Sergio is such an amazing guy and together with his wife, they’re living an incredible journey. On this episode of The Your Life! Your Terms! Show, you’ll learn about living through 30% annual inflation as a normal way of life and then experiencing 100% monthly inflation! Sergio and his wife immigrated to Canada twelve years ago and in a classic, amazing, adventure have managed to invest in multiple properties using variations of the BRRRR strategy and now have two amazing children born here in Canada. We’re super excited to share Sergio’s story with you.
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Transcript
Hey everyone, it’s Tom Karadza and wait to hear this podcast Sergio men’s who are a rock star member that’s been working with us for a long time actually he wants to send a shout out to, his coach here at rock star for being part of his journey and helping them out along the way. So there you go, Sergio. We called him out. And he also wanted to thank just the network, the rock star network, you know, the he calls it his strong network and Power Team at Rockstar, the lawyers and accountants and mortgage brokers and the whole bit so Sergio, thank you for for asking us to include that in the intro. But what I want everyone to understand on this talk, it’s fascinating because Sergio shares his story of how he and his wife lived in Argentina during 30% annual inflation like that was normal for them. 30% annual inflation was normal. Then he shares where they lived through a period of 100% inflation and it was 100% inflation a month, 100% a month. So he goes through that and he talks about how in Argentina you have to play defensive like you always have to protect yourself from this inflation, when they finally decide to pick up Leave Argentina, they decided Canada was going to be the spot for them. And that is interesting enough to all of us real estate investors here in Canada, hearing how, you know, wonderful people like Sergio and his wife picked up and moved to Canada chose Canada as their destination. Part of the reason obviously, it was a maybe a little easier to get into Canada and United States, but they did still come to Canada. So that is interesting. But then he also talks about how in Canada, he could go and play offense where he felt like he could get ahead. And sometimes I feel in Canada, Canadians don’t see the opportunity. It’s kind of like you don’t see the forest for the trees right. If you’re born here in Canada, you don’t realize the great opportunities that we have in front of us in this country with our banking system, our real estate situation, our education system, everything that we have going for us. So it’s really just an interesting story to hear Sergio go through and explain his journey, just how he had to protect his income in Argentina during this time how he had to deal with property prices, when properties you know, we’re changing value. He’s gonna explain all that kind of stuff. And we get into a chat about interest rates. It’s fascinating because he knows the difference between nominal rates and real interest rates. And I think I was so excited to have this conversation, I’m pretty sure I totally screwed up and explaining it all. So I just want to explain that we did some math that I might have gotten backwards. But basically, you should understand that when we when, when the media talks about rates, so like the nominal interest rate, that doesn’t account for inflation. So for example, if you’re getting like a nominal interest rate of 4%, on some investment that you’re doing, but inflation is 2%, the real interest rate has to be adjusted for inflation. And the way you do that is you take the nominal interest rate of 4% that you were earning on something, and then you subtract inflation off of that. So if you’re earning 4%, and inflation, that year was 2%. The real rate, the real rate is 2%. And we have a discussion around that I’m pretty sure I added when I should have subtracted I started talking about negative rates and got all crazy on the negative side. I think I was actually accurate, but if you hear us talking about it, just know that afterwards, you might want to Google up the difference between real rates and nominal rates. something that’s really important in the economy. And we should all understand it. Perhaps in a future podcast, I’ll just focus specifically on that topic because it’s that big of a deal. But just a fascinating talk so pumped, that surgeon was willing to share his story with us on the podcast for all of us to hear together through this. And listen, if you are listening to this, and you want to check out real estate investing for yourself or you have a friend or family member, one of the best ways to check it out is one of our books, you can get free copies of our books, and the most popular one over the years has been income for life. for Canadians, you can get a free digital copy of that book at Rockstar inner circle, calm forward slash books. So that’s Rockstar inner circle, calm forward slash books, you can get a PDF of it there. You can give that over to somebody tell them to get it for themselves. But if you’re you’re interested in real estate yourself or you want someone else that you’re working with to understand why they should consider real estate, perhaps one of the books might be the best way to go and you can get those at Rockstar inner circle calm, forward slash books. And with that, let’s going 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.
We are live with Sergio menzer. And Sergio just told me before we started recording here that it’s a Lebanese name, but you are were you born in Argentina?
I was born in Argentina. Second generation. Yeah, my family’s from Lima. Nice and Italian ancestry lemony because yeah, I
also know there’s a lot of Italians there.
Lots of Italians,
lots of Italians. I grew up with all Italians. I’m married to an Italian Italians have been everywhere in my life. I love the country of Italy. It’s a great country. Have you? Yeah,
yeah, I’ve been there many times, like have some family. Yeah,
yeah. I have no idea the Italian influence In Argentina is a huge
for whatever reason I mean it is probably the only place in in Latin America where the talent immigration is as large as Spanish immigration. And then you have people from all other places right many places in Europe, Middle East Asia, but it’s primarily you know, Italian and Spanish The Heritage Area.
Yeah Now that’s an I heard the what’s the capital Buenos Aires? We’re excited. Yeah. And I heard it’s a beautiful city.
It is a beautiful city. Yeah.
You’re some hesitant you’re hesitating a little bit. No, no, no, no. Sometimes, you
know, you know, for someone that has to leave the country is is tough, right? There’s some some nostalgia some
Why’s that? Where did you live? Right, right there. Yeah, I was
born and raised him when Osiris that’s the main capital of Argentina. It’s all our city altogether. It’s like you know, 12 million people. If you take the whole grade, when I say this area of our country that is probably 40 4045 million. I don’t know what the number right now. So a little bit larger than Canada in terms population in some beautiful city and it’s a beautiful country. So it’s sad that you know, sometimes you have to make these type of decisions. But you know, we we did it for the sake of our future and to find a better place, you know, to build and raise a family. And we’re extremely happy with the situation. So we’ve been in Canada already for 12 and a half years so
12 and a half years So what was the tipping point? Like, when did you start to think like, cuz, you know, Argentina you did was it was the currency issue? Like what was it finally that made you think, Okay, were you married? You were already married? We married two years before we came here. Okay, so what was the tipping point Can you explain for because that’s a big decision leaving a country? What was it?
Yeah, we were not like super young. We were already in our mid 30s when we when we decided to make this decision. So the last few decades in Argentina have been really quite a mess from an economic point of view. Like, you know, the economy swings up and down. Inflation is over. problem, currency depreciation, you really cannot plan your fruit your future from our, you know, financial point of view at all. It’s like, you know, whatever decision you want to make, it almost feels like gambling. You don’t know the outcome. It’s just very, very hard to live in those conditions. I mean, it’s not impossible. People still live there. And my wife and I were we’re doing okay, right. We were really doing okay. But it was just realizing that we were working really hard. And we were not really getting our head in the way that we were expecting. And just a, you know, having to leave with concern, you know, worry not only about our jobs, but what’s happening with inflation with currency depreciation, with corruption that you see that is rampant and it’s not getting better. A lot of things that really you have to keep in your mind all the time, just to survive. So you’re basically Malina defensive mode, right? How do you play the game in terms of financial world, whatever it is, basically try to protect what you have more than you know what we’re trying to do here, which is really playing offense, right and investing and taking some calculated risks over there. It’s just very, very tough.
That’s crazy to hear. You know how so Canada is a great so you agree that Canada is a great place?
