The Canadian Investor - Real estate and stock investing with Robert Leonard

Episode Date: May 10, 2021

In this episode we had the privilege of interviewing Robert Leonard from The Investor’s Podcast Network. Robert is the host of Millennial Investing and Real Estate 101. The discussion started with Robert explaining how he became a podcast host. We then talked about stock investing and finished our interview by talking about real estate investing. Want to send us a question? Check out our Anchor.fm link in the description below and leave us a voice message! Getstockmarket.com theinvestorspodcast.com Candian Investor Pod Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital --- Send in a voice message: https://anchor.fm/the-canadian-investor/messageSee omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

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from Millennial Investing, part of the The Investor's Podcast Network. As always, Simon Belanger is joining us to do this interview. Robert, thanks for taking some time to come out and talk with us today. So are you able to give us your background and story of how you got here? What initially got you interested in studying financial markets? I'm particularly interested in how you came to be with the Investor Podcast, which I believe needs no introduction. Sure. So originally I had no plans of going to college. I had a different path in life kind of

paved for me. And then some things changed and I ended up having to find a different way. And I decided to go to college. Nobody in my family had ever gone to college. So I didn't really have that expectation. I was the first one in my family to ever graduate, but I was pretty good at math and I knew I liked money. So I figured why don't I combine the two and start studying finance. And so that's what got me even interested in it in the first place. And then from there, I just happened to actually stumble upon a day trading program on Facebook via a Facebook ad. And I was 14 at the time. And so the promise to get rich quick overnight, obviously spoke to me as a 14 year old freshman in high school. And I started to study what this gentleman was offering. And I quickly realized that that wasn't really a real investing strategy. It wasn't something I actually wanted to be involved in. So

thankfully I didn't spend any money on his courses or his programs or anything of that nature. I didn't lose any money day trading or anything along those lines. But what it did do was it taught me about the world of investing and you can't start studying investing without stumbling on Warren Buffett. And so I started studying Warren Buffett a ton, read all his books. I even went out to Berkshire Hathaway's annual meeting out in Omaha. And at the time, Stig and Preston, who you mentioned, the co-founders of the Investors Podcast Network, hosted a show called We Study Billionaires with the main theme of studying Warren Buffett and value investing principles. So first podcast I ever listened to was those guys. They taught me a ton about investing and everything I know today. And so because I was such a big fan of them,

I listened to that for years. And one day I was driving to work. I was actually driving to the gym before work. It was about five o'clock in the morning. And I remember on one of the episodes, Stig had mentioned that he was looking for a host for a new show that they were looking to launch about Silicon Valley. And the requirements were that you needed to understand tech well, and you needed to live in the valley. And I remember saying to myself that I really wanted to do that, but I didn't live in the valley and I didn't know anything about tech. So I kind of just

forgot about it, pushed it in the back of my mind, and that was really it. And then fast forward six months or so, and Stig came on the episode and said the same thing, but this time about a real estate show. And at the time, I had been a little bit involved in real estate, not to the extent that I am today, but I had done a little bit involved in real estate, not to the extent that I am today, but I had done a little bit. So I figured, well, I actually have a chance at this one, so I should try reaching out. And so I did, Stig actually said no at first. And so I basically continued to pester him and we ended up working together on some smaller projects and he enjoyed working with me. And so he said, well, I still don't want to give you the real estate show yet.

So let's start with a different show called Millennial Investing and we'll see how that goes. And so we started with Millennial Investing and that's done really, really well. And from there, he basically said, well, you want to do the real estate show? And now I host both those shows and I work with those guys on a bunch of different projects as well. And that's pretty much how I got invested, interested in investing and also in podcasting. That's incredible.

I have two quick follow-up comments and questions on that. So first off is when you were first exposed, you're 14 years old and you're exposed to a facebook ad that is about day trading we talk about this all the time on this show of how if you're really not educated on the subject you are trained to think that trading and looking at charts is investing. And it couldn't be further from the truth, right? So I'm curious if you have any advice running a millennial investing show of how you properly convey that trading and investing are not the same, because it is very difficult for new investors to really delineate the difference when really they're not the same, frankly, at all, in my personal opinion.

