Prospecting and growing a network to increase deal flow and find deal partners

In this video, we’re going to have a special guest, Axel Monsaingeon. He’s a full-time real estate investor he shares his raw journey as to what it takes to build a real estate empire. He’ll show us how Prospecting and growing a network to increase deal flow and find deal partners in real estate. Check this video to know more.

All right, everyone, we’re here live on the Payneless Wholesaling podcast. I got my guest, Axel. Axel, how do you say that last name of yours?

Massage? Oh, it’s it’s French. I’m in Quebec, Canada.

Wow, I like that. That’s nice. Well, hey everybody, if this is your first time tuning into the Payneless Wholesaling podcast what our goal and what we do is we get real estate investors on this podcast and we try to learn from their experiences. So we can make getting into wholesaling, getting into real estate less painful than it is because if you’re brand new, you’re gonna go through some ups and downs, it’s inevitable, but our goal is to help you get through it. So we have Axl, he’s going to kind of tell us about what he does as a real estate investor. And let’s see what we can learn from him. So let’s dive right in Axel, kind of tell the audience tell us if we don’t know if they don’t know who you are. Tell us a little bit about yourself.

Sure. Well, thanks for having me on the show, man. It’s a pleasure to be here. So my My name is Excel I live in, in Quebec, Canada, in the City of Montreal, we have a harsh winter and a great summer. And after years in the corporate world, I discovered that I actually really liked real estate. And it’s something that I can I could understood that I can understand sorry, that I could more or less control that I could force appreciation, there was a number of benefits, and I could be my own boss. So after years in the corporate world, actually, when our son was born, we now have to He’s the oldest is six years old, I resigned, I resigned. And then I did about I still did a year of consulting, but at least it was on smaller companies, it was more flexible, and then went all out in real estate. And we have a partner, my wife, we invest together, and we’ve started with just like buying a condo, and then buying some multifamily, and now we’re continuing to buy some multifamily. And then we’re also doing some construction projects, where it’s redevelopment or it’s new construction. And we really liked that process. So, you know, go back in your question, there’s a lot to unpack. And the court I have I haven’t wholesale? Well, I’ve tried to wholesale. And I know it’s possible. And I want to because I see so many deals, where I could just package them and then try to go and go get a fee is that in the end? I haven’t put my energy towards that.

Hey, man, it’s no problem. That’s why I got I got your back on that. If you ever need help, I’ll kind of point you in the right direction for that. But what you’re doing is cool. So was it scary to kind of drop the job that you had and go full in real estate your did?

Tell me about that? Well, it was really scary. Because it’s, you realize, once you resign, how much comfort you have in getting a paycheck every month. And you know, the code that says that the money that paycheck is the drug they give you to make you forget your dreams is absolutely true. They drug you every two weeks, basically. And it was a big change. But we found an agreement with my wife where she would stay in employment, I would go full time into real estate because event at the beginning, I wouldn’t really make anything. And so we lived on her salary. And I like to say that she earned money and I spent it, it was a bit more complicated than that. But that’s what allow us to still live and by then we had a newborn and, and everything. So it took a little bit of time. But by the time we really finished our first multifamily optimization, which is essentially a burr and you refinance, and you get that money tax free. All of a sudden, you’re like, damn, I was worth it.

Yeah, for sure. So that’s amazing. So that I kind of have the same experience. My wife when I got into wholesaling, I went all in and she has had a job. So we’re able to live off of what she makes, and she still works, because you know, she enjoys it. We don’t have any kids yet. We have one on the way. So that’s revelations. Yeah, man, I’m excited about that. The first will be the first one. So change. That’s, that’s what I’ve heard. I heard it. You know, you can’t be too you can’t really prepare too much. Right?

You can try. That’s beautiful moments, though. I’m very happy for you.

Thank you. I’m really excited about it. So that’s, that’s that had that kind of experience that you’ve had. So that’s awesome. And tell me a little bit about Canada? Because Are you only investing in Canada? Are you doing the United States as well?

No. So for now, we only invest in Canada, only in Quebec. And there’s actually I have more and more real estate investor friends that are no torque turning towards the US market. Because surprisingly, it’s actually a lot more accessible. In terms of price price per door and cash flow and everything like Canada, the real estate is expensive. And so there’s kind of two ways to see this. We’ve always kind of picked this as the as an equity game. Obviously, we make it a little cash flow, but you know, yeah, it’s expensive, but then you just make bigger deals. So that’s we’re okay with that. And I’d like to start diversifying and I’m actually quite interested in the US market, but I need to put a little bit more energy into doing it with a partner because I’m, I have quite a bit going on here. So when I’m ready, I’ll make that jump but for now, no, we really have just stuck to around the Montreal region, like all of our properties are within a 50 kilometer radius.

