember at one point I read in the article and I’m going, oh, okay, good. This sounds like Gurtz, you know what I mean? And then I get to the of the article and the article says, if you are experiencing neck or upper shoulder pain, you should get to the hospital immediately. And at that time, after about an hour, um, my shoulders, you know, and I used to bodybuilding me, now he’s, yeah, that’s how I met Nick Right at the gym. So I remember for some odd reason my shoulders had felt like I had just worked them out for five days in a row and after not working out ever.
And it just, it just, it was weird because it was a muscle pain. It was very odd. Like it just felt like I had just put my shoulders through this massive workout. So that, and the fact that my neck, I remember my neck started feeling like warm and thick and just like, not, not through the look, but just, it felt odd. Um, and so I thought, okay, yeah, I’ll probably, I should just get to the hospital. So we did it. It’s not like we call it the ambulance. We just, I was like, maybe I said to my wife, maybe we’ve got to go. I just think it’s probably get this looked at. So we just hopped in the car. We drove down to Saint Joseph’s hospital in Hamilton. We parked down the road and like, we’re feeding the meter. Like it was, we did not know.
I was having a hard Jag. We just walked across the street moseyed on in and I grab a ticket and the ticket number is like, let’s say [inaudible] [inaudible] million two or something. Well, I was really lucky. You’ll be surprised. So I grabbed the tickets, like I won, I won 90 or something. And of course I look up and they’re on [inaudible]. So I’m thinking, okay, well, so they, the, it’s the, the person in front of me goes, they call my number, I go up, I sit down. Um, I’m dealing with the person, you know, I hadn’t been in hospital for a while, so I did, who figures out how to not even yet information, get my information, you know, them to identify who I am. Of course I don’t have a health card. It got stolen out of my car years ago and I just never got one too. Um, so then I, you know, that’s going to have to go through that whole process. And then finally I get to the point where the nurse comes to assess you. And, uh, I told her the situation, I get squared pain. She says, I’m going to take your blood pressure six, my blood pressure. And then I remember I said to her, I go, what is it like what was my average? And she says, you’re too 10 over one 10.
It’s like there’s a right, or do they know immediately what’s going on from that? Or No? Yeah. Well, yeah, you could tell like I was going to tell the story, you’ll, you’ll, they definitely something. But for me, I knew right away that was a problem. I’m going to, you know, I always, uh, yeah, one 20 over 80 is just the magical number you want to be. So I knew that, you know, if you’re at one 60 over like 90, that’s actually really bad. So to be at two 10 over one 10, um, something was clearly going on. Now what really then trips me out as imagine so that she tells me I’m too 10 over one 10 and then she says, okay, go wait and go sit in the waiting room, Mr. Butler. So that, so imagine all, and I’m still having a heart attack. So like imagine like I’m about to die, but I’m going to go in the waiting room to die.
Right? But then I’m thinking like if she’s sending me to the waiting room and then obviously see isn’t that bad? Right. So then, but so now my wife and I walk into the waiting room. There’s probably like 20 people waiting there and my wife says, I’m going to go get a coke. So she walks as soon as she turns and crosses like across the hall where I can’t see her anymore, two nurses come barging through a door and just go, Mr. Butler, Mr. Butler was, they grabbed me, they bring me out. I’m like my wife, they’re like, nope. They grab, they won’t, you know, I’m, I’m trying to get my wife, you know, they can’t, she can’t hear me. She’s gone. So, and I’m thinking I could just wait. They grabbed me, they throw me on it on a little gurney. They put me right into a room.
So now all my, you know, I hadn’t been to hospitals for us. Everyone’s like, who’s, you know, every time they’ll go to hospitals, oh, I couldn’t get a room. Could agree. The fact that they’ve now put me in a room within like five minutes of being there, then the Canadian system is pretty good. Clearly. Clearly, if you’re having one of like five. Yeah. So then all of a sudden these nurses starts strap, they start throwing on all these heart monitors on you and you know, they’re telling me to lift my tongue and they’re spraying nitrous underneath my tongue. And um, uh, yeah, I your your mind is going a million different things cause I’m saying myself, I’m 39. I, I remember her like, what the hell is going on is, you know what, I haven’t actually told me I’m having a hard tech either they’re just, but I’m starting to infer that this is what’s going on.
And um, then some guy comes in, he says, I’m Dr so and so I’m the resident Er guy. And I said, yeah, yeah, you’re like, what do you think’s going on? And he says, it’s not what I think is going on. You’re having a heart attack. And so that was pretty interesting situation for just in terms of while your mind is at that point. Um, and a lot of thoughts just filtering. Like my, my parents were in Vegas at the time, so I’m thinking like, am I going to see my parents before I die? Like all these things, weird things that are going on. My wife’s, I’m sitting there like I’m putting my wife through the, it was just very, very odd situation. Um, and then within, yeah, as you’re thinking about this, you don’t have time to think because then two guys, two really big guys with a big, huge yellow gurney show up and all of a sudden they’re telling me to move in.
They’re shifting me around so that they can get me on to this Gurney. And then all of sudden now I’m on a Gurney and the rushing me now out to the hospital into an ambulance. Now I’m in the back of an ambulance. So I mean this is all happening within minutes of me walking in. So now I’m in an ambulance and you know that ambulance and then goes to Hamilton general. I don’t know what to Hamilton General, I just, I figured all this out after, but I ended up at some new hospital and rate out of the back of the ambulance. You end up on a table, like I literally from an Ampac in the ambulance, I’m on an operating table. There’s like people putting stuff like all over me and seven or eight people there and it’s, it’s, it’s just surreal what’s going on and they tell you you’re not going to feel very good.
And um, you know, all of a sudden you start feeling not very good. You don’t know what’s going on and you can’t see anything. You don’t know. I’m doing surgery right on the spot, literally like there. Well, what it is is there, they’re there, they’re doing an angiogram to figure out where my blockages and then once they find the blockage, they end up either ballooning or stenting the artery that is blocked. And so just to back up, for anyone that doesn’t know about heart disease or heart attacks or anything, you’re probably wondering what is a heart attack like I did? What is it like physiologically, what is a heart attack? A heart attack is effectively when one of your arteries to your heart has, it’s, the blood is effectively become blocked because I, the artery thins so much from either plaque buildup, cholesterol, that kind of stuff.
And then what’s happened is, is it’s so small, this little artery, now you’re thinning out the blood and the blood is still got to go through it. But then a piece of the plaque breaks off and it actually, it clogs it effectively and now no more blood goes from that artery to the heart. And that is basically a heart attack. The smaller the artery that gets clogged, the better chance you have of living. The larger the artery that gets clogged, the likely is you die right, right away. Like, it’s, you know, when you see people that do know die of a heart attack, that’s because they had a huge artery that actually got completely blocked and then you just die here. Heart just can’t, your heart can’t needs so much blood basically. Right. So, um, yeah, so they ended go, they go in, they put a stent in, um, you know, in the effectively, they then put me into, uh, uh, uh, uh, surgery like an after care heart attack ward, and I’m here through the youngest.
