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Should I Buy Now OR Wait
Until 2024? (Part 2) +
Joint Ventures with Austin Yeh
October 18, 2023
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Agenda
And yes, the Meetup will be recorded and posted on our website!
www.volitionprop.com/mastermind-meetup/
6:30 - 6:45 pm Volition Intros and Market Updates
6:45 - 7:45 pm Should I Buy Now or Wait Until 2024? (Part 2)
7:45 - 8:00 pm Networking Break
8:00 - 9:00 pm Joint Ventures featuring Austin Yeh
9:00 - 10:00 pm Wrap Up and Networking
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Housekeeping Items
● Support local! Order food and drinks and PAY YOUR BILL! 🍺
● Washrooms: Down the stairs to the left
● Cell phones: Put on silent mode and step out if you need to take a call
● Recordings: This presentation is being recorded and slides will be
available.
● Make sure you’re on our e-mail list to get the recording!
E-mail info@volitionprop.com or use the QR code
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Legal Disclaimer
Volition Properties and its members, officers, directors, owners, employees, agents, representatives, suppliers and service providers, provides this presentation for informational purposes only.
This presentation and the information, materials, services, and other content available (“Content”) are subject to the following terms and by participating today you agree to these terms.
● The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained
on within the presentation constitutes a solicitation, recommendation, endorsement, or offer by Volition Properties or any third party service provider on a property, for investment
or otherwise.
● All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing within the presentation constitutes professional
and/or financial advice, nor does any information within the presentation constitute a comprehensive or complete statement of the matters discussed or the law relating thereto.
You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content before making any decisions based on such
information or other Content.
● In exchange for participation at this event, you agree not to hold Volition Properties, its affiliates or any third party service provider liable for any possible claim for damages arising
from any decision you make based on information or other Content made available to you.
● There are risks associated with investing in real estate involving risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains &
losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.
● Past investment performance is not a guarantee or predictor of future investment performance.
OUR EXCLUSIVE REMEDY FOR DISSATISFACTION WITH THE CONTENT OF THE PRESENTATION IS TO STOP YOUR PARTICIPATION. VOLITION PROPERTIES AND ALL ASSOCIATED
MEMBERS ARE NOT LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, UNDER ANY THEORY OF LIABILITY, INCLUDING
WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, USE, DATA, OR LOSS OF OTHER INTANGIBLES. IN PARTICULAR, AND WITHOUT LIMITATION, VOLITION PROPERTIES
WILL NOT BE LIABLE FOR DAMAGES OF ANY KIND RESULTING FROM YOUR USE OF OR INABILITY TO USE THE CONTENT OF THIS PRESENTATION
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Who is Volition?
● Mission Statement: To help people navigate the
complex world of real estate and to be the team who
has your back.
● Complete Solution Provider: Everything you need to
be successful.
● We Figure It Out For You: Cutting-edge research,
analysis, and synthesis.
● We Come From Experience: We’re all investors
ourselves and have sizeable portfolios across various
types of real estate investments. Learn from our
success and mistakes!
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What do we do? Volition Services
Mentorship,
Education &
Consultation
Toronto’s Leading Real Estate Investment Advisory & Realty Firm
Realty Community
Advisory Renovations
Property
Acquisition &
Sale
Design &
Renovations
Inner Circle &
Ongoing
Support
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How do we do it? The Volition Team
Toronto’s Leading Real Estate Investment Advisory & Realty Firm
Matthew Lee
Founder &
Managing Partner
Ming Lim
Head of Realty
Florence Lee
Head of Operations and
Construction Advisory
Alykhan Jinnah
Realty & Leasing Services
Alcina Sung
Interior Design
Wilson Ching
Realty & Leasing Services
Sally Xu
Administrative Assistant
JC Robas
Transaction Coordinator
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What are our values?
Win - Win
Thinking
Tonight is this!
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What are our results?
● Realtor Awards: Chairman Award, President Award, Top Producer Awards 2017, 2018,
2019, 2020, 2021, etc, etc.
● Industry and Media Accolades: Featured on HGTV, REIN, RISE, Property Profits Real
Estate Podcast, Michael Millenear Real Estate Investing Leadership Award nomination, etc,
etc.
● Certifications: Certified Real Estate Investment Advisors
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Exclusive Volition Inner Circle Whatsapp Group
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Volition Market Updates
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What We’re Seeing This Fall
● Properties are still selling, but prices and volumes are down
● Expiring rate holds are motivating buyers to make a deal
● Ming's theory on which properties are selling
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From the Oracle of Omaha
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Should I Buy Now OR Wait Until
2024? (Part 2)
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But First… Fun With Inflation!!
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Matt’s Agenda for the next 45 mins…
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The Good, The Bad, And the Ugly –
3 Real-Life Volition Investors
1. The Good:
Gina the Action
Taker
2. The Bad:
Tommy the Wait-
and-Seer
3. The Ugly:
Jon Bongiovanni and the
Catastrophic Timing
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1. The Good Gina – Calm Clear Mind.
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1. The Good Gina the Action Taker
● Took advantage of market
conditions (down market in 2022)
● Bought for $1.35M (previously
$1.6M) with $7500 rent
● Conditions! (Home Inspection / Financing)
● Dictated terms! (Vacant possession, closing
date)
● Negotiated with seller directly!
@volitionproperties
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1. The Good Gina – When Did She Buy
0.25%
0.5%
0.5%
1%
0.75%
0.5%
0.5%
0.25%
0%
0%
0.25%
0.25%
Bought into the
dip, just before the
bottom ($1.35M)
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1. The Good Gina – Lessons Learned
● Accidentally bought at the right time
● Did not get caught up in the
newspaper headlines.
● You cannot time the market!
● Favourable pricing ($250k off market)
● Got Conditions (reduced her risk)
● On her terms (long closing date, seller paid out
existing tenants)
● No competition (got to know Seller’s pain points)
● Desperate sellers = Creative deals (0%
VTBs, AFSs, JV with seller, etc.)
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2. The Bad Tommy – Hesitated. Froze. Missed.
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2. The Bad Tommy the Wait-and-Seer
● Was in wait-and-see mode in 2022
● Eventually bought during market
recovery in Spring 2023
● Paid $1.57M for a similar property
as Gina ($7500 rent)
● 8 other offers!
● No conditions (went firm)
● No terms (assumed tenants)
● Still a great property, but…
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0.25%
0.5%
0.5%
1%
0.75%
0.5%
0.5%
0.25%
0%
2. The Bad Tommy – When Did He Buy
0%
0.25%
0.25%
Bought coming
out of the dip
($1.57M)
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2. The Bad Tommy – Lessons Learned
● Paralyzed By Fear
● Negative Cognitive Bias (Useful when a
tiger is chasing you)
● It’s NOT just about price!! It’s also
the “other stuff”!!
● Shoot the puck!! Just don’t shoot
stupidly (econ fundamentals, risk mitigation in place)
● The Irony of Market Psychology
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The Irony of Market Psychology
Everyone wants a
deal, but when it
comes, everyone is
too afraid to act.
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The Irony of Market Psychology
Everyone wants a
deal, but when it
comes, everyone is
too afraid to act.
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3. The Ugly Jon Bongiovanni – Still Awesome
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3. The Ugly Jon Bongiovanni – Catastrophic Scenario
● Bought in early 2022, for $1.6M with
$7500 in rent (Market Peak )
● The market dropped $200k THE
NEXT DAY(!!)
● Smartly bought a solid performer
● Wasn’t forced to sell into the
downturn
● Could hold for the long term
● Didn’t freak out… stayed cool…
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0.25%
0.5%
0.5%
1%
0.75%
0.5%
0.5%
0.25%
0%
0%
0.25%
0.25%
Bought right at
Market Peak
3. The Ugly Jon Bongiovanni – When Did He Buy
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3. The Ugly Jon Bongiovanni – Lessons Learned
● Sucks… but is it the end of the world?