Oh, wow. Okay, and do you manage them yourself, or do you hire a property management?

No. So now we’ve we used to do everything ourselves. Now we have a property management company, just because it’s time consuming, there’s very little value to be added in that sense. And Quebec is quite known for its strict laws and being very pro tenant, you know, at some point, you need to draw the line because we we make money and we create value by finding packaging and acquiring new deals know by managing the current ones.

Of course, so curious, you said that real estate is pretty expensive out there. Where I live, is I feel like it’s pretty expensive. But what are the prices look like on that? You can kind of let us know. I know. It’s there’s a huge wide range, but like, what does a multifamily eight Plex go for? Or what a single family homes go for in that area? So I think everyone here knows kind of what’s going on out there.

That’s a really good question, man. So it really depends, obviously, neighborhood city and stuff like that, like an eight unit at this point is barely 2 million. Okay. Two and a half. Pretty similar to what we were at in Utica. Okay. And Utah. Yeah, I just, you know, sometimes your numbers of like, in a radio or stuff like that, and just like people are buying for like, 55k a door? And it’s like, yeah, yeah.

So in Utah, California, the West Coast of the United States, it’s more expensive. I think it’s just maybe a I don’t know why the real estate, maybe more people want to live here. I don’t know. But the Midwest very cheap. And then if you get to the south, it can get cheap. But it really depends. New York actually gets more expensive and the north. So but yeah, we’re similar to that. So 2 million. What does that adore? Is that like 150,000?

A door almost for a plague. That’s two for 250. A door?

250? Door. Okay. Yeah. Which is, so it makes it hard to cash flow, because I’m assuming on those doors do you know like, average, like what those a door can run out for? Like an eight Plex?

Yeah. So same thing, it depends on the neighborhood, like really even market right now for let’s say a two bedroom would be like 15 1700. And it depends what kind of services you also you also include. So I don’t know if it’s common in the US. But now here in Quebec, it’s pretty much standard, at least for educated investors to also provide Wi Fi. And so we have some companies that specialize in that kind of installation, we’ve done it in, in some of our buildings where now Wi Fi is comes with with the rent, it just allows us to charge another 50 or 75 bucks a month per unit, and it costs me in total 150 bucks for the building. So when you do the math, all of a sudden, you’re asking, you’re adding like 200k value with a $3,000 setup expense.

Wow, that’s very interesting. Now, I don’t think they do that here. But that is a great idea to increase it by 5075. And then just provide it for the whole eight Plex to four Plex, I don’t know what it would look like for like giant multi units, like,

oh, they do it, they do it for like 3040 unit buildings now and even for new builds. It’s built in I mean, and here, there’s a company that’s quite striving, it’s called Wi Fi Plex. And what they do, it’s two guys, actually, that I know that are real estate investors, and they, they wanted to do it in one of their properties. And they’re like, How come no one is doing this. And when you do the math, like you get a provider I guess in the US it would be an AT and T or T Mobile whoever provides you the cable, the cable the coax, you know, the internet, and then you put a you put a switch, you put a router, you split that connection into eight, and then you supply it. So in Canada, so we’re not allowed to resell the connection, we can only provide it as a service. That’s why, for us it’s included in the rent is is that which smart is higher, because otherwise you have to be a licensed distributor of telecommunication services, which none of us are because that’s not what we do. So anyway, so yeah, but But you know, when you do the math about a multifamily and you charged, let’s say just an extra 50 bucks a month per units, all of a sudden, again, like you’re adding 200k value to your building,

Do they get to choose if they want to opt into that and pay the extra 50? Or is it just everybody has to pay 50 Because of the Wi Fi that’s included.

So we at least what we do is that it’s included? If they don’t want to use it, they don’t want to use it. The only time where it’s been a bit iffy is that we had acquired a building, and we were installing it while we had current tenants. So for them, it was a little bit more of a choice. out of the out of those five tenants, for them took it and in the fifth unit, we just said, Look, we’re just going to install it. You don’t have it. And he’s a bit of an older gentleman. He does not have internet in his apartment, which I still find crazy nowadays. He’s like I have internet at work. I don’t need it. So it wasn’t that big of a difference.