I remember I was 39 and just remember like looking over at you going, Oh holy Shit, look at the young guy in here. Totally. So I mean that was my biggest wakeup call. I mean, aside from having a heart attack at 39 was just the realization and living out that situation where you’re sitting there in the recovery room was like 75 year old guy that just had a massive fire attack, you know, 80 something year old woman and like a 65 year old guy, you know, and you’re 39, you know, and everyone’s kind of looking at your life short men short. Well it’s short and you know, I, I mean my 39 dude, my situation,
we’re all, we’re all lucky and grateful that 39 is, uh, has his past.
Yeah. Um, I just turned 40, so I made it and uh, no, I, I took it really seriously. Um, you know, and you should because you’ve lost a ton of weight on her down to like 190. Uh, so I’ve lost about 65 pounds. Was the hardest part. Changing your diet.
Cause I found when I lost weight, when I had to change it, it was hard to find replacement foods. Like that was my biggest thing. Like I didn’t know how to change go from, cause when I was eating too much and too much of the wrong foods, I was literally taking my wife’s chocolate chips that she had to a in a, in a Tupperware thing for baking. And I would just dump my hand in there like a cop and then I would just cut my hand and pour them into my mouth and eat them. And then I wash it. I didn’t even drink coke much like in my life, but for whatever reason, that six months period I was like washing it down with coke and um, just on top of all the whole bunch of other poor eating habits. But then when I had to change my eating, it was like, okay, if I’m not going to eat like pizza right now, what do I eat?
Like I had to reintroduce, this sounds crazy because I was eating vegetables and stuff, but it was like, oh, I have to eat some nutrient dense healthy meats, healthy fish, vegetables, nuts. Like I was like Holy Shit and academia and it tastes pretty good and I’m like at this dark chocolate thing, even though it’s really dark with macadamia nuts, this is actually, it’s pretty filling and satiating. And so I had to find all these other foods and what I also found is by eating healthier foods, they’re more nutrient dense. So I wasn’t always snacking anymore either. Right. And then everything kind of cleared up in my digestive system. That was the problem I was having, but that was the hardest thing. Finding the replacement. There was a book called the primal blueprint by mark that I think I mentioned
to you. Anyway, that particular book really taught me about food in a way that I could understand and adapt to my life. So that was the hardest thing for you to help me. I mean, you know what, food for the food for you, you are, you have a bodybuilding background, so you knew all this stuff. The food part for me was just like I had done, I had bodybuilding for so long that I, that actually is probably what helped get you fat in a way. Like you just, it’s such a regimented thing that when you finally are almost break away from it, you do the opposite. So like I was only eating pretty much one big meal a day. Like I wouldn’t even eat breakfast. I woke up, I have a red bull. My main meal is when I’d come home maybe at five or six o’clock I’d have a huge dinner and then I’d start working again and then I’d probably snack a lot of me and I, I was doing all the bad stuff, so, but the food wasn’t really the hard part.
That was when I just knew I had to go back to eating every three hours, smaller meals, clean stuff like back chicken breasts, you know, that kind of stuff. Although you like you, other people were able to teach me because my body building, you know, years we’re back in my, we’re going to talk, let’s just say 20, 20 to 10 to 20 years ago, you know, in terms of the range. So there’s a lot newer stuff out there in terms of just information on, on nutrition. But not only that, I wasn’t, I’m not eating for bodybuilding now, Eh, for me really the hardest part was the cardio because it was so fat and how to shape, um, it’s not easy to be 255 pounds and start walking and running a law. So is that what you started doing? Well, I just, I eat, my first thing I started was walking, just walking around the block.
Um, and then just every day, just like with bodybuilding, you know, you push yourself, you know, just most people determined. I was determined to have our judge clearly determined to fix it. So, um, uh, I just really, you know, everyday wanting to beat, you know, whatever it was either my time or how much distance I covered and then it really happened organic. It was like, it might’ve been maybe two, three weeks in as I’m now walking longer distances. And I’m telling you this was really weird. It felt like almost like I was in a movie cause I’m like, I’m near probably the final like maybe one 10th of my walk. Right. I’ve gone all the way here. Do you know on this trail I’ve come all the way back and I’m doing this fast walk and I’m sweating and whatever. But I felt so good that just organically I just, my brain and it wa it was not preplanned.
It was just like Kim, I feel like we could just run the rest. So then I just start writing, not a fast run jog, Maki movie. Well it felt like it because it was just so weird. I felt basically outside of my body when it was like, can you mention the eye of the tiger started playing in the background? Well you know what though I would have had some type of motivational music God, cause that’s, that’s just crap that I listened to you. Right. So I would have my headphones on it. So it was like I probably the the right song came on and I was like, I’m going to run this, I’m going to go, I’m going to go. And I ran it. And then ever since then it’s just trying to run more and more and more. I’m up to a point now where, um, it’s certainly not a fast run, but my cardio routine right at the moment is about 30 to 45 minutes on a pretty, on a fast walk of like maybe 3.12 all the way up to 3.8 miles an hour.
I’m like, I’ll start off with 3.1 and then every five minutes, oh jack it up. And then at about either a half an hour, 45 minute mark, I’ll just start, I jack it up to about five, five miles an hours where I start. That’s where I started jogging. I’m a short guy, so that’s a job for me. And then, um, uh, do that for as hard as far as maybe a half an hour, 45 minutes or even an hour. And I’ll usually, like if I do a half an hour, then the next day I’ll do 45. Next day I’ll do an hour for a run. So total everyday is about an hour and a half of cardio. But I do that every year. Tracking, I know you’re wearing the Oro rinks, your tracking data, fitbit for Larry. I’m like I’ve got, I’ve got my radio frequency, Bluetooth frequency going around your body and you know what? I got the end to keep the iPad or the iPhone in your pocket because that also gives you like if for some reason your fitbit over goes out to the aura ring.
I’ve also can track my, uh, through the health app it tells you how many kilometers and stuff you did there. Right? So, and then every, that’s cool because you can visually see everything either on the fitbit or on the iPhone and the aura. So then you just push yourself the next day. A lot of people will ask us like, why on this particular podcast, don’t you guys always talk about real estate? And I’m like, well, the whole bunch of things we talk about like bringing doctor Cowan on here, we’re talking about health chiropractor, Doctor Pete, who we’ve had on here multiple times and I’m like, without your health, really, what does all this matter? Like if I don’t feel good in the morning, you know, I laughed at that like literally like, I don’t mean to laugh at that, but I mean like when you would be like when you were telling me we’d be talking about a member meeting, you’re like, oh, I’m going to have some like health guy there.
