The 5 Questions Podcast
Join us as we unlock real estate and business insights, one question at a time.
The 5 Questions Podcast
Why Smart Professionals Are Choosing Multifamily as Their Freedom Vehicle | Michelle & Melissa
Michelle and Melissa share their journey from stable government careers to successful multifamily real estate investing, revealing how they build wealth and help others invest without dealing with the day-to-day hassles of property management. Their story demonstrates how real estate can create financial freedom and time flexibility that traditional employment cannot provide.
• Transitioning from government jobs to real estate investing after realizing relying solely on earned income wouldn't create the financial future they wanted
• Starting as passive investors before moving to active investing allowed them to learn the industry while building confidence
• Multifamily properties offer better risk mitigation than single-family homes because when one tenant moves out, it's a non-event financially
• Commercial financing (5+ units) can be easier to secure than residential, offering more flexibility and better economies of scale
• Their company, Magnetic Ventures, creates hands-off investment opportunities for busy professionals who want real estate benefits without management headaches
• Education is critical - they dedicate time to teaching their investors about both risks and benefits of each opportunity
• "Build Wealth, Pay it Forward" philosophy shapes their approach to investments and community involvement
• Finding the right partners with complementary strengths creates more opportunities than trying to do everything alone
• Investing in proper education up front prevents costly mistakes that could set you back tens of thousands of dollars
Remember, if you don't find a way to make money while you sleep, you'll be working until you die. Take action today and build your real estate portfolio with partners who share your vision.
Connect with Magnetic Ventures: https://linktr.ee/magneticventuresinc?utm_source=linktree_profile_share<sid=83104ffd-82c5-42d6-9b7e-c56d69eb4ca2
You know, Warren Buffett says it best right, If you don't find a way to make money while you're sleeping, you're going to be working until you die.
Speaker 2:Welcome to the 5 Questions Podcast, where we unlock real estate and business insights one question at a time. Welcome to the 5 Questions Podcast. I am your host, mario Lamar. Our guests on today's show. They bring over 40 years of experience in high-level government roles to now changing the way people invest into real estate. They focus on buying multifamily properties and developing sustainable projects, with the goal of helping others build wealth and make a positive impact through easy, hassle-free investments opportunities. Welcome, Melissa and Michelle.
Speaker 1:Thank you so much.
Speaker 2:Welcome to the show today. The concept of the podcast is real simple. I ask five questions, either about real estate or business, and we get straight to the point you ready.
Speaker 3:Great, all right there.
Speaker 2:Okay, first questions I have for you. As mentioned, you both started your real estate journey in November 2020, but you had government jobs or you still do but you transitioned to real estate investing. What was the tipping point that led you to pivot into this industry and, maybe, what is the biggest challenge you faced when you began?
Speaker 3:Okay, so I can take on this one. So in late 2020, like many people, we found ourselves re-evaluating what matters most, especially when we were spending our time and planning for our future. So we have stable careers in the federal government, but we weren't building the kind of financial freedom we were looking for, and so the tipping point for us was when we realized relying solely on earned income wouldn't really give us the future that we really wanted or envisioned so, or even even the impact we wanted to create. So so that realized we we needed to take some action, and the biggest challenge for for us, and especially for me, is analysis paralysis. You think you always need all the information before getting started. At the end of the day, you just need to take action and involve yourself. Would you add anything to this?
Speaker 1:Yeah, no, I think part of our story as well is that we started with passive investing only. As well is that we started with passive investing only and and and. During that time we got. We felt like we got our toes dipped into the industry and just fell in love with it really.
Speaker 1:And one more so, michelle, my, my love for it, you know, slowly came a little later, when I was able to find myself in our business a little bit more, which I think is a pretty typical situation when there's a couple in the industry One's 100%, in the other one's supportive but doesn't have the same level of passion. But then I was able to find that mainly through different, various forms of mentoring and then, while we had our toes dipped in there because we were passive investors, we took that opportunity to really learn everything we could so that we could transition from passive investors to now active investors.
Speaker 2:You know, what I like is you said it right is, even though you had good jobs at the government you still do but you were not satisfied with the wealth you were trying to build, you know, for the future. And a lot of people get in that trap where they think, okay, I'll pick up some overtime and then you know, make a little bit more money, but really you're making peanuts. This is not what, what's going to leave a legacy or the type of you know money that you can build or wealth that you can build to, to get the free time of freedom of time, or or really what you want to do. And through real estate, that's where you guys shifted to build your wealth.