● How can we be sure that it’s going to
recover?
● Importance of Holding for the Long
Term
● “But I Don’t Want To Catch a Falling
Knife”
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Education Time!
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Economic Fundamentals
GDP Growth
Job Growth
Population Growth
Rental Demand
Vacancy Rates
Rental Rates
Real Estate Demand
How Can We Be Sure That It’s Going To
Recover? Market Influencers
Interest Rates (cost of financing a purchase)
Ease of Borrowing (the availability of financing)
Confidence in real estate as an investment vehicle
Inflation
Legislative Amendments (taxation and/or local authority)
Foreign Investors in Local Real Estate
Investment Alternatives
Creates an
opportunity for
sophisticated
investors
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Importance of Holding for the Long Term
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Importance of Holding for the Long Term
Equity: $300k
5% Growth
Equity: $6.5M
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Importance of Holding for the Long Term
Equity: $300k
2.5% Growth
Equity: $3M
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Importance of Holding for the Long Term
Equity: $300k
0% Growth
Equity: $1.5M
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Importance of Holding for the Long Term
Equity: $300k
-2.5% Decline
Equity: $700k
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BONUS: OMG Interest Rates…😱
3% Interest Rates
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5% Interest Rates
BONUS: OMG Interest Rates…😱
@volitionproperties
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10% Interest Rates
Did you see the
difference?!?!
BONUS: OMG Interest Rates…😱
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Stop focusing on OMG the market, and focus
on the IMPORTANT stuff like Risk Mitigation:
Is it the right T.I.M.E. to invest?
T – Tenant Risk
I – Investment Model Risk
M – Market Risk
E – Estate Risk
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“But I Don’t Want to Catch a Falling Knife”
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“But I Don’t Want to Catch a Falling Knife”
Buying Into
the Dip
Buying Out
of the Dip
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“But I Don’t Want to Catch a Falling Knife”
● Even if you can’t time the dip
perfectly…
● It’s better being on this side of
the dip than other side…
● WHY? Risk Mitigation!!
○ Deal Terms (vacant possession,
long closing dates, submission of
permits, advertising for lease, etc.)
○ Conditions (Financing/Home Insp)
○ Negotiating Power & Directly with
Seller (no bidding war)
○ Creative deals (VTBs, AFSs, JV
with seller)
Buying
Into the
Dip
Buying
Out of the
Dip
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Double Dipping
Buying
Into the
Dip
Winter
Seasonality
Dip
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Strategies in a High Interest Rate Environment
Rethink Financing
Increase revenue Decrease Expenses
-Higher DP
-Refi Later
-ReAmort
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Strategies in a High Interest Rate Environment
Larger Downpayment
(Then Refi in 1yr)
20% Down
Property: $1.5M
Downpayment (20%):
$300k
Rent: $7500
Expenses: $1100
Mortgage (6%): $7200
Cashflow: -$800
30% Down
Property: $1.5M
Downpayment (30%):
$450k
Rent: $7500
Expenses: $1100
Mortgage (6%): $6300
Cashflow: +$100
@volitionproperties
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Strategies in a High Interest Rate Environment
Capitalize Negative Cashflow
(e.g. $800 x 12 = $9600)
Yr1
Property: $1.5M
Downpayment (20%):
$300k
Rent: $7500
Expenses: $1100
Mortgage (6%): $7200
Cashflow: -$800
Yr2
Property: $1.5M
Downpayment (20%):
$300k
Rent (4%): $7800
Expenses (4%): $1150
Mortgage (5%): $6450
Cashflow: +$200
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1. The Good Gina – Project 10 yrs from now
Bought into the
dip, just before the
bottom ($1.35M)
5% Appreciation
over 10yrs (62.9%)
= $2.606M
4% Rent Growth
over 10yrs
(48.0%)
Equity Growth:
$1.256M
Value today is
$1.6M
@volitionproperties
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2. The Bad Tommy – Project 10 yrs from now
Bought coming
out of the dip
($1.57M)
5% Appreciation
over 10yrs (62.9%)
= $2.606M
4% Rent Growth
over 10yrs
(48.0%)
Equity Growth:
$1.036M
Value today is
$1.6M
@volitionproperties
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3. The Ugly Jon Bongiovanni – Project 10 yrs from now
Bought right at
Market Peak at
$1.6M
5% Appreciation
over 10yrs (62.9%)
= $2.606M
4% Rent Growth
over 10yrs
(48.0%)
Equity Growth:
$1.006M
Value today is
$1.6M
@volitionproperties
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Summary
1. The Good:
Gina the Action
Taker made
$1.256M
2. The Bad:
Tommy the Wait-
and-Seer
made $1.036M
3. The Ugly:
Jon Bongiovanni and the
Catastrophic Timing made
$1.006M
@volitionproperties
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1. The Good:
Gina the Action
Taker made
$1.256M
2. The Bad:
Tommy the Wait-
and-Seer
made $1.036M
3. The Ugly:
Jon Bongiovanni and the
Catastrophic Timing made
$1.006M
Summary
THIS IS THE
OPPORTUNITY
RIGHT NOW!!
@volitionproperties
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1. The Good:
Gina the Action
Taker made
$1.256M
2. The Bad:
Tommy the Wait-
and-Seer
made $1.036M
3. The Ugly:
Jon Bongiovanni and the
Catastrophic Timing made
$1.006M
Summary
IF YOU FREEZE…
MARKETS ALWAYS
RECOVER AND YOU
WOULD HAVE
MISSED THE BOAT!!
@volitionproperties
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Summary
1. The Good:
Gina the Action
Taker made
$1.256M
2. The Bad:
Tommy the Wait-
and-Seer
made $1.036M
3. The Ugly:
Jon Bongiovanni and the
Catastrophic Timing made
$1.006M
EVEN THE WORST
POSSIBLE SCENARIO
ISN’T THAT BAD… IF
YOU’RE SMART
ABOUT IT!!
@volitionproperties
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Summary
1. The Good:
Gina the Action
Taker made
$1.256M
2. The Bad:
Tommy the Wait-
and-Seer
made $1.036M
3. The Ugly:
Jon Bongiovanni and the
Catastrophic Timing made
$1.006M
Actual Worst Case Scenario:
Do Nothing
(And watch $1M+ of wealth building in 10yrs evaporate away…)
@volitionproperties
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What’s out there right now?
Price: $1.55M
Type: Triplex
Rent: $8650
Expenses: $1100
Mortgage: $7450
Cashflow: $100
… at 80% LTV!!
@volitionproperties
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What’s out there right now?
Price: $1.55M
Type: Triplex
Rent: $8650
Expenses: $1100
Mortgage: $7450
Cashflow: $100
… at 80% LTV!!
@volitionproperties
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Final Thoughts
Scenario 1 is playing out right now.
Scenario 2 is less ideal, catching it out of the dip.
Even if we’re wrong… Scenario 3 demonstrates risk mitigation.
Contact us for details on specific opportunities and off-market listings
If we go deeper, would there be interest?
● How to Mitigate Risk
● Best Investment Business Models & What To Buy
● How can we be sure that Toronto has longevity?
TAKE A POLL!! Masterclass 2024??
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So Why Is This Important?
People are afraid
People are skeptical right now
People are looking for good information and guidance right now.
Your potential JOINT VENTURE PARTNERS are looking for
good information and guidance right now.
And if you can be the person who is a beacon of light in all this
darkness and noise, the money will flow to YOU.
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Networking break!
See you in 15 mins!
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Joint Ventures – “The Good, The
Bad, and The Ugly” with Austin Yeh
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Please Welcome Austin Yeh!