I remember I would just be like, why so many people told us that like, guys, wake up your real estate, you’re into real estate. And I’m like, no, we’re really into living life on our terms and I need to be able to feel good. Real estate happens to be an income equity component, asset base, but without feeling good, forget it. The, all of the stuff then why are you going to put up with the hassles of real estate? You know, we were just talking about mortgage, the difficulty of getting mortgages in Canada. Why are we all struggling to go through this if we’re just going to feel crap all the time, but to write one, why make white, why invest and make all this money if you’re going to die earlier? Totally. Right. So that’s where I’m at now is I remember one of the thought processes like I want to go down in a blaze of glory, man, wanted, want to go down like something big is happening.
Yeah. Not, I’m like a mild heart attack. That just seems weird. Like it doesn’t, it doesn’t fit the story. You know what though? And we’ve kind of been lighthearted about this, at least I have talking with, it’s obviously a very serious thing, but a dude, we’re obviously really grateful that things worked out the way they worked out. I mean, you never want to hear that, get that kind of call it but a friend and you know, did that happen? Honestly it had to happen. If it did not been, I’d be, if it didn’t have, but I wouldn’t have changed anything. It’s yours was more serious than mine. But I feel like sometimes we all need to be, you know, someone needs to shake you a little bit and sometimes it’s your body shaking you saying, hey look, when you don’t listen to your families telling you for years, you’ve got to do he, hey, by the way, you look terrible. Your blot, your red book, you know, and you don’t change anything, you’re in trouble. So yeah.
I’m going to switch gears a little bit because apparently you know stuff about mortgages shit. So, uh, I just want to go through, I have a little, a little, I never prepared for these podcasts. I have a little list here. Do I feel special or is that we were just trying to walk. No, no, no, no, no. There’s too much to ask you. Really A, so I want to talk about the state of getting mortgages in Canada in a second cause there’s lots of talk about there, but a few kind of bullet items, pulling equity from properties. Some investors, uh, shockingly to myself and they don’t understand that they can tap equity and I know you have to qualify and stuff, but if you have equity in your rental properties or income properties, you can go get that equity, use it to get other real estate. And I’m not saying this from a self serving point of view, I just mean if you want it to tap equity, that’s possible.
Correct. Very possible. Um, some know about it, some don’t. Excuse me. Um, the reality, you know, the truth is, is that yes, when there’s equity in the home, you know, as long as we qualify, we can tap into all the fun. You just have to qualify. Like you’re getting another mortgage based. That’s the tricky part. And the bad. I mean, it’s in all the members listening, you’re going to know like the paperwork part is the worst part about mortgages. And I think we can all agree about that. Um, so that may be why this is more than rock star members here that you’re giving is all over the country to all of the investor. Someone listening to this from Czech Republic. I just looked at style. I love that. Um, um, yeah, no, there’s you can. So the rule of thumb, basically if you ever curious as to like how much equity you might be able to access, grab your calculator on your phone.
Take the value of the home. So say you and I are talking and you know, one, two, three rental properties, street we, you and I think is worth roughly 500,000 take that 500,000 on a calculator, multiply it by 0.8 which is obviously 80% right? That is the maximum you can borrow off of a property in Canada at the moment on a refinance. So you take the 500,000 you times it by 0.8 you end up, your calculator says 400,000 now take that 400,000 minus the mortgage balance that’s on the house. Let’s assume the mortgage balance on those as 300,000 let’s use it. Easy take. So now we know that we can get access up to 400 which is 80% of the value of the home. We only owe 300 so you take that 400 minus 300 that leaves a hundred that hundred thousand is how much possible access we can get to equity in that home.
Right? So that that would be the number. So it’d be 100,000 now we still have to go through the approval process. I got to get an appraisal. That’s the biggest thing. Cause someone could say my house is worth 500 if the appraiser goes in and says it’s worth only four 65 four 75 but the reality is if you only go 300 you’re still gonna get access to equity. Just take again, take that value times 3.8 and then minus whatever you own the home. You could ever first mortgage, there could be a home equity line of credit already on the home. You have to factor that into what you owe. But anything you own the home, take that from the 80% and that will tell you how funds you get access
- Yeah. And, and if you’re listening to this, that’s probably how like 99% of all investors we ever work with are able to continue to grow the portfolio in some way, whether it’s their principle place of residence or somewhere they’re tapping equity. Very few people in Canada right now for the last 10 years that I’ve seen saved money like no one really. I, I know just because I, and I’m not trying to make fun of that, I just mean the cost of living’s high and no one’s really saying there are people, I shouldn’t say no one, but the majority of people aren’t saying, I just saved up another hundred thousand bucks in my checking account and I’m ready to go buy some property. It’s very rare. Someone just calls you up and as an investor he has got 800 grand just sitting in the bank because the reality is that’s actually you’re not investing correctly then you’re with that much cash or you think the world’s coming to an end.
And some of us know people like that. Listen, someone told me to sell my house and I remember this in 2009 because they said real estate crash is coming to Canada. It wasn’t, no, it wasn’t your gun. It’s a different guy in real estate and experienced guy. He was living out in Burlington, sold his home and started renting for the protection of his family. We really didn’t think we want it to sell our own home so we didn’t. Um, and who knew what the next 10 years we, I mean we didn’t know, interested in between and be like this is your friend missed out on a lot of echo. I don’t know. Yeah, we haven’t talked about it since really. So the next thing is negotiating your, when a mortgage comes up for renewal, often you just get a letter in the mail from the bank saying, hey, you don’t need to requalify again. Your five year term is up. We’re rolling this forward into another one year term or three year term or five year term. You pick and here are the interest rates you’re going to get. A lot of people don’t understand. They can negotiate at that point.
Yeah, so what, you know we, we look at this in a couple of different ways. There’s, you know, you have to look at it as a branch. There’s going to be one of two things are going to happen on a renewal. Either my client or your client or whoever it is, the investor, whoever they are either going to, they don’t need to get access to money. So they just want to continue on with the mortgage or they want to access money. So really on a, on when you’re coming up for renewal, the question that if a client calls me and says, Dave, my renewal’s coming, what am I doing? I say, well, here, this is a very simple question and I have to answer, do you want access to equity or are you okay for now? And let’s say we go down avenue number one.
