Good morning, Keyspire community.
Thank you so much for joining us this morning.
I'm just giving you guys all a moment to trickle in.
I do see some people are still connecting.
Beautiful.
Love to see you all.
Good morning, Prue, happy Monday, Tatiana, Philip, Dan and Donna, Jennifer, Ivis, Pat.
So good to see you all.
Hello, Brandon, Lauren.
Good morning.
So lovely to see everyone joining us this morning.
Okay, so I'm going to get started here.
Good morning, everyone.
It is Monday, March 3rd, 2025.
My name is Gabrielle, and I'm your program advisor here at Keyspire.
And this is our weekly focusing call.
We are taking a look at our 14 day radar.
I'm getting a lot of good mornings in the chat.
Thank you so much, everyone.
Hello, good morning.
Thank you so much.
I love to see everyone joining us.
We've got everyone coming in coast to coast, all across Canada and the US.
And I love to see that everyone's participating and programming their RAS to take a look at
what you've been accomplishing over the last seven days.
The purpose of the 14 day radar is to take a look at what you have accomplished in the
last seven days and what you plan to accomplish in the next seven.
The first thing I'm going to share is I do check in calls, I do welcome calls.
Good morning, Cassandra.
Good to see you too.
And I get a lot of check in calls with our members who start off by saying, Gabrielle,
I'm wasting your time right now.
I have done nothing.
But let me tell you, it takes less than 10 minutes of the conversation to discover that
you have actually done a lot.
Whether you realize it or not, I think as a community or as a society, we are so used
to minimizing our accomplishments and not giving ourselves enough recognition for what
we do.
And it's not everything case buyer, it's not everything real estate investing, okay?
We have so many things that we need to accomplish and focus on.
So we're dealing with life, we might be a spouse, we might be a parent, we might be
a sibling, we might be a grandparent, we might have a full time JOB.
We might be retired, we might be property managing, project managing, we have so many
things that we need to do in a day, it just feels like there isn't enough time.
And this is what makes us feel like we're not accomplishing enough.
So the point of the weekly focusing call is to take a moment and take inventory of what
we've done and celebrate those wins, no matter how big or how small.
So I'm going to start with my 14 day radar.
In the last seven days, I've been working on spending quality time, I'm going to do
a personal one and a professional one.
So I've been spending quality time with my family, and making sure that I make time for
them.
And yes, I have to fit them in my calendar.
And I have to cross reference to make sure that I don't have a workshop that day or over
the weekend, or maybe a monthly meetup that week in the evening.
But I do make sure that I make time for my loved ones, my family, my friends, blood and
chosen family.
So we took the kids to the movies on the weekend, I made plans to have a sister day with two
of my sisters.
The week before, because I didn't host the weekly focusing call then on family weekend,
I also spent time with my brothers as well.
So I have four siblings.
And I've made sure to set aside time to have quality time to build those solid relationships
with my siblings, and my mother, and I know that I made plans with my one of my best friends
to go to Port Hope as well, and spend some time with my friend.
So I've been working on that.
We have some light renovations going on at home as well.
So we are replacing the light fixtures, we're painting, we're lightening everything up.
And then as this is evolving, we're discovering, oh, wait, you know, maybe I don't want to
just paint, maybe we should redo the kitchen, maybe we should move this around, maybe we
should add on this or change that.
So our creativity is being sparked alive again.
And we're finding our passion for our primary residence, which is really good, because it
allows me the opportunity.
Opportunity to gain the experience so that way when I'm active investing and I'm working on my my portfolio
I have more experience in that department on
project management and
How I'm going to accomplish
Different tasks to bring up the revenue in these properties and it really excites me because I've done tiling
I've done drywalling
I've
Built up quite an inventory of tools. Have you guys noticed that do you guys do you guys build up tools?
Do you have tile cutters and saws and I didn't at one point?
