Toronto Real Estate Investing Masterclass | Volition Properties

@volitionproperties
www.volitionprop.com
Toronto Real Estate
Investing Masterclass
The Formula to Success for Investing in Toronto
January 30th, 2021

@volitionproperties
Welcome!

@volitionproperties
Housekeeping Items
1. The day will be a combination of recordings, live segments and Q&As plus networking
2. Type your questions in the Chat function and they will be queued for our presenters
3. There are no scheduled breaks other than lunch - take them as needed
4. Use “Gallery View” in Zoom + you will be on mute
The recording and slides will be sent after the event :)
Recording: By taking part in this event you grant the event organisers full rights to use the images resulting from the photography/video
filming, and any reproductions or adaptations of the images for publicity or other purposes to help achieve the group’s aims. This might
include (but is not limited to), the right to use them in their printed and online publicity, social media, press releases and funding
applications. If you do not wish to be photographed please inform an event organiser.
Legal Disclaimer: Today’s event is provided for general informational purposes only and does not constitute financial, investment, tax,
legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any products, financial or otherwise, referred to.
Individual circumstances and current events are critical to sound investment planning; anyone wishing to act should consult with his or
her advisor before doing so.

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Agenda
Topic Start End
Introductions, Housekeeping Items, and Agenda 10:00 am 10:20 am
Real Estate Investing Fundamentals (including 3 Live Q&A Sessions) 10:20 am 12:25 pm
Lunch break - Open networking and Q&A 12:25 pm 12:45 pm
Investor Panel - Real People, Doing Real $#!T (including live Q&A) 12:45 pm 1:45 pm
How Can I Quit my Job? - The Volition Approach and What to Buy 1:45 pm 2:15 pm
3 Case Studies: Turnkey, House hacking, and Max ROI 2:15 pm 2:40 pm
Breakout Rooms - Q&A and Networking 2:40 pm 2:55 pm
Fundamentals Continued 2:55 pm 3:20 pm
Mortgage Financing (Vine Group Guest Speakers with live Q&A) 3:20 pm 4:20 pm
Wrap Up, Next Steps and Open Networking 4:20 pm 5:00 pm

@volitionproperties
Who are Matt and Ming?

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@volitionproperties
ASIAN

@volitionproperties
Who is Matt?

@volitionproperties
Ming Lim - Investor,
Mentor and Dad

@volitionproperties
How I started..

@volitionproperties
My ﬁrst time
IT WAS ALL WRONG
● Property was illegal - more
people than allowed
● Illegally subdivided
● No license
● Parking didn’t meet regulations
● IT WAS CHEAP!!!
Was this my agent’s fault?

@volitionproperties
Waterloo to Toronto
● Kept expanding in Waterloo - reached 21 doors
● Also invested in Toronto
○ Townhouse, condo, duplex
● I wanted to quit! Real Estate Investing SUCKS!
Learn from our experience

@volitionproperties
Where am I now?

@volitionproperties
The sunset
is so pretty,
Matt
Not as
pretty as
you, Ming

@volitionproperties
Our Intention for the day
Let’s dive
right into:

@volitionproperties
Focus On Fundamentals

@volitionproperties

@volitionproperties
How does real estate make
money?

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Real Estate vs Other Asset Classes
● A mutual fund
returns 8% - but
what is the return of
a real estate
investment?
● How do we compare
apples to apples?

@volitionproperties
The THREE Proﬁt Centers
in Real Estate!

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Cashﬂow
Mortgage Paydown
Appreciation

@volitionproperties
#4 - Reno Lift

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Name of Return Annual ROI Calculation
Cashflow
Mortgage Paydown
Appreciation
Reno Lift
Four Proﬁt Centers in Real Estate

@volitionproperties
Cashflow Cash-on-Cash %
Mortgage Paydown Cash-on-Mortgage Paydown %
Appreciation Cash-on-Appreciation %
Reno Lift Cash-on-Reno Lift %
Based on capital
invested, NOT
purchase price

@volitionproperties
Cashflow Cash-on-Cash % Annual Cashflow /
Capital Invested
Mortgage Paydown Cash-on-Mortgage
Paydown %
Annual Principal Paid /
Capital Invested
Appreciation Cash-on-Appreciation
%
(Market Value - Purchase Price) /
Capital Invested
Reno Lift Cash-on-Reno Lift % (Reno Lift - Reno Costs) /
Capital Invested

@volitionproperties
Name of Return Annual ROI Target ROI
Cashflow Cash-on-Cash % ~2% ($300-$1000 / month)
Paydown %
~7% (First 5 years of buy and hold)
Appreciation Cash-on-Appreciation % ~15-20% (3-5% market appreciation
at 80% LTV)
Reno Lift Cash-on-Reno Lift % ~50% (depending on how extensive
the reno is)
Now you can compare to
other asset classes!