He says, yes, I want access to equity. Well then at that point we’re going to say, okay, if you want access to equity, we’re now open on renewal on this date. You will have no penalty. I have to re look at your application, I have to requalify you and we just have to go through the process almost like you and I just talked about where a refinance, we’re going to send an appraiser to the house, find out how much it’s worth. We’re going to then go from there minus the 80% for how much is owing. Figure out how much access the client then can decide how they want to take it. Do they want to take it all as a more new mortgage? Do you want to take it as a mortgage, keep your mortgage the same now and just add a home equity line of credit. There’s all these different ways that we can get access to the funds.
So the next thing I wanted to ask you about was uh, in Ontario there’s going to be over the next 10 years. Look, we were just talking about before we started here, the population growth in Ontario, it’s really the last year, last 12 months, a huge growth. There’s a lot of opportunity going
forward over the next 10 years will be for people to several pieces of land. And build on them. How difficult is it to get financing on? Like let’s say I have an old rental property big lot and I’m like in multiple Rock Star investors are doing this kind of stuff already. I want to sever a piece of land and I’m going to build on it. What type of financing in my looking to get is that like a construction loan? I’m looking to get what? Well you’re, you’re, you’re looking at having to go through the severance process first before you do anything which can be costly, which there’s no financing for that, right? I mean you, a lot of times a investor is going to take the equity out of their house to, you know, or or that property or whatever it is to pay for the severance process once it is severed and who knows how deep you are now into find it into some money and funding this thing.
Um, at that point, once it’s severed though you, you do have one part, one lot has a property on it. The other part property could be really great cause it’s like a free piece of land. Technically. If you’ve already bought the law. It is except for the fact in what kind of makes it difficult though, is that the, a lot of times we have heard that the bank who has the mortgage on the one property who now has a mortgage on half of the same guy. Right. So I’ve even seen like if you ask like Jerry Gato and Chris, I grew up lists that we, that we, that’s where we’ve actually run into snacks all the way up until that point. You got to check this first then. Well, it’s almost not check it. It said sometimes the bank, the bank has to, depending on who you’re talking to in terms of a lawyer, the lawyers will tell you that they have to notify the bank of this.
And if the bank once once notified, the bank could say, well, you know, our security is not the same. We want, you know, so I’ve had situations where the bank has told us, no, we’re not okay with it and we have to go and Redo the whole mortgage again. I mean, don’t get me wrong. There are people doing it and they’re doing it well and I mean they’re doing, oh yeah, no, I know you’re not trying to say it’s not possible. These are just important things to think about. Well, I just think some people hear of people doing it really determined people doing it. They think it’s easy and it’s like, yeah, but those people put in a lot of time. They’ve also done it six times so they know all the pitfalls and the, you know, the goings and comings of the, of the process for people that are starting a brand new.
Not that I’m discouraging it, but I mean it’s, it certainly is probably a lot harder than it. It’s, it’s like we all know people who’ve done stuff who’ve haven’t informed the bank on anything. Like I show people who’ve bought a house, bulldoze the house down there is a mortgage. The financing they got originally was based on the fact that there was a house standing on the law, but they decided they’re going to flip this thing and the flipping meant destroying what was there. And if the bank ever drove by and took a look at what, you know, that stuff happens all the time. It’s just you need to know the risks. Well, and then the way that, when that, when that happens, so there’s no lawyer involved. Right. You know what I mean? Like the problem with the severance that I’ve talked, God, there is a lawyer involved in the severance and the leather, you’re obligated, they feel obligated by the law.
It makes sense. Explain to the bank. So we, I mean it’s again, we’ve done it, but it’s specially if it was the lawyer that was the lawyer at closing of the original personal, I probably have a fiduciary responsibility to go to the bank because they were representing the bank at the time of closing. So, uh, putting people in a bad spot, if you’re having them try not to do what they shit, what they feel they should more leaky doing sketches time. But as far as how to finance it, we’ve had situations where once the people own the lot has been severed. You had now have a lot that’s got nothing on it. Um, now it’s just getting either a construction mortgage or a lot of times to be quite honest, people are going with private lending. I mean I can’t, okay, so what would you borrow?
W W how would that work? What would the interest rate beyond that? I’m going to fall, I’m going to build a house. I’m going to build a house on here. It’s going to be a rental property. They’re going to build. Yeah. You’re looking at, and you know from a private lender you’re, you could be looking at anywhere from seven, eight, 9% even higher. I mean it also, it’s per application. So it really does depend on, yeah, but it might be a lot easier than going through a bank. That construction loan, that’s the big thing, right, is that it’s much easier. The private lender does not do draw melts, so that’s a huge thing. So understand like you’re getting your whole money, you’re getting, you get it all. Like the private lender doesn’t want to give you draw a mouse. I want to give you the whole thing just because a bank would give it to you piece by piece as milestones.
We’re hitting hit on the project by the way. Sounds good because we know people, these milestones and the bank said forget it, we’re not lending you. Yeah, you think that sounds good cause you’re thinking, oh well they’re going to give it to me in stages. They’re being so nice. Well no they, the way they set up, as they say you get x amount at 25% you get x amount of 50% you get x amount of 70 well your if your contractor, if, if they’re saying, well no we need this money, it does it. The bank doesn’t just go, oh well the contractors [inaudible] surveyor or something like that. There’s a guy who was responsible, like a project manager to see that you’re hitting certain milestones for on the construction. Like when I’ve done them, the bank construction mortgages on those, they it, they leave it up to the appraiser.
Yeah. So like if you got a good or bad at that thing’s going to go good or bad. It’s got it. Okay. And then so how, so since we’re talking about that, how do second mortgages or no, let me say private lending. How do proud is private lending work here in Canada? Because a lot of people don’t know that like, so I, I want to do exactly what we talked about. I approach us or mortgage broker. I don’t even have to write. If you go to a private individual, I mean a private lender as effectively it is anyone that’s is not an institution that’s willing to lend you the money. I mean that’s your private land. I have a private lesson. I guess the, the, the way, the reason I’m asking you is a mortgage brokers like yourself who do a ton of volume, you have a lot of clients who are looking to lend out money.
So you could have, I’m not saying you do have that, but I kind of know that you have that kind of stuff. Um, so, uh, you will then evaluate the deal and put the private lender in touch and say, hey, or, or give this deal to the private lender saying, Hey, look, here’s the opportunity. Here’s the risks, here’s the equity and here’s the interest rate. I think we’re going to have to charge. Yeah. With private, you’re acting as an advisor in the middle a little bit. When a broker is working on a private deal, they’re basically covering both sides. Um, they’re effectively putting the deal together. I mean that’s the way it works. I mean, private lender, you generally will go and access through a mortgage broker. With that said, there are private lenders that, um, you know, are on Kijiji. I mean, I know they go direct to the public, whereas a lot of private lenders will just go to like a mortgage broker.