Speaker 1:You know Warren Buffett says the best right If you don't find a way to make money while you're sleeping, you're going to be working until you die. And you know we were just talking a little bit earlier before jumping on this podcast. You know I'm quite literally just coming home from a family funeral and you know, working a nine to five job even if working from a home, you know, doesn't give you that freedom to pick up and go quite as much as if you have this going for yourself full time. So it's money. It's, you know, money freedom, but time freedom, and it's an important value for us as well.
Speaker 2:That leads us to our second question. And you created Magnetic Ventures, which is your real estate company, and it's focused on multifamily real estate. What's the appeal of multifamily investments over maybe other types, and how do you identify the best opportunities?
Speaker 1:Yeah, for us we just felt that the risks were more mitigated through multifamily. You know scalability, stability, cash flow potential If you have, you know units, you know duplex, single family homes, duplexes, triflexes, you know you, you only have a couple people contributing to that mortgage. But if you go larger, scale, multi-family, you know you have so many people contributing to the the mortgage that when someone moves out it's really a non-event. So for us we felt that risk-wise, it was the best strategy, the benefits of the economy of scale. And for us, we also like the idea of looking for value-add projects so that we can bring some value to an underperforming building. And then, of course, you know, bring that up and then refinance and pull out the money and repay back our lenders. And so we feel that that, you know, is one of the ways to mitigate the risks is by being able to really focus on those opportunities where you're bringing something to the table.
Speaker 3:Focus on those opportunities where you're bringing something to the table and then it doesn't make the numbers so tight and you're not so concerned about how you're going to repay back your lenders at that magical year five. Yeah, also, I'll add that. So we have a duplex in St John, new Brunswick and, yeah, when someone moves out, you're like, ok, so someone needs to cover that mortgage. You're like, okay, so someone needs to cover that mortgage. Yes, it does, um, but there's that and there's also um, at one point you run out of money, right. So now you're looking for capital partners, but, um, it's um, it's easier to get a mortgage, um, on the commercial side, commercial mortgage, so for five units or more. So I find that at one point no one's going to finance you anymore. So now you, you can. You know, as long as the numbers work, the uh debt service ratio, as long as it's uh over 1.2 in most cases, um, you can get some some pretty decent financing.
Speaker 2:So you have more flexibility. When you're dealing with multifamily, either to raise the rents, create more revenue, reduce expenses you just have to be creative. And then easier to finance, and people don't realize that, which is you know. Once you start dabbling into real estate, you quickly realize that it is easier to get financing on bigger assets. The banks love it.
Speaker 1:All the work that you do for a single dwelling unit, duplex, triplex is the same work that you do for 15 unit or 32 unit, right, and the convenience is that it's all under one roof.
Speaker 1:So, you're not having to run around town, you know, because you have 15 single houses. If you have, you know, 15 doors under one roof, you know that helps you manage your portfolio a lot easier as well, so we find that it's an advantage at that point as well as our mentor would say, say that's a lot of leaks, a lot of leaks, a lot of leaks.
Speaker 3:So uh, so yeah, so we, uh, we truly believe and uh, we, uh, we have seen this real life, we've realized it through our own experience.
Speaker 1:So yeah, so yeah, it's uh, just a better way, I think, to go forward I mean, we love our duplex and it was our first investment, you know, and it was a nice way to get our toes dipped in there a little bit, as I said, with passive investing. But once you do that and you build your confidence, you quickly realize that it's the same formula. You just add a bigger scale.
Speaker 2:Yeah, absolutely Brings us to our third question. At a bigger scale. Yeah, absolutely Brings us to our third question. You focus on offering tailored investment solutions that allows people to invest without dealing with either the toilets or the tenants. Can you elaborate on how you make this possible for your investors?
Speaker 3:Yeah, so many of our investors are busy professionals, so they're busy professionals or families who want the benefit of real estate without those headaches, the day-to-day management or dealing with toilets, our projects as class of investment opportunities so that they're truly hands-off. For others, so, as general partners, we're doing all the heavy lifting sourcing deals, securing financing, managing the renovations and overseeing property management, or hiring out for property management. So our investors come in as limited partners and so they can contribute the capital and receive a share of the returns, and so they do that while we manage the asset. And so, yeah, so, and we keep communication with the, with our limited partners, and give them regular updates, performance reporting and quarterly distributions and all that good stuff. So it's a partnership built on trust and with aligned interest. We try to partner with those that we share our values with.