@volitionproperties
Name of Return Annual ROI Target ROI
Cashflow Cash-on-Cash % ~2% ($300-$1000 / month)
Paydown %
~7% (1st 5 years of buy and hold)
Appreciation Cash-on-Appreciation % ~15-20% (3-5% market appreciation
at 80% LTV)
Reno Lift Cash-on-Reno Lift % ~50% (depending on how extensive
the reno is)
Boring, buy and hold real estate investing nets ~24-30% ROI

@volitionproperties

@volitionproperties
Mutual Funds
https://www.thebalance.com/good-annual-mutual-fund-return-4767418
From The Balance -
For stock mutual funds, a “good” long-term
return (annualized, for a period of 10 years
or more) is 8%-10%. For bond mutual funds,
a good long-term return would be 4%-5%.

@volitionproperties
Stock Market
https://www.theglobeandmail.com/globe-investor/personal-ﬁnance/numbers-
never-lie-but-they-sure-can-deceive/article536314/
From The Globe and Mail -
While the annualized returns of the TSX
Total Return index was indeed 7.04% for
the past 10 calendar years, the average
return was 9.1%

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Incomplete Perspective - Investment vs. Business

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“Where is the best place to buy?
What is the best property to buy?”

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Time Out!

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Richest (Smartest?) Guy in the World

@volitionproperties
”What drives a real estate
market?”
“Which market should I
invest in?”
“Which
neighborhood?”
“Which
property?”

@volitionproperties
What Drives A Real Estate Market?
Look for markets with a
future, not a past

@volitionproperties
Which market should I invest in?

@volitionproperties
Where in the world should you invest?
● You could invest anywhere!
● What do you in a country that good to
invest in?
○ Politically Stable
○ Growing Population
○ High Standard of Living
○ Steady GDP
● How do places around the world compare?
○ United States?
○ Europe?
○ Asia?

@volitionproperties
● Politically Stable ✓
● Immigration Friendly ✓
● Public Health Care ✓
● High Standard of Living ✓
● Good Education System ✓
● Steady GDP = Job Growth ✓
Oh, Canada!

@volitionproperties
Stable GDP Growth over
the past 10 years

@volitionproperties
Immigration Forecast - Federal Government
https://www.canada.ca/en/immigration-refugees-citizenship/news/2020/10/government-of-canada-announces-plan-to-support-economic-recovery-through-immigration.html
Although Immigration, Refugees and Citizenship Canada (IRCC) continued to accept and process
applications throughout the pandemic, the global travel restrictions and capacity constraints led to a shortfall
in admissions over the last several months. To compensate for the shortfall and ensure Canada has the
workers it needs to ﬁll crucial labour market gaps and remain competitive on the world stage, the 2021 to
2023 levels plan aims to continue welcoming immigrants at a rate of about 1% of the population of Canada,
including 401,000 permanent residents in 2021, 411,000 in 2022 and 421,000 in 2023. The previous plan set
targets of 351,000 in 2021 and 361,000 in 2022.

@volitionproperties
Canada is great! So where in Canada?

@volitionproperties
Why Ontario?
● Low Crime Rate
● Harmonious multicultural population
● Diverse Culture
● Government stability
● Toronto is an economic hub
○ 38 percent of Canada’s business headquarters
○ One-ﬁfth of Canada’s Gross Domestic Product (GDP)
○ Accounts for nearly half of Ontario’s GDP
https://www.visaplace.com/blog-immigration-law/why-immigrants-settle-in-toronto-heres-10-reasons/

@volitionproperties
5 Most Important Questions When
Investing

@volitionproperties
Question #1
Where is the Economic Growth in Ontario?

@volitionproperties
Downtown > Toronto >
Ontario > Canada

@volitionproperties
Highly-skilled,
highly-educated, young
population
Downtown growth is
outpacing the suburbs

@volitionproperties
2041: Downtown
population doubles
from 240k to 475k
Downtown accounts
for...

@volitionproperties
Big Tech opening up
major ofﬁces in
Downtown

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Volition Metrics - Toronto Downtown Core

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Volition Metrics - Downtown municipalities

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Volition Metrics - Downtown SF Detached

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Volition Metrics - Downtown Condos

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Volition Metrics - Toronto - Everywhere else

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Volition Metrics - Uptown municipalities

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Volition Metrics - Uptown SF Detached

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How can Volition help?

@volitionproperties
Who is Volition?
● Mission Statement: To help people navigate the complex world of real
estate and to be the team who has your back.
● Complete Solution Provider: Everything you need to be successful.
● We Figure It Out For You: Cutting-edge research, analysis, and (more
importantly) synthesis in putting together solutions for the competitive
Toronto market.