Either someone they trust or someone who’s high volume. Um, and they will approach that broker and say, Hey, I’ve got x amount of dollars. I’d like to lend this out privately here on my terms. Um, that’s one way. Another way is, as you’re mentioning is I, you know, for instance with a lot of the Rock Star investors I’ve worked with over the years, you know, we become friends, we talk outside of work, private lending comes up because it’s something I’m a big fan of and I’ve been involved with. Um, and at that point they may be looking to diversify their real estate portfolio and they’ll ask me about private lending and I’ll say, yeah, I’ve got, you know, I can put you in touch with my father who’s a big broker in the private mortgage world or, and I can add you to my list. And then as deals come about, we would bring them, approach a private lender and say, how do you feel about this deal?
Here’s where we’re at, you know, here’s what we got. The loan devalue is this, the rates are, this is what we’ve priced out. But basically, yes, the mortgage broker in a nutshell is going to package up the deal for both sides. So there’s going to be an interest rate charge, some fee charge for doing this work. Yeah, well, yes. So the reality is there’s generally the fees that you’re looking at if you’re a bore rower is you’re always going to pay a lender fee. So there’s always a lender fee. So let’s, let’s back up if we will. You’ve got your interest rate, whatever, you know, and that’s going to be a little bit higher than the construction from the bank. Um, but you’ve got no draws right now. The private lender gives you all the money up front. They also don’t bug you. They don’t stay on top.
You know, it’s very, it’s not an interest of process. Private lenders just, you’re usually want to get their money out, but um, you will basically, uh, the mortgage broker will, uh, you know, say have a client who is in need of some money. Um, the deal looks good, you know, in the sense of the loan to value is where we want it to be, where we feel safe. Uh, we’ve priced it out, we bring it to the private lender and just kind of show them the details. By that time, my office, a lot of times we’ve already done the appraisal on the property. You know, and we just approached the private lenders say, what do you think about this deal? Is it something you’d like to lend on? If they agree to it, then effectively we put the deal together in terms of the fees.
You’ve got a lender fee at all times. So the lenders usually gonna charge one to 2% of the mortgage amount, which the higher the mortgage amount, the higher the fee. There’s always going to be a roughly about 1700 to $1,800 in lenders legal fees. So this is something the borer also pace. Um, there’s also an appraisal fee, uh, which generally the borer would pay for. Um, and then finally there’s usually a broker fee. Now a lot of people that have dealt with me will know, like when I’m lending one of, you know, let’s say it’s a Rock Star investors’ money out, I don’t charge a fee. I mean I’m probably the dumbest mortgage broker there is in terms of monetizing my practice in one sense. Because, um, in the oddest way possible, and maybe this is why my brain is backwards. I look at it when I do that deal is I’ve got a borer, he needs money.
I’ve got a lender who once I lend their money, he’s gonna make money so that I’m keeping my lender happy, which is great. I mean, they’re usually clients of mine, but that borrower, if I had to get them private money to be able to, you know, facilitate whatever it is they’re doing, I prefer to then work with that borrower to try to, you know, I’ll put them on, maybe it was a credit issue. They’re hired, maybe it was an incubation. You’re, you’re trying to do it more cost effective way at some point afterwards. Well, what it is is if I’m taking someone from getting a private mortgage now, when I work with them for the next year and then I can, I can then take them, fix their situation, help them more conventional. Now I move it to a bank. The bank will pay me, right? W My, my brokerage and get the deal.
So again, this is where I say I’m probably the dumbest guy cause there isn’t any mortgage broker listening to this right now is saying, oh that guy’s an idiot. He’s not charging. He could make a ton of money by charging the borer fee. But I and I can and I know and it’s dumb and I’m sitting, I’ll agree with you and say, you’re right, I’m an idiot. But I just, I’ve built my business differently. I think you’ll appreciate it. Many people have come to us when they’ve gotten in jams and you’ve helped them out. Um, and I think you’ve built a really good reputation that way. So yeah. But uh, but something I think people want an or everyone should know is that if I’m lending, my security is the equity in the property. So you’re going to likely advise people, Hey, don’t lend out over a certain amount of loan to value on this project because I’m basically going to be the bank.
I’m going to foreclose on this thing. If I’m private lending and I’m in second position, if it’s a second mortgage, I might have to take care of the bank. Actually can I just go and foreclose on this thing and give the banquet idos? Um, if I’m in second position, so let’s say no, you believe it or not, you’d have to continue paying the first mortgage so I would have to continue paying. That’s right. Yeah. We’re delving into something. I literally you and I can tell you over 12 hours, but you know to dumb it down a little bit. Um, if you’re lending on, on those construction, went in particular wouldn’t be a second when you’re lending on a second mortgage. If the borrower was to default to you. Right. Then I would, you know, let’s, let’s just assume they have a mortgage first mortgage with TD bank and they have a second words with let’s say me as a private lender.
If they now stop paying me and they stopped paying the bank, well my problem is I’m in second position. So if that is actually good discussion, um, if the first mortgage lender a is in default and they’re in first position, right, sorry, they, the borrower’s in default with them. Did he fought with us? They’re in first. I’m in second position as the lender. My problem is is they now have the power to get the power of sale judgement over me. So what a lot of smart second mortgage lenders will do is I will start paying the first mortgage bank, I’ll start literally paying the bank, the mortgage payments so that dot mortgages in good standing. And then now I have the right of power of sale being an, even though I’m in second position because I’ve kept the first position in good standing right. Cause if TD bank’s getting their money, are they gonna want to kick the people out of the house?
The answer is no. I then have to then you know, and I know that sounds really crass, but you know the reality is as a private lender is if I don’t get my payment, if they go into default with me, if they’re bouncing their checks to me, my only recourse on my money as I have to put across maybe, I don’t know, I was younger. I mean that’s just kind of what the reality of the world. Well it is your board. You’re going to take my money and you’re not gonna agree to make payments and you don’t make your payments. I mean, I own, my only recourse is I can take your home over by a power of sale, which by the way, is going through a whole legal process, which you know that that costs money. Um, now you do get it back as a private lender and he funds any, you know, all that money.
You’re probably saying, Dave, you’re going to pay the first mortgage. That’s crazy. Well, I just keep a record and accounting record of everything I paid and then when it goes through the whole legal process, I will get my money back. But the, to back up to that, the key is to never lend out to a certain loan to value. That’s dangerous. The whole thing of a private lending. Yeah. The whole thing about private lending is that if you’re going to lend out to a loan to value, that’s, you know, let’s say as an example, you’re going to lend past 85% loan to value. You’re in danger. And I’ll explain it. It’s very simple. The reason why you’re endangers the cost of a power of a good power of sale lawyer, it’s probably about nine to 10% of the equity in the home. Okay, so let’s add this up.