Canada is a fantastic country. I mean, we
all our problems that we complain about, it’s
no problem.
Come on. I love you. You know what I love hearing you say that? Because I think this country gives us all the opportunity in the world. But sometimes I feel like if you’re born here, it’s a situation where you don’t see the forest for the trees and you don’t realize that you need to travel and get out to realize Holy smokes.
Dom To tell you the truth. I deal with that all the time. I mean, I talked to Canadians all the time. I work with Canadians, and many people just don’t get it right. They get a little bit but the reality is that if they leave all their life here, they don’t really have a basis to come Bear. But I can say that, you know, I live in other countries, I had to work there. I had to save money, I had to invest. I had to do a lot of things, right? When if you are born here or you came here as a kid, you unfortunately me you don’t have that experience. Right. So I think it is bad. But at the same time, it’s also good, at least what what we feel is that we came very aware of what we had to do to get ahead. And actually it was it ended up being easier than what we expected. Just because, you know, I believe that this is a fantastic country. displacing ourselves in Ontario is truly amazing, right from every angle that you that you look at. I mean, the economic growth that you have here is is just amazing, right? So but you really have to leave out in other places to be able to compare right?
So in Argentina, can you explain to me how did you guys play defense? I like that analogy. Like you’re you feel like you’re playing offense and we’ll get into some of the stuff that you’re doing. But how did you even play defense Protect some of your wealth in an environment where inflation maybe is kind of changed.
So the only true way of you know having some savings is either you buy real estate. And that’s tricky because it’s a different market. But we can talk about that under the stage has actually gone up quite a lot there too in good places, or you save us currency. And I’m not talking just US currency in your bank account. It’s it’s US currency that you have the your mattress under your mattress, or that you can take abroad to a financial institution outside the country. That’s truly how you can feel comfortable that your savings are protected. I know it’s tough, but no,
no, I know exactly about this stuff. And I love hearing it from someone who’s lived it like you. And I’m
sorry, I just struggled to explain these because people look at me with their open eyes And what if these guys talking?
Because he’s like, okay, it’s just
crazy talk. Yeah, because Nick can I saw our family go through it and Yugoslavia you know, we weren’t there but I remember my aunt going through this I mean my arm ain’t used to she’s no longer alive great lady I learned so much from watching her sell eggs in the market at but her her selling eggs in the market. There was a cover for her money laundering operation where you gave Yugoslavian dinars in exchange for German marks because just like you’re saying, people didn’t want to keep the was lovely and dinner because of the inflation problems. And and she got arrested for that it was illegal. The government arrested her she was in jail, one of my uncle’s had to go and get her out of jail. Great lady like Amina smartly when it came to money, smart lady like her kids there have land on the islands over and create like she came from literally nothing like born in the bush, outside of one of the cities to get to the city start making a name saving, doing all this stuff. So I totally know what you’re talking about. It’s fascinating to me. Like, but I just need to understand like Why could you not save the US dollars in an Argentinian bank account
because Every once in a while, you can actually be prevented from taking that money out, believe it or not, maybe you can just get, you know, take a little bit every week, whatever, when there is a crisis where your funds are
controls that you can access your money.
Yeah, yeah. And actually, you know, in some cases, you may lose it all together. There was one crisis where they, the government issue some new law and all the dollars that people had in their bank accounts were automatically converted to the local currency to pesos. And that’s it, it’s like okay now is you cannot have dollars anymore, and we converted everything to pesos.
So a lot of people do that take American dollars wherever they couldn’t keep them at home or get them abroad. And
some studies that talk about, you know, the how much money Argentineans have outside the country, just because they don’t trust that the country’s a good place to keep their savings right.
I don’t know if you know this in Germany right now. They’re changing the law that you used to be able to buy 10,000 euros worth of gold bullion anonymously in Germany but they’re changing the law there in a couple months. And I was just reading about this and they’re reducing it to like 2500 euro that you can buy anonymously in gold, everything over that you have to like a report. So Germans are queuing up some gold dealers own there are like there are shelves are empty. And there’s queues of people trying to do this because that country has a history of what I mean it’s even the blood of the country there yet because they have a history of what happens in inflation and currency crisis. So when they see something like this, they are doing the same thing. They’re not getting that they some of them might be doing US dollars too. But in their mind, it’s the gold, they’re buying the gold and I’m sure squirreling it away wherever they can squirrel it away. So like this happens all around the world and as Canadians we never really see it, so you think oh, that’s kind of like fairy tale talk almost. But, but Okay, so there’s the currency. But then also, did you have a Did you ever buy a property with a mortgage on it? That wasn’t in the Argentinian peso?
Yeah. So in 2001, we bought a property that was the first condo that I bought a And I had to buy it in a mortgage in US dollars. And it was 10 point 75%. So not only the rate was super high, but I also had the currency risk, right? Because
you were being paid in pesos. Exactly. So if a peso depreciated against the US dollar, your mortgage payment on up,
and actually that was one of the up swings where you can actually get a mortgage, even if it was hard. There was some other times where you just cannot access credit, right? And many people, especially right now, because this situation cape deteriorated, unfortunately, many young people, they just cannot buy a property because there is no access to create. And the properties are quoted in US dollars and he’s like parallel market, but he’s kind of legal that you know, all the prices are in US dollar like a local currency. Just doesn’t mean a thing, right? When you have inflation that is normally you know, 30 40% a year with some swings when sometimes it was a little better, but we had periods of hyperinflation, I had to leave one of those when I was already at an adult age. And it’s just a nightmare, because he’s not just that living through a hyperinflation is absolutely nuts. The reality is that the the country, the economy is spiraling completely out of control. So the businesses go bankrupt, people lose job, actually, you know, 2001 does be crisis, I lost my job too. So I had to, you know, almost start again. So it was, it was painful. And you know, then a few years later, I started to, you know, spend more time because of my word to, you know, traveling outside the country. That was in the US I came even came here to Toronto, and you start comparing how people leave and how okay with the same amount of effort or even less, they have a better standard of living, and they don’t have to worry about so many things. One thing that amazed me here is YouTube with a lot of people and some people care a little bit about You know, politics, less people, I would say care about the economy. I know you do. You do a lot. But the majority of the people don’t care. And the reality is that they can leave without caring. Over there. It’s more like, you need to survive. So you need to become almost an expert in the Korean economy, right? It’s weird, at least in all the aspects that will allow you to move fast if you see some trends in the market, because you can go belly up that quickly. Right.
And where’s there? I’m curious, what was the highest level of what was like a normal level of inflation and what was the highest level of inflation you lived
through Norman I would say about 30%. There was a below the 30% to
30% to normal right now your annual inflation of that 30% so groceries that cost $100 one year 130 the next year? Yep. And then 160 or hundred, whatever is compounded that is like over $160 the next year
is nuts. There was appealing the night way out, it was a little bit less, but then at the end of the decade it spiraled out of
your income going up at that time was the income inflation matching.
That’s the main challenge. You are constantly trying to prevent your income from you know, falling behind falling behind in real time. You know how over there people don’t here we don’t talk much but you know, for money, financial point of view, you talk about the nominal rate or real rate. So reiterate these actually adjusted by inflation.
They are no one gets that here. So just owner so nominal. Everyone talks about nominal inflation, like what’s the inflation rate, but the real inflation rate is nominal rate, then taking him to a let me now I’m not confusing.