Austin Yeh is a full-time real estate entrepreneur who has had the privilege of working on numerous
successful ventures in the industry. Austin has accumulated a portfolio of multi-million dollar assets and
engaged in over 100 real estate transactions using various strategies such as buy and holds, joint ventures,
wholesaling, and fix-and-flips.
He has also co-founded Ontario Property Deals, a real estate wholesale company. Through the dedication
and hard work of his team, they were able to achieve significant success, even reaching seven figures in
revenue during the company's first year of operation.
Recognizing the importance of community in the real estate world, Austin established the RISE Network
community. It has grown to become one of the largest real estate investor groups in Ontario, boasting a
membership of 7,300 individuals with varying levels of experience. The community provides a space for like-
minded individuals to connect and learn from one another, and Austin is grateful for the opportunity to
facilitate this platform.
In addition to his community-building efforts, Austin co-founded the RISE Real Estate Investing Podcast. This
podcast has garnered recognition in the Canadian real estate community for its informative content,
interviews with experts, and valuable insights aimed at inspiring and educating listeners about real estate
investing.
About Austin Yeh
• Currently 28 years old & full-time real estate investor & entrepreneur –
first investment property closed November 2018
• Former job experience: Audit @ PwC, Tech Consulting @ Deloitte,
Strategy @ Hydro One, Commercial Banking @ RBC
• Co-Founder of Ontario Property Deals – wholesaling business
• Founder of RISE Network – 7,300+ members on Facebook, 275k
podcast downloads
• Owned over 50 units, comprised of over 20 properties in Toronto,
Windsor and Greater Sudbury District
• Completed over 10+ joint ventures
• Raised over $5mil+
What is OPM?
Other
People’s
Money
Joint
Ventureships
Bank
Financing
Private funds
Seller
Financing
Real Estate
Syndications
Crowd
Funding
• Leveraging other’s capital or finances to invest in real estate properties or projects
What is OPM?
Seller Financing
Joint
Ventures
Private Funds
Bank
Financing
BE THE
YELLOW
STAR
What is a Joint Venture?
Money
• Capital to fund the deal
• Can come from cash savings, HELOCs, LOCs etc.
• Financing capability
People
• Operator to execute the deal
• Team members – legal, accountant, contractors, property managers etc.
• Ensure that the deal is profitable and goes according to plan
Deal
• The property or project that is profitable
• Can be on the market or off-the-market
• Price, terms, potential, profitability, risk etc.
Joint ventures are not new to the real estate world. They have existed in the corporate world for decades.
Business Definition: two or more parties pooling resources to accomplish a goal.
You are not the owner of the property, nor on title, you are not vested in the property rather, vested in the profit or loss of said property
Which resource is most important?
• As we progress from Expansion to Peak,
greater value comes from finding deals
• During the peak – deals and people are the
most valuable
• As we shift down to a recession and
decline – capital becomes more important
and deals and people become abundant
Lets SHARE - How many of us have tried raising
private capital or joint venture partners?
What have we done so far?
1. Have we marketed ourselves on social media? If so, which platforms?
Lets SHARE - How many of us have tried raising
private capital or joint venture partners?
What have we done so far?
2. Did anyone have success right out of the gate?
Lets SHARE - How many of us have tried raising
private capital or joint venture partners?
What have we done so far?
2. Did anyone have success right out of the gate?
The Money always comes when you don’t need it
and it disappears when you need it most.
Typical Joint Venture
Most common split is a 50/50 Joint Venture where the active partner is responsible for bringing the deal and the people while the
capital partner will bring the money/financing.
Active Partner
• 50% of Profit/Loss on sale
• 50% of Cash Flow
• Brings the deal
• Brings the power team
Capital Partner (Passive)
• Provides Capital to Purchase and Renovate
• Provides the cash buffer required for any capital calls
Note in either situation – the active partner only gets paid on PROFITS – the deal must be profitable for the active partner to make money
Joint Venture Structure
Initial Capital
•Typically
passive
capital pays
100% of
initial
capital
invested
•Can give
them a
budget e.g.
200k, any
overages
you will
cover
•75/25 split,
60/40 etc.
Cash Flow
•Cash flow
split 50/50
•Give 100%
of cash flow
to active
partner until
initial
capital
collected
Capital Tied In
•Split the
capital tied
in on
refinance
•Capital
partner
100%
responsible
for capital
tied in
Profit Split
•50/50
capital split
on sale
•More profit
to the
capital
partner
•Agreed to a
MOIC
before profit
split
Capital Calls
•Capital
calls split
50/50
•Capital
calls on the
responsibilit
y of Joint
Venture
active
partner
Equity paydown
• Split
50/50
• Split in
another
creative
way
Appreciation
•Appreciatio
n above
and beyond
refinance
appraisal is
split
•Maybe one
party
receives
more
appreciatio
n than other
Mortgage
• One
partner
qualifies
for
mortgage
• Both
qualify for
mortgage
• Mortgage
holder
receives
more
equity
• Joint venture terms are flexible and can be negotiated depending on each active partners needs and each passive partners needs
• What you can negotiate depends on your experience, expertise, cycle in the real estate market, active partners needs etc.
• The goal is to structure a win-win between both partners
Examples of Structures
• Capital partner brings in 100% of initial capital
• Split capital tied in post-refinance OR capital partner receives 100% of cash flow until capital tied in below $5,000
• Active partner holds mortgage (myself)
• Capital calls responsibility of capital partner
• Profit split 50/50
New Investor
• Capital partner brings in 100% of initial capital
• Capital partner responsible for capital tied in post refinance
• Passive partner holds mortgage
• Capital partner responsible for 100% of capital calls
• Profit split 50/50
Experienced
Investor
• Capital partner brings in 100% of initial capital up to an agreed upon amount ($200k) any overages are covered by
active partner
• Split capital tied in post refinance
• Passive partner holds mortgage
• Capital calls are split post refinance
Market
Slowdown
ATTENTION EQUALS CURRENCY
In the digital age people are fighting for our attention
Attention is the most valuable digital currency. We invest in digital experiences
We can do 3 things with Attention
1) Earn Attention
2) Spend Attention
3) Lose Attention
IMPORTANCE OF ATTENTION
• People make decisions based on who they know, see or hear about on a constant basis
• Build your awareness, ensure everyone knows what you’re doing
• Position yourself as the expert
The more eyes you have on you The more money you’ll raise
ATTENTION: BUILDING A BRAND
• Psychologically people do NOT make decisions solely based on numbers & data
Real Life Example: Pepsi vs Coke
• 1980s Coco-Cola was leading
beverage company by Market
Share
• People said they preferred the
taste of Coke
• Pepsi introduced the Pepsi
challenge in 1980s, known as one
of the greatest marketing
campaigns of all time
• In 1983, Pepsi outsold Coco-Cola
• Coco-cola changed their formula
and received backlash
• Coke doubled down on branding –
now 5th most valuable brand in the
Branding: How Do People Make Decisions
Do we trust
you?
Do we like
you?
Do we know
you?
Do we
relate to
you?
Numbers
Partner with you
Why Do We Brand?
Why do
we
Brand?
Build an
Image
Gain Trust
Position
yourself as
an expert
Sell
ourselves
How real
estate is
going to
help our
lifestyle
Attract
capital, not
find it
Establishing an Ideal Avatar
Who is your ideal partner?
Building Your Ideal Avatar
Who is your ideal partner?
• Message must resonate with your avatar
• Hit their emotions
• The more specific we get about our partner, the more we can target the message
Austin’s JV Partner
• Age: Late 20s – Late 30s
• Job:
• White collar job with 100k income
• Works 40 hours or more a week
• Stressful job
• Wants to make a change in life: Maybe career transition, not satisfied with job,
enjoys their job but doesn’t want to work forever, escape rat race, flexibility in life
etc.
