The 5 Questions Podcast
Join us as we unlock real estate and business insights, one question at a time.
The 5 Questions Podcast
Achieving Multifamily Real Estate Success with Rodrigo Parada
🎙️ Ready to unlock the secrets to successful real estate acquisitions and growth? Join us on the 5 Questions Podcast with Rodrigo Parada! Learn how to evaluate properties, leverage provincial programs, and build a strong network for informed decision-making. 🏢📊
Rodrigo shares his strategies for sustainable growth, risk management, and the ins and outs of long-distance investing. Plus, get insights into MLI Select mortgages and adapting to regulatory changes like CMHC's energy efficiency criteria. This episode is packed with game-changing tips for multifamily real estate in Canada! 💼
Sponsored by: https://aliferousacademy.com/
#RealEstateInvesting #RodrigoParada #MultifamilyInvesting #AcquisitionStrategies #CMHCUpdates #MLISelect #RiskManagement #5QuestionsPodcast #SustainableGrowth #Networking
Going back to what I said earlier, the market research and staying informed of these market trends and networking with the right people so that we're up to date.
Speaker 2:Welcome to the 5 Questions Podcast, where we unlock real estate and business insights one question at a time. This episode is sponsored by Elliferis Academy.
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Speaker 2:I'm Seth Ferguson and this is your Elliferis Academy. At Elliferis Academy, only experts in their field teach the courses. I'm Mark Amiot and this is your Elliferis Academy. I'm Melissa Dupuis and this is your Elliferis Academy. Elliferis Academy all the experts one subscription. I'm Chad Robinson and this is your Elliferis Academy. One subscription. I'm Chad Robinson and this is your Elliphorus Academy. Dive into self-paced courses, regular group coaching and stay ahead with fresh content every month. Sign up now at ElliphorusAcademycom. Welcome to the 5 Questions Podcast. I am your host, mario Lamar. Our guest on today's show is as assets in Quebec, ontario, alberta. He manages a portfolio of multifamily properties of over $10 million. He is the founder of the mutual fund trust Triple Arbor Capital. Welcome, rodrigo Parada. Rodrigo, welcome to the show today.
Speaker 1:Thank you, mario. It's a pleasure to be here. Thank you for the opportunity and, yeah, very excited to get this going.
Speaker 2:Rodrigo, the concept of the podcast is really simple Five questions about either real estate or business and we get straight to the point. You ready Absolutely extensive experience in managing multifamily properties. I wonder what key factors do you consider when you evaluate a potential acquisition?
Speaker 1:Yeah, that's a great question, Mario, because it really has to do with the market. So, basically, one of the key factors is always going to be location. So I'm always looking for strong economic fundamentals wherever I'm investing. So it doesn't change right, it's always the basics location, location, location. But if I might add to that, what I'm really looking for right now are markets or sub markets where we have infrastructure development so that there's going to be some jobs for the next little while, and also anything that has a provincial investment program. So if the government is willing to put their money into that market, well, I'm fairly comfortable following suit for the multifamily assets that we're acquiring.
Speaker 1:What we're also looking for in my acquisitions is, basically, I always revert to the local experts. So I know that you're a networking king, my friend, so I took a page of your book and I connected with as many people as possible in all of the markets that we're investing in and I really revert back to their expertise. Right, it's applying the whole who, not how, strategy to this side. One of the other things that we're looking for is property conditions. I want to make sure that I'm buying something that I'm comfortable in doing.
Speaker 1:I'm at a stage in my investing career where I don't have to take on every single deal or opportunity, that I'm at a stage in my investing career where I don't have to take on every single deal or opportunity that I'm presented. So I try to be mindful of that and also in the anxiety that it can produce in management of projects and our investors. And also what I'm looking for is value add potential. So, depending well, actually, if it's an existing build, not a new build, anything that's easily achievable is what I'm looking for. And, last but not least, a key factor in my decision making is the structure of the actual deal and the partnership. So who am I working with and what are our responsibilities?
Speaker 2:That's always something that I'm keeping top of mind, mario, so clarity on each of your roles in the partnership. Also, you mentioned locations, so there's trends in the markets right now where people are moving to because of affordability that might be something you look at as well and government implications. These are all amazing insights that we should take in consideration, like you, when we go and analyze a deal. That brings us to our second question. Managing over $10 million of assets is impressive and is not a small thing. What strategies do you use to ensure to be sustainable in the growth and also on the risk management side of your portfolio?