Great idea. I think that’s something that’s people. I was not aware of that they were doing that but I think that’s that’s a solid idea to increase the value of your property just by offering that. Wow. Cool. So are there any other tricks that you guys got up there that you’re doing that are increasing rents?

Well, that’s the thing. We have to be creative, because here we have a big strong rental rental board called the towel. Administrative Court of housing basically, and we do rent increases. They have to be legal, there’s forms to use and all that and As an investor, as a landlord, I actually do feel a huge and say human responsibility towards people, if we provide housing, which is a basic need, it’s very important. And I’ve always said that we always treat all of our tenants like they were our grandmother, because I wouldn’t want to do anything that bad. And I was gonna say, have it on my conscious like after that, or interpret that the way they want. So what other tricks do we have? I mean, we all know like in multifamily, the, the value of the property is directly based on its net operating income, and so anything that you can do to raise operating income, so obviously, minimize your expenses, and then increase your your revenue. So something that’s also quite common here is add sheds, you know, some people go into storage, and they only invest in storage, but then you can go to Home Depot, and go buy one of those plastic sheds for, you know, seven by seven feet. And then you, you know, you build this for 150 bucks, no 1000 bucks, and then you rent it for $75 a month, all of a sudden, same thing, you’ve added almost 10s of 1000s of dollars of value to your property you put for them in the back, it’s like you’ve added a whole new unit to your apartment building.

Do you have to get permitting for any of that? Or is it not? Oh, no, it’s like a shed.

Yeah, it’s a temporary structure. And you know, we just do it on a, on a wood base. And sometimes not even sometimes, like the kits that you can buy, they come and they’re fully independent, sustainable. And again, you can get one at Home Depot for 1000 bucks. So depending on your size you want to go, people look at you know, I don’t know how it is in the US. But in Canada, you can do billboards that you have to have some air rights, so that you have to have, if you’re in a busy intersection, and you have like a wall with no windows, you can go and put a giant billboard and then you rent that to a media company to two creates extra revenue. But that’s here as more regulated, you need to have again, air rights. And then that’s something that I’ve never done, it’s for bigger building is cell phone towers, same thing like you, you approach them, or they approach you if you have a good location. So usually it’s a you have to be in height, there has to be a view as it has to be, you know, open and so it makes sense for the telecom networks and stuff like that. I’ve never done it, it’s a little bit more rare, but I know that some buildings quite benefit from that. Otherwise, after that increasing revenue, same thing like can you do some short term rental and then in the short term rentals, same thing, it’s fairly regulated here in bigger cities, but if you do short term rental, okay, so in the short term rental, like you know, there’s the Airbnb people think about, like for three days, but if you’re willing to do just 3032 days plus at least here, too, it’s a whole new regulation, so you can do less than a year but more than 32 days, so like the sweet spot is like three months, four months, five months. You are sure you can charge more and we provide it with fully furnished all the utilities. Electricity is included heating obviously high speed internet, it’s it’s like walking into an Airbnb, you know, and recharge definitely charge a premium for that. So that’s when you have a little bit more turnover you a little bit more vacancy and all that. So you got to see what kind of investor you are.

Yeah, so let me ask you about the sound like you got some great exit strategy, some great strategies that uses once you’ve acquired the properties, how are you acquiring most of your properties? Is it through wholesalers in Canada or people that are finding deals? Is it the MLS? Is it a different site? How do you acquiring most of your your deals?

So that’s a good I’ve realized that over time, we actually bought both on market and off market. I’ve gotten one from a bird dog. One or two. Yeah, one from a bird dog. No. Yeah, I bought I bought from a wholesaler actually. Yes. Okay. It’s been a little bit of both, but with we’ve actually gotten quite good with with my wife at doing our own prospecting and getting to know a neighborhood that we target and then talking to people and then quickly be able to, you know, the back of back of the envelope analysis to see if quickly a deal makes sense. I mean, we’re working on a deal now where we’re adding two floors on a on a on a building that my wife found while she was on a stroller walk. And there was there was a paper from the city on the door and we always go read those official notices because you always find out stuff and this one had been vacated by the city because it was set up to like in it was so dirty. unmaintained the hazard hazardous So like right away, we contacted the owner, older lady and starting to have some mental issues. The property was administered by her, says her younger sister who was in her 70s And they said, right now we’re not ready, but eventually we’re we’ll be ready to sell and it took about two months. And then we visited we got it under contract and then we closed but it was yeah, it was worth about 550 and we close it for 400. So to me that’s a good deal.