Yeah, and I would agree with your opinion. And it's probably one of the most difficult things that I deal with because being in this space, a lot of people reach out to me to talk money and investing. And almost every time that somebody reaches out to me, if they're not a listener of the show, it's to talk about some new craze, whether it's Dogecoin, Bitcoin, Tesla, or something that's going crazy. And I basically just try and give them a quick pitch, a quick explanation of what investing is versus trading or speculating. And if they understand it, if they can seem to grasp and conceptualize what I'm explaining, then I'm happy to speak with them more. And if they don't, I don't have the time to really try

and convince them that they should be investing, not gambling. And I kind of just say, hey, here's my podcast. Here's a couple episodes I recommend listening to that talks about these two concepts. If you're interested, go check it out. If you're looking to follow these paths on these types of investments, I'm not the person to talk to because I don't invest like that. And that's pretty much where I leave it. That's well said. One other follow-up question. You've been to a Berkshire meeting, so congrats on that.

Were you the youngest guy at the Berkshire meeting? I was not, surprisingly. Okay, because I am picturing you the youngest guy there by far. But congratulations on getting there. I'm extremely jealous. That's really cool. All right, Simon, you want to hit him with a question? Sure, Brayden. So Robert, you run two full-time podcasts and you're constantly interviewing

people from all kinds of backgrounds. How much would you say guests have molded in your investing style since starting the podcast? And what's one takeaway from a guest that comes to mind that you regularly think about and implement in your investing strategy? I would say that they've had quite a big impact on me, both from my investing strategy in detail, like how I actually approach it on a day-to-day basis when I'm picking assets to invest in. it on a day-to-day basis when I'm picking assets to invest in. But even more, they've also kind of broadened what I consider investing in. So if it wasn't for guests on the show, I never would have started a position in any cryptocurrency or even any alternative assets. I would have probably just strictly stuck to the stock market and real estate. But because of some great guests on the show, I've opened my eyes to the world of crypto and I've been involved in it for quite some time now. So they've broadened the asset

classes that I'm willing to consider. But in terms of investing strategies and style, there's a specific guest that comes to mind and his name is Brian Feraldi. And he has a ton of great investing principles, but one that he really has ingrained in me is this idea of letting your winners run and adding to winners. So when I was a newer investor, I always thought that you shouldn't add to your winners because they're more expensive now. And so it doesn't really make sense to add to them. Whereas you should add to losers or double down on losers or look for something that's more cheap. And he's really changed my philosophy on that. And then the same thing goes for letting your winners run. I typically, back when I was a newer investor, I would tend to cut my wins. If I'd hit a threshold of a gain, I would cut that position down a bit just to kind

of take some of those gains off the table. But he has really taught me to let those winners run. If they've earned a significantly higher percentage of my portfolio, then they deserve to maintain that spot. And so there are some stocks in my portfolio that started as much smaller positions, but because of how well they've done, they hold a pretty significant percentage of my portfolio. And I have no intentions of trimming those positions because they've earned that. And now I'm not afraid to add to those positions, even at slightly higher prices because of some of the principles that he's ingrained in me.

Can we get an amen? Yeah, that's a great answer. We talk about this every episode. Every single episode of this show, we talk about that. Yeah, it's really important. It's made a big difference on my investing approach. And you'll never be able to invest in the next Amazon or Netflix or whatever the company is like that. That's revolutionary if you don't follow those principles. listening to your podcast, I have a feeling what you'll answer for this next question. But so how would you describe your investing style? You're more a growth investor, value investor, momentum investor. And really, what are the qualities of businesses that capture your

attention and then ultimately your capital? And I have a feeling I know how you'll have responded based on the podcast, but also are you mentioning Brian for all because I'm familiar with him as well? So I think Brian's a bit more of a growth guy than I am. Having started studying Warren Buffett when I first started, I'm more classify myself as a value investor. But I typically try to not put myself in a box and classify myself as any specific type of investor because then you are fighting this subconscious thought that you have to invest only on given principles when you need to be more flexible in your strategy and invest in things that are good opportunities, whether they fit your style or not.