• Mediocre job satisfaction
Building Your Ideal Avatar
Austin’s JV Partner Continued
• Owns primary residence with significant equity built up
• Has access to HELOC
• At least 150k+ in liquid funds
• Money in stock market or mutual funds
• Family Life
• Married with kids- their time is tied up between work and family life
• Not much time to invest
• Understanding of investments
• Understands real estate is a long-term investment
• Understands real estate is a great wealth builder
• Understands basic concepts like ROI
Building Your Ideal Avatar
Empathy Map
Building Your Ideal Avatar
Example Posts
Travel/Freedom:
https://www.instagram.com/p/BtQosAVgGzN/
https://www.instagram.com/p/BuBh5M8Ayyj/
Networking:
https://www.instagram.com/p/Bw7x67WAIq4/
https://www.instagram.com/p/BzWoGWWBkAk/
Real Estate:
https://www.instagram.com/p/B0wi6xhBvVI/
https://www.instagram.com/p/BtkKayFgPA9/
Personal:
https://www.instagram.com/p/BsxwF7hg4Pi/
Leveraging Social Media to Raise Capital
LinkedIn Facebook
YouTube Instagram
• Professional platform
• Think and act like a white-collar employee
• Best way to raise capital is by educating others – no firm call
to action. Quality is very important
• Financial Accomplishments
• Milestones
• Long form article
• Credibility leveraged by previous experience,
accomplishments, and education
• Older audience, generally have more money
• People in 30s-50s are most active on Facebook
• Generally people you know, maybe lost touch with, or people
you met a couple of times – prime platform to connect with
others
• Not ideal for videos
• Best for medium size content with photos
• Educational posts
• Lead by showing what you’re doing
• Quality over quantity on Facebook
• Generally younger audience, millennials etc.
• Naracisstic platform
• Quantity over quality
• Post stories + engage often
• 4 categories: Personal post, educational post, motivational
post, random post
• Short-form, medium form, Long-form content
• Educational & entertaining
• Best platform to position yourself as an expert
• Best platform to build personality + image + mannerisms ->
Gets people to know and like you
• Vlog style + record journey
Leveraging Social Media to Raise Capital
X (Formerly Twitter)
• Short form information
• Sharing quick thoughts throughout the day
• Offer high value and minimal asks
• More data focused – what’s happening boots on grounds
• Thoughts on Real Estate market
• Sharing headlines- summarizing articles etc.
• Make yourself the expert
TikTok
• Platform with quickest potential growth
• Making engaging content – low value, high entertainment
• Less than 60 seconds – follow trends, make videos
entertaining, funny etc.
• Easiest to go viral
• Push them towards other platforms
Always lead with providing value first!
How can we produce content to attract investors?
Educational
Post
Educational Post
- Simple content I learned in a
Volition Properties meet-up
- Simplifying complicated real
estate content in an easily
digestible way
Blog Post
During
Covid
Personal Post
- During Covid-19 lockdown,
everyone stopped buying real
estate
- I purchased a primary residence
+ other rentals and explained
why
-People reached out who wanted
to learn how to continue to invest
How can we produce content to attract investors?
Education alone is not enough
How can we produce content to attract investors?
Show What You Do
Posts like these showcase to your
followers, those in your network
that you are constantly investing in
yourself.
That’s why when we are at an
educational event, a mastermind,
any sort of coaching – we
constantly share what we are
doing and learning.
If you do not invest in yourself –
why should someone else invest
with you.
Selecting the Wrong Avatar
Real Problems with joint ventures:
• Do not understand the risks of real estate
• Capital source – overleveraging via HELOC, Line of Credits etc.
• Expectations not aligned
• Overly active - multiple questions and suggestions
• Operational disagreements
• Counting pennies- not dollars
Risks of all joint ventureships:
• Financing
• Lack of control over JV’s life decisions
• Counterparty risk
• Market Risk
• Sell the property without your consent
Other JV Risks to Consider
• Resource strength: More relationships to manage, a lot communication
• Market timing risk: Acquiring too many properties in one period may lead to higher exposure to market timing risk –
overpaying for multiple properties
• Locked in Capital: Commitment of too much capital for long-term investments – if partners need liquidity may face challenges
• Capital Call: Too many properties in your portfolio – especially smaller properties may lead to capital call risk. Ensure enough
liquidity
• Timelines: If one party wants to sell and another doesn’t how do you figure out a solution? What if it’s at a loss?
• Time commitment and expectations on reporting & updates
• Changing regulations: UHT filings, reporting guidelines on JVs etc.
MAKE SURE TO HAVE A LAWYER DRAFT UP ANY JOINT VENTURE AGREEMENTS
Questions to Ask Joint Ventures
• What are your expectations going into a joint venture?
• Timelines, financial, ROI, cash flow, capital tied in, BRRRR etc.
• What’s your employment?
• What is your borrowing capacity? Are you pre-approved? Do you have any other big purchases
coming up that will restrict potential financing going forward
• What would you consider a successful joint venture?
• Set expectations on real estate being a long-term investment: What happens if we can’t pull out
all your money? Capital calls? If appraisal comes back unfavourable etc.
• What are you expectations on communication?
• Explain the risks of real estate investing!
Legal Considerations
THIS IS NOT LEGAL ADVISE – ADVISE LEGAL COUNSEL. THESE ARE MY OPINIONS AND INFORMATION THAT WAS
COMMUNICATED TO ME:
• Be careful not to solicit funds from general public if you are selling securities/selling shares– ensure you speak with a lawyer
to understand the Do’s and Don’t of raising capital ; could get in trouble by OSC
• Typically if you’re doing a joint venture, you are able to market it on Instagram or Facebook – but try not to advertise returns.
Save that for a conversation.
• Do not PROMISE returns – you will get in trouble
• Do not say Guaranteed returns
• Can show projections – but never guarantee!
• Raise capital from family, friends, business associates or accredited investors
• If someone reaches out- make sure to have a few conversations with them, build a relationship, phone calls, text, email and
ideally meet in person or Zoom ! Make sure to log these conversations
Deal Sheet
• This can be as fancy as you want it to be. Some investors want more numbers, some investors prefer simplicity. We lean
towards simplicity and can expand via a phone conversation as needed
• Focus on the key facts, set expectations and anticipate questions.
• Property (type, # of bedrooms, etc)
• Location – Introduce the reader to the area – demonstrate your expertise
• The Plan – full gut renovation? Cosmetic Reno? Tenanted? BRRRR? Is the project in phases? Etc.
• Costs – be conservative here. Its better to pitch for the worst and be able to tell them that you are pitching for a
worst case scenario.
• The Net Investment – do not inflate the truth
• The Returns
• Expectations for Partnership
Walk
Through
Deal Sheet
@volitionproperties
www.volitionprop.com
Take MASSIVE Action…
@volitionproperties
www.volitionprop.com
How Volition Can Help. As Advisors.
FREE 30-min
Advisory session
with Matt
Come prepared with:
Capital available to invest
Mortgage qualification
Current real estate portfolio details
We will help you determine:
Where you are at
Where you want to go
Customized plan to get there
@volitionproperties
www.volitionprop.com
Home Buyer & Home Sellers
are 50% of our business! We
can ensure that your home
makes good financial sense.
Pre-Analyzed Deals for Investors looking
for the BEST investment properties in
Toronto!
How Volition Can Help. As Agents.
@volitionproperties
www.volitionprop.com
Your Next Step… Take MASSIVE ACTION
SCAN TO BOOK A FREE 30-MIN CONSULT WITH VOLITION!
@volitionproperties
www.volitionprop.com
Next Month: Street Smart Tour - Fourplex Edition
Date: Saturday, November 11
Location: Little Italy
RSVP: www.meetup.com/Volition
LARGEST REAL ESTATE MEETUP IN TORONTO WITH OVER 4000+ MEMBERS!