That is Yeah, so because I know when you can find properties off market it usually you’re able to avoid the fees Avoid, you know, having an on market where a ton of people start bidding. So I always like to hear, you know, the deals that people get.

And the thing is that when you’re able to do it off market directly with with an owner, usually the people have less of an idea of the property value of an overcurrent accurate property. Yeah, yeah, it’s 400. And she was so happy to sell it that that price?

Of course, yeah, it’s that’s usually how it is like people, they, you know, if they take it on market, they, they they quickly see you know, what’s coming in. But you know, if you do off market, you really just negotiate what everyone feels comfortable with.

And it’s less competitive, and you have more time and, and all this, we quite like that. There’s some other ones that we found on off market, no, sorry, on market listed on the MLS, and then we just pounced on it. And we’re finishing a project like that right now. It’s a Rando on a four unit. Really close to the Metro here that we bought from we bought it was an estate sale. And when the people have no descendants, it goes to the government, basically. And then we bought one directly from the government, it was the weirdest transaction. But yeah, and then we bought from I bought one from a wholesaler, which we in order to close it, we actually had to structure it a bit differently. Because this one was a bigger project we bought, he had the promise to purchase. And we we actually close together, we incorporated we put that that property in a company. And then essentially, after the closing, I bought his shares. So he got out that

that’s how they do it. That’s how they kind of have to get around it occasionally here in LA. They can’t assign the contract, they’ll do exactly what you said they’ll buy it in the company and then sell the company at the end. Yeah. Wow. Wow. Okay, so let me ask you about the bird dog. You said you got a deal from him? How did he specifically go and find you what you’re looking forward to? He just brings something.

Okay, so yeah, so actually, like it was, it was during the pandemic. And he contacted me, because we’re both part of the bigger pockets, community. And it was like, I reached out to people in the center. And we ended up having like, a good half hour conversation. And I was like, Look, if you find a good deal, like, I’ll buy it, and, and literally like two weeks later, he’s like, Oh, I have a deal. Let’s go see and stuff. And I went to go see it. And I was like, no, not interested. There’s a Friday night in a good area of town, like one block away from the metro from a metro station, which is really good. And but the whole facade was stolen, facade broken. Like, I just looked at it. And I was like, I’m not touching this. And then I had a conversation with with another investor who’s like, a lot more advanced. And he looked at me, he’s like Excel, like if you think you can find easy deals, you might as well just stay home. And anyway, we had like a five minute conversation, but he basically kind of kicked my butt. And I was like, That is a good deal. It’s just that we had to redo the foundation, the facade and everything. And so yeah, we did, we bought it and, and this this bird dog he wanted to learn. So I told him, Look, I’ll buy it, I’ll give you your fee. And then stay involved in the project, you can handle some of the property management. And so we did the full cycle. So it basically took us a year. But we took he stuck with it from acquisition to refinancing. So he was so happy because he was younger, and just the amount of experience that he got, like, it was it was good.

What is the fee like that look like? I’m just curious, cuz, you know, there’s different fees that we make here in the States, depending on the deal.

In this case, I had negotiated to 1% Okay, okay, of acquisition, and then 1% of refi. So, by stick by sticking with it, it was worth it.

Yeah. And that’s, uh, you showed him a lot. He learned a ton out of that. Okay. Wow, that’s really cool. Well, let me ask you, for people that are watching this or will watch this if they want to get into real estate in Montreal and they’re from the States. Is that possible? Or do they have absolutely okay.

Okay, so two things It depends on what they want to buy. Canada like a lot of other countries had to had crip tremendous property value growth fueled by foreign buyers. And so since the beginning of the year, there’s a memorandum on foreign buyers buying but they can they can buy single family homes. And I think duplexes something if you want to go into larger rent, commercial and rental properties, they still could so yes, and fellow Americans could come and buy here and depends what kind of asset class they’re looking for.

