Insights from the 2024 Multi-Family Conference
Commercial Real Estate Professionals: Paul Davidescu and Seth Vandaele
The 2024 Multi-Family Conference (MFC) in Toronto brought together leading minds in commercial real estate to discuss trends, strategies, and actionable insights for investors and business minds alike.
The three-day conference had a perfect blend of hands-on workshops, and inspiration from the likes of Jordan Belfort (aka the Wolf of Wall street), Shark Tank’s humble 9-figure businessman Robert Herjavec, and celebrity super-connector, JT Foxx.
This blog synthesizes my notes to highlight some key learnings from the conference that you can take away and put into action. Whether you're looking to understand how to analyze multi-family deals, build a network of trusted professionals, or navigate the nuances of financing, this document provides the essential knowledge to make your foray into helping bolster the increasingly government-backed supply home supply crisis.
Build Your Team
Success in multi-family investing often depends on having a reliable core and extended team. Almost every speaker hammered this point home and backed it up by anecdotes of where overlooking this can backfire.
The core founding equity team should be as nimble and diverse as possible. Typically one teammate can arrange financing via lenders or investors while the other can roll up their sleeves and is skilled in optimizing Net Operating Income (NOI). To increase NOI you need to move the needle on various cost reductions and property enhancements that drive revenue.
For an extended team, consider hiring*:
Property Manager: Manages day-to-day operations.
Accountant: Ensures financial health and tax compliance.
Real Estate Attorney: Handles legal aspects.
Interior Designer: Enhances property appeal.
Marketing Assistant: Promotes your properties.
*Any building under 60 units will likely not have enough profit to justify hiring the majority of this team (especially a property manager) so if you start small, it’ll need you to be hands on and fill the void.
Lock Down The Capital
CMHC & Financial Institution Financing:
Government-backed CMHC and Commercial Lenders like First National, TD Bank, and BDC are the institutions that you need your mortgage team to work closely with. Nadeem Keshavjee from GreenBirch Capital focused his speech on the below key points:
You can get 85%-95% of the building financed if you tick the boxes with CMHC to back-end insure the purchase with your lender of choice
There is usually a lot more ROI on buying in tertiary markets like Nanaimo, Kelowna, Kamloops, and Penticton
Having a capital partner for down payment and qualifying is important as lenders want at least 25% of the buildings value to be held in net worth from your team
Raising Capital from Investors:
Having enough down payment and net worth to be bankable is a big challenge for most. This is why a financial sponsor, whether it be a high net worth individual, or a syndicate of investors through an LP/GP model are prudent business models to think about early on.
In this video, CPI Capital's Chief Investment Officer, August Biniaz, talks about investment structures like joint ventures and syndicates
Conference organizer and speaker Seth Ferguson, spoke about the elaborate funnel of investors you need to build and put your marketing and sales chops to the ultimate test in. Some key points that stuck with me were as following:
Build a team that leverages someone’s else’s track record. Your General Contractor (GC) that is in charge of building improvements and construction, needs a track record to prove the project will finish on time and on budget. You don’t need this on your CV, but your team definitely does.
Present a credible team to get “first sniff” at off-market deals. When you build a credible team and present yourself properly to real estate brokers, you will see the good deals come to you before others. Your brand, marketing collateral, and hyper-local market experience creates faith from investors. Have personal skin in the game ($50,000-$100,000 is recommended).
Always find the sizzle: Why now? Whether it’s a tech company or a real estate asset, there needs to be a reason why timing and opportunity for a particular unit is prime.
Key Conversion Metrics: 100 cold calls per day leading to 12-20 conversations and 3-5 meetings with investors is a reasonable benchmark to follow. Bear in mind that 50% of investors that originally say they will invest may back out at the last minute so try to get double the "hot leads" that you think you might need.
Additional Financing Helpers:
Government Grants: For purpose-built rentals, you have the CMHC MLI Select Program alongside others that allow as little as 5%-15% down payment if you qualify properly. CMHC makes frequent changes to the program (such as this June 4, 2024 announcement that has many developers up in arms) so make sure you work with a broker that has their hand on the pulse.
Creative Financing: Partner with guarantors or use vendor take-back (VTB) notes for better terms.
Key Strategies and Risks
Go Big Early On: Investor and coach Brad Sumrok spoke about why buying a 60+ unit property can trump 10-15 units as the former allows you to justify hiring that ever-important property manager while the smaller buildings need you to be on site.
Local Labour Supply and Mindset: In your target city, are there enough workers and will they work hard? One investor story shared how Newfoundland was a major challenge for both of these factors.
Landlord Friendly Governments: Whether it’s Alberta or a red state in the USA, you need a government that can have defaulting tenants out in 30 days. In BC and Ontario, some tenants can squat for 6-12 months and thus completely ruin your investment.
Hot Market Factors
USA Hot Markets: Texas, Arizona, Florida, and North Carolina offer growth opportunities due to favorable economic conditions and population growth.
Canada Hot Markets: New Brunswick, Edmonton, Calgary, Nanaimo
Economic Market Factors: Pay attention to the below when choosing markets.
1. Landlord & Business Friendly
2. Above Avg Job Growth
3. Above Avg Population Growth
4. Above Avg Rent Growth and Occupancy
5. Affordability Gap between rent and mortgages
In this video, Christian Szpilfogel talks about why he is more bullish on Canada than the USA
Insights and Quotes from Keynote Speakers
Jordan Beltford (Wolf of Wall street Author and Coach)
Jordan Beltford gave most of his advice simply through the conviction, humour, and energy that he brought to his talk. He walks the walk and success is about how you sell yourself first on something, and then how you transfer that conviction to your customers. Namely, strategy needs to meet mindset before you execute well.