You I noticed by the inflation,
the inflation rate, so the nominal rate, then you adjust by the inflation rate. So if the nominal rate is like 6%, for example, reported, but inflation is 3%. Their real rate is 9%. Exactly. That’s crazy. That’s crazy. So you are always He’s talking about nominal and real nominal and real. Yeah.
Yeah. And sometimes here, you hear people that say, Yeah, that’s great that you’re, you know, you’re a salary increase 2%. And they don’t even think that, you know, okay, but inflation rate is about 2% you really didn’t get an increase
in inflation was 3% you’re behind it. Yeah, you got us our rate of 2% you’re actually bound by 100%. But I find that’s the sneaky thing about inflation when it’s at small levels, like it’s reported here to 3% people kind of ignore it, but if it’s going at 30% like it was for you in Argentina, yeah. If the inflation rates, the nominal rates 30% but the real rates like 40% everyone pays attention, because they’re like, hold on a second here, man, things are really going up. 40% not 30% Yeah, like, this is a big deal.
You know, fix all the decisions that you made, right, how you save where you save, sometimes you have to, you know, you know, wanna buy some stuff because you say, yeah, I’m gonna need that in the future and it’s gonna go up so I better you know, buy my car now. For example, it is crazy but it just messes up a Your whole decision making so
if 30% was normal that incomes really ever match inflation like, or no. Sometimes they do, how was that handled like employers really sad, okay, you’re getting a 30% raise
this year, it’s just a struggle. Sometimes, you know, unions, they are very powerful. And depending on the government, there’s some governments that accommodate their their requests much more. So we had some years where actually the unionized employees were getting a better you know, salary increases that non unionized and then other periods with other governments it was the opposite, right? But at the end is you have to be on guard, and you you know, you want to make sure that you get at least the inflation rate. So, again, he’s one of those open phones that you have to have in your head just to survive that here. You don’t
have it you don’t have any kids kids complicated because here’s sometimes where the where we are with raid sometimes I think we could have we could actually have a negative rate here a negative real rate with positive nominal inflation. What I mean by that is, we could have a situation here, where we might be interest rates might be 2%. Let me get this straight, but prices are going down like 3% price are actually going down slightly deflationary 3%. So like that’s a negative 3%. But in real rates are 2%. So then the real rate becomes not negative three becomes negative one. Yeah, so we’re even we even even though we have like this positive rate, we’re actually have this negative interest rate environment, which is completely insane to me. Like every time I even talked about it, I’m like, my brain starts just kind of exploding, that this this could be a reality. And I think that’s kind of almost the world we live in, in some areas where some things are going up. You know, the real rate is much higher than it’s being reported that people believe but then there’s also this weird situation that I think the Fed and the the bankers are a bit worried about that we can’t go negative. And that even though we have these rates, were These positive rates were actually in this weird negative territory, a lot of things that they measure, and it’s absolutely crazy. And if it’s not negative, it’s still very low. Because consider that, you know, we can get a mortgage rate right now, even on our rental property, which is higher, you know, 3.3%, something like that. And if inflation rate is two and a half percent, that means that the reality rate is only point 8%. So it’s free money. It’s still free money. That’s a concept that many people struggled to understand. But the reality right, I like how you’re literally laughing at the situation you’re in, but you’re laughing because it’s like so good because you’re thinking this is just a joke because if I could survive at 30% when I look at these rates here, and 10% interest rates maybe or whatever you were getting, what did you say you’re gonna have one of your mortgages with a 10% 10 point 75 but again, in in in US dollars and US dollars Yeah. So
when you factor that it could be 40% in local currency, right? Oh my
god. This whole conversation is making you think I need to get a paper and pen Oh, and rewrite. Oh, I find whatever Go into the world of nominal rates and real rates. I got it. I honestly I confuse myself and I have to write it all down. I’m like, let me get this straight again and I have to look at it and then I feel like I’m good again. I’m like, okay,
the concept I think is is is not that complex. But then when you when you want to track what happened after 10 years, 20 years, then it gets more complicated, right? Because then you have to if you talk about the dollars, you have to talk about dollars for what year? Yeah, got it really having to adjust for Okay, I’m talking about today, these many dollars, but back in the 1970s 70s, it would be this amount of dollars today. So that’s where it gets a little bit tricky, right.
So you said you live through like normal was 30% inflation, what was the highest
you lived through? So there was one month and I remember perfectly because we’re so crazy March 2001, where it was like 100% a month. That’s insane. That’s insane. That’s absolutely insane. That’s an I mean, people were super mad. People were, you know, looting supermarkets. My mom at that time she was in a supermarket and you know, they cannot keep up with adjusting the prices and at the time, I guess there were more more stickers right that they have to put on the on the shelf right for the pricing. And my mom was in a supermarket. And they announced via the speakers that okay, as of right now, or prices are up 30% and people will win Not a lot of people just grab their bags and left without paying the supermarket, right? It was cows.
It was absolutely.
And so in that environment, though, you could still get food. It’s just the prices were changing. And I remember some of my family over in Croatia during a time like this. They told me the moment you got paid. They would literally run to the store, run to the store and exchange whatever currency they had for whatever food or groceries supplies that they needed because if you waited just like your environment there if you waited like two days now what you could get for your pay might be completely different. So it was a matter of just getting the currency and exchanging it immediately for something of value.
Yeah, so in that environment a lot of crazy things happen for example, when you are the new you know, business two reasons that you sell one company sell product to another, etc. You cannot wait to get paid. So in those extreme situations, it’s almost cash. It’s okay, drop the emergency you have to pay me cash today. I don’t want to check that I kept to the paucity in in one week, not even 30 days, right. That’s crazy. If you want 30 days, and we’re going to factor another 30%. Right. So it’s, it’s
the I remember and I’ve shared the story, you’re but you’re making me reminded that remind me of it when we bought that place we have over there in Croatia on the Adriatic. We went to go do the final payment. And I thought, okay, we’re just gonna go to the bank to get a bank draft and to make a payment. And they my cousins like no, the banks, don’t trust each other. They’re here because every 20 years or so some banks just go completely out of business. So there’s no concept of bank draft. So we had to go order the currency, like so. So to make our final payment, we ordered the currency and local and local currency, it was cut, it’s called the corner over there. And I literally had two plastic bags of money that I walked out of the bank with. And then I handed it to the people that we bought it for, because they were banking another bank, who was literally just across the street, but the two banks had no way to connect themselves. So I gave the currency this is this is like six years ago, this is probably get now like nine years ago or so. But this is so that’s like still 2011 this is what they did. And then they took the money that we counted, it had some espresso has some pursuit, though we
we counted all the money. And then they went to their bank to deposit Well, I thought it was the most ridiculous thing I’ve ever seen. It’s still like that in Argentina, if you’re buying a property, it’s still like that. And then it’s a big deal when you are presenting your offer, who decides or who’s negotiating where that transaction is going to happen? Because let’s say if you are ceiling, you would like the city you know the buyer to come to your bank so that then you can count the money there. And you just put it there you don’t risk going to the street to the positive somewhere else a couple hundred thousand. So that is one of our big negotiating points right where the transaction is going to happen. It is cash
real estate there is awesome. That’s correct. Okay, so when do you get to the point? Where what was the deciding factor that you’re like, hmm, we just have to leave Argentina?