And as long as you're okay with those positions. And so over time, I think I started out as a strict value investor. And I think I still am rather strict when it comes to investing as a value guy. But I think my definition of value has changed significantly. When I first started, I looked only for things that were cheap on a fundamental or a quantitative basis. So think to Benjamin Graham cigar butt style investing. That was pretty much exactly what I was doing. And I thought that was Warren Buffett

style value investing. And I quickly learned that that was not the case because my discounted cashflow model assumptions were overly optimistic and clearly the market didn't agree with me. And so I lost some money on those positions and I often found myself falling into traps, value traps and falling knife situations. So I quickly realized what I was doing wrong was that I was not adding any value to these picks for qualitative factors that can't be seen in financial statements. I wasn't looking at future business prospects. I wasn't looking at future industry prospects. I wasn't looking at the management teams too much. I was purely focused on quantitative factors. And that led to a lot of positions that look cheap on paper, but they actually deserve to be cheap because of

future business prospects. So from that perspective, I've changed a bit to how I define value. I think value is anything that you buy that you believe to be undervalued. I mean, isn't that what everybody's trying to do? Isn't everybody in theory a value investor? Isn't everybody trying to buy an asset for less than what they believe it to be worth? And so the position that I often cite when I'm giving this example is square. So a lot of people would classify square as a growth pick. And I can clearly understand why they would make

that case. But I make the argument that I'm still a strict value investor and I still have a large position in Square because when I purchased the stock, I felt that the stock was significantly undervalued from when I purchased it. So how is that not a value pick? Just because a company grows fast, I don't think that necessarily means that it can't be a value play for me personally. That's how at least I think about it. And then I've also having worked with the TIP guys, Preston is a big fan of momentum, especially when you couple it with value. And so I've started to add a bit of momentum to my picks as well. I'm not overly focused on momentum. I'm really not super complex with it. That's probably my weakest point, but I definitely

do give consideration to momentum when I'm looking at entering and exiting positions. It just helps avoid falling knife situations and oftentimes value traps as well. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way.

As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. What I'm gathering from that is that you're open-minded and willing to adapt and not be so one way of thinking. I think we all come out of investing, especially if we've read more than we've done when you're starting, which I believe is a good way to go about learning how to do this stuff is before you put your capital at risk is studying what others have done. But many of us have gone down the road of finding stuff that's just cheap on paper. And it's really as a, as a whole underperformed some of these growthier

names. I'm using air quotes on these growth names because if we look at true value investing, it's the future cash flows. And if the business is growing really fast, I mean, forward looking, the business is extremely cheap. And I think that with a lot of these technology names over the last 10 years that have been said by many managers as too expensive, well, they're not too expensive when 10 years later, they're still growing 36% revenue growth, like we just saw from Google. So I really like that answer. So leading to the next question, I'm curious about what you define as your investing superpower. And when I mean that, I think everyone has something that they

believe to be pretty good at, or they might consider their edge. I'm curious what you believe your investing superpower is. For me, I would say it's analyzing numbers. So that could be financial statements. It could be understanding accounting. I think that's probably when I'm looking at publicly traded stocks, it's probably my ability to understand the intricacies of accounting and financial statements. And even we'll probably talk about real estate in a little bit. My superpower there, again, I would say is analyzing deals. Anything that really comes along with analyzing numbers, I think is my superpower when it comes to real estate. That's awesome. So you've got the accounting down on Pat,

good at looking at the numbers and real estate as well. I know you're recording this from a hotel room. You're into dirt biking. So Robert, you are very multifaceted. You're like a Swiss army knife, and I really appreciate that. So, on your podcast, you talk about various investing topics, and you have guests on the show. So, that's kind of in the nature of that format. format. You have lots of different things for self directed investors with a broad range of topics. You know, there's personal finance, there's introductory stuff, there's investing and adding to winners like we had talked about before. What is the number one piece of advice for your beginner investing self? When you started this journey? What do you think is the most useful one or two lines and then go into detail of why piece of advice that you would give to your younger self? Number one is to pick your strategy and understand why you're going with it. And that's not to say that you have