@volitionproperties
www.volitionprop.com
End

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Austin Yeh x Joint Ventures – “The Good, The Bad, and The Ugly”

  • 1. @volitionproperties www.volitionprop.com Should I Buy Now OR Wait Until 2024? (Part 2) + Joint Ventures with Austin Yeh October 18, 2023
  • 2. @volitionproperties www.volitionprop.com Agenda And yes, the Meetup will be recorded and posted on our website! www.volitionprop.com/mastermind-meetup/ 6:30 - 6:45 pm Volition Intros and Market Updates 6:45 - 7:45 pm Should I Buy Now or Wait Until 2024? (Part 2) 7:45 - 8:00 pm Networking Break 8:00 - 9:00 pm Joint Ventures featuring Austin Yeh 9:00 - 10:00 pm Wrap Up and Networking
  • 3. @volitionproperties www.volitionprop.com Housekeeping Items ● Support local! Order food and drinks and PAY YOUR BILL! 🍺 ● Washrooms: Down the stairs to the left ● Cell phones: Put on silent mode and step out if you need to take a call ● Recordings: This presentation is being recorded and slides will be available. ● Make sure you’re on our e-mail list to get the recording! E-mail info@volitionprop.com or use the QR code
  • 4. @volitionproperties www.volitionprop.com Legal Disclaimer Volition Properties and its members, officers, directors, owners, employees, agents, representatives, suppliers and service providers, provides this presentation for informational purposes only. This presentation and the information, materials, services, and other content available (“Content”) are subject to the following terms and by participating today you agree to these terms. ● The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on within the presentation constitutes a solicitation, recommendation, endorsement, or offer by Volition Properties or any third party service provider on a property, for investment or otherwise. ● All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing within the presentation constitutes professional and/or financial advice, nor does any information within the presentation constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content before making any decisions based on such information or other Content. ● In exchange for participation at this event, you agree not to hold Volition Properties, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other Content made available to you. ● There are risks associated with investing in real estate involving risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods. ● Past investment performance is not a guarantee or predictor of future investment performance. OUR EXCLUSIVE REMEDY FOR DISSATISFACTION WITH THE CONTENT OF THE PRESENTATION IS TO STOP YOUR PARTICIPATION. VOLITION PROPERTIES AND ALL ASSOCIATED MEMBERS ARE NOT LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, UNDER ANY THEORY OF LIABILITY, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, USE, DATA, OR LOSS OF OTHER INTANGIBLES. IN PARTICULAR, AND WITHOUT LIMITATION, VOLITION PROPERTIES WILL NOT BE LIABLE FOR DAMAGES OF ANY KIND RESULTING FROM YOUR USE OF OR INABILITY TO USE THE CONTENT OF THIS PRESENTATION
  • 5. @volitionproperties www.volitionprop.com Who is Volition? ● Mission Statement: To help people navigate the complex world of real estate and to be the team who has your back. ● Complete Solution Provider: Everything you need to be successful. ● We Figure It Out For You: Cutting-edge research, analysis, and synthesis. ● We Come From Experience: We’re all investors ourselves and have sizeable portfolios across various types of real estate investments. Learn from our success and mistakes!
  • 6. @volitionproperties www.volitionprop.com What do we do? Volition Services Mentorship, Education & Consultation Toronto’s Leading Real Estate Investment Advisory & Realty Firm Realty Community Advisory Renovations Property Acquisition & Sale Design & Renovations Inner Circle & Ongoing Support
  • 7. @volitionproperties www.volitionprop.com How do we do it? The Volition Team Toronto’s Leading Real Estate Investment Advisory & Realty Firm Matthew Lee Founder & Managing Partner Ming Lim Head of Realty Florence Lee Head of Operations and Construction Advisory Alykhan Jinnah Realty & Leasing Services Alcina Sung Interior Design Wilson Ching Realty & Leasing Services Sally Xu Administrative Assistant JC Robas Transaction Coordinator
  • 8. @volitionproperties www.volitionprop.com What are our values? Win - Win Thinking Tonight is this!
  • 9. @volitionproperties www.volitionprop.com What are our results? ● Realtor Awards: Chairman Award, President Award, Top Producer Awards 2017, 2018, 2019, 2020, 2021, etc, etc. ● Industry and Media Accolades: Featured on HGTV, REIN, RISE, Property Profits Real Estate Podcast, Michael Millenear Real Estate Investing Leadership Award nomination, etc, etc. ● Certifications: Certified Real Estate Investment Advisors
  • 12. @volitionproperties www.volitionprop.com What We’re Seeing This Fall ● Properties are still selling, but prices and volumes are down ● Expiring rate holds are motivating buyers to make a deal ● Ming's theory on which properties are selling
  • 14. @volitionproperties www.volitionprop.com Should I Buy Now OR Wait Until 2024? (Part 2)
  • 17. @volitionproperties www.volitionprop.com The Good, The Bad, And the Ugly – 3 Real-Life Volition Investors 1. The Good: Gina the Action Taker 2. The Bad: Tommy the Wait- and-Seer 3. The Ugly: Jon Bongiovanni and the Catastrophic Timing
  • 19. @volitionproperties www.volitionprop.com 1. The Good Gina the Action Taker ● Took advantage of market conditions (down market in 2022) ● Bought for $1.35M (previously $1.6M) with $7500 rent ● Conditions! (Home Inspection / Financing) ● Dictated terms! (Vacant possession, closing date) ● Negotiated with seller directly!
  • 20. @volitionproperties www.volitionprop.com 1. The Good Gina – When Did She Buy 0.25% 0.5% 0.5% 1% 0.75% 0.5% 0.5% 0.25% 0% 0% 0.25% 0.25% Bought into the dip, just before the bottom ($1.35M)
  • 21. @volitionproperties www.volitionprop.com 1. The Good Gina – Lessons Learned ● Accidentally bought at the right time ● Did not get caught up in the newspaper headlines. ● You cannot time the market! ● Favourable pricing ($250k off market) ● Got Conditions (reduced her risk) ● On her terms (long closing date, seller paid out existing tenants) ● No competition (got to know Seller’s pain points) ● Desperate sellers = Creative deals (0% VTBs, AFSs, JV with seller, etc.)
  • 22. @volitionproperties www.volitionprop.com 2. The Bad Tommy – Hesitated. Froze. Missed.
  • 23. @volitionproperties www.volitionprop.com 2. The Bad Tommy the Wait-and-Seer ● Was in wait-and-see mode in 2022 ● Eventually bought during market recovery in Spring 2023 ● Paid $1.57M for a similar property as Gina ($7500 rent) ● 8 other offers! ● No conditions (went firm) ● No terms (assumed tenants) ● Still a great property, but…
  • 24. @volitionproperties www.volitionprop.com 0.25% 0.5% 0.5% 1% 0.75% 0.5% 0.5% 0.25% 0% 2. The Bad Tommy – When Did He Buy 0% 0.25% 0.25% Bought coming out of the dip ($1.57M)
  • 25. @volitionproperties www.volitionprop.com 2. The Bad Tommy – Lessons Learned ● Paralyzed By Fear ● Negative Cognitive Bias (Useful when a tiger is chasing you) ● It’s NOT just about price!! It’s also the “other stuff”!! ● Shoot the puck!! Just don’t shoot stupidly (econ fundamentals, risk mitigation in place) ● The Irony of Market Psychology
  • 26. @volitionproperties www.volitionprop.com The Irony of Market Psychology Everyone wants a deal, but when it comes, everyone is too afraid to act.
  • 27. @volitionproperties www.volitionprop.com The Irony of Market Psychology Everyone wants a deal, but when it comes, everyone is too afraid to act.