Yeah, it was just, you know what? struggling to get our heads in. Okay, you know what, we’re already in our 30s I mean, we out what one one interesting thing that happened to me that was super painful. I’m over it right now. But a you know, since I started working when I was in my early 20s, the economy was solid with where they are and the government implemented a program no matter the name, but suppose that is something like the RRSP program here which is basically breed dogs dog as a tax deferral program. Okay. So it’s like a private It was like a private savings plan retirement savings plan. Okay, so I diligently contributed as much as I could, for many, many years, at some point that I was making relatively good money, at least for local terms. So I save a lot of money. And many years later, I had 90,000 US dollars on those savings and they they allow a, you know, US dollars are there, right. So then, when a crisis came, the first thing that they that the government did was force all these institutions to lend money to the government. So I got that money. And of course, I didn’t have a choice, right. It was like a law so that money got converted into a bond. It’s not a US bond. It’s a bond of the government of Argentina right so it got converted to a bond in US dollars. And then a few sometime later, it actually got rolling to the say the equivalent of the CPP here say well we’ll give you something we consider these when you are 65 so I felt that they stole all my money so when they come out like this is because I’m not expecting to see any any of these maybe penis when I’m 65 but likely not even that because I left the country so I won’t even have the year to qualify but those $90,000 were converted to $97 but on our bond, so you of course you can discount that and then it got converted into local currency and with a depreciation It was like $30,000 and then it goes roll into the you know, that long term problems are basically lost everything
went from cash to basically an You to pretend from an IOU to basically like, okay, we don’t even really owe you will just maybe give you something in the future. And with an inflation rate then of going out of control, it’s even worth. It’s basically Monopoly money. Holy crap. Okay, so that happens. So so basically all of this combined, you guys are like, Hey, we’re, you know, I’ve traveled a little bit now out of Argentina. These crazy people in these other countries don’t even realize how good they have that we’re going over there. Yeah, yeah. Was it hard to get into Where were your choices? Canada?
Yeah. So a the time we look at the US, Canada and Australia, the US and we’re talking like you know, the 2005 around that time, the US was already at tougher to get in without a job offer right without a sponsor. It started to be if you want to do things written completely legal. There are other ways right but
apparently you can run across the border.
But if you want to know everything legal a it was pretty pretty die. So then we actually looked very seriously at Australia and Canada, where affiliate has a point based immigration system very similar to what Canada what Canada has a Yeah. And we we like both options and we ended up applying, you know, to Canada. And it took us about 20 months until we got all our paperwork and we had to, you know, do a trip here to officially land and then we were permanent residence. I was amazing, right? Because as a permanent resident, you know, you’re Canadian, right? You cannot vote. But
they are basically
your KD. Exactly.
And then five years later, yeah, we we came through the Canadians are controlling our our kids were born here. So they were Canadians. Before we we were Canadians, right?
you produce Canadians before you became a Canadian. I remember as a student, I worked at the terminal one, the old terminal one you probably don’t even know this old building, but old terminal one, a horrible little terminal. And I worked in basement as a student customs officer, and planes would come out and every once in a while, we would get people hiding in the hallways to declare straight up refugee status. So they would, and we would find that they would have maps of the Toronto airports and with instructions of where to go, and they would get on the plane because they get on a plane, you need a passport, but then they would destroy their documents and declare straight up refugee status. And that, you know, I would have to send them to immigration, and they were always petrified, they would sometimes be hiding behind polls in the customs Hall, where I’d be sitting there. I’m a student, I’m studying for university, and I look up and I can kind of see someone’s face staring at me like 100 feet away, and then I would go and approach them. I don’t even know if I would do that anymore now, and, you know, talk to them, and then they would declare, you know, I’m declaring refugee status and I would walk them into immigration. But the people that were coming with their proper papers to stack of papers landing for the first time and saying, Hey, I’m, I’m here, I forget the language. It was like I’m landing to declare my status here or whatever it was, and I was taken to immigration. You know, I’m Coming landed, I’m landed here officially or whatever the terminology what led me right
about eight,
they would have all their paperwork and sometimes they would have all the money that belongs to them in one check or bank draft or something from the other. And they were so happy, so happy and it was like, I felt happy to be Canadian, welcoming them welcoming them. And I always tried to make an extra effort to be like, welcome to Canada. I’m like, Who am I? Like I’m this weird guy here and I’m the person like Welcome to Canada you know,
and that meant a lot to them because my wife and I still remember where you know we we we go to customs and they grab all the paperwork we go to this basically the final step of the immigration process where you when you officially land right and then you become a permanent resident. Yeah, and the officer once everything was done, he totally Welcome to Canada. I just felt
Yeah, I could see how that would feel good. Yeah, sometimes, you know, you went outside and it was snowing. You felt so bad.
No, it was all
good. Yeah, buddy, buddy. Me
uncompensated You know, every time that I have to travel especially when I have to travel abroad and usually to the US. When I come back I always remember that it puts everything in perspective. It’s like okay, what is it that I was worrying about this? I don’t have anything to worry i’m so as good
it’s funny every time I come back home after we travel for some time, I always feel like when I come back to Canada, I’m like, okay, I feel organized again. I know how the system works here I know the bank I know my money’s probably probably hopefully still in the bank like there’s this this nice comfy feeling about coming back to Canada you know that with the health care for all the complaints about it, it’s a great system and you know, you just feel like Ah, you can kind of relax your eyes when you travel around some of these countries that you go to you just are always a little bit odd you’re obviously not local to some of these so you don’t know the systems be always a little more on edge right? And come on coming on with so great. So when you so you decide to come here, and then how do you transition to You got it. I guess you picked up a job. Up here, then. Yep, yeah. So you’ve been working now here for 12 years? Yep. Something like that approximately 12 years. And then how do you transition from getting a job here to getting into how you’re investing in real estate in a country like you’re in a country you’re not born in and have so much respect for that? Because I find Canadians question investing in real estate, the ones that are born here and educated here and they are always debating Should I or shouldn’t I have here you are landed here? What what process did you go through? Was it a series I think you mentioned to me, I feel like Rich Dad Poor Dad stands out to me. That was one of those is how you started reading these books.
Yeah. So so let me tell you how it was. And actually, you know, real estate is still relatively new to my wife and I right, we started we bought our first property in November 2017. And a few more a few years each or a few months earlier, we started really considering these the strategy, but before I never really look at real estate, and I always kind of dismissive that. Yeah, there may be something there but prices went up so much right now. That Petunia is probably gone, probably when I correct sometime, but I was just England right? I knew nothing. Right. So, so what we did, you know, when we came, you know, I started working my wife started a little later because, you know, she she stayed a few years with the with the kids, we have two boys I’m very close in age. So we started, you know, I started working and my focus was to, you know, to do a great job and to get promoted and keep, you know, the main, the normal focus was to exactly to increase my salary number one, and the second focus was to save as much as possible. So we went through a period where we saved and and we were when you can see that everything that britax dollar RSP and extra savings, etc. Probably about 50% of my salary. I was just my salary. We were saving that wow,
you will want goes that man. I mean, I should say when you did it,
but I mean that’s huge. That is huge. Dad for quite a few years. So it was a sacrifice that we decided to to make. And you know, we had one old car. We were very strategic in terms of where we buy stuff. And I can tell you, we knew everything around, you know, goodwill by the village thrift stores, and, you know, everything. And but again, it was part of, we were happy doing it, because this is our plan. We need to save money and we need to save money fast, because we need to catch up.