to be concrete in what you're doing or following. But what I always recommend, people always reach out to me and they ask what strategies they should follow, what they should invest in, etc. And what I tell people is I give them an assignment. I say, here, go read this book and this book. And one of those books is about individual stock picking. Typically, I'll recommend The Education of a Value Investor or The Dondo Investor or something along those lines about picking individual stocks. And then I'll also give them a book that's solely about index fund or passive investing. And I'll tell them, do not invest any money. Don't make any decisions until you've read both of these books and try to read them

back to back. It doesn't matter which one you read first, just read them both and then decide which path you want to go down. Do you want to be an just passive index fund or ETF investor, just consistently dollar cost average into a relatively low cost diversified position and be pretty hands-off and get great returns, just match the market and go on with your life and enjoy other things. Absolutely nothing wrong with that. And I think most people should probably go that route. However, if they're asking me that question, they probably have some interest in individual stocks. So I want them to read that and understand that path as well and see if that's more along the lines of their interest,

but also their time. I hope it helps them realize that they are going to have to invest some time, not only in understanding this material, but also in actually finding picks to invest in. And so once they've read those two books, I tell them to decide which path they're going to follow. And of course, there's always that third path where you do a little bit of both. But I think by at least being a new investor and doing that exercise first, I think it puts you leaps and bounds ahead of a lot of other investors. And I think it's a great place to get started. to get started. I really enjoy that answer because if you know yourself, you'll find out pretty quickly which way you want to go. And you mentioned a mix of both, which is awesome as well.

Now, just to give you some numbers around that, a two and a5% mutual fund, which is very common in Canada still, the difference in that 2.5% compounded over time, if you maxed out your TFSA and a little bit of your other retirement accounts, a study by Nestwell said it's $324,000 is the difference between just an ETF, like S&P, at three basis points compared to 2.5% mutual fund fee. Now, both of them require zero work. So that's a huge ROI on your time is making that switch. So I'm glad you pointed that out. Because for most people, that's a great option. But if you have some interest in individual stocks, then that's also a fulfilling way to go as well.

So I like that. Yeah, exactly. And I think it's great that you mentioned too where like, you know, a hybrid approach is good too, which is something I do because I do like investing in companies. But I also know myself that I don't have that much time to have a portfolio of 25, 30 stocks or something like that. And just a quick note on what Braden said, and the TFSA is basically Canadian version of a Roth IRA, if you were wondering. Yeah, good point. It's the Canadian investor pod though, so it's all good.

That's it. So I guess I'll go on with my next question, which I'll go a bit more into real estate because if anyone listened to your podcast, obviously they know that you are into real estate. So you've mentioned on your podcast that you started house hacking with a condo without actually knowing that you were doing it and that you bought a condo, had two rooms. You were noticing that one of the rooms you were not using. So you decided to rent it out. So can you give us a bit more details on how you got started? And if you can elaborate on what other types of house hacking people can look into.

And do you have some tips and things to keep in mind for those who are just getting started? So as I went into college, I was 18 at the time, my dad sat me down and he said, when you graduate college and you're earning a salary and you have your career, you're earning a salary in your career, you're going to have to start paying me rent. And I thought that was reasonable. I didn't think it was really overly ridiculous or a problem, but I just I didn't want to do it. I knew it was something I didn't want to do. So I basically told him that I was not going to pay him any rent and that I was going to buy my first house while I was in college so that I didn't have to pay him any rent. have to pay him any rent. And of course, having not bought his own house until he was in his 40s and nobody else in my family having ever gone to college or made any type of investment or even really owned property, everybody kind of laughed at me and told me that it was not possible. And so I just kind of shrugged it off and told them, you know, I'm going to do this. And of

course, you know, people telling me no, just kind of lit the fire under me even more than I already had. And so I worked nearly full time all throughout college. I made a few good decisions. I worked at a company that actually had tuition reimbursement. They offered full benefits to part-time employees. So I was taken care of quite well for a part-time position in college. And so that helped me, but I worked a ton and I basically just got educated on what I needed to do to be able to purchase that house. And so I actually stayed up until 12.01 AM on my 18th birthday. And as soon as 12.01 clicked, I opened my first credit card so that I could start building credit because I knew I needed a credit