Power, good power of sale, lawyers, debt. The cost on that tonight at 10% of the value home, you then need a real estate agent. And the way it works on these power sales is that you know, the reality is you need that thing sold very quickly. So when you’re, when you’re a private lender and you’re working on a file that you’re in a power sale, you’re not bringing it to your brother who’s a realtor, who’s going to put a for sale sign on it and put it on Kijiji and hope it sells. You need to find the number one guy in that area that spends the most amount of money on advertising so that that property will sell immediately. We cannot have this on the market for four or five months. This has to sell right away because it’s costing me as the lending market has changed at all.
Because on top of that, let’s say the market changes 5% like it, we were just talking about the certain price categories of homes in Toronto have changed more of the slightly more than 5% so, uh, on top of that, so nine to 10% legal fees, 5% to a percent change in here, about 15% of that equity is just going in the power of sale lawyer and the realtor, right? So now we got up, you’ve got to figure out, I never want to lend past 85%, but do in this day and age, do I really even want to go to 80% because as as you just said, what if there’s a shift in the market right now when things are great, when the market is in a bull run like crazy, and every year it’s the house’s worth more. As a lender, you can
extend your risk per se and maybe lend to 80, 85% because you know, a year from now the value of that home will be worth more in your loan devalue positions for better. But when you’re in today’s market, you know, it looks like we’ve kind of cleared the peak and Ron, maybe the, you know, we’re hitting a trough here. If you’re lending at 85% of the crystal ball, the crystal ball, Dave Butler’s ball has just made it onto the podcast. But if you’re, if you’re lending out at 85% in this market, you’re in trouble because if a year out of the house it makes sense. So yeah, second mortgage is a little trickier, but private lending in general got really interesting to me about 15 years ago when we were dealing with a lawyer. And um, I think it was even longer. I think it was around like the year 2000 and a lawyer was a singing to us.
Um, I, we were talking about the, the Nasdaq market correction and I’m like, hey man, you know, I got these like oracle shares. They were at $80. They’re now at like 12. I thought. I remember telling Carol like, I think we’re probably a rich because we’re going to pay for our first house, like 80% of it and this oracle stock and then it all just going to evaporate it. I bought Carol a ring at the top of that Oracle stock’s value. Um, and it was for me, it was really expensive room at the time. And uh, that’s the only worth x because that was the only good thing I got into the tech bubble, this ring. But cause it all then collapsed around me. But anyway, I remember kind of talking to him and everyone was talking about the tech stock market collapse and he was like, well, it didn’t really affect me too much.
And I’m like, why? He goes, well, I’m older than you guys. You guys probably don’t know this, but like I just do private lending with my money and I’m like, what? And he goes, Oh yeah, all my buddies were lawyers and accountants. Everybody who’s made a little bit of money, they just do private lending. They just lend their money. And I’m like, wait a second, you guys all just become the bank and you guys just lend out your money and you don’t even play in the public markets at all. And they kind of just like, the way you just have right now is the way he kind of just, and I think the way you’re holding your pinky finger, he was like, I think he was spinning a gold ring while he was telling me this story and smiling and there was like a sparkle from his tooth that came up and I remember thinking, Oh my God, this is a world of, I didn’t know.
I always thought investing was like the stock market, you know? And then we were just getting into ourselves to real estate, but I was just like, oh, you invest, you just do, you buy a passive fund and that’s your investing. I didn’t realize people who are actually making big money, they don’t play in the bowl. That’s, that’s the crazy part. Like, I’ll give you the little quick story really quick about how I even got interested in private mortgages is what I hadn’t even worked for my dad yet. I was like, uh, I think I was just still in university and I had gone to my dad’s office, um, just to, I don’t know, pick something up or whatever it was. And I’m there and a guy pulls up in a beautiful, I mean you got to imagine this was like, this must have been the late nineties, right? So Guy Pulls up to my dad’s office in a, like a BMW, I want to say like seven series or eight series. It was like right when the,
this crazy, amazing BMW just come out and this guy pulls up in this beautiful BMW and he gets out of the back and a guy gets out to the front and they walk into my dad’s office and they go and they sit in my dad’s office and they’re talking to him. And remember right away I’m intrigued cause I’m like a teenager. I’m in my late teens and I’m going, I think this guy, a driver, you know, I’m like, this is the leading driver, right? I mean, they try to think about, go back to the late nineties right? So, and it’s beautiful BME. It’s not just a driver. It’s a beautiful BMW’s. Not like he’s just taking a little town car around. So he like, I leave, my parents owned a town car, they bought it [inaudible] it was the best summer. It was a Maroon, I think my dad’s was maroon.
It was looking up some Shit Brown. So this guy, he leaves. He talked to my dad for about half an hour and I think I was there talking to my brother. I don’t know what I was doing, but I was so intrigued by this guy when he left and went up to my dad, I was like, oh, like what does that guy do? Right? He goes, and I’ll say his name because he’s, he’s, he’s alive and he’s well, and he’s kicking, it’s Terry Wallman. He’s a, he’s an amazing lawyer on Bay Street, but it turned out, so that was my dad’s power of sale lawyer. But I said, oh, so he’s a lawyer. And I go, wow, he’s, he must be a good lawyer. And he goes, Dave guys, not only a good lawyer, he’s a great lawyer, but if you’re wondering why as a driver and a brand new BMW, he’s one of the biggest private lenders in this country.
And he said his dad was, I think it’s that actually it was alive at the time. He says, dad is the maybe the biggest private mortgage lender in this country. And I remember that rate then and there. And it was like, okay, I got to learn out of this private lending stuff works. And I was just in my late teens. And then once I ended up working with my dad and I, that was the first thing I wanted to know is how, what is that? Okay, I’m going to make some money. And at some point I’m going to become the bank. I’d say, well I might, my big goal when I got into the business, I remember I had to say I was so naive. I was, what, 22 or 23 when I started and I’m a ride this dumb naive dream that all I needed to do was get to 1 million bucks and just lend it out privately.