Speaker 1:Sure, so that's very interesting, because when you first asked me that, I really had to go back to the drawing board and put on paper all that's here, right? So I'll try to clarify as much as I can and exteriorize what I have in my mind. So what we've been doing is we're very comfortable with diversification. So, whether it's markets or asset classes, that's one of the strategies that we implemented, so that we're not a one-stop shop. We're able to adapt to whatever the market is presenting as opportunities. Another thing that I'm really focused on at this stage still is proactive asset management, if I could put it that way. So I still like to get a hands-on approach to asset management and basically what I'm saying is actively managing the managers. Right, I'm not necessarily doing the work I'm still working on the business and not in the business but I still like a certain level of hands-on at this stage. What I would say also is going back to what I said earlier the market research and staying informed of these market trends and networking with the right people so that we're up to date. Right. So I'm not. I want to avoid as much as I can speculating and focusing on facts, and that's done through a healthy network of highly qualified individuals that we have been working on and I keep on working on constantly. Obviously, you're only gonna be as good in your acquisitions as your due diligence. So the quicker we were able to put in checks and balances and solid processes for that, we were able to move forward at a faster speed with our acquisitions, because we knew exactly what to expect and how to go about it.
Speaker 1:I'm somebody, mario, who's always focused on shifting my paradigms or challenging my preconceived ideas and keeping myself informed and learning, so that's one of the strategies. Also, this is more on the personal level, but I'm fully aware that there's more stuff that I don't know that I do, so I'm constantly looking for that information and connecting with people or resources. And the last thing uh, the strategies is is basically, you know, focusing on the long term, however that looks. So, obviously we, when we implement a strategy and we go forward with our investment thesis, uh, we have some short to mid-term gains or goals, but also what you need to focus on is the long-term vision, so that you have your North Star that you're always moving towards, but you can shift. You know what I mean. So it's kind of like sailing right. You're not necessarily always going to be going in a straight line. You're going to be moving a bit, but at least you have that clear, defined point where you're going to. So it makes everything easier. Pivoting is easier because you're always focused on that long-term vision.
Speaker 2:One point you mentioned and it really resonated with me is having systems in place that will assure you the growth of your operation. If you're reinventing the wheel, every single deal, most likely you're not going to grow as fast as if you implement a solid system and, once you know it works, you keep on doing over and over and you just multiply your assets. Yeah, so that brings us to our third question, and talking about managing a portfolio of the size of $10 million, it doesn't come without challenges. So can you maybe mention to us some of the challenges you had when expanding your portfolio from Quebec to Ontario, to Alberta? And what we want to know specifically is how did you overcome those challenges?
Speaker 1:Yes, so I'll share my personal experience as to how I overcame them, because, basically, like anything good in life, it's the path is through hardships, right.
Speaker 1:So my challenges initially were, to put it quite bluntly, understanding that there was a certain amount of theory, meaning books or, let's say, videos from different coaching programs that I was part of that were teaching me about how to do these things and actually getting it done Right.
Speaker 1:So, in theory, you could be doing certain things, but in reality, when you're applying those things, you still have to go in and get your hands a bit dirty, if I could put it that way. So my main solution to long distance investing has been finding the right people to work with, and that was the game changer for me, because initially, when you start and you're exposed to different opportunities in different markets, you're going to do some underwriting, right. So you're going to look at the numbers on the listing and you're going to try to figure out if it makes sense based on your specific criterias in terms of returns or whatever you're looking for. But that doesn't take into account the human factor of real estate investing. Right, it's a team sport and, as somebody who's been put in leadership positions, you end up realizing that you're only going to be as good as your team, right?
Speaker 1:So, putting the right focus on meeting the right people with the right set of values, with the same objectives as me, was how I overcame the majority of these challenges on investing long distance and, at the same time, not every single market has the same type of opportunities. So if you're looking to bring in people together to close an acquisition meaning partners and investors well you have to be aware that whatever product you're presenting to people has to fit what they're looking for right. I like to call this listening to the money. So finding the right opportunities through these different markets within our country or even the United States, made it so that I understood how I could present them, so that I could close deals faster. So finding the opportunities and again I'm referring to another book that I said previously, but it's all about you know who, not how. I don't need to learn every single thing, but I need to have the right people around me that know how to do it, so we can delegate and work together and build a meaningful partnership.
Speaker 2:And in real estate it's more true than ever in other industries before. Your network is your network, and it's so true. You surround yourself with the proper people, the people that will help you get to the next level, because, like you said, you can't know every single details about everything, but if you have a solid team, you will Talking about opportunities, which brings us to our fourth question the biggest opportunities and challenges in the Canadian real estate market today. What are they according to you, and maybe more particularly in the multifamily space, since it's your expertise?
Speaker 1:Yeah, that's a very intriguing question to me, because I end up thinking about it and realize that it's basically two sides of the same coin. What I mean by that is the biggest opportunities right now, in my opinion, in the multifamily space in Canada have to do with acquisitions that are going to require less amount to be put in. So mainly MLIs select mortgages on these multifamily properties, whether it's new build or existing builds. So it's fairly advantageous to be able to put only 5% down on a multifamily acquisition in this current market, because I think that I don't have the numbers off the top of my head, but the majority of these transactions for multifamily acquisitions are done through this program right now. So that's the biggest opportunity I find is understanding that program and how you can leverage it for your acquisitions.