You actually had that working for you, you had this burning fire inside of you to do this. Yeah.
Yeah. So that was you know, for quite a few years until we save some money and we started investing in the traditional way, not through all the, you know, either TFSA storage fee or even our ESP that we set for set for our kids, but all in the traditional way right through mutual funds, right? And then we realized that okay, the returns are not what we would like. We have Almost no control of their of the outcome. And the fees are ridiculous when people really do they’re, you’re laughing but you know I know I really do their homework and realize how that more than words it’s a complete ripoff because they all these meet these you know financial institutions they manage trillions of dollars and even if they get you know between two and 3% A fees that’s billions of dollars of profit that they get regardless if you make money or not. And even that 2% that they take compounded assuming that they can deliver for you average returns of the average market portfolio which sometimes you don’t get even that it’s just a report right and it feels that it felt that Yeah, even if
the banks as much as I hate the banks, I have you ever
No, no, no, absolutely, like they’re
using their own advantage.
advantage that you like to Yeah,
yeah, exactly, exactly. Yeah. So we realized that okay, no matter how much we say, you know, I probably was able to get ahead at work and increase my salary quite a lot and by just you know, taking more responsibility, right. And, but right now I’m already at my, you know, my highest marginal tax rate that means that every additional dollar that are getting salary or in the month the yearly bonus 50% I don’t see that.
So shocking. The first time I got a commission check at a company called Oracle software company, an American company that I was working for. It was a it was in my life. It was a massive commission check. Okay, this commission check was $32,000. Okay, one commission check. Like when I got this was like the lottery. To me. This was like, I think I might have just one. This is 30. I remember counting the day till I was going to and you didn’t get the check. I just got the pay stub saying that it was deposited Right. Yeah. And I remember The day I got the pay stub and I guess online banking wasn’t so good because I didn’t check the deposit or whatever, I rip open the pay stub. And so then it I saw the net amount. Yeah. And they had taken 50. But it was 16,000. And obviously, that’s a huge that’s still, I mean, that’s a lot of money. There’s no doubt, but in my mind, I am I had a harder to Island. What happened to all the money. And I remember how hard I was working that year. It’s not like I just stumbled into that. I mean, I was working it like I was coming in early. I was thinking I was I was working. Right. And it was it was a good paying job. So I didn’t have anything to really complain about. But when I saw that $16,000 deducted off I you know, when you just have that sinking feeling like I just been ripped off and is there a mistake here? Like do Is there a number is there a number that I call the government and Okay, I think you’re screwed up here. So yeah, I can totally relate man. It’s shocking.
Yeah. So that was kind of our realization, right? That even if we’re doing all the right things, and you know, I’m have a good salary. I’m doing okay, a job at work, etc. Yeah, that that money never seems to be enough, right? It’s just like a lot of work for, you know,
live you can live.
Yeah, no, no for sure. But in terms of saving, and then when you know what we were saving, you know, already investing in mutual funds and not happy with those returns. That’s where we realized that, okay, there’s gotta be something else here. So then we started, you know, looking for that something else. And that’s how, you know, we we run into real estate and started you know, learning and actually I you know, because of my I am an engineer, so I like numbers and work with spreadsheets and all that stuff, even if right now I don’t do much of that. But that’s kind of my my type of engineer, industrial and mechanical engineer.
Cool.
Yeah. So
you know what I started looking at Real Estate but mainly from a numbers point of, like, okay, different strategies. What are the numbers started running the numbers and I realized that, wow, this is pretty powerful. There is something here. Think about the basics, right that and you know, these well not even if there is a 3% appreciation, appreciation on, you know, on the market and we know we’ve had much more than that, right, but even a 3% if you’re putting 20% down, that means that their return on your investment is 15%. And you’ve done nothing, even if the property breaks even, but it doesn’t just break even because you are also getting at a minimum, you know, the principal repayment, and that’s traditional equity that you are making right? So you your return automatically is going to be above 15% even if you are just breaking even from a cash flow point of view, and then if you find the right strategy, and you can get you know, additional cash flow and again, cash is king of course, but that’s a pure bonus right. So when I started you know, running those numbers and saying Okay, you know what, what does that properties going to do for me in five years or 10 years. And I said, Oh my god, there is something there. There’s something that no one told me about it about this. So I was pissed about that. But now I know and I’m looking at the numbers, and it’s true. And I remember, you know, listen to you or Nick many times saying something like, oh, if someone just buys one rental property, and they keep it for 2530 years, they’re gonna be okay. And it’s true. Actually, if you if you run the numbers, you it’s, it’s true. I mean, it’s it’s a great vehicle to build wealth. And the cash flow is fantastic, but it’s, it’s tough to get for sure. But the cash flow, you know, it’s the gravy, the wealth creation that you get on equity is just amazing, especially when you have a strategy as you guys talk all the time we are here and you know what property prices may go down. But if you have the right property and you still cash flow, and you can you know, you can go through that those years when it staff eventually properly I’m gonna come up. So they’re gonna be okay. So, so to me, it was like, super interesting to, you know, understand all the numbers and then Okay, well, I mean, now it’s a matter of defining what type of strategy what is the
was your wife in at that moment? Or did you have to convince her usually one you know if you’re married usually it’s one one of the people in that marriage are like all in and the other ones like no, this is wrong. No, no, she,
she was seen but she was seen more conceptually not not as much into the detail. now now now she’s but we
also if you have like a white collar type job, and once you get involved in real estate, you have had some friends go through this. They’re like, they’re, you know, really high paying white collar type jobs. And then they get a piece of real estate and you have to do some blue collar type work when you own your own real estate, which might mean when you first get into real estate, you might be doing some demo, because you need to renovate a washroom or something and maybe that demo is going to be done by You so you have someone who’s maybe worked in a nice beautiful office and stuff and then all of a sudden it’s like, Yeah, you got to go there. You gotta rip up the toilet. You gotta rip down the shower. There’s a dump box, you got to deal with some contractors, the dump box guy might be late, the neighbors might complain, there might be a permit required. Try and deal with City Hall. There’s all these things to do with real estate. That’s why I tell everyone I’m like, yeah, it’s not really. It’s a pretty it’s a pretty simple thing. Real Estate, but it’s not always easy. No, no, no, no.
You know, it depends on the strategy that you pick, right, as I mentioned to you, and then we can go you know, my strategy called duplex conversion. So
that’s what that’s what it takes. And on a duplex conversion. Have you been able to pay for someone to do the work? Are you doing the work? How you doing that? No, no. Right now,
I still don’t have the expertise or the or the time to do it myself. So you’re hired
to do it.
Yeah, we we are hiring. Yeah.
So you’re buying the property that has the opportunity to be converted into a duplex? Yeah, you converted it into a duplex. You basically almost double the ink. It’s not quite but pretty close. Sometimes you’re almost doubling your income on it.
Yeah. And and that those are the properties you’ve chosen to focus on. Yes. without, you know, without clear focus on what’s going to be there, what is called the ARV or the or the after repair value. Because the plan is to as soon as the project is completed, you know, we are renting it and then we’re turning around refinancing that property.