Cause that was like that’s not a dumb night. Well it’s only done when you realize that wait, that’s at 22 years old. That would be nice. But then when you finally do get that much money, you’re 30 you’re getting married, you need a house, you need to, you’re 30 like literally. I tell everyone who comes in here and rocks are, and if they’re in their twenties I’m like buy a freaking rental property. You clean right now because we won’t see you again until you’re about 40 or 45 because then you’re, we don’t see anyone in their thirties in here cause everyone in Canada in their thirties is completely broke. They can’t, well you can’t, you can’t qualify for anything. You can’t because you’re going to buy, you’re going to buy a car today, you’re going to buy it. Yeah. Yeah. And so listen, we’ll get to it today now. So interest rates, um, actually came down a little bit in January. Fixed rates, which is freaky, but we’re, so just to paint a picture, I know this guy, I think Bank of Canada is meeting tomorrow or announcing any changes, which I don’t think they’re going to announce any changes, but where our, uh, give a ballpark
fixed five year term and variable just to paint the picture. Five years, fix on a, on like an owner occupied home. I mean, I’m seeing as low as 3.39 3.493159 on a rental rental. I’m, I’m seeing, you know, three, six, nine, three, seven, nine, you know, right around there on a five year fixed. Now conversely, I mean, just what a couple months ago, you know, you’re, you’re talking high threes, low fours I remember. Or the fixed rates. So I guess what, what I could see was the bond market looked like it had a, ever since C in December, if you remember, the stock market looked like it was on the verge of collapse. So the [inaudible] Claus rally ever, it’s, I like that. Yeah. Everyone was moving their money into bonds obviously. Um, and so of course it’s okay, how does the bond market rates down? Yields came down, right?
So, uh, that was, I think that was a bit of a blessing because otherwise had that not happened, had to stock market just continued on. I think we were just headed for higher rates. And I think if you think about it, the US Fed, you know, that’s pretty much saying he’s going to raise him four times in all of the sudden, well, in December he said that they, like two weeks later, I think basically Trump yelled at him over Twitter. He came to us, but they need changed again. It kind of flipped flopped back and forth. He’s all over the place three times. But then in January, you finally came up with that speech and he said, we’re going to be patient. And as soon as everyone heard that, everyone’s was like, oh my God, are we at the top of the market cycle on uninterest rates?
And that’s Kinda where we’re at right now. But Canada has made it so hard to qualify. You’ve noticed, we’ve all noticed the difference. I mean the tribe market data, you know. So first of all, I think British Columbia is a lot worse off right now. Alberta, Calgary, they have their oil and gas crisis, which I’ve come to learn a lot about over the last few months in spear. Paul kind of brought me up to speed on that. Their mortgage market kind of is a little bit weak, but Ontario, uh, it w it was something interesting is happening. We are seeing, you just talked about some price points that where people bought in 2017 like a $900,000 home in new market that is now like uh, eight 20, which is bananas. But we’re seeing on starter homes as rental properties that we’re buying. We just talked to Mike about this the other day, like, Hey, not the other day, like 60 minutes ago, Mike, what are you, you know a home you bought last year for, for 80 or a year and a half ago for 40 what are you seeing it today?
And he’s like, well about 45 so like the reason that we always talk about v talked with investors about starter homes is because starter homes always are the most liquid. And I don’t mean real estate’s liquid, I just mean relative to other price categories. It’s not that they can’t go down, they absolutely can and we can. You think you need to be prepared and that’s why we need to have tracked for cashflow and you need to buy good properties and the whole bit. But starter homes just kind of tend to hold their value a little bit there a little bit more stable. They’re a little bit more liquid. It doesn’t mean they can’t go get down 20 or 30% but my feeling is that they’ve held their value is because the banks have made it so hard to qualify. The government of Canada has made it so hard to qualify that you can’t go
buy $1 million like who’s going to be able to qualify to buy $1 million property. So he’s rates and the stress test, so people are being pushed further out of the GTA. And so if you can buy, you know, $1 million home in Toronto or $1 million home and Mississauga, it’s $1 million home to get something in Oakville, $1 million home in Burlington, if you’re coming west. Yep. Then Hamilton, you find something at like four 80 500,000 it’s like half. So you buy their kind of holds that market. So we’re seeing the, it’s a tale of two markets right now where people don’t believe it’s worth seeing multiple offers in Hamilton and multiple offers in Saint Catherine’s. It’s crazy. Right? But then you see other price categories. If you go higher at the 1.5 to 2.5, it’s dead. It’s dead and Kinda, Yup. That’s what I, I’m, I’m seeing the same stuff on our side.
I mean we, it’s funny how we see, Oh, you’re on the real estate side. On the mortgage side, we end up seeing kind of all the same stuff and from very wide range and I’m definitely seeing the, the luxury stuff, you know, it’s just much more volatile. Right. So I mean it goes up nice when things are good, it comes down, you know, pretty much just as fast. Um, yeah, the, the stuff right in the middle, those starters, they really hold their value. I haven’t seen any panic in the market yet, so it’ll be interesting to see. Like, I think this is something we were talking about before we came on here. He’s like, it’s going to be interesting to see because it’s way harder to get mortgages. I don’t think there’s any secret with that. Yeah. I mean, I’m talking to someone who definitely intimately knows this, but, but it’s going to be interesting to me to see if the banks aren’t able to get new mortgage ordinations like they make a killing from these mortgages.
So like nine months from now, if they’re not able to just continue to replenish their mortgage pool, I’m wondering is there a crisis coming our way where the banks just tap the government on the shoulder and say, hey look, you better loosen this up a little bit. Yeah. Or you know, this isn’t going to be pretty, or is it going to take some bigger correction for that to happen? Yeah. I literally think exactly the same. I mean, uh, I think right now, and I, I told you this earlier, I think right now the regulators are still in the final stage of patting themselves on the back because they think they’ve cooled the, that they’ve done with it. I mean, they had their soft landing and in essence, they kind of have day and what they want to do. So I think right now we’re at the stage where they’ve got another two, three months, maybe another quarter is who are they going to keep patting themselves on the back.
And then as you say, the reality is the banks run this thing as far as, I mean as five always convinced myself that banks run the country. If the banks are crying to the government, then the government will make the changes. That’s my belief and I, I’ll say it right now just to get the prediction out there. I think the first thing, if, if I think of how the bank and the government would think more so the government, because they’re the end, there’ll be the one making the actual end up change. I think the first rule change we will see is a, they’ll allow 30 year amortizations on insured mortgages. So that’s the stuff at five, 10 and 15% down. Right. That’ll appeal to the fight for the first time home buyers, primary place of residence, Guy, girl who uh,
so they can make it easier to qualify it. Pardon me? Like the freaky part with all this as part of me just disagrees that we manipulate our banking system to make the banks make profits and the rest of us are left to try to bring assets into our life. Like part of the reason Rock Star exists and people go to to you and you helped him on his, like we’re trying to help people get assets into their lives, but we’re, we face bigger and bigger hurdles every day. And, and the, and the crazy part is it never stops me from telling people you still need to jump over these hurdles because I believe in you don’t you need assets to survive this crazy money game that we’re all in and you need to survive the ups and the downs. And a lot of people will then say, well Tom, I’m just going to wait until the market collapses to buy.