history to be able to get a loan, a mortgage for my first property. And I knew the longer I could do that, the better. And so by the time I graduated, I knew I'd be 21. So if I did it right when I was 18, I knew I'd have about three years of credit history and I knew that would help. And so I just did those few things, saved up about, I think it was about 10,000 bucks and I bought my first, yeah, like you mentioned condo before I walked at my college graduation, my senior year. And I moved, I moved there right after I graduated and ultimately didn't pay my dad any rent, but that was really the extent of it. I wasn't doing it as an investment or anything. I just needed a place to live.

And I always was interested in real estate, but I never thought I could do it. I always thought, you know, most of the people, this was even probably five years ago now. Even back then, it doesn't sound that long ago, but the social media platforms that we have today weren't quite what they were five years ago. You didn't see all these normal people investing in real estate. So my understanding was that you had to be super wealthy or multimillionaire, billionaire to invest in real estate.

So I never thought it was something that I could do. So I wasn't really looking at it from that perspective. I was really just trying to give myself a place to live. And so I always figured I'd follow my Warren Buffett principles, get rich in the stock market, then I would take that money and I would invest in real estate. But what I found out was when I lived there, I lived there for a few months and it was just a two bedroom condo. It wasn't anything massive, but what I realized was I didn't even open that bedroom door for the second room for a couple of months. And so I said, well, I should probably do something with this room. And so I ended up renting out that room

for about 700 or $750. And my all in cost for the condo with mortgage taxes, insurance, HOA fee, everything included was about $1,100. And so now I was living for about 350 to $400 a month. And I was like, wow, that's pretty cheap compared to the 1,100 I was expecting to spend. And so again, I didn't really think much of it. Six months, nine months passed and I realized, well, I'm not really that smart and there's no way that I'm the first person to ever have thought of this. So let me see if I can find anything about this on the internet. And that's when I came across this idea of house hacking. And then I also stumbled onto bigger pockets. And that's when I was open to this world of thousands and thousands and thousands of

everyday people that were investing in real estate and buying real estate. And I realized that they were no different than me. And it was basically just a huge revelation for me because I realized that if they could do it, I could do it. And I knew they had nothing different from me. And so it just knocked down every limiting belief that I had. And from there, I've got on to build a small but relatively successful and respectable real estate portfolio. That's really interesting how that started. And just to keep on the real estate theme. So one thing that we're hearing a lot in the media is some of the, you know, risk of inflation with all the money printing that's going on and quantitative easing. And how do you view real estate as a potential edge against inflation? Like personally, I view it as something that

is an interesting, definitely interesting against inflation as an asset, but it has its drawback, especially when it comes to residential income properties, because you are kind of locked in in those rents. And there is some limits to how you can increase your rent year over year, at least there is in Canada, I'm not sure exactly how it is in the States. And of course, if we're facing inflation, chances are that your taxes, but also maintenance costs will go up. So how do you view real estate generally as an edge against inflation? As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North

American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. is questtrade.com. Typically, I don't really get too involved with macro factors like inflation. I try to make good, sound investment decisions, individual investment decisions,

and really just focus on doing that the best I can and let the macro environment play out the way that it does. And of course, I typically think real estate is a good hedge against inflation, but you mentioned rising costs versus rents not being able to rise. There's a couple of ways to combat that. So we only invest in real estate in markets where we'll be able to raise rents. So we're buying in these markets where there are demographic factors that are indicating that we'll be able to raise rents. So we're not investing in these areas where we think it'll be an issue that we can't raise rent. So I'm not really overly concerned that inflation is going to drive up our costs more than we're able to raise rents. And even if that were to be the case, it's unlikely that it would be drastic. And if it does shrink our margins a bit, I go into all of these deals with very, very conservative numbers with wide margins. So I'm able to give up some margin if I needed to.