Yeah. And that’s what I try to give everybody some warnings because the refinancing thing is a beautiful concert. It’s another one of those things that conceptually is so beautiful, but it depends on when you hit the market with your refinance because a lot of times what most Canadians don’t understand is the appraisers are given instructions by the bank saying, Hey, listen, if there’s any sort of market correction in the next 18 months, and we’ve heard through the grapevine that this stuff happens, I don’t have it firsthand. So I should say that, but we have heard through some pretty reliable sources that appraisers have been told under certain situations that this kind of thing, if the market corrects, and your appraisal comes into high and we are underwater on the property value over the next 18 months. We’re not going to be using you anymore. And when that happened a few years ago, all of a sudden, we saw appraisal values coming in way low across the board almost overnight. And when you’re banking on that appraisal to be able to go refinance it to pull out your money, sometimes it hurts. And sometimes appraisers don’t do a good job of the income approach of properties, you might have done a beautiful duplex conversion, doubling the value essentially on the property because you’ve doubled the amount of income you can get, because now you have two units instead of one. But they are just looking at it as like a residential property.
They may have mainly at comps, right?
Exactly. And so you don’t get the full value. So it’s, you can’t always it’s a beautiful strategy. And we all do it. We all went with that’s been done since the beginning of time, but it’s something you have to navigate through and can be very frustrating. The appraisals sometimes Yeah,
yeah. So going back a little bit when we decided to jump in and look at different strategies. I realized that Yeah, even if you find out you know, you buy a single family and that’s great, right? If you’re not going to spend a lot a lot of time on it, but we decided okay, we want to do more. We want to spend some time we want to go through the grind whatever it takes an unlearning because there is something There. So we said, okay, you know, we want to focus more on on multifamily for the cash flow, but then they be for our strategy, which is what gives you the boost to their return on investment, right? Because you can actually, you know, pull that money and use it on a project. And so far we’ve been able in every touch on every refinance that we had, we were able to pull all the money from the renovation, and a little bit of the downpayment. I didn’t have any of those crazy home grants that some people talk about, well, you
never know. You never know when your home runs coming though. That’s the thing I can tell you from experience in real estate is sometimes the Nick and I have had many times where you’re like that property. Why did we even buy that property that property is actually a piece of crap. You always have some properties that are not on you don’t like but they’re you own them in your portfolio. But every once in a while the property that you think is not going to produce it just produces like a magic. You know, you just have one that it appraises beautifully. You always rented out for top dollar and another property that you think is going to be your gym and it’s this beautiful part. Doesn’t appraise quite right. So you just never know when you’re going to hit that home run. Yeah, you know. So the key with this thing is to do just what you’re doing, do what you can and you keep moving you know keep keep you pushing your money back into the market. Something you said really struck home with me is now when I see 20 year olds walking here because of what you said them the the, the advantages of real estate, one of the things that we didn’t talk about are there are tax advantages to ALL your rental properties that you can take expenses with a good accountant, and really use that to your advantage as well, which can be very good if you’re earning tea for income. Yeah, but something when I see 20 year olds walking here thinking about real estate, usually I kind of tell people about real estate, I’m like I do it if you want we’ll help you and I’m obviously all in and sold on it right? But when I see someone in their 20s I feel like shaking them by a freaking property right now you’re in your 20s if you just buy one property, you just survive and you hold this till the time you’re 40 You know, you’re going to be great. I and I pointed Nick I don’t look he bought his first property when he’s 21 Look at him now. He’s 4120 years has passed. You think he’s happy? So I tell these 20 year old me they can buy it now can change your life. If you buy one property, you know how we talk about one property change in your life, if you have one property in your early 20s, that property can I mean, you know, 20 year and that obviously, there’s no guarantees to this,
again, worst case scenario. So both said, you get no cash flow, after 30 years, you’re going to have the full hundred percent value of that property, yours, it’s all going to be your equity, right? The mortgage will be fully
plus the rent is going to be all yours minus insurance and some property taxes, but you’re going to have plenty of cash left. Yeah, pretty
in that scenario, where let’s say that you don’t refinance. You don’t pull money. But, I mean, there’s a lot of more things that you can do, right? But even if you keep that very, you know, very simple strategy, and you said, I’m just gonna let this property pay for itself, even if I don’t get any money, hopefully, you know, I don’t need to put money but if that property run for 30 years, you’re gonna have you know, the full amount of a property.
Frequently, how are you managing some of these things you working full time. Did you pop in on the weekends afterwards? Like how like, yeah, I mean, it was a lot, it was
pretty crazy at some point in time, because, you know, my wife and I, you know, we’re both working full time. So it was a, you know, every day doing a little bit over the phone, talking to people eventually going and checking the properties, you know, when we were trying to feel, you know, to feed the property, for example, and weekends, there was, you know, a point in time where I had the money, you know, no money, but at least two projects on the goal. Maybe that will be our maximum where I was working, you know, five days a week, and then I will be there almost all Saturday, because right now we’re investing in well, and so that’s about an hour from what we leave. So between the time they commute and you know, you’re there and you’re doing little things, whatever and then you check your clock and it’s already six hours went by, right. So it was six days a week for sure.
That’s freaking me out than somebody born in Argentina is Investing in well and on because like when you’re born here you never think and I don’t mean to anyone listening to this from well and under we do a ton of ton of Rockstar investors buying well and telling us we do a ton of stuff in Welland but just to hear that story like you’re in Argentina you come here to get it and now you’re investing well and and why? I think I know the reason but why well and what will
okay when we were going to start we had no clue like literally no clue for us. You tell me you don’t know your region or brand for or berry or Kitchener Waterloo area, whatever. I have no idea. Right. So you know, at some point in time, I hired a coach who was like, you know, like a personal development but also real estate coach,
I forgot that you’ve told me that, sir. Yeah.
And he he lived in St. Catherine, because he lived in St. Catherine. He would say Okay, you know what, what’s interesting here, right? And he actually pointed to well, and then this was, you know, two years ago as I think there is a lot of potential here and he was Right from that point of view,
we just did. We just put out the latest population number. So the US immigration, the financial post has an article right now that US immigration fell to one of its lowest levels. And i for i think it’s a couple decades to about 575,000 people last year, Canadian immigration last year was about 430,000 immigrants into this Gumtree. And, you know, that was that’s not quite equal. 430 and 575 are clearly different numbers. But you know, we are one 10th of the size of the US. So when we are one 10th of the size, but we are getting almost the same amount of immigrants in here, like what is happening here in Canada and you know, this you are one of the immigrants that came here, my parents are the some of the immigrant, when you sometimes people here I try to convince them like you and you don’t understand not only our property prices going up because of what’s happening in monetary policy with inflation, right, and money is created when a new mortgage is taken. So the domey growth and
the same time economic growth. It’s also fueled by immigration, not just property market, right.