Speaker 1:It's really a reflection of our company name Magnetic Ventures. Right, we want to attract the right projects. We want to attract the right partners, whether that's the active or the passive side. We just want to attract the right mentors and just the general team around us where it's really in the core of how we set up our projects and and what we're, who we decide to go in business with, including investors. Trust is a huge one.
Speaker 3:So you know when you're dealing with money, there's a lot going on there, uh, it's.
Speaker 3:You know, in relationships, some of the the the barriers are communication and, uh, finance yeah so and and then you're getting in, uh, in a deal with people who you know you're not dating or anything right, so so they are completely different couples. So, essentially, at the end of the day, you're kind of dating each other or like coming to a marriage, because you know these deals are like for like sometimes five years or more, so so it's really important to find the right partners and yeah, most deals last longer than most marriages.
Speaker 1:Yeah, and this is what we were working with.
Speaker 2:This is interesting what you're saying, because you know you don't want to accept the first dollar that comes on the table. You really want to take your time and the investors that you're getting involved with, as you said, could last for many years and it's important that your goals align to be successful. And then let's say it's for five years. Well, this is not transactional. I mean, I'm into real estate too and we know we want to keep working with the same investors because once we have a track record with them, well guess what? They'll reinvest on your next deal. So, really taking your time to choose your partners on both sides, I should say, is key to success. Both sides, I should say, is key to success. Well, if you're ready, we're going to go to question number four and your mantra is build wealth and pay it forward. How does this philosophy shape the way you approach both your investments and your relationships with clients and partners? I think we touched a little bit on it, but let's dig a little deeper both your investments and your relationships with clients and partners.
Speaker 1:I think we touched a little bit on it, but let's dig a little deeper. Well, deeper, yeah, absolutely so. You know, Build Wealth, Pay it For. It's not just our slogan, it's our North Star, it really it's part of our why. It's, like I mentioned earlier, it drives who we partner with and what projects we take on.
Speaker 1:We really believe that real estate is a powerful vehicle for creating freedom for ourselves and for others, and we take that seriously, including paying it forward and educating our partners so that they know the risks, they understand the benefits. We don't just highlight the benefits, we talk about the risks and various exit strategies. We give them a little bit of investor 101. For those who are newer, we take the time to educate them so that they have a really solid understanding and that they feel not only excited for the returns but they feel excited for being educated about this and to hopefully, you know, gain a little bit more confidence in what they're doing.
Speaker 1:Another thing is, you know we like to pay for not only an education but our community.
Speaker 1:You know, Michelle and I are in a position that we don't want to just be taking from the community, as in raising capital and, you know, looking for transactional deals, but rather giving back to the community and education, whether that be joining podcasts like yourself, like this podcast, rather setting up on stage and giving talks at different conferences, going into, you know, smaller like masterclasses, or, you know, any opportunity that we can do to really just find a topic that we think that we have expertise in and again give back to the community, so that we're not in a position of just taking I think as well you know we'd like to give back to the community.
Speaker 1:I think as well you know we'd like to give back to the community. So identify some of those organizations that are really meaningful for us and with an additional stream of income, we're able to give more as well. So find those organizations that really speak to us, you know, individually, but then, of course, within the community of real estate themselves, and just keep giving back. I mean, I come from a background of social work and so helping others is one of my passions and one of my strongest attributes, and so we just make sure that we weave that into our business as well.
Speaker 2:That's great and I like the fact that, going back to the partnerships, the people you decide to get involved with you educate them if they're new, if they're not used to it, on what they can expect. So the cards are on the table, it's clear for everybody and you know you can go on a more secure relationship. Sure, things will happen, but that comes with communication afterwards. But as long as people are from the beginning on the same page, it puts all the chances on your side to be successful for both sides.
Speaker 3:Yeah, both sides too, and you're having those difficult conversations at the beginning, right, and so they're coming in informed and so it's always good. So, and exit strategies are so important when you're getting into a deal, because, hey, if you're going to go belly up, know your exit strategy, know what you're going to do to get their money back and how hard you're going to work. It's so important. So that's how you can rinse and repeat. But you need to, you need to really work hard and take them their money Like it was, like like it's yours or your parents. You know what I mean.