I didn't know the difference between a regular drill and a hammer drill or an impact drill
but now I know and I also have those and I'm really proud of my collection of tools and
That I know how to use them. So I've been working on that as well. And I also got myself a new drill set
So now I can drill through
PVC piping and brick which I'm really excited about because we're going to be adding on a deck over the summer. That's the goal
and as far as professionally
My team and I are still running numbers on properties. This is something that I don't want anyone to feel like
Like you're running out of steam. Okay the momentum
You're you keep it going no matter what because I'm taking a look at the market me and my team
take a look at what market we want to invest in we take a look at the numbers and what makes sense and
Just because we don't find a property that works in the first week or the first month
We're not losing momentum and we're still looking we've put in offers and you know what it didn't go the way we wanted
But that's okay Scott's done the same thing
he's put in so many offers that he gets more declined than accepted and
You can't be afraid to put in those lowball offers
You can't be afraid or ashamed to take action because that's what gets you experience
And that's what allows you to move forward and then you keep taking a step putting that foot in front of the other
And that's what my 14-day radar has been. So the next week is going to be along those lines. I'm going to continue doing that
but that brings me to my guest and
Some of you might be familiar with my beautiful guest that I'm about to bring on
I've had her on once before and she is a complete inspiration to me. I admire her
She always has a smile on her face, and I know that the market gets difficult. I know that things get frustrating
I know life can't be perfect, but I can tell you this woman always has a smile on her face
She sounds like an angel she is so smart. She's always working in the background
She does not get the spotlight role, but she's always working hard behind the scenes to make those deals work
So something Michael was talking about this morning is you have your front stage and you have your backstage
the backstage is absolutely paramount to building a
Solid foundation for your business to move forward so that you can have a successful team and a successful portfolio
Keys by our community without any further ado
I am honored to invite you to the weekly focusing call with my special guest miss Sarah LaResh
Sarah, would you like to say good morning? Good morning
Thank you so much for that introduction Gabrielle. That was really kind of you
I
I'm ready to just dive right in to to share a bit of a story with everyone if you're ready for it
I am I'm so excited to hear what you want to talk about this morning
Awesome. Well, I know that a lot of people are looking to scale. They're looking to shift into
Multifamily and I thought it might be helpful to share with everyone a little bit of a story
So you can sit back and relax and and hopefully there'll be some
Nuggets along the way that are helpful for everyone on their own journey
And it I'll bring you full circle to acquisition all the way to the sale of the property
it was a two-year whirlwind and
Nothing went how we planned but it turned out very well
I shouldn't say nothing went how we planned but I'll let me tell you the story. So back in 2021
We were very active in the Moncton, New Brunswick market
Our property manager was also a realtor
which is a really great skill set to have and I would highly recommend once you
narrow down your your market that you want to go into and
Invest into is team up with the property manager because the realtor is just there for that quick transaction
but the property manager is going to be there the long the long run and
So they're gonna steer you away from bad neighborhoods
and like a quick sale
because they're gonna be the ones looking after it.
So anyways, we're shopping with our property manager
and he also knows the other multifamily owners
because he's managing their properties.
So a lot of times they'll let him know,
hey, do you have any investors that are looking to buy?
I wanna unload this property.
And that's what happened with McSweeney.
McSweeney was a seven unit property
in a great location,
just a stone's throw away from the hospital.
It met all of our criteria.
So we were looking for something
that was five units or more
so that we could get commercial financing.
It needed to have a debt service coverage ratio of 1.2
so that the banks would go for it.
It needed to have some value add, which it did,
but it could cover its own
and it was a good little property as it was.
So we purchased that for 547,500 in 2021.
How we did that is we brought in two financial partners
and they were 100%.
They brought all of the funds required
to purchase the property.
We created a corporation.
The name of the corporation
was the address of the property.
So we created a corp for the sole purpose
of owning this property.
We didn't create it before we knew
we were gonna buy the property.
We created it once we knew
that we were buying the property.
So we set up the corporation,
opened up the bank accounts.
You need to make sure you're keeping track of your books
because there's a lot of moving parts
and money coming and going.
So you need your bookkeeper, you need your accountant,
you got your lawyer for closing.
You've got to keep all of the communication lines open
with your partners.
So all of us were on the corp.
We're all shareholders, the working partners.
So that would be Nick, my husband and our partner, Evan.
We were the directors in the company.
We were dealing with all of the day-to-days
and we had some renovations that we needed to do.
We also had a good relationship with the appraiser
because we'd already acquired a few buildings.
We were able to go to the appraiser prior to closing
and get a verbal over the phone
of what he thought the property would be appraised at.
And so we knew going into it
that our appraisal was gonna come in
where it needed to come in.