Got it. So depends on the asset class. And is that all throughout Canada? Or is it just specific territories where the Province of Canada or Canada

okay, it’s like, oh, Canada, because the worst was Vancouver and Toronto. prices went up a lot. And you know, it’s foreigners buying and then the locals can’t buy themselves a house so

yeah, so my wife is I don’t know if I told you this, but my wife is actually from the Toronto area Ontario okay. She Yeah, so we want to buy a place in up north She’s fresh. He grew up of north of Toronto. I don’t know if you know Peterborough any of those areas. But yeah, yeah. So she grew up over there. And they’re like, Hey, you can’t buy here. So we’re trying to have to figure out a single fan because that’s what we want. We want to buy a single family.

But again, you can’t for two years.

So I totally get it. And obviously, if we become residents right there, I don’t think she’s currently a resident because she’s lived here for a long time. But she has citizenship. Obviously, she’s born there. But I don’t know.

Canadian citizenship. It’s not a problem. She doesn’t need to be a resident.

I thought when I talked to someone about it, I thought it had to do something residency, but if not, then we’ll have to revisit it.

Yeah. You might be right to know, just as I said it, I realize you might be yes, having citizenship is definitely a requirement. But of course, a resident is as well. You’re right.

Yeah. So they they’re really locking it in which I totally get, you know, a lot of people you know, that live there if they can’t afford a place which it is extremely expensive there. I really don’t know how a lot of people four places in Toronto, I know outside of Toronto, it gets a little less expensive.

But in Toronto, it’s so expensive. And Vancouver is even worse, man.

Yeah, Vancouver is I love Vancouver to have you. I’m assuming you’ve been there.

Oh, yeah. It’s a beautiful city. It’s just it’s impossible to unless you come with like, you know, suitcases full of cash, which I don’t recommend. Agreed.

Agreed. Well, it’s not axle. It’s XL. Is that right? Yeah. Yep. X XL. So tell. I’m curious what, I’ve had a good time chatting with you. Can you tell me give any pointers give anything you’d like to say left for the audience? Before we head out anything you’d like to leave them with?

Sure. Like for people who are listening to this and are interested in getting started, whether it’s to wholesale, to do some buy and hold some Burr and all this stuff. Like one of the most important things that you need to start with, is investing in yourself, learn and educate. And there’s so many ways there’s books, there’s podcasts, there’s masterminds, there’s coaching programs and stuff like that, do your research, be selective, pick one and then go the whole way. Because I’ve met so many people that say, oh, I want to invest in real estate and I want to do this. I’m like, Okay, go perfect. Go take a five or $10,000 course in Walmart. But you want to go buy a half million dollar property? What the heck, right? It’s crazy. And so just learn, first thing you do is educate yourself invest in you, and then you can learn on how to do it, and you’ll be even more successful at it.

Man, I really liked that. Because you’re right, I’d never thought of it that way. It’s like, Hey, you want to buy a million or half a million dollar house, but you won’t invest 5000 or $1,000? In your education? You know, that’s a little crazy. It makes no sense. Does it make sense? You think you’re just gonna figure it out? Just you probably wouldn’t want to just buy something and just try and figure out because you’re on the hook. That’s, that’s an asset that if you don’t know how to pay, don’t know how to improve the value. You could be in trouble for sure. Yeah. So how can people find you if they’ve, you know, they Washington and say, hey, I want to reach out to him, too.

How do we reach out? can they can reach out, they can find me on LinkedIn, my first name, last name on on Instagram, and I’ll provide it to you. So for the shownotes. And also, I host a podcast on real estate investing in Quebec, called the very real estate effect. And invite anyone interested in this market to come and listen to it. It’s always fun. And if you have any questions, comments, or anything, like feel free to reach out and try to respond to absolutely everything I get.

I love it. And I do have one last question that I would like to know. So I have a podcast, you started a podcast, what was your main goal was starting your pod podcast as an investor,

It was meeting people and sharing knowledge with people who are starting because listening to podcasts when I was starting had a huge impact on on my knowledge and my confidence. And at the time, there was no podcast specialized about the Quebec real estate market. And so I wanted to start one. And my main goal is obviously to interview successful real estate investor and real estate professionals who are expert at their niche to give listeners the confidence that they can do it too.

I like that. And I know I’ve been on your podcast and I know what you sent out is true. Like everybody can do this. You just need to you know, educate yourself and take action, education action. That’s what it takes. All right. Well, I had a great time chat with you.

I mean, two months we’ll be in touch. All right, brother. Yeah. Thanks a lot, Nathan.

Pleasure. Yeah, you have a good one. Talk to you later.


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