@volitionproperties
Who is Volition?
● Credentials:
○ $30M+ personal holdings in Toronto Real Estate (over 50+ doors)
○ Certiﬁed Real Estate Investment Advisors
○ Michael Millenear Real Estate Investing Leadership Award nomination
○ Investor Realtor Awards: Chairman Award, President Award, Top Producer Award
○ Featured in Real Estate Investment Magazines
○ Expert Speakers on national stages & podcasts
○ ...and more.

@volitionproperties
Mentorship,
Education &
Consultation
Leasing &
Property
Management
Toronto’s Leading Real Estate Investment Advisory & Realty Firm
Volition Services
Realty Management
Advisory Renovations
Acquisition of
Properties
Design &
Renovations

@volitionproperties
Toronto’s Leading Real Estate Investment Advisory & Realty Firm
The Volition Team
Matthew Lee
Founder & Partner
Ming Lim
Advisory & Realty
Alcina Sung
Design
Florence Lee
Strategic Initiatives
Sam Ho
Founder & Partner
Edward Zhang
Advisory & Realty
Janny Fu
Leasing Services
Shelby Hagymasy
Operations Coordinator
Brian Li
Construction PM

@volitionproperties
The Investing Maze
The Volition Team!

@volitionproperties
Where is the COVID economic growth? Let’s
look at jobs...
● Unfortunately the blue
collar economy has been
disproportionately impacted
● More than ever, you want to
invest in a diverse local
economy, with highly skilled
knowledge workers

@volitionproperties
Q&A - Session 1

@volitionproperties
Question #2
Who are the customers for my business?

@volitionproperties
Millennials and Gen Z
Why Millennials? (more speciﬁcally, PROFESSIONAL
Millennials)
● Largest rental cohort
● Responsible
● Pay for nice places and take care of their places
● Inherently transient - more details in the TIME
section!

@volitionproperties
What do Millennials want?
● Work, Live, Play Neighbourhoods
○ More details in the where to buy section!
● University educated
● 35 min commute time to their jobs
○ Public Transit / Uber / Lyft

@volitionproperties
● What jobs do they work in?
○ Tech, finance, healthcare, consulting, etc.
○ Knowledge workers
○ Stable and Well paying - $60-80k
● What kind of properties to they like to live in?
○ Low maintenance - condos and alternatives
○ Willing to make a trade off between space /
commute times
○ Nice places - good finishes (quartz counters, wood
flooring), stainless appliances, great wifi access, etc.

@volitionproperties
● Not every Millennial wants to live in the
concrete jungle.
● Look for neighbourhoods where with greenery
and parks
● Keep this in mind when we start to discuss
speciﬁcs around investment properties and
where to buy a bit later in the presentation

@volitionproperties
Question #3
Who are the buyers, and where are they
buying?

@volitionproperties
• Growth of Toronto’s downtown
population has more than tripled in
the past five years.
• They get married, have children and
purchase homes in the city.
• Proximity to work, a shorter commute
and access to city transit is a fair
trade-oﬀ for the higher real-estate
prices and smaller properties
• Echo Boomers are now the largest age
and a higher proportion of them live
downtown than anywhere else
• Formerly run-down neighbourhoods
have experienced significant
gentrification as young people
purchase properties, then renovate
them.

@volitionproperties
First-time house buyers in the 24- to
44-year range looking to add a
basement apartment so the rent will
help pay their hefty mortgages.
40 per cent are expected to do
renovations aimed at turning the old
family home into a great entertaining
space — in many cases with a
basement apartment.

@volitionproperties
Question #3
Who are the buyers, and where are they
buying?
Question #2
Who are the customers for my business?

@volitionproperties
Millennials vs Gen Z for Real Estate Investors
● Millennials: 1981-1996 (23-39 yrs old)
○ Approx 22% of the population
● Gen Z: 1997-2012 (6-21 yrs old)
○ Approx 20% of the population
○ The next wave of renters
● Overall Gen Z is a more pragmatic
generation due to parents being Gen X

@volitionproperties
● They have different attitudes about
money
○ Millennials put their money into
buying products or services that
will give them a positive experience
○ Gen Z is more focused on savings
and practical products
● Focus on value in your rental in the long
term over fancy amenities

@volitionproperties
● Gen Z is more likely to make mobile
purchases
○ Ensure that your ads are mobile
targeted
○ Websites are responsive
○ You’re marketing on mobile
focused platforms

@volitionproperties
● Millennials pay attention to ads for a
longer amount of time
● Many investors use video as part of
their marketing efforts
○ Millennials - 12 seconds
○ Gen Z - 8 seconds

@volitionproperties
Q&A - Session 2

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Question #4
What type of asset should I buy?

@volitionproperties
Question #5
What is the single most desirable feature that
will help me determine where to buy?