Inner World Management:
1) State management: Do you have certainty in you? Key moments in your career need absolute certainty.
2) Check your limiting beliefs and be extremely self aware of where they show up
3) Align your “Vision-Focus.” Where will you be in 5 years and why does that matter? Don’t set stretch goals beyond your physical range of motion.
4) Set Standards and a Thermostat. How will your vision and work-hard standards be realistically aligned? Don’t fall prey to a “Champagne vision and beer standards.”
Outer World Management:
1. Rules of entrepreneurship: Keep staff motivated but ensure you give them proper training, always.
2. Marketing is king: who are your best buyers and what’s the best way to bring them into your funnel?
3. Sales, Persuasion, and Influence: Master the art of knowing how to close prospects. With his famous Straight Line Method, you have 4 seconds to keep a prospect engaged. You must 1) Show them you are sharp 2) You are enthusiastic to Sell 3) You are the undisputed expert
4. Multiple Streams of Income (MSI): The sooner you work on this, the better.
Robert Herjavec (Shark Tank Judge and Millionaire CEO)
Robert Herjavec blew everyone away with his extreme humility and wisdom. Unlike the Kevin O’Leary’s of the world, his soft-spoken nature resonated greatly with the audience and the way he articulated important reminders many of us seem to forget, was masterful.
Sell someone on you, before the idea.
Do not recreate the wheel. Business is an evolution and not a revolution. Hire coaches who best understand a niche.
Smart Leverage: Use leverage wisely and understand its impact on cash flow.
Decisive Action: Act quickly and decisively, especially when you're a small player in the market. Stop Hedging. Go all in. Decisive action beats stalled action.
JT Foxx
Advertised as the conferences “mystery speaker” JT Foxx surpassed all expectations and was my personal favourite of the conference - alongside half the audience that rushed over to his booth to sign up for his 2-day workshop intensives. His charisma, impressive celebrity rolodex, and complete candid nature cast a spell on the crowd to take action by thinking of ways to activate their networks to mutual success.
Relational Capital is everything: Build and leverage relationships to accelerate success through relational capital. The most effective way can be to pay money at the right conferences or mastermind groups with a sufficient cost barrier to entry.
Take care of your people: Before rushing to the next hire or customer, think hard about how you can support the current believers and take them to new levels.
Focus and hustle can beat intelligence. Most people fail by never taking the first step and intellectualizing why they should delay.
Enemies of success with real estate investing: 1) Comfort 2) Not doubling down on strengths 3) Limiting beliefs
Focus on Strengths: Identify and capitalize on your core strengths while mitigating weaknesses.
Best Quotes
“Formal education gets you a job. Specialized education earns you a fortune.” - Brad Sumrok
FEAR = False Evidence that Appears Real - Brad Blazar
Get off the “Hope-ium” drug to OPM (Other People’s Money) - Brad Blazar
"Failure + Perseverance = success." - JT Foxx
Practical Tools and Resources
Essential Tools
City-Data.com, Yardi, Co-star: Use these platforms for market research and property data.
DealMachine.com, Zillow, Craigslist, Propstream.com: Platforms for finding deals and managing properties.
Back of Envelope Analyzer: Utilize tools like this for quick property assessments. Analyzer Tool
Recommended Multi-Family Courses
Brad Sumrok's AIM Accelerator: An 8-week course starting June 12, focusing on multi-family investing. Course Link
Brad Blazar's Bootcamp: A comprehensive program for $1200. Course Link
Seth Ferguson's Investor Attraction Workshop: Learn how to attract and manage investors. Workshop Link
Jordan Belfort's Sales Strategies: Enhance your sales and persuasion skills. Course Link
Ray Glympth’s Tuesday Evening Mastermind: Drop into a Zoom call to review deals in the USA
Multi-Family Conference 2025: Plan to attend for the latest insights and networking opportunities. Event Link
Financial Metrics To Know
Cash on Cash Return: Measure cash income relative to the cash invested.
Internal Rate of Return (IRR): Assess the time value of money and overall return.
Cap Rates: Understand how cap rates affect valuation and risk assessment.
Equity Multiple: Evaluate the growth of your equity over the investment period.
In this video, Don McDonald talks about alternative investments to the stock market
Conclusion
Investing in multi-family real estate requires a combination of knowledge, strategy, and networking. By leveraging the insights from the Multi-Family Conference, investors can navigate the complexities of the market and make informed decisions. Whether you're new to the industry or an experienced professional, continuous learning and adaptation are key to success. Utilize the resources, build a strong team, and stay updated with market trends to achieve your investment goals.
This post serves as a comprehensive guide to multi-family investing, encapsulating the wisdom and practical advice shared at the Multi-Family Conference. Use this document to educate yourself, refine your strategies, and build a successful real estate portfolio.
Want to finance, invest, or learn more about multi-family investing? Contact paul(at)levelupmortgages.com.
THE BOTTOM LINE
By equipping yourself with the insights from the 2024 Multi-Family Conference and leveraging the resources and expertise offered by Level Up Mortgages, investors can successfully navigate the complexities of multi-family real estate investing. Understanding the importance of building a reliable team, securing capital through CMHC and other financial institutions, and leveraging creative financing options will pave the way for a prosperous future in the commercial real estate market. Utilizing these strategies, along with the actionable advice from industry leaders, will help investors make informed decisions and achieve their investment goals in the Canadian real estate landscape.
Level Up Mortgages is a mortgage broker team focused on helping the self-employed, new immigrants, non-residents, and investors access the best rates and alternative lending in Canada. We have been nominated for the Best Up and Coming Broker in Canada in 2021 and have been featured on CTV News and various publications due to our education-first approach. Our mission is to help you always stay a step ahead in the process.
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Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
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