  • 28. @volitionproperties www.volitionprop.com 3. The Ugly Jon Bongiovanni – Still Awesome
  • 29. @volitionproperties www.volitionprop.com 3. The Ugly Jon Bongiovanni – Catastrophic Scenario ● Bought in early 2022, for $1.6M with $7500 in rent (Market Peak ) ● The market dropped $200k THE NEXT DAY(!!) ● Smartly bought a solid performer ● Wasn’t forced to sell into the downturn ● Could hold for the long term ● Didn’t freak out… stayed cool…
  • 31. @volitionproperties www.volitionprop.com 3. The Ugly Jon Bongiovanni – Lessons Learned ● Sucks… but is it the end of the world? ● How can we be sure that it’s going to recover? ● Importance of Holding for the Long Term ● “But I Don’t Want To Catch a Falling Knife”
  • 33. @volitionproperties www.volitionprop.com Economic Fundamentals GDP Growth Job Growth Population Growth Rental Demand Vacancy Rates Rental Rates Real Estate Demand How Can We Be Sure That It’s Going To Recover? Market Influencers Interest Rates (cost of financing a purchase) Ease of Borrowing (the availability of financing) Confidence in real estate as an investment vehicle Inflation Legislative Amendments (taxation and/or local authority) Foreign Investors in Local Real Estate Investment Alternatives Creates an opportunity for sophisticated investors
  • 35. @volitionproperties www.volitionprop.com Importance of Holding for the Long Term Equity: $300k 5% Growth Equity: $6.5M
  • 36. @volitionproperties www.volitionprop.com Importance of Holding for the Long Term Equity: $300k 2.5% Growth Equity: $3M
  • 37. @volitionproperties www.volitionprop.com Importance of Holding for the Long Term Equity: $300k 0% Growth Equity: $1.5M
  • 38. @volitionproperties www.volitionprop.com Importance of Holding for the Long Term Equity: $300k -2.5% Decline Equity: $700k
  • 41. @volitionproperties www.volitionprop.com 10% Interest Rates Did you see the difference?!?! BONUS: OMG Interest Rates…😱
  • 42. @volitionproperties www.volitionprop.com Stop focusing on OMG the market, and focus on the IMPORTANT stuff like Risk Mitigation: Is it the right T.I.M.E. to invest? T – Tenant Risk I – Investment Model Risk M – Market Risk E – Estate Risk
  • 44. @volitionproperties www.volitionprop.com “But I Don’t Want to Catch a Falling Knife” Buying Into the Dip Buying Out of the Dip
  • 45. @volitionproperties www.volitionprop.com “But I Don’t Want to Catch a Falling Knife” ● Even if you can’t time the dip perfectly… ● It’s better being on this side of the dip than other side… ● WHY? Risk Mitigation!! ○ Deal Terms (vacant possession, long closing dates, submission of permits, advertising for lease, etc.) ○ Conditions (Financing/Home Insp) ○ Negotiating Power & Directly with Seller (no bidding war) ○ Creative deals (VTBs, AFSs, JV with seller) Buying Into the Dip Buying Out of the Dip
  • 47. @volitionproperties www.volitionprop.com Strategies in a High Interest Rate Environment Rethink Financing Increase revenue Decrease Expenses -Higher DP -Refi Later -ReAmort
  • 48. @volitionproperties www.volitionprop.com Strategies in a High Interest Rate Environment Larger Downpayment (Then Refi in 1yr) 20% Down Property: $1.5M Downpayment (20%): $300k Rent: $7500 Expenses: $1100 Mortgage (6%): $7200 Cashflow: -$800 30% Down Property: $1.5M Downpayment (30%): $450k Rent: $7500 Expenses: $1100 Mortgage (6%): $6300 Cashflow: +$100
  • 49. @volitionproperties www.volitionprop.com Strategies in a High Interest Rate Environment Capitalize Negative Cashflow (e.g. $800 x 12 = $9600) Yr1 Property: $1.5M Downpayment (20%): $300k Rent: $7500 Expenses: $1100 Mortgage (6%): $7200 Cashflow: -$800 Yr2 Property: $1.5M Downpayment (20%): $300k Rent (4%): $7800 Expenses (4%): $1150 Mortgage (5%): $6450 Cashflow: +$200
  • 50. @volitionproperties www.volitionprop.com 1. The Good Gina – Project 10 yrs from now Bought into the dip, just before the bottom ($1.35M) 5% Appreciation over 10yrs (62.9%) = $2.606M 4% Rent Growth over 10yrs (48.0%) Equity Growth: $1.256M Value today is $1.6M
  • 51. @volitionproperties www.volitionprop.com 2. The Bad Tommy – Project 10 yrs from now Bought coming out of the dip ($1.57M) 5% Appreciation over 10yrs (62.9%) = $2.606M 4% Rent Growth over 10yrs (48.0%) Equity Growth: $1.036M Value today is $1.6M
  • 52. @volitionproperties www.volitionprop.com 3. The Ugly Jon Bongiovanni – Project 10 yrs from now Bought right at Market Peak at $1.6M 5% Appreciation over 10yrs (62.9%) = $2.606M 4% Rent Growth over 10yrs (48.0%) Equity Growth: $1.006M Value today is $1.6M
  • 53. @volitionproperties www.volitionprop.com Summary 1. The Good: Gina the Action Taker made $1.256M 2. The Bad: Tommy the Wait- and-Seer made $1.036M 3. The Ugly: Jon Bongiovanni and the Catastrophic Timing made $1.006M
  • 54. @volitionproperties www.volitionprop.com 1. The Good: Gina the Action Taker made $1.256M 2. The Bad: Tommy the Wait- and-Seer made $1.036M 3. The Ugly: Jon Bongiovanni and the Catastrophic Timing made $1.006M Summary THIS IS THE OPPORTUNITY RIGHT NOW!!
  • 55. @volitionproperties www.volitionprop.com 1. The Good: Gina the Action Taker made $1.256M 2. The Bad: Tommy the Wait- and-Seer made $1.036M 3. The Ugly: Jon Bongiovanni and the Catastrophic Timing made $1.006M Summary IF YOU FREEZE… MARKETS ALWAYS RECOVER AND YOU WOULD HAVE MISSED THE BOAT!!
  • 56. @volitionproperties www.volitionprop.com Summary 1. The Good: Gina the Action Taker made $1.256M 2. The Bad: Tommy the Wait- and-Seer made $1.036M 3. The Ugly: Jon Bongiovanni and the Catastrophic Timing made $1.006M EVEN THE WORST POSSIBLE SCENARIO ISN’T THAT BAD… IF YOU’RE SMART ABOUT IT!!
  • 57. @volitionproperties www.volitionprop.com Summary 1. The Good: Gina the Action Taker made $1.256M 2. The Bad: Tommy the Wait- and-Seer made $1.036M 3. The Ugly: Jon Bongiovanni and the Catastrophic Timing made $1.006M Actual Worst Case Scenario: Do Nothing (And watch $1M+ of wealth building in 10yrs evaporate away…)
  • 58. @volitionproperties www.volitionprop.com What’s out there right now? Price: $1.55M Type: Triplex Rent: $8650 Expenses: $1100 Mortgage: $7450 Cashflow: $100 … at 80% LTV!!
  • 59. @volitionproperties www.volitionprop.com What’s out there right now? Price: $1.55M Type: Triplex Rent: $8650 Expenses: $1100 Mortgage: $7450 Cashflow: $100 … at 80% LTV!!
  • 60. @volitionproperties www.volitionprop.com Final Thoughts Scenario 1 is playing out right now. Scenario 2 is less ideal, catching it out of the dip. Even if we’re wrong… Scenario 3 demonstrates risk mitigation. Contact us for details on specific opportunities and off-market listings If we go deeper, would there be interest? ● How to Mitigate Risk ● Best Investment Business Models & What To Buy ● How can we be sure that Toronto has longevity? TAKE A POLL!! Masterclass 2024??