@volitionproperties
@volitionproperties

@volitionproperties
Eglinton
West
St. Clair
West
West Side
East Side
Eglinton East
St. Clair East
South
Parkdale Beac
hes
@volitionproperties

@volitionproperties
Question #5
What is the single most desirable feature that
will help me determine where to buy?
Question #4
What type of asset should I buy?

@volitionproperties
How does COVID impact where and what you
should buy?
People will be back in ofﬁce after COVID, but things won’t be back to usual
● Access to public transit
○ Gen Z doesn’t drive as much
○ Access to transit and ride sharing even more important
● Access to the outdoors
● Access to more space
○ More square footage
○ Dedicated home ofﬁce space

@volitionproperties
Q&A - Session 3

@volitionproperties
When is the best time to buy?

@volitionproperties
Better Q: How does real estate build wealth?
● How do you make money in real estate?
○ Buy low, sell high?
○ Timing the market?
● New paradigm to think about it...

@volitionproperties
Average Market
Purchase: $500k
Initial Investment: $100k
Mortgage:
Standard 25yr, 3%
Assume: $1M value
(double in 25 years)
Initial Investment is
now worth $765k
Importance of Holding For The Long Term

@volitionproperties
FLAT Market
Purchase: $500k
Mortgage:
Standard 25yr, 3%
Assume: $500k value
(same in 25 years)
now worth $765k

@volitionproperties
DOWN Market
Purchase: $500k
Mortgage:
Standard 25yr, 3%
Assume: $375k value
(25% less in 25 years)
now worth $765k

@volitionproperties
DOWN Market
Purchase: $500k
Mortgage:
Standard 25yr, 3%
Assume: $375k value
(25% less in 25 years)
now worth $765k
…

@volitionproperties
What’s ACTUALLY happened in Toronto
Purchase: $500k
Mortgage:
Standard 25yr, 3%
Assume: $1M value
(double in 10 years)
now worth $709k

@volitionproperties
Q: When is the best time to buy?
● A: YESTERDAY!! :)
● Wealth is built thru real estate by holding for the
long term.
● Everyone wants to buy low...but that is NOT
where the real wealth is built.
○ E.g. I bought a fourplex 10+ years ago. Listed
for $799k, I bought for $810k, and I was the
ONLY offer. Today, what is it worth?
○ I saw value in it where nobody else could.
● Trying to get a “great deal” is very myopic. Look at
the bigger picture.

@volitionproperties
But I still want to time the market!
● It’s not about timing the market, it’s about TIME IN the market.
● But if you want to time, time for buying spring. Why?
○ Finding good deals always the hardest thing in investing in any market
○ As a buyer, you want to be primed for maximum choices
○ Spring market starts in January!
○ Construction, if required is best done during the warm months.

@volitionproperties
T.I.M.E in the Market

@volitionproperties
T.I.M.E
● What separates sophisticated
investors from those who are
lucky?

@volitionproperties
T.I.M.E
● What separates sophisticated
investors from those who are
lucky?
MANAGING MARKET DOWNTURN
AND RISK MITIGATION
● Everyone is an investing genius
when the market is good

@volitionproperties
T.I.M.E
● It’s not “IF” the market will turn
down, it’s “WHEN”
● Prepare for it by investing against
fundamentals and use risk
mitigation strategies

@volitionproperties
T.I.M.E
● TIME is the Volition acronym for
mitigating risk in your investment
strategy

@volitionproperties
T.I.M.E.
Tenant Risk - Risk of a Bad Tenant
Investor Risk - Risk from lack of investor knowledge
Market Risk - Exposure to Market Changes
Estate Risk - Risk Inherent to the Property

@volitionproperties
Ontario Risk vs The Rest of Canada

@volitionproperties
Toronto mitigates Tenant Risk
● Major urban areas attract the best
tenant proﬁle - Millennials
● Why do we like Millennials?
○ Covered in Question #2!
● Transient!
○ Why do we want a tenant who is
moving every few years?

@volitionproperties
Investor Risk
● Do you know what you’re doing?
● Are you a local expert?
● What business models works in your area?
● What doesn’t work in your area?
● Who is your target demographic and how
are you servicing them?
● Do you have a team to execute?

@volitionproperties
Toronto mitigates Market Risk
Major urban areas are more resilient to
changes in the market
● Diverse economy vs small single
industry town
● Job growth
● Economic growth, service based
economy, head ofﬁces, well paying
jobs

@volitionproperties
Toronto mitigates Market Risk
A great economy leads too...
● Immigration
● Population Growth
● Low Vacancy Rates
● Lower cap rates = lower risk
Join our monthly meetups to get the
latest data to support all these claims!