Totally the economic growth that we’re getting in this area would be and I tell everyone, like I don’t remember much from my economics stuff. I’ve studied more about the economy since University. But I remember I remember somewhere reading that GDP was the gross domestic product was labor times capital, it was labor times capital, then everybody argued about productivity, how whatever the productivity factor is, will ultimately determine the size and the efficiency of the gross domestic product of the country for that year. But labor times capital was basically the big equation. And then if you if you have labor coming in here in droves, high quality people like yourself and your wife, educated people, I mean, the quality of immigrant no one believes me, I tell everyone, you don’t understand the quality of immigration that we get in here is very unique. So we had a high quality immigration and then you marry that with cheap money because interest rates are cheap and stuff, the economic impact and that we might be in this magical spot. And I say that with complete short term paranoia, because I’m always scared. I’m always scared, market could tank property prices could go down, interest rates could spike up you know, I’m always going Here, but long term, I’m very optimistic about the Syria for these reasons. So just seeing your story and hearing about your story play out the way it has, to me is like, yes, this is happening right in front of our eyes, right. And then as Canadians here sometimes will look at me, and they’ll say, I don’t understand property prices. I don’t understand why in Burlington, for example, 10 years ago, I could get a fully detached home for you know, like, 350,000. And now it’s like, a million dollars. And I’m like, well, there’s all these factors happening that you’re not paying any attention to. Yeah, you know, and I think someone like yourself, because you’ve gone through what you’ve gone through, you clearly pay attention to this stuff.
Right. Let me let me tell you something about, you know, the the, you know, the real estate market. So what’s happening in Argentina all the time, what’s happening here? It’s clear, we talk a lot about that right there. Of course, population growth is one of the big drivers for sure. Right. I will say it’s basically the main driver, because when you know population growth is significantly less than new construction. Statistics, right, as it’s happening here is the basic law of, you know, demand and supply. Right, that takes over. And that’s why, you know, we are seeing what we’re seeing with property prices and rates right. Back in Argentina, what actually happened is that population growth was still there, with some immigration, you know, from inside Argentina or other countries. So immediate. So population growth was still there. At some point in time, there was no access to credit. We know credit is a big driver, but it wasn’t a big driver there. But we just with population growth, and because of the crises, new construction was actually very low. property prices skyrocket to,
like I saw because it was just a main from the population growth because because I’ve always been concerned that I just don’t read it is such a critical factor in the real estate market that when that disappears, in the back of my mind, I’m always like, we might have to live through 18 months period where property prices really nosedive. And that could happen at any time but you’re thinking or from what you’ve seen with experiences population growth. Add a little bit like it prevents the collapse I
think it’s a matter of you know, how we change for example, right now we have a access to credit. If that access to credit gets easier or worse is going to have an impact for sure. So it’s all relative, right? You know, in Argentina access to great these has always been incredibly tough. So when there is a little bit of access to create, it also boost the property market, but even when there is no access to credit because that is probably a less of a factor. They are just population growth. That’s the trick because it’s the Basic Law of you know, demand and supply. Just as I give you an example. So I the condo that I had in Argentina that we we sold a year later, you know a year after we came here so that was around 2008. We saw the that 170,000 US dollars. Those condos right now cost like 300,000
God with very little access
to credit well, years later, yeah, because there is you know With all these prices is the recent much new construction, but the demand is there, the demand is still there when population grows, right? So it’s crazy and again, in the same way that you know, US dollar that you keep under under your mattress over there, you know, a property is also a way to save. It’s like a piggy bank is another asset that you can trust that is going to be there.
I feel like sometimes going to all the high schools in Ontario and saying you know, earn an income but own assets, you know, own as many freaking assets as you could possibly own. It’ll change your life, right?
Yeah, that’s fortunately I got it only three years ago, but yeah,
it’s true. Yeah, but we all get it at different times, right? Like I I went through it with my father, like, I’ll never forget when he shut down his drywall company, and you may have heard me say this, but I remember the day and we pulled away and he closed up the office and remember thinking while he worked all those years and just shut down that business, but the person who owns those industrial unit Who owns the real estate, they’re just going to put in another tenant and there they don’t actually care. Not that they should care. But they didn’t really care about my father having to work that many years and then basically having nothing for to closing down the business. They’re just going to stick someone else and it’s like this piggy bank that just keeps producing that it has pain and you have to be careful, like I understand all the risks for it. But I still to this day, haven’t met anyone of real wealth that doesn’t own real estate. Like I’ve never met that person. There are some quote unquote, new rich, you get some Bitcoin stuff, some tech stocks, of course, there’s going to be that stuff. But I mean, like any kind of generational wealth that owns real estate, pretty much anyone who has generational wealth, there’s always real estate in the family somewhere. I’ve always found that, right. Sergio, this has been man, this is real fascinating talk. What are your kids? How old are your kids right now?
Nine and 10? Sorry, yes, 99
and 10. And we were just talking before this is that like I feel like you know I’m the Nick and I are the kids of immigrant parents and the benefits that I’ve personally received by being born here and I think your kids are they don’t even know Know the benefits that they’re going to get by just being raised here and developing their network here and you know us and will do anything for you and your kid, just that network is so valuable. Right? So it’s cool. And it’s really, really cool to see. Do they know what you do talk to them about real estate at nine and 10?
I totally we do. I totally we do I mean, of course, not a lot. Right. But you know, sometimes they come with us and we explain that. Yeah, this is, you know, a way of getting income building wealth that we want you guys to to understand, right? Actually, the, as I mentioned, but so in 2016 that’s really when we started doing something in in real estate because my wife and I bought two condos in in Toronto. I think I mentioned this to you before, right. So but at that time, again, because it was just a way of diversifying us okay, what’s the what could be the easiest to manage? Let’s just buy a condo. Sure. so happened that then the market subject that was reconstruction. Sorry. So then the market went up. But that was just luck, right? We know fire. Yeah. And the next week, we really didn’t know what we were doing. But I started, you know, in the meantime, I was learning more and more and more and then I, you know, once I understand the numbers better and the different strategies, I said, Okay, I think there is a better strategy where I don’t have to park you know, 20% that you pay within 18 months or so right 20% of the of that for three years, that could be five years and you get nothing, right? But there is a way that you can get some money, that money work for you right away, right? Because you finish the property you start getting you know, the mortgage pay down. If you actually add value on your weekend, you refinance, you are actually making some money, you’re making some profit that is embedded within the equity of the property, but it’s true profit right that you are making, right. So yeah, it was an interesting, an interesting journey, for sure. Very cool. And I know a lot of work for you, as you said. You know, I think you just put it nicely. I mean, it is. It is conceptually simple. But it’s not easy. It’s not easy. And you know, when I see many people that I talked to, and they, they see, yeah, they see something there, right. But then I don’t feel that they really understand that there are sacrifices, and then we have to work hard. And the one thing that I struggle a lot initially, but sometimes you have just have to bite your teeth and go through, it’s like, okay, I knew nothing about real estate, and all my expertise was, you know, in what I was doing at work, where I barely knew nothing about real estate. So you’re jumping into something and you just don’t know how to start meeting people trusting people. You’re gonna hit the wall, they’re gonna fall, they’re gonna learn and that, I mean, I’m gonna stop now but a lot of stories. I mean, it was super tough for somebody. foundation he said he once he that you understand that, Okay, you know what, you’re gonna go through that phase, and it’s gonna be painful. But when you understand that, that’s how it is in life. And as long as you you know, you keep going, you keep going, you keep going, it’s going to be fine. But I feel that many people, you know, they give up quickly when they see how much work it is, or even before if they realized that yeah, it’s gonna take some work, they are finding for the heart, right? They are finding, okay, how can I do the strategy and get the best returns? But still not get involved in the management are all right and manage everything at a distance? And is University a big opportunity? Yeah, no, no, you have to get involved. You have to learn so there is a sacrifice a but it certainly pays off. Right? But you have to be willing to do that sacrifice. You’re
bringing up such a big point here because I think what I’ve come to realize now is that without mistakes, you don’t have the raw material for your own success. And what I mean by that is the mistakes help you make better decisions. So If you make no mistakes in life in any endeavor, you don’t have the context in which to make a better decision from Camp. So you need to make a whole pile of mistakes because the actually I know that sounds a bit ridiculous. But the more mistakes that you know, you have more context. So if you do get screwed by a contractor or you give money up front, when you shouldn’t have given money up front, like we’ve all done with different things,
I believe that a lot of
the foolish things that I’ve given people keys to a house without getting first and last month’s rent and to have the first check man, like, but you make all these mistakes, and these mistakes actually guide you going forward. So I tell everybody on our team right now is like, don’t be scared of mistakes. When you come working with us here at Rockstar, go make all the mistakes in the world. If we happen to make a mistake with an investor we’re working with, we will fix the mistake and protect them. Absolutely. But if you’re making mistakes yourself, this is part of the process go make all kinds of mistakes and actually the faster you can make them the better because you’re going to get better at what you’re doing faster.