  • 61. @volitionproperties www.volitionprop.com So Why Is This Important? People are afraid People are skeptical right now People are looking for good information and guidance right now. Your potential JOINT VENTURE PARTNERS are looking for good information and guidance right now. And if you can be the person who is a beacon of light in all this darkness and noise, the money will flow to YOU.
  • 63. @volitionproperties www.volitionprop.com Joint Ventures – “The Good, The Bad, and The Ugly” with Austin Yeh
  • 64. @volitionproperties www.volitionprop.com Please Welcome Austin Yeh! Austin Yeh is a full-time real estate entrepreneur who has had the privilege of working on numerous successful ventures in the industry. Austin has accumulated a portfolio of multi-million dollar assets and engaged in over 100 real estate transactions using various strategies such as buy and holds, joint ventures, wholesaling, and fix-and-flips. He has also co-founded Ontario Property Deals, a real estate wholesale company. Through the dedication and hard work of his team, they were able to achieve significant success, even reaching seven figures in revenue during the company's first year of operation. Recognizing the importance of community in the real estate world, Austin established the RISE Network community. It has grown to become one of the largest real estate investor groups in Ontario, boasting a membership of 7,300 individuals with varying levels of experience. The community provides a space for like- minded individuals to connect and learn from one another, and Austin is grateful for the opportunity to facilitate this platform. In addition to his community-building efforts, Austin co-founded the RISE Real Estate Investing Podcast. This podcast has garnered recognition in the Canadian real estate community for its informative content, interviews with experts, and valuable insights aimed at inspiring and educating listeners about real estate investing.
  • 65. About Austin Yeh • Currently 28 years old & full-time real estate investor & entrepreneur – first investment property closed November 2018 • Former job experience: Audit @ PwC, Tech Consulting @ Deloitte, Strategy @ Hydro One, Commercial Banking @ RBC • Co-Founder of Ontario Property Deals – wholesaling business • Founder of RISE Network – 7,300+ members on Facebook, 275k podcast downloads • Owned over 50 units, comprised of over 20 properties in Toronto, Windsor and Greater Sudbury District • Completed over 10+ joint ventures • Raised over $5mil+
  • 66. What is OPM? Other People’s Money Joint Ventureships Bank Financing Private funds Seller Financing Real Estate Syndications Crowd Funding • Leveraging other’s capital or finances to invest in real estate properties or projects
  • 67. What is OPM? Seller Financing Joint Ventures Private Funds Bank Financing BE THE YELLOW STAR
  • 68. What is a Joint Venture? Money • Capital to fund the deal • Can come from cash savings, HELOCs, LOCs etc. • Financing capability People • Operator to execute the deal • Team members – legal, accountant, contractors, property managers etc. • Ensure that the deal is profitable and goes according to plan Deal • The property or project that is profitable • Can be on the market or off-the-market • Price, terms, potential, profitability, risk etc. Joint ventures are not new to the real estate world. They have existed in the corporate world for decades. Business Definition: two or more parties pooling resources to accomplish a goal. You are not the owner of the property, nor on title, you are not vested in the property rather, vested in the profit or loss of said property
  • 69. Which resource is most important? • As we progress from Expansion to Peak, greater value comes from finding deals • During the peak – deals and people are the most valuable • As we shift down to a recession and decline – capital becomes more important and deals and people become abundant
  • 70. Lets SHARE - How many of us have tried raising private capital or joint venture partners? What have we done so far? 1. Have we marketed ourselves on social media? If so, which platforms?
  • 71. Lets SHARE - How many of us have tried raising private capital or joint venture partners? What have we done so far? 2. Did anyone have success right out of the gate?
  • 72. Lets SHARE - How many of us have tried raising private capital or joint venture partners? What have we done so far? 2. Did anyone have success right out of the gate? The Money always comes when you don’t need it and it disappears when you need it most.
  • 73. Typical Joint Venture Most common split is a 50/50 Joint Venture where the active partner is responsible for bringing the deal and the people while the capital partner will bring the money/financing. Active Partner • 50% of Profit/Loss on sale • 50% of Cash Flow • Brings the deal • Brings the power team Capital Partner (Passive) • Provides Capital to Purchase and Renovate • Provides the cash buffer required for any capital calls Note in either situation – the active partner only gets paid on PROFITS – the deal must be profitable for the active partner to make money
  • 74. Joint Venture Structure Initial Capital •Typically passive capital pays 100% of initial capital invested •Can give them a budget e.g. 200k, any overages you will cover •75/25 split, 60/40 etc. Cash Flow •Cash flow split 50/50 •Give 100% of cash flow to active partner until initial capital collected Capital Tied In •Split the capital tied in on refinance •Capital partner 100% responsible for capital tied in Profit Split •50/50 capital split on sale •More profit to the capital partner •Agreed to a MOIC before profit split Capital Calls •Capital calls split 50/50 •Capital calls on the responsibilit y of Joint Venture active partner Equity paydown • Split 50/50 • Split in another creative way Appreciation •Appreciatio n above and beyond refinance appraisal is split •Maybe one party receives more appreciatio n than other Mortgage • One partner qualifies for mortgage • Both qualify for mortgage • Mortgage holder receives more equity • Joint venture terms are flexible and can be negotiated depending on each active partners needs and each passive partners needs • What you can negotiate depends on your experience, expertise, cycle in the real estate market, active partners needs etc. • The goal is to structure a win-win between both partners
  • 75. Examples of Structures • Capital partner brings in 100% of initial capital • Split capital tied in post-refinance OR capital partner receives 100% of cash flow until capital tied in below $5,000 • Active partner holds mortgage (myself) • Capital calls responsibility of capital partner • Profit split 50/50 New Investor • Capital partner brings in 100% of initial capital • Capital partner responsible for capital tied in post refinance • Passive partner holds mortgage • Capital partner responsible for 100% of capital calls • Profit split 50/50 Experienced Investor • Capital partner brings in 100% of initial capital up to an agreed upon amount ($200k) any overages are covered by active partner • Split capital tied in post refinance • Passive partner holds mortgage • Capital calls are split post refinance Market Slowdown
  • 76. ATTENTION EQUALS CURRENCY In the digital age people are fighting for our attention Attention is the most valuable digital currency. We invest in digital experiences We can do 3 things with Attention 1) Earn Attention 2) Spend Attention 3) Lose Attention
  • 77. IMPORTANCE OF ATTENTION • People make decisions based on who they know, see or hear about on a constant basis • Build your awareness, ensure everyone knows what you’re doing • Position yourself as the expert The more eyes you have on you The more money you’ll raise
  • 78. ATTENTION: BUILDING A BRAND • Psychologically people do NOT make decisions solely based on numbers & data Real Life Example: Pepsi vs Coke • 1980s Coco-Cola was leading beverage company by Market Share • People said they preferred the taste of Coke • Pepsi introduced the Pepsi challenge in 1980s, known as one of the greatest marketing campaigns of all time • In 1983, Pepsi outsold Coco-Cola • Coco-cola changed their formula and received backlash • Coke doubled down on branding – now 5th most valuable brand in the
  • 79. Branding: How Do People Make Decisions Do we trust you? Do we like you? Do we know you? Do we relate to you? Numbers Partner with you
  • 80. Why Do We Brand? Why do we Brand? Build an Image Gain Trust Position yourself as an expert Sell ourselves How real estate is going to help our lifestyle Attract capital, not find it
  • 81. Establishing an Ideal Avatar Who is your ideal partner?