@volitionproperties
Estate Risk
● Are you buying the right investment property?
● 99% of “investment” properties DON’T WORK.
● Making sure you’re buying in the right areas
and it’s the right property.
● You can’t just say “Toronto”. You have to be
speciﬁc.
● You can’t just say “triplex” it has to meet many
requirements.
● What are you looking for in a
neighbourhood/area?
○ Gentriﬁcation

@volitionproperties
Estate Risk
● What are you looking for in a neighbourhood?
○ Gentriﬁcation
○ Transit
○ Infrastructure
○ Tenant Proﬁle
● What are you looking for in a property?
○ Side setback
○ Laneway access
○ Minimum ceiling heights
○ Separate Entrances
○ Potential Floorplans
○ Structural Issues

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Q&A Session 4 and Lunch Break!

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Our Investor Panel
Real People, Doing Real $#}+!

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Investor Panel!
Wil Madarang Cecily Lo Dewey Mai

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Investor Panel!
1. Introductions
2. What is the one piece of advice you wish you could
give yourself when you started investing?
3. If you could do anything differently, what would it
be?

@volitionproperties
Q&A Session 5 - Questions for our
Investor Panel?

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How can I quit my job?
First things ﬁrst –
Understand the role of cashﬂow

@volitionproperties
The Evolution of Investors
Stage 1 - Buy solely on appreciation
● Everyone understands buy low, sell
high
● Everyone in the here knows there
is more to investing than that

@volitionproperties
Stage 2 - MAXIMUM Cashﬂow
● Get some education and decide
that CASHFLOW IS KING!
● Many investors do it the detriment
of all else
● Where many investors are stuck

@volitionproperties
Stage 3 - Understanding the ROLE of
cashflow
● Allows you to hold for the long
term - so equity can be built
● How does cashflow indicate risk?
● How does cashflow compare to the
rest of your real estate returns?
● When is cashflow important?

@volitionproperties
Does cashflow really matter?
● $250 vs $500 cashflow a
month?
Is your life drastically different??
How does that compare to your
overall returns??
So what is cashflow good for??

@volitionproperties
Cashﬂow = Hold for the long term
● The role of cash ﬂow is to allow you to
continue to hold your properties for
the long term, thru the ups and downs,
so that you are not forced to divest at
the wrong time.

@volitionproperties
Cashﬂow is less in Toronto because the market
is less risky!
● Investing in Toronto is less risky
● Remember TIME and how Toronto mitigates
risk

@volitionproperties
How does cashflow compare to appreciation?
What would you choose?
5% appreciation and $2000 in cashflow
OR
7% appreciation and $500 in cashflow

@volitionproperties
5% Appreciation and $2000 Cash Flow
Value of Property $1,000,000
Down Payment 20%
Annual Interest Rate 4.00%
Years 25
Payments Per Year 12
Mortgage Amount $800,000
Appreciation 5.00%
Total Periods 300
Rent Increase 5%
Monthly Cash Flow $2,000
Final Property Value $3,466,845
Final Equity Built $4,443,095

@volitionproperties
7% Appreciation and $500 Cash Flow
Value of Property $1,000,000
Down Payment 20%
Annual Interest Rate 4.00%
Years 25
Payments Per Year 12
Mortgage Amount $800,000
Appreciation 7.00%
Total Periods 300
Rent Increase 5%
Monthly Cash Flow $500
Final Property Value $5,692,214
Final Equity Built $5,936,276

@volitionproperties
The impact of cash ﬂow vs appreciation
5% and $2k cashflow $4,443,095
7% and $500 cashflow $5,936,276
Delta $1,493,181
What’s the important take away?

@volitionproperties
Don’t buy negative cashflow
● Do not buy negative cash flowing properties
○ Can’t handle a dynamic investing environment
■ Property Expenses - Repairs, utilities, etc.
■ Market Changes - Rental control changes
○ Not scalable
■ Would you invest in a business that lost more money
the larger it got?
Cash flow is important but not the expense of all else!

@volitionproperties
So when do you really need cashﬂow?
● You need cash ﬂow at the
“end” - when it comes time to
full supplement your income.
● So when is the end? How do I
get to the end?

@volitionproperties
Simple Approach vs.
Sophisticated Approach (i.e. the
Volition Approach)

@volitionproperties
Finally going to start looking at houses
● This is what everyone has been
waiting for…

@volitionproperties
Finally going to start looking at houses
waiting for…
● This probably isn’t what you
were thinking, though! :)

@volitionproperties
Simple Approach – Buy one and wait 30 years.
Wait 30 years to pay it off
● Triplex: $1.4M
○ Rent: $6,000
○ Mortgage: $4,400
○ Expenses: $1,200
○ Cashﬂow: $400
What’s the result in 30yrs?