And everything was all lining up
and we were gonna ride into the sunset rainbows
and lollipops and it was gonna be fantastic.
And it was, it really was.
We secured it, everyone was happy,
but then things happened.
There's renovations here.
We had somebody do a midnight dash
in the middle of the night,
but really that was kind of a blessing in disguise
because we were able to do a quick renovation on their unit
and increase rents and everything was going
according to plan.
And we actually had one tenant in the building
who had been there for 20 plus years
and her rent was $650.
And the market rent, if we did nothing to her unit,
we could have easily rented it out for 1200
without batting an eye.
But so we sat down with her,
there was no rent caps at the time.
And we said that we would like to increase her rent to 800,
which was a big increase for her, but well below market.
So we thought it was a good compromise.
And she actually decided that she thought
she could find something better
and had set her mind to move.
So she's about to go move into her new unit.
All her stuff is packed up in boxes,
like she's ready for the moving truck.
And the unit that she was planning on moving into,
the landlord gave it away to somebody else
and she had nowhere to go.
And so she reached out and asked if she could stay.
We said, of course,
but she'd never had a renovation in over 20 years.
And there was things in her unit
that really needed updating.
And so we sat down with her and we asked her what she wanted
and it was very modest things that she wanted fixed up.
And we said, okay, well, if we do all of that,
would you be willing to increase your rent
to $1,000 a month if we...
And all of her stuff was all in the center of the room,
all packed up.
It was very easy to work around and do the renovations.
And that was going to be less
than what she was going to be paying
to move into her new unit.
new unit, and she didn't really want to move. She really loved
the the building in the area. And so it was a win win for
everybody. And she was delighted. She got everything
that she wanted on her wishlist. She got her unit updated, she
was still going to be paying less than what she would have
paid moving to another place. And we got a big bump on on our
revenue, which was awesome. And well, our, our contractors were
in there doing her unit, there was another tenant in the
basement who had some requests. And we negotiated a small bump
in his rent as well. And by the way, we didn't have to
negotiate anything we could have arbitrarily just said, No, we're
raising your rent and not do any renovations. But that's not how
we roll. And we really wanted to look after our tenants. And they
felt that they knew that we were looking out for them and that we
were really fair and reasonable. And so all of these renovations
were happening February and March of 2022. Well, April of
2022 rolled around and the government of New Brunswick
decided that there was going to be a rent cap in place. And it
wasn't going to start on April 1, it was going to start retro
actively on January 1. And any rent increase that happened
after January 1, we would be forced to go back to the
original rents, regardless of the fact that we did renovations
and negotiated, and we would have to pay the tenants back the
difference of their rental increase. And that was only
enforceable if the tenants actually picked up the phone and
called and said that they wanted that to happen. And we were on
pins and needles for a long time, because all our tenants
had to do was pick up the phone and say, I want my rent to go
back the way it was. And I want my my the difference I've been
the increase I've been paying, I want that paid back to me. And
they didn't. And that's, that's one thing that we got really
right, when when doing this project, and that is we treated
our tenants how we would want to be treated, if we were in their
shoes, and we did right by them, and they did right by us. So
that was a huge win, because it would have been pretty crippling
to go back to their original rents after putting out more
than $20,000 in renovations. So that was that was a big win.
Flash forward to the winter of 2023, there was a big deep
freeze in in Moncton, and our we had pipes burst, and there was a
cleanup to do. And we had to refix up what had just been
renovated. And but it wasn't it was more scary getting the news
than the actual fallout that we had to deal with it ended up not
being that bad at all. But when you're the go to person on the
operations side, and you're the person that the property manager
calls to, you know, troubleshoot, whatever might be
happening, you just don't know what email what phone call what
text is coming in that day. And, and you got to hit the ground
running and just be prepared. And we purchased in 2021. And we
very optimistically gave ourselves a two year mortgage,
thinking that we were going to turn over units and increase
rents and make the building worth more. And then in two
years in 2023, it would be a great time to refinance and pay
our investors back at least a big portion, if not all of their
original investment. Well, as I'm sure you know, the interest
rates had a very different plan in mind for us. And when we got
we came up on our two year mortgage, our cost of borrowing
was going to triple because of the interest rates. And so we
had to sit down with our investors and say, Okay, we have
a decision to make, we can either renew our mortgage, and
we'll be looking at being in a breakeven situation for however
long we extend our mortgage terms. So whether we do a one
year, two year, three year, or Moncton is still a hot market,
we could try selling it and you could get a great return on your
money now. Well, needless to say, our investors took option
B, let's get a great return on our money now. And really,
thankfully, for us, we, the Moncton market had not cooled
down like the rest of a lot of Canadian markets. And so we sold
in less than a week for $950,000.