  • 82. Building Your Ideal Avatar Who is your ideal partner? • Message must resonate with your avatar • Hit their emotions • The more specific we get about our partner, the more we can target the message Austin’s JV Partner • Age: Late 20s – Late 30s • Job: • White collar job with 100k income • Works 40 hours or more a week • Stressful job • Wants to make a change in life: Maybe career transition, not satisfied with job, enjoys their job but doesn’t want to work forever, escape rat race, flexibility in life etc. • Mediocre job satisfaction
  • 83. Building Your Ideal Avatar Austin’s JV Partner Continued • Owns primary residence with significant equity built up • Has access to HELOC • At least 150k+ in liquid funds • Money in stock market or mutual funds • Family Life • Married with kids- their time is tied up between work and family life • Not much time to invest • Understanding of investments • Understands real estate is a long-term investment • Understands real estate is a great wealth builder • Understands basic concepts like ROI
  • 84. Building Your Ideal Avatar Empathy Map
  • 85. Building Your Ideal Avatar Example Posts Travel/Freedom: https://www.instagram.com/p/BtQosAVgGzN/ https://www.instagram.com/p/BuBh5M8Ayyj/ Networking: https://www.instagram.com/p/Bw7x67WAIq4/ https://www.instagram.com/p/BzWoGWWBkAk/ Real Estate: https://www.instagram.com/p/B0wi6xhBvVI/ https://www.instagram.com/p/BtkKayFgPA9/ Personal: https://www.instagram.com/p/BsxwF7hg4Pi/
  • 86. Leveraging Social Media to Raise Capital LinkedIn Facebook YouTube Instagram • Professional platform • Think and act like a white-collar employee • Best way to raise capital is by educating others – no firm call to action. Quality is very important • Financial Accomplishments • Milestones • Long form article • Credibility leveraged by previous experience, accomplishments, and education • Older audience, generally have more money • People in 30s-50s are most active on Facebook • Generally people you know, maybe lost touch with, or people you met a couple of times – prime platform to connect with others • Not ideal for videos • Best for medium size content with photos • Educational posts • Lead by showing what you’re doing • Quality over quantity on Facebook • Generally younger audience, millennials etc. • Naracisstic platform • Quantity over quality • Post stories + engage often • 4 categories: Personal post, educational post, motivational post, random post • Short-form, medium form, Long-form content • Educational & entertaining • Best platform to position yourself as an expert • Best platform to build personality + image + mannerisms -> Gets people to know and like you • Vlog style + record journey
  • 87. Leveraging Social Media to Raise Capital X (Formerly Twitter) • Short form information • Sharing quick thoughts throughout the day • Offer high value and minimal asks • More data focused – what’s happening boots on grounds • Thoughts on Real Estate market • Sharing headlines- summarizing articles etc. • Make yourself the expert TikTok • Platform with quickest potential growth • Making engaging content – low value, high entertainment • Less than 60 seconds – follow trends, make videos entertaining, funny etc. • Easiest to go viral • Push them towards other platforms Always lead with providing value first!
  • 88. How can we produce content to attract investors? Educational Post Educational Post - Simple content I learned in a Volition Properties meet-up - Simplifying complicated real estate content in an easily digestible way Blog Post During Covid Personal Post - During Covid-19 lockdown, everyone stopped buying real estate - I purchased a primary residence + other rentals and explained why -People reached out who wanted to learn how to continue to invest
  • 89. How can we produce content to attract investors? Education alone is not enough
  • 90. How can we produce content to attract investors? Show What You Do Posts like these showcase to your followers, those in your network that you are constantly investing in yourself. That’s why when we are at an educational event, a mastermind, any sort of coaching – we constantly share what we are doing and learning. If you do not invest in yourself – why should someone else invest with you.
  • 91. Selecting the Wrong Avatar Real Problems with joint ventures: • Do not understand the risks of real estate • Capital source – overleveraging via HELOC, Line of Credits etc. • Expectations not aligned • Overly active - multiple questions and suggestions • Operational disagreements • Counting pennies- not dollars Risks of all joint ventureships: • Financing • Lack of control over JV’s life decisions • Counterparty risk • Market Risk • Sell the property without your consent
  • 92. Other JV Risks to Consider • Resource strength: More relationships to manage, a lot communication • Market timing risk: Acquiring too many properties in one period may lead to higher exposure to market timing risk – overpaying for multiple properties • Locked in Capital: Commitment of too much capital for long-term investments – if partners need liquidity may face challenges • Capital Call: Too many properties in your portfolio – especially smaller properties may lead to capital call risk. Ensure enough liquidity • Timelines: If one party wants to sell and another doesn’t how do you figure out a solution? What if it’s at a loss? • Time commitment and expectations on reporting & updates • Changing regulations: UHT filings, reporting guidelines on JVs etc. MAKE SURE TO HAVE A LAWYER DRAFT UP ANY JOINT VENTURE AGREEMENTS
  • 93. Questions to Ask Joint Ventures • What are your expectations going into a joint venture? • Timelines, financial, ROI, cash flow, capital tied in, BRRRR etc. • What’s your employment? • What is your borrowing capacity? Are you pre-approved? Do you have any other big purchases coming up that will restrict potential financing going forward • What would you consider a successful joint venture? • Set expectations on real estate being a long-term investment: What happens if we can’t pull out all your money? Capital calls? If appraisal comes back unfavourable etc. • What are you expectations on communication? • Explain the risks of real estate investing!
  • 94. Legal Considerations THIS IS NOT LEGAL ADVISE – ADVISE LEGAL COUNSEL. THESE ARE MY OPINIONS AND INFORMATION THAT WAS COMMUNICATED TO ME: • Be careful not to solicit funds from general public if you are selling securities/selling shares– ensure you speak with a lawyer to understand the Do’s and Don’t of raising capital ; could get in trouble by OSC • Typically if you’re doing a joint venture, you are able to market it on Instagram or Facebook – but try not to advertise returns. Save that for a conversation. • Do not PROMISE returns – you will get in trouble • Do not say Guaranteed returns • Can show projections – but never guarantee! • Raise capital from family, friends, business associates or accredited investors • If someone reaches out- make sure to have a few conversations with them, build a relationship, phone calls, text, email and ideally meet in person or Zoom ! Make sure to log these conversations
  • 95. Deal Sheet • This can be as fancy as you want it to be. Some investors want more numbers, some investors prefer simplicity. We lean towards simplicity and can expand via a phone conversation as needed • Focus on the key facts, set expectations and anticipate questions. • Property (type, # of bedrooms, etc) • Location – Introduce the reader to the area – demonstrate your expertise • The Plan – full gut renovation? Cosmetic Reno? Tenanted? BRRRR? Is the project in phases? Etc. • Costs – be conservative here. Its better to pitch for the worst and be able to tell them that you are pitching for a worst case scenario. • The Net Investment – do not inflate the truth • The Returns • Expectations for Partnership Walk Through Deal Sheet
  • 97. @volitionproperties www.volitionprop.com How Volition Can Help. As Advisors. FREE 30-min Advisory session with Matt Come prepared with: Capital available to invest Mortgage qualification Current real estate portfolio details We will help you determine: Where you are at Where you want to go Customized plan to get there
  • 98. @volitionproperties www.volitionprop.com Home Buyer & Home Sellers are 50% of our business! We can ensure that your home makes good financial sense. Pre-Analyzed Deals for Investors looking for the BEST investment properties in Toronto! How Volition Can Help. As Agents.
  • 99. @volitionproperties www.volitionprop.com Your Next Step… Take MASSIVE ACTION SCAN TO BOOK A FREE 30-MIN CONSULT WITH VOLITION!
  • 100. @volitionproperties www.volitionprop.com Next Month: Street Smart Tour - Fourplex Edition Date: Saturday, November 11 Location: Little Italy RSVP: www.meetup.com/Volition LARGEST REAL ESTATE MEETUP IN TORONTO WITH OVER 4000+ MEMBERS!