@volitionproperties
Wait 30 years to pay it off
● Triplex: $1.4M
○ Rent: $6,000
○ Mortgage: $4,400
○ Expenses: $1,200
○ Cashﬂow: $400
What’s the result in 30yrs?
● Triplex: $4.5M (5% growth)
○ Rent: $19,400 (4% growth)
○ Mortgage: $0
○ Expenses: $3,900 (4% growth)
○ Cashﬂow: $15,500

@volitionproperties
Not bad… but is this the best way to do it...?
● How do we do BETTER than this?
● How do we do it FASTER than this?
● What are we LEAVING ON THE TABLE?

@volitionproperties
Sophisticated Approach (i.e. The Volition Approach)

@volitionproperties
Year 4
• Value: $607k
• Existing Mortgage: $365k
• New 80% LTV Mortgage: $486k
• Cash in hand: $121k
• Downpayment Required: $121k
• GO BUY ANOTHER ONE!
Year 0
• Value: $500k
• Mortgage: $400k
• Downpayment: $100k
• Rent: $2000
• Expenses: $500
• Mortgage: $1500
• Cashflow: $0
5% growth
THE MULTIPLIER EFFECT – Acquisition Phase

@volitionproperties
Year 4 Year 8 Year 12
… and then you wait.
Value: $739k
Mortgage: $591k
Cashflow: $0
Value: $898k
Mortgage: $718k
Cashflow: $0
THE MULTIPLIER EFFECT – Acquisition Phase

@volitionproperties
Year 18
Year 12
Value: $739k
Mortgage: $591k
Cashflow: $0
Value: $1.2M
Mortgage: $600k
Rent: $4000
Expenses: $1000
Mortgage: $3000
Cashflow: $0
THE MULTIPLIER EFFECT – Hold Phase
50% LTV

@volitionproperties
Year 18
Value: $1.2M
Mortgage: $0
Rent: $4000
Expenses: $1000
Mortgage: $0
Cashflow: $3000
THE MULTIPLIER EFFECT – Divesting Phase
Free & Clear

@volitionproperties
Result of 18 Year Action Plan
• Portfolio value: $1.2M x 4 = $4.8M
• Mortgage value: $0M x 4 = $0M
• Rent: $4000 x 4 = $16,000
• Expenses: $1000 x 4 = $4,000
• Mortgage: $0 x 4 = $0
• Cashflow: $3000 x 4 = $12,000
• Annual Portfolio Cashflow: $144,000
(… vs. buy a single property and wait 30 years to pay off mortgage!)
“REACHING BELIZE”

@volitionproperties
Head-to-Head Comparison
Realistic Toronto Triplex Example:
Start with $1.4M triplex, $6000 rent, $1200 expenses
Growth rates: 10% property, 4% rent, 4% expenses
Simple Approach Volition Approach (aka Multiplier Effect)
2.5yrs
2.5yrs
2.5yrs
4yrs
Total: 11.5yrs

@volitionproperties
Time: = 11.5 years
Portfolio: $3.0M = $12.0M
Mortgage: $0M = $0M
Rent: $9,400 x = $37,600
Expenses: $1,900 = $7,600
Mortgage: $0 = $0
Cashflow: $7500 = $30,000
Annual Portfolio Cashflow: $360,000
Time: = 30 years
Portfolio: $17.5 M = $17.5M
Mortgage: $0 = $0
Rent: $19,400 x = $19,400
Expenses: $3,900 = $3,900
Mortgage: $0 = $0
Cashflow: $15,500 = $15,500
Annual Portfolio Cashflow: $186,000
Power of the MULTIPLIER EFFECT
now worth $765k
Approx 1/3
the Time
now worth $765k
Approx 2x
the Cashflow
Simple Approach Volition Approach (aka Multiplier Effect)

@volitionproperties
What do I buy?

@volitionproperties
Finally going to start looking at properties
waiting for…
● Hopefully you’ve understood WHY
we haven’t gotten to a single
property yet. The fundamentals are
the MOST important thing.
● Now, let’s talk about what Toronto
has to offer...

@volitionproperties
Tenant Profile
Short Term
Headache
Long Term
Headache
Short Term ROI
Long Term ROI
Affordability
Pros
Cons
Who Is This
For
Overall

@volitionproperties
Small Town
Tenant Profile F
Short Term
Headache
F
Long Term
Headache
F
Short Term ROI C
Long Term ROI D
Affordability A+++
Pros Cheap,
Cashflow
Cons Higher risk,
higher
headache
Who Is This
For
Cashflow-chasing
myopic thinkers
Overall D

@volitionproperties
Preconstructio
n Condo
Small Town
Tenant Profile A+ F
Short Term
Headache
A+ F
Long Term
Headache
A F
Short Term ROI C C
Long Term ROI B- D
Affordability A+ A+++
Pros Deposit
structure
Cheap,
Cashflow
Cons Can’t get rent
or sell in the
short term
Higher risk,
higher
headache
Who Is This
For
Want zero
headache in
short-term.
Short-term Mort
Qual problems.
Cashflow-chasing
myopic thinkers
Overall B+ D