Speaker 1:At the same time, in the right markets within our country, there are creative financing opportunities that can still work for savvy investors to have a quick turnaround and not necessarily a longer let's call it a five-year term before you can refi. At the same time, if we're talking about challenges, well, it has to do with financing. So anything that cannot be smoothly acquired through the MLI Select program, you're going to be facing some challenges, right, and that goes hand in hand with, you know, sellers expectations and the industry's expectation as to what something is worth, and there's always, you know, like they're up here and then the market is down here and as investors we're in that limbo between the two of them and we're trying to make the best of it right. So there's always going to be that. And if I can be a bit more technical about a challenge that we're seeing, at the beginning of June CMHC made some changes to the MLI Select mortgage in the energy efficiency component and what they did is that they basically cut the points that you could get for that aspect of the mortgage in half.
Speaker 1:So anything that was energy efficiency in the east was greatly impacted, meaning that a lot of these multifamily acquisitions that initially we were able to do quite simply by switching to a heat pump type of heating in your unit, that just disappeared because now it's not the same model. So that's a challenge, and I'm not saying that's something that we won't be able to overcome, but kind of like any sports organization out there, mario, like the season finishes and then the higher-ups get into a room, they reevaluate the rules and then the new season starts right, so the rules change, but the game doesn't stop, and it's the same thing here. So I'm sure that in the East so Ontario, quebec we're going to find some other strategies to use the Analyze Select program as it is right now, but that was a big change. That happened now close to two months ago at the time of this recording.
Speaker 2:Well, it's going to make a difference where somebody you know remains or continues being successful is knowing, as a real estate investor, is knowing how to shift, because the government is always going to bring new laws and new requirements and and you know sometimes institutions, and if you don't have you know a way to go around these things, then you're going to be stuck. So having the first to be the ability to shift and the right team that surrounds you it brings you ideas is crucial to being successful in a real estate investment. So, Rodrigo, it brings us, unfortunately, to our fifth question already, but I want to know, looking ahead, what are some goals for Triple Arbor Capital we spoke about that in the introduction and maybe your personal real estate journey over the next five years.
Speaker 1:Yeah, Well, yes, we're at the fifth question, so it's been a pleasure, but I'll answer this question as truthfully as I can. In terms of my personal goals over the next five years, I want to increase my assets under management up to $100 million. What I want to be doing also is launching my own investment fund in the United States. That's something that I'm currently working on in the United States. That's something that I'm currently working on. Also, I want to transition out of my smaller assets that I have in Quebec, my smaller multifamily assets, and transition from, let's say, a C plus B type of building into a B plus A type of building, so it's a longer hold.
Speaker 1:I'm at that stage now and again, you know, taking a page of your book, mario, after having spent a bit of time with you this past month or month and a half, I want to start networking with an intention right Meeting more people, being part of more group, just being exposed to different ways of thinking and different strategies.
Speaker 1:That's something that I want to focus on in the next five years, because I haven't been doing it enough. And seeing you work a room and shaking hands and having that smile on your face and being part of all these amazing organizations. I think that that's something I aspire to and I will be working on Now. Going back to Triple Harbor, what we want to be doing is basically grow our investor base and the people that we're working with, and I would like for us to at least have 150 active investors in the next five years working with us in our deals, whatever they are, whether they're in Canada, the United States or maybe around the world. I think that that's a fair goal to have 150 investors in our group working with us and believing in us as we keep on growing with them.
Speaker 2:Well, these are very ambitious goals and very possible if you do what you said you're going to do and start networking more, because you know that you cannot find partners by sitting on your couch at home. You got to go out there, you got to go network, shake some hands, like you said, and people underestimate the amount of doors it opens for you. It's unbelievable what life brings to you if you put in the efforts to go and network and shake some ends. So good on you and I wish you all the luck and the $100 million you know asset management that's going to be coming in the next five years. So good on you for that. Thank you so much, rodrigo, for being on the podcast with us today. It was a pleasure talking to you, lots of insights, and I hope our listeners are going to take some pieces on their journey. Thank you, mario. It was a pleasure talking to you, lots of insights, and I hope our listeners are going to take some pieces on their journey.
Speaker 1:Thank you, Mario. It was a real pleasure and I hope to talk to you soon.
Speaker 2:Bye-bye. Thanks for tuning into the 5 Questions Podcast. If you enjoyed today's episode, don't forget to subscribe, like and hit the notification bell on our YouTube channel so you never miss an episode. Stay tuned for more insights and tips to transform your real estate and business game. See you next time.