But also we still have the other pillars of real estate that you don't necessarily get in the stock market. So even if our margins shrink, we still have our principal being paid down by our tenants. So we're not actually paying down that. We're building equity without us having to do anything. We get the massive tax benefits that we get here in the US for real estate. And we're also still getting some cashflow, even if it's being shrunken. So I'm not overly worried about inflation when it comes to my residential rental properties, mostly because I know I'm buying in good markets that should have rent depreciation over the next decade, but also because of the other pillars of real estate that I just mentioned. That's great. And I was wondering right now with prices of housing going up, at least across Canada, it's crazy. We're seeing the city I live in, it's been 30% increase year over year in terms of real estate average prices. Are you finding it more difficult to find attractive real estate in terms of income properties? And yeah, just finding good deals out there like in the past, I would say year or so? Yes and no.

So we are seeing the same price action here in the US, but I am still finding deals. I actually did the most deals that I've done ever last month. And so you could argue that we're in the middle of a global pandemic with rising real estate prices, yet I was able to close three deals last month alone for property. So yeah, I would say it's definitely not the easiest time ever to find undervalued properties, but there are other factors that come along with

what we're experiencing. And the prices of real estate aren't increasing for no reason. There are a lot of factors that are driving that. And one of those factors being very, very, very cheap and easy to access capital markets or debt. And so that makes it a little bit easier to find properties that make sense from a rental perspective when your debt is so cheap, you can pay a little bit more and still do okay. So yeah, it definitely, these aren't 2007, 2008 bottom of the barrel prices, but if you get a little bit creative, there are definitely still deals out there to be purchased. With real estate, which I am no expert in in it seems like there's probably so much arbitrage and value

as a value investor because of special situations like forced selling i'm curious how you're looking in the market for some of these unique situations where there's emotional attachment to why you're getting such a good deal, like forced selling, moving, you know, people need to move to another job and can't afford two mortgages. And they got to, you know, move to another state within a month. I'm curious how you find those deals? Or do you just kind of stumble upon them? So that is one of the benefits of real estate. There are tons and tons of opportunities like that. And I mean, in the stock market, you know, there's no, you're not allowed to insider trade or, you know, use any insider information to make investments where that doesn't really exist in real estate. So you're able to leverage any information that you can get to buy deals undervalued. So like you said, I mean, there

are so many reasons as to why somebody could be kind of quote unquote forced into a sale. Sometimes maybe somebody passes away and you're selling a mother or father's house and they just want to get rid of it. They don't want to deal with it. That could be one reason you're falling behind on your mortgage. You have to move for whatever reason. So there are a lot of different ways you can find these deals. Typically, the best way that I found to get those types of deals is through just having relationships. So typically, you're going to want to get those deals before they actually hit the NLS, which is where properties are listed. It's called the multiple listing service. And so the way you get those deals before they hit the NLS is by having a real estate agent that

you have a relationship with that is seeing these deals come across their table. It could be an agent or a broker. They'll see these deals. They're often called pocket listings. They'll come across their table. And because you have a good relationship with them, ideally they would then pass along that information to you. That's one of the most common ways. And I actually bought a deal recently, sort of like that using a relationship. I don't typically focus on those types of strategies because I'm able to find deals relatively easily without having to get too, too creative with those types of strategies. But recently we did have the relationship factor come into play for us. But the other way you can do it is a lot of times

absentee owners, meaning a property owner lives in a different state than where the property is. A lot of times you can get cheap properties that way, or sometimes there's another strategy called driving for dollars. So there's some times where you just drive or walk around neighborhoods and you look for properties that are distressed. And what a lot of people will do is they'll take down those property addresses or take the property addresses for absentee owners. And they'll just start mailing out postcards to all these people telling them that they're willing to buy them. And I don't know if they do this in Canada, but here in the US, we very often see we buy houses for cash signs on the

side of the road. Those are people that are trying to help people that are in distress and get deals in the exact situation that you just mentioned, and they're trying to get undervalued properties. Before they hit the market, right? Exactly. That's pretty smart. It's funny that you mentioned that people can actually mail out postcards to homeowners to see if they would be interested in selling their home. It happened to us a few times last year where we had some postcards dropped in our mailbox and they were saying that they'd be interested in purchasing our home if we wanted to sell um so i found it uh found it a bit funny that you brought that up when it actually