Speaker 2:Other people's hard, hard earned money 100%.
Speaker 3:yes, it can make or break them. You don't want to break them.
Speaker 2:Yeah Well, here we are at our final question for today. Question number five looking back at your real estate journey, what's one piece of advice you'd give someone considering maybe a shift, like you did, into real estate investing in today's market?
Speaker 3:market. Well, I would say, there's no time like today. Um, so we wish we would have maybe started earlier, but uh, you know we started when we did. And um, uh, so don't wait and take action. Um, that's what I would say. Um, there's a lot of noise out there. Don't concentrate on that. Essentially, there's a market for every um, for every uh situation.
Speaker 1:Yeah, um and so and I think part of that too is, um, you know, educate yourself, so spend a little bit money, invest on in yourself and your education before diving in there. Uh, one way that we did it is we started with, you know, an education program, um, and we started passively, as I mentioned earlier, and then so that at least we're in the market, and then we slowed down a little bit and learned the active side, and so that gave us a little bit of confidence to boost from one end to another. And, you know, don't do it alone.
Speaker 1:Yeah, um, oh yeah, real estate is all about community and supporting one another, finding people who have your strengths or their weaknesses and vice versa. And I think there's a lot of great solutions to different challenges that buildings might have. And so when you're able to build a team and everyone brings in a different quality, you know it's, it's quite, it's a lot easier to find the right solutions to those buildings, because most times when people are selling, there's there's a you know a problem, or you know there's a, or there's a death, or a partner, or multiple partners, allows multiple eyes and multiple strategies to come to the table when it's necessary to to kind of brainstorm and find those creative solutions for it. So, you know, build that community.
Speaker 1:Go to events, networking events, go to education weekends or you know little seminars here and there, and start talking with people and see what they're doing, follow them on Facebook or Instagram or LinkedIn and, you know, start having those conversations behind the scenes if you're not really going into going in person, you know meetings or events and create that. You know, start creating a little mini community and you'll see everybody wants everybody to succeed. You know there's a lot of abundance in terms of opportunities. So share, share ideas, collaborate and team up because you know, even if you're multiple people in one deal, you'll probably be able to do more projects with partners and get a piece of the pie. Then try to go at it alone and try to get, you know, a hundred percent of of one pie. You know you've really beat your eight. We're able to create multiple streams that way and I think it's a lot more fun to to do it with somebody else and to, you know, build that relationship.
Speaker 2:Yeah, and to you know, build that relationship. Here's the two things. The two top mistakes I think most people do if they're new and I agree with you is they try to do it alone and they try to save money by not buying education Because, oh, I'll learn, you know, I'll start slow and learn on my own. I'll learn, you know, I'll start slow and learn on my own. You know, if education is going to cost you $10,000 or $20,000 to participate in a community and learn from people that have done it longer than you, it's totally worth it. Because in real estate, a mistake is not $100. A mistake is tens of thousands, even maybe, in some case, $100,000.
Speaker 3:You're going to pay one way or another.
Speaker 1:That's the thing. You're going to pay one way or another. And you can pay up front and be educated and have mentorship and have that investment in yourself, or you can learn the lessons as you go. But I'm telling you it's going to cost you over the years, versus just putting the money up front for that education. It's that investment in yourself. If you're going to invest in buildings and in partnerships, invest in yourself first. It'll just give you the confidence you need and it'll give you access to so much more. You'll be able to go bigger likely with the right education, the right mentorship.
Speaker 3:Yeah, and you're not learning piecemeal, right, You're not learning one thing and doing one thing. No, now you know like 10 different things and how you can actually add them in together, and this one opportunity that you thought was great now can be even more amazing because you've used all those strategies.
Speaker 2:Michelle, Melissa, it was a great conversation we had together today. I hope every listener will take a piece of your advice on their journey and, once again, thank you for being on the 5 Questions podcast sharing your knowledge.
Speaker 1:It was an absolute pleasure, mario. Thank you so much for including us and inviting us, and you know we look forward to listening to your upcoming episodes as well.
Speaker 3:Yes, it's awesome to see you shine and grow and you're just you know you're one of the greats. So yeah, absolutely.
Speaker 2:Okay, so I'm blushing now. We'll stop there. We'll talk soon, Thank you. Okay, thank you. Thank you Bye. Thanks for tuning in to 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.