Totally. I think you know, the the issue is that people you know may not understand that or if they understand it, they understand it understand that intellectually. Yeah, and it is tough consciously, it’s a deal want to find a way where that’s not going to be the case? I can tell you when, you know, when when we started with these, it was really, I mean, because so many years of saving money and hard and earned dollars, right? And you start to get into these benches and you can easily you know, 70,000 here on, you know, the down payment plus another 70 on the renovation. It’s tough. I mean, I was scared to death. I really had to start working on my mindset and start thinking about, okay, are learning how others are doing it? Because I said, Yeah, people are doing it. It’s doable. He is what’s holding me back and it always goes that goes down and it gets for everyone to fear, right? Fear is what holds us back. Totally to say but if you’re able to, you know, through the face that fear say I don’t give a damn I’m gonna do it anyway. I’m gonna learn I’m going to keep going.
That’s that’s the trick, right? There’s a whole funny flip side to all of what we’re talking about is that when I hear someone like yourself share the story and the journey they’re going through. And sometimes we’ll put stuff out on the internet about real estate investing in, people will say, you’re part of the problem, not you, Sergio, like, like a me or all of us investors in general, because you’re, you’re the reason property prices are going up. And they’re always looking to blame. You know, no one knows the hard work. You’ve put in the savings that you’ve done, The Saturdays that you’ve spent, and everyone’s just looking to point fingers and blame and there become a day and this will be a sad day. But I feel like in 10 or 20 years, this might arrive where somebody who owns property in this country might be looked at as part of the problem. Oh, that’s the rich guy who owns the investment property, they’re not going to know any, they’re not even going to care about what you’ve been through to get there that will be kind of dismissed from the narrative and I’m a little scared. I hope that does not come to fruition, but I’m slightly kind of scared. Like, we’re on this weird path where you know, no one’s going to remember all the things everyone’s done to get head and you know, but anyway, that’s getting into a whole political Well, there’s leave all that for now, but it’s it is in the back of my mind sometimes, right?
Yeah, I think the mindset may go some things to what you see in Europe, right, for example,
owning a property, it’s almost impossible and people who own their they always talk about people who own property, they’re like, Oh, that’s so and so he owns the property. And there looked like these are these are the quote unquote, rich people, you know? And I’m like, jeez, yeah.
But I mean, you you talk about this all the time, right? How property prices are going up so much faster than regular inflation rate or an incomes right. So people are going to struggle you know, more and more to buy property and even thinking about you know, an investment property where you cannot get your own property. It’s it’s tough, right? So I think it’s, it’s, I mean, it’s it’s a problem right now, but I think that’s gonna only gonna get worse important.
Sergio, what do you work within Do you? Do you have like, should we share any of your contact information or we hold it? Do you have a website and what you’re doing or you don’t right now?
No, no, I I can share my information. I can remember people.
I don’t know all the people listening to this Sergio. No, no, no, I don’t know either. You want to share an email address?
Yeah, sure. Okay. Go ahead. What is s underscore, Man suit, that’s ma n z as in zebra, you are a@hotmail.com. So so I don’t have a I don’t have a website. I don’t, I’m not big in social media. In fact, in my life, what I found lately is that, you know, social media is a little bit of the structure, same as, you know, TV, whatever. So I’m, I’m not into that right now. Maybe in the future, who knows? Right? But right now, no, very cool.
I appreciate you, you sharing that. So anything else we wanted to discuss that was that I feel like I could talk to you all day. about all this kind of stuff, anything else on your mind that you want it to get out there today will bring you back and if you we’re gonna we’re gonna we’re going to kind of log your journey a little bit we’re going to be bringing you back over the years. Yeah, anything else right now that on your mind that you wanted to get out there? I think we’ve covered it
No, no nothing we Sergio thank you
for doing this man really like you’re anything but I’m hearing you talk. It’s it really an inspiration for me to hear someone like yourself with your journey. It really helps myself and Nick when we hear your stories like this. So thanks.
I also don’t think you and Nick because, you know got you guys open a lot of open my eyes quite a lot. Right? And also because you know, at some point in time, you’re gifted, you know, my wife and I have some books to read. And then I read those books and I read other books that you guys recommended on YouTube. And I’m actually a big reader, especially the last few years. And I I found that that’s so right. Instead of you know, spending time on social media or watching TV, just grab a book, read the book, really again, highlight and most importantly, you know what I learned from for, you know, for myself that I can tell others is, you know what? It is great to redouble but don’t just read the book, just highlight and decide, okay, what are you going to start to apply? And go and apply it? Because it’s only when you start applying what you learn? Sorry, what you say what you understand intellectually, that you really learn it. if nobody’s like Sophie Oh, that was great. Well, that was really suiting to read these, but then I’m going to move to the next book, right? But to me, you know, realizing that I have to apply what other people are telling me or what other people are reading about and apply it and when you apply it, you realize that it’s not easy and you make mistakes and you learn and that’s, that’s really how you get out here. Right. So cool.
Have you ever read the book, the greatest salesman in the world? Kevin, great. That’s little funny. Some funny little books always stuck with me. Is there a book that you like right now, anything come to mind on one of the books you’ve read over the last few years that you
Why I really love but what one did you give a US was a you know the the water fart
oh my gosh I love isn’t that great you could read that book in an afternoon it’s it’s the chapters are not even a full page it’s
it’s an it’s a book that at any point in time I need inspiration wherever you can grab it any major yeah so then I read you know the rich dad Rich Dad Rich Dad Poor Dad. People I know you know Napoleon hills Think and Grow Rich yeah I read lots of books right but but again what I found is that the keys Yeah, apply what you love.
Sergio, thank you so much. This is absolute pleasure, man. Appreciate it.
Me too. It was really really fun. so thankful up.
Hey everyone, it’s Tom crowds. So we’re going to bring Sergio back because I just enjoyed talking to him so much to keep track and tabs on his life’s real estate journey. So really want to thank him again for doing that. If you are listening to this and you want access to some real estate information yourself you can go to Rockstar, inner circle calm, get access to all our stuff, including books, articles, videos, the class that we host here our free introductory 90 minute class. It’s all accessible to you at Rockstar inner circle, calm. That’s it, everyone until next time, your life, your terms