happened to us a couple times last year yep that's exactly i know it's hard to come up i know it's hard to come up with a generalization but do you know i don't like in your area, what a detached home price is going for these days, like on average in U.S. dollars? I mean, it depends. Are you talking like a single family house with two bedrooms? Are you talking four bedrooms? And are you talking where I personally live or where I invest? Well, I guess any of the above. The reason I ask is because many of our listeners are dealing with an absolute, like I know the US home prices are going up too, but

in major city centers in Canada, they have gone mental. The average detached home in Toronto is $1.75 million. And the average home price is over 1 million, but detached is just ridiculous. So I'm just curious. Yeah. So those prices are, are certainly much higher than where I live. I would say probably five, four or five, 600,000 is probably roughly the ballpark for where I live. Those prices you just mentioned for Toronto, I've seen those numbers. I've heard those numbers as well. Those kind of rival what we see here in the U.S. in New York City and San Francisco. But yeah, across where I live, you're typically looking at $400,000 to probably $ 600,000 for a median size detached house.

Our listeners are salivating right now hearing those numbers, Robert. Yeah, I can imagine. That's awesome. All right. So we're talking about real estate and you have a stock portfolio as well. So I'm curious how you think about portfolio allocation as a whole. You're interested in multiple asset classes. How do you think about that across the board in terms of your net worth?

Do you have some sort of methodology or criteria you use to determine position sizing, both for stocks and for real estate, and then how they blend together. I'm curious about that. So I no longer have a W-2 job. I do the podcast full-time and a few other projects. But when I was a W-2 employee, I kept my allocation super simple. Anything I was saving through my paycheck, which I was basically just going right up to the company match, that would go into the stock market. And then anything else I saved would go into real estate. I just kept it super simple that way, up to the company match, nothing like that, I am finding myself putting the majority of my money into real estate deals because I'm more focused on generating cash flow than I am looking for the appreciation right now. Given the popularity of the podcast, there are a lot of people that want to invest in real estate deals with me. And so that's one of the biggest benefits of real estate is they're able to leverage OPM, other people's money. And so that's kind of the next level for me when it comes to real estate. So over the next year or two, I suspect I'll probably significantly increase

the size of my portfolio without using any of my own money. And so therefore I'll have a lot more freed up capital to put into the stock market. I'm not currently overly excited to do that. I think valuations across the board and there are still deals to be found, but I'm just speaking generally here across the stock market, it's relatively expensive. So I'm not overly excited or in a rush to deploy a bunch of capital into the stock market. So I'm okay with it staying in real estate for now, but that's kind of how I expect that to change over the years. And I do put some of that money into crypto as well. And I actually do some equity crowdfunding investments as well. That's really cool. Yeah, across the board. And I mean, you're not alone with people thinking equities are priced at a premium. And yeah, I mean,

there's lots of reasons to think that but it sounds like you are enjoying the real estate journey. like you are enjoying the real estate journey and other people's money. Hey, that's pretty good. Always nice to use leverage and other people's money to make more money. So I can stand behind that. So thanks so much for coming on the show today, man. Thanks for joining their neighbors to the north. Can you tell our listeners where they can find you? Cause I know for a fact after listening to this, they're going to want to hear some of your stuff. Yeah, I really appreciate that guys. Thanks so much for having me. The best place to connect with me,

I'm kind of, I have a couple of different things going on. Definitely check out the podcast. Those are both called Millennial Investing. That's all about stock investing and personal finance. And then Real Estate 101. They both share the same podcast feed. So you could just search Millennial Investing. That's all about stock investing and personal finance. And then Real Estate 101. They both share the same podcast feed. So you could just search Millennial Investing. You'll be able to find both shows. You can find me on Instagram. My username is drobertleonard. And then also you can check out, I have a real estate community. It's called dreishadow.com or my newsletter, deleonardletter.com. Thanks so much, man. And we'll keep

in touch and thanks for coming on. Take care. Appreciate you guys. Thanks. The Canadian investor is not to be taken as investment advice. Braden or Simone may own securities mentioned on this podcast. Always make sure to do your own research and due diligence before making investment decisions.