$1,000. So we bought it for $547,500. And two years later,
we sold it for $901,000. Our investors got a 60% ROI and
annualized over two years a 30% over two years. So they did
extremely well. And we learned a ton we we made mistakes in that
building we made. We had some big wins in that building. And
certainly, we can't feel bad about how how that exit
happened. However, I will tell you, nobody, especially me, set
about going through all this work of creating a corporation
and getting an accountant and filing corporate taxes, and and
all that learning curve to flip an apartment building, which is
essentially what we did. And so you know, if I could rewind the
clock, I probably would have realized that our investors, we
set the expectations that they were going to get their money
back in two years. And that's really what they had in their
mind. And in our minds, we wanted that to happen too. But
we also wanted to be able to retain the building for many,
many years, we wanted to hold that for 10 plus years. And so
that just wasn't an alignment. If we if I could go back, I'd
say, you know, we need investors that are in it for the
long run, who would have ridden out the the the high interest
rates a little bit longer, but, you know, it was a win. And, and
hopefully some of that is helpful. But that's next week.
Excuse me while I pick my job off the floor. Oh, my goodness,
Sarah, that sounds like whirlwind didn't didn't cover
what you went through. And you just summarize two years in 10
minutes. I have so many questions.
Okay, so how do you how do you pivot the market changes, rules
change, changes, law changes. The government makes surprise
announcements and just drops a bomb at your front door when
you've made all these plans. I think my first thing is, how do
you one I know you remove the emotion, but how do you pivot?
How do you say, okay, we just got a bomb dropped on us
mentally, I feel chaotic internally. How do we move
forward? So who do you bring into the conversation so that
you can make these educated decisions on how to move
forward and pivot?
Well, the nice thing about our structure is that we were a
team. So there there was a few parties involved that had a
vested interest in this in this property. So, you know, you just
sit down and look at well, what are our options, and we we hash
them out over over a zoom meeting. And we come to a
consensus about what is the best way to to move forward. And so
yeah, it's just a matter of evaluating with the best amount
like with the best available information at the time, and
making sure that everybody's, you know, heard and really, we
we never really ran into any situations where we had really
opposing views. It was pretty easy to come to decisions, even
in in hard circumstances, because you're just like, well,
this is what's on the table. This is what we're looking at.
And these are our options. So which one, which way do we want
to go? And we all really just kind of agreed on on the way to
go. So I don't have a lot of experience in having really
opposing views sitting at the table, which would be another
level of challenge. So luckily, we never had that. But I think
you gain that level of contentedness with your team
just by being completely transparent. So never sugarcoat
any situation. It doesn't it doesn't do anybody any favors.
And as soon as there's something you know, to share, you share it
like nobody wanted to hear that retroactive news and that we
could be on the hook for, you know, giving money back and
going back to original rent amounts, which would have
really crippled the value of our building too, because it's based
on our revenue and income. So you know, there was there was
pins and needles, but I think is as long as everyone feels like
it
it's open and transparent and that nothing's being hidden,
then it was pretty easy to make the right choice,
to be honest, yeah.
Thank you for that.
This might be a basic question,
but do you have your lawyers and accountants
a part of those conversations to weigh out the pros
and cons of what your options are?
If their advice is valuable,
like if it was just a matter of deciding
whether to sell or hold, no,
but there's certainly times when you want
to bring them in on the conversation.
So we had another building where our lawyer did a search
and discovered that the oil tank had been originally buried
on the property, this is for another building,
this isn't from McSweeney, but he did a pretty deep dive
and the same thing when we were selling.
So if there was, it became a point of contention
when we sold the building as well
and luckily all was good,
but we had to do an environmental
as like the buyer of this other building
required that we do an environmental
to just basically put their mind at ease
that there was no contamination.