@volitionproperties
Condo Preconstructio
n Condo
Small Town
Tenant Profile A+ A+ F
Short Term
Headache
A A+ F
Long Term
Headache
A A F
Short Term ROI C C C
Long Term ROI B- B- D
Affordability A A+ A+++
Pros Entry-level
$150k
Deposit
structure
Cheap,
Cashflow
Cons Cashflow is
hard at 20%
down
Can’t get rent
or sell in the
short term
Higher risk,
higher
headache
Who Is This
For
Want minimal
headache. Limited
cash to invest.
Want zero
headache in
short-term.
Short-term Mort
Qual problems.
Cashflow-chasing
myopic thinkers
Overall B+ B+ D

@volitionproperties
Entry-Level
Multi
(2plex/3plex)
n Condo
Small Town
Tenant Profile A A+ A+ F
Short Term
Headache
A- A A+ F
Long Term
Headache
B+ A A F
Short Term ROI A- C C C
Long Term ROI A- B- B- D
Affordability C A A+ A+++
Pros Own land Entry-level
$150k
Deposit
structure
Cheap,
Cashflow
Cons $350k+
required
Cashflow is
hard at 20%
down
Can’t get rent
or sell in the
short term
Higher risk,
higher
headache
Who Is This
For
Entry-level freehold,
Personal residence.
Mortgage helper.
Want minimal
headache. Limited
cash to invest.
Want zero
headache in
short-term.
Short-term Mort
Qual problems.
Cashflow-chasing
myopic thinkers
Overall A- B+ B+ D

@volitionproperties
House & Add a
suite
Entry-Level
Multi
(2plex/3plex)
n Condo
Small Town
Tenant Profile A A A+ A+ F
Short Term
Headache
C A- A A+ F
Long Term
Headache
A- B+ A A F
Short Term ROI A A- C C C
Long Term ROI A A- B- B- D
Affordability D C A A+ A+++
Pros Reno equity lift Own land Entry-level
$150k
Deposit
structure
Cheap,
Cashflow
Cons Renos required,
no rent during
reno period
$350k+
required
Cashflow is
hard at 20%
down
Can’t get rent
or sell in the
short term
Higher risk,
higher
headache
Who Is This
For
Personal residence.
Mortgage helper.
Increased cashflow
due to renos &
additional unit.
Personal residence.
Mortgage helper.
Want minimal
headache. Limited
cash to invest.
Want zero
headache in
short-term.
Short-term Mort
Qual problems.
Cashflow-chasing
myopic thinkers
Overall A A- B+ B+ D

@volitionproperties
Legal Luxury
Multi
Conversion
House & Add a
suite
Entry-Level
Multi
(2plex/3plex)
n Condo
Small Town
Tenant Profile A+ A A A+ A+ F
Short Term
Headache
F C A- A A+ F
Long Term
Headache
A+ A- B+ A A F
Short Term ROI A+ A A- C C C
Long Term ROI A+ A A- B- B- D
Affordability F D C A A+ A+++
Pros New, Cashflow,
Solid Lift
Reno equity lift Own land Entry-level
$150k
Deposit
structure
Cheap,
Cashflow
Cons $800k-$1.4M
cash required.
Renos required,
no rent during
reno period
$350k+
required
Cashflow is
hard at 20%
down
Can’t get rent
or sell in the
short term
Higher risk,
higher
headache
Who Is This
For
Lots of cash.
Big mortgage
qualification.
Has the
time/energy.
Personal residence.
Mortgage helper.
Increased cashflow
due to renos &
additional unit.
Personal residence.
Mortgage helper.
Want minimal
headache. Limited
cash to invest.
Want zero
headache in
short-term.
Short-term Mort
Qual problems.
Cashflow-chasing
myopic thinkers
Overall A+ A A- B+ B+ D

@volitionproperties
(Tack on)
Laneway
Housing
Legal Luxury
Multi
Conversion
House & Add a
suite
Entry-Level
Multi
(2plex/3plex)
n Condo
Small Town
Tenant Profile A+ A+ A A A+ A+ F
Short Term
Headache
F F C A- A A+ F
Long Term
Headache
A+ A+ A- B+ A A F
Short Term ROI A++ A+ A A- C C C
Long Term ROI A++ A+ A A- B- B- D
Affordability C F D C A A+ A+++
Pros Amazing ROI
on $300k+
New, Cashflow,
Solid Lift
Reno equity lift Own land Entry-level
$150k
Deposit
structure
Cheap,
Cashflow
Cons Complex,
expensive
process
$800k-$1.4M
cash required.
Renos required,
no rent during
reno period
$350k+
required
Cashflow is
hard at 20%
down
Can’t get rent
or sell in the
short term
Higher risk,
higher
headache
Who Is This
For
Buying land with
foresight for
laneway potential
now OR in the
future.
Lots of cash.
Big mortgage
qualification.
Has the
time/energy.
Personal residence.
Mortgage helper.
Increased cashflow
due to renos &
additional unit.
Personal residence.
Mortgage helper.
Want minimal
headache. Limited
cash to invest.
Want zero
headache in
short-term.
Short-term Mort
Qual problems.
Cashflow-chasing
myopic thinkers
Overall A++ A+ A A- B+ B+ D