And the reason, and, and I, and I know how this can come sound around selfish sounding when I say this, but my response is, listen, when the market’s at the bottom, the reason the market’s at the bottom is there is no access to credit. If you go back to 2007 2008 the reason it collapses credit or mortgages weren’t being released from the banks. Not only that, banks were sending people we know letters saying your unused credit line of $100,000 that you had on that property, we’ve closed it, so credit vanishes, so you’re going to be really hard pressed to buy properties. We’ve always taken this belief that you buy properties when you can and you hold on for dear life, there’s going to be good times and there’s going to be bad times. Like real estate. I say that. Yeah. Yeah. So you know what? We’ve probably been hanging out so much. I don’t even know. I always used to that
maybe from such a juvenile way of thinking, but I remember thinking like that late eighties early nineties crash her all the p if you own let’s say three or four properties and you ended up going through that bad time. If you just held on, and I know it sounds easier than you know, I get all emotionally it’s psychologically it’s tough, but if you just were able to do it, if you made that your central focus and you did it, think of how rich and equity you are today on those four properties. Right? So I mean to, to your point, that’s what I say to the clients. Just, you know, this is real estate. This game is a long game. This is not a short game in my opinion. You know, you can take short approaches on specific properties or investments in this, but this is a long game, right?
And if you’re playing it, you need to know you might hit a bad cycle. I mean, these things are very, which is why you need properties that pay for themselves as hard as they are defined. And that’s why you need to go through student rental second Sweden by the million dollar rental, even though it seems, you know what I mean? Like, you know, that’s why it’s what I love about working with you guys is the, Eh, my, my number one thing is that when I see these properties, they are all hold value type properties. I, I can tell you unequivocally I’ve never seen you bring me, um, you know, or your team or anyone or an investor come to me with a million dollar rental and let’s say Oakville, it just, that’s, we’ve always stayed, yeah,
tried to stay. We’re not perfect Dave. And you know that. But we’ve tried to stay true to that because we’re always paranoid based on what our family has been through. And when we looked at the data in 1990 it was really interesting. It took six for prices to bottom right. But it only took a year and a half for volume in the real estate market to come right back. And the reason I think real estate investors need to know that is that if you do need to sell, because let’s say there’s a point in your life where you’re like, damn, I need to sell during this market. You’re, you really have a, from what we’ve seen on the worst real estate crash in Canada, 18 month window where it could be really tough if you can survive that 18 months, there will be some liquidity in the market and you’ll be able to get rid of a property.
It’s probably going to be less than what you were hoping. Yeah. But you’ll be able to kind of get rid of it. So to us it’s like think you need to survive 18 months at a minimum and then up to like a six year window until things turn around. But they get back to where they were. Yeah, well yeah, six years I have to look at it. It might be six years to bottom. Like, I can’t remember if 1986 was the bottom half to half the time. You only realize you’re in it about halfway through. So then you only really have another like, yeah. Yeah. And I’m assuming you pocket, and in my example, I’m assuming you bought at the totally, totally too, right? Like, I mean if you, if you bought a few years earlier then you know you didn’t go through and lose kind of as much. We know what you say about the people that are saying, I’ll wait and I’ll buy it at the bottom of the crash.
It’s, it’s like, I mean if, if you have that ability to do that, then you should also get in the stock market because you should go and buy. I mean how do you, I mean that’s how do you buy the bottom? The only thing that sucks about us talking about this is because you’re in mortgages and we’re a royal estate brokerage. It sounds so self serving, but I know it’s true because in 2006 we had 10 people we make and I made a list. We had 10 investors that I’m not buying right now. I’m going to buy when you know there’s blood in the streets. That was their words, not ours. Then. Then the u s had freaking blood in the streets to what are those 10 people to that are still rock star members today by the way, proceeded to go buy properties at that time because they thought this is the time, right?
Because all of a sudden there was opportunity. Even though the market in Canada only plateaued, they went in the other eight who said they’re absolutely going to buy. We’re frozen at a fear. Yes, and they didn’t buy a house. I mean it’s too tight. I feel like you just have to, you have to, you have to know that you may buy and still have another year or two of downward pressure. But I mean you still got to figure it. You got to pick a spa. I mean, and if you do nail the bottom, it was just pure luck. Pure luck. We’ve never met that person. We’ve never met the person who’s picked the top or the bottom. It’s like get in and survive and if the property is paying for itself, that’s why we’re so anal about looking at rents because all the data that we can see in the US and in Canada during any economic change, rent, stay stable or if not trickled up.
So if you’re happy with the rents today and then we haven’t even talked about population growth in here, but if you have 300,000 people entering the province last year, a big chunk of that immigration, but then there’s natural increase and then movement from other provinces. We just have 300,000 people came to Ontario. If that trend comes up, there’s another 300,000 people coming next year. The city of Mississauga is like eight hundred thousand nine hundred thousand that means in three years there’s a city of Mississauga entering Ontario is is in this country. It’s the hotspot, right? It’s the place to be relatively, which is funny when things are bad, people run to Ontario. When things are good, they go in there, run it like the nice places like Calgary. And anyway, we went off on a bit of a rant here. Dave, we need to bring you back more regularly because I think you know what going forward, there’s going to be lots of stuff going on in the mark mortgage market was.
So listen, we need to make an agreement, don’t have another freaking heart attack. Take care of yourself and they’ll more red bulls after your Turkey dinners. We’ll just book the next podcast dates and then I have something to look forward to. That’s what we’ll go raps. Hey everyone. So if you want it to reach out to Dave Butler’s office, the best way to do it as a phone number he has left with me. It’s (905) 569-8326 that’s (905) 569-8326. I want to be pretty clear there are two sides to Butler mortgages or his dad’s side of the business, which is, um, Ron Butler, uh, Dave side of the business. Dave Butler typically works with real estate investors. He’s been really good to us. Um, so that’s the phone number to reach out with Dave, really thankful that have things have worked out as best as they possibly could after his heart attack.
Um, hopefully you found the mortgage information. Um, insightful. Thank you everyone for listening to this podcast. If you are finding this useful and you haven’t given us a rating on iTunes yet or review and you think we’ve earned it, we would greatly appreciate it. Getting your feedback like that is really the fuel that keeps making us put this out there. So thank you for those of you who have done that. If you haven’t done that yet and you think we’ve earned it, please do so. We really, really appreciate that. So thank you. And um, that we’ve had a little hiccup with the email address that I was handing out for feedback on this. So I’m about to have a new email address to share. But apparently over the last few months, the email address that I’ve been sharing hasn’t been working the way that we want it to be working in.
Some of those emails have not been getting to us. So we’ll have a new email address to share with you shortly. So if you’ve sent us something and we haven’t responded because we typically respond to everything that comes in, that’s why. So our apologies for that. Stay tuned for new email address. Thank you so much for listening to this. We really appreciate it. The whole reason we’re doing this is trying in some small way to help all of us together here in Canada, live life on our terms and with that, until next time, your life, your terms.