And our lawyer was quite concerned about it
because he said, well, you know,
your oil tank might not have leaked,
but it was common practice in the area.
So all you have to do is have a neighbor's tank leak
and that could contaminate your soil.
So you might discover that your soil is contaminated
and it might have nothing to do with the oil tank
that was buried there.
So it was just like all this risk
that you just didn't even realize was a risk.
Like, yeah.
So sometimes it is very appropriate to bring in a counsel.
Okay, perfect.
Thank you for that clarification.
I think it's important as well
to get the professional opinion of those involved
so that you can make those educated decisions.
You don't know what you don't know.
Was there a deadline for tenants to appeal the increases?
That's a good question.
I think they could have had basically
the whole remainder of 2022 to appeal,
but then in 2023, the cap was removed.
So basically come 2023,
we all could really breathe a big sigh of relief
because it was no longer hanging in the balance
whether a phone call could be made.
So then we were officially off the hook
and we sold later, we sold in the spring of 2023.
So it was like there was nothing hanging over our heads
anymore when we sold.
And the province has actually now since reinstated
a cap on rents again.
And I don't think it's going anywhere this time.
So yeah, you can do all the due diligence in the world,
but nothing can prepare you
for what you don't have control over.
So you really just wanna make sure you're going in eyes
as wide open as they possibly can
because you have no control over interest rates.
You have no control over government initiatives
and decisions.
So yeah.
Wow.
Well, I applaud you for being able to pivot,
removing the emotion out of that
because if I understand correctly,
you went in there with the impression
of a long-term buy and hold.
And after two, I'm assuming short-ish years,
you had to pivot and you had to change
and remove that from your portfolio
to do what was best for your investors.
I imagine that those weren't easy discussions
with your investors,
but understanding how the market changes
and understanding how you can invest
in someone's opportunity that they create,
how things are beyond your control
and that from time to time, you have to pivot.
You need multiple exit strategies.
And sometimes it's not your first choice,
but it's what's best for the tenants.
It's what's best for the investors
and your long-term business decisions.
Yeah, totally.
I mean, we would have hung on to it,
but no, our investors did fan,
like they were over the moon.
They were thrilled.
30% return annualized was like,
it was better than projected.
So no complaints there.
We just, if we had a choice,
if it was our say, we'd still own the building.
I can understand that. Well, um, what is your focus for the next seven days, Sarah?
Oh, well, I would like to find another one, knowing what I know now, and, and just align myself with with the right investors who have a really long term vision, the way that that we do.
And, you know that I think that'll be a lot easier just because, you know, now I have experience to apply that I didn't have the first time around so it'll be fantastic but no I'm on the hunt for another great property like McSweeny.
And I also have a couple of development projects in the works here in Nova Scotia that are ticking along nicely so, but I know that might sound like I'm really busy but really, it's, it's hurry up and wait a lot so there's busy moments
and then a lot of the times I'm just cooking and doing yoga and reading and, like, having a great life, honestly. Yeah.
Well that sounds like lifestyle freedom day to me.
And Sarah, I know you very well. For those of you listening who who don't know Sarah and I have been friends since before I even joined Kiesbauer, and we met because I was one of Sarah's tenants in in one of the properties that her and Nick had owned in Cambridge,
Ontario, and gardening was one of your things that brought you peace that I loved seeing you do every evening as the sun was going down and health has always been top priority so being able to put that at the forefront of your day by design to be able to do yoga is admirable
and I do admire you I do look up to you and I want to thank you very much for taking time out, out of your day to share with us your story your experience and your knowledge because it is invaluable so thank you once again for joining us Sarah, I want to thank the entire community for being a part of the weekly focusing call with us this week.
And I would love for everyone to please document what your 14 day radar is what have you accomplished celebrate your wins no matter how big or how small, and always have a focus to move forward, check those things off your list so you have that sense of accomplishment.
So I want to thank you all once again. I hope you all have a fantastic and productive week and we look forward to seeing you guys next week on the weekly focusing call also heads up the monthly meetup is this Wednesday at 7pm Eastern Standard Time we look forward to seeing you there.
Take care everyone.
Thank you. Thank you, Sarah.
You're getting applause in the chat.
Thank you both of you. Fantastic info.
Thank you. Absolutely.