@volitionproperties
Case Studies
1. Toronto Turnkey Fourplex
2. Triplex Conversion & House Hacking
3. Finding the Highest and Best Use to Maximize
your ROI

@volitionproperties
Case Study #1:
Toronto Turnkey Fourplex

@volitionproperties
Toronto Turnkey Fourplex
● : 3-storey detached with 4 units in High Park.
● Features: Above-average sized suites, lots of upgrades, lots of
storage, ﬁnished basement with two entrances.
● Massive: Approximately 4,297 sq ft including basement.

@volitionproperties
Case Study #2:
Triplex Conversion –
House Hacking Edition

@volitionproperties
Triplex Conversion: Value Creation + House Hacking
House Hacking - the idea of combining your
investment property with your personal residence
Pros
Cons
● More favourable owner-occupied mortgage
● Higher quality asset (house vs. condo)
● Subsidized cost of living
● You are the on-site property manager
● Less privacy
● Noise transfer
● Live in a triplex and rent units out
● Live in a 2-bed condo and get a roommate
Triplex
Conversion:
Value
Creation

@volitionproperties
Overview - Luxury House Hack
3-unit rowhouse in Trinity-Bellwoods - Fully Legal Triplex
1,800 sq. ft., no parking, 16 month reno (thanks COVID!)
Purchase Price $940k
Initial Investment
(20% down payment + closing costs)
$225k
Renovation $500k
After-Repair Value (ARV) Appraised: $1.56M
Market Value: $1.7M
Reno Equity Lift / Forced Appreciation $120k+

@volitionproperties
From “Maggot Farm”... to HGTV Transformation

@volitionproperties
Financials - House Hacking
Second Floor - 640 sq. ft. Owner Occupied - Projected: $2,350
Main Floor - 550 sq. ft. $2,050
Basement - 595 sq. ft. $1,695
Total Monthly Rent $3,745
Mortgage $4,608
Property Tax $450
Owner’s share of utilities + Wiﬁ for whole house $211
Insurance $207
Total Monthly Expenses $5,476
Monthly Cost of Living including utilities
(excludes principal paydown + surprises!)
$1,731
All units are 1 bed, 1 bath - modeled at 80% LTV, 2% interest, 30-year amortization

@volitionproperties
Case Study #3
Finding the Highest and Best Use
to Maximize your ROI

@volitionproperties
Why Is It Hard To Invest In Toronto
● Numbers are not as juicy as some smaller cities
● Limited cash ﬂow on a turn key property or light renovation
● Limited desireable land for investments
How do we change that?

@volitionproperties
What is a laneway house?

@volitionproperties
Challenges of Laneway Conversions
● Toronto Fire Code and Bylaws limit supply
● You will pay a premium on suitable lots
● Increased cost to build
● Require a strong team to execute
Is it worth it?

@volitionproperties
Overview - Luxury Multi + Laneway House
Single Family Semi in DT - Legal Triplex + Laneway
4700 sq. ft., no parking, 16 months
Purchase Price $1.45M
Initial Investment
$350k
Renovation $1M

@volitionproperties
Estimated ARV of 3.65M. Mortgage @ 2.5% interest & 30 Year Amortization with 70% LTV
Upper Floor (4Br 3Wr) - 1500 sq. ft. $4600
Main Floor (2Br 2Wr)- 780 sq. ft. $2800
Basement (2Br 2Wr) - 800 sq. ft. $2400
Laneway House (3Br 3Wr) - 1400 sq. ft. $4500
Total Monthly Rent $14,300
Mortgage $9230
Property Tax $700
Utilities (Water & Waste) $200
Insurance $300
Total Monthly Payments $10,430
Net Monthly Income $3870

@volitionproperties
Equity Lift and Cashﬂow
Estimated Market Value of 3.65M
Purchase Price $1.45M
Initial Investment
$350k
Renovation $1M
Equity Lift $1.15M
Reﬁnance and Equity Takeout Potential

@volitionproperties
Breakout Rooms -
Networking and Q&A Session #6

@volitionproperties
Is it all just about the numbers?

@volitionproperties
UPDATE THIS
Headache-Adjusted ROI
-Time & Energy
-Eﬀort & Focus
“The less I work, the more money I make”
–Matthew Lee
Risk-Adjusted ROI
-Understand Relationship Between Risk & Reward
-Cap Rates
“You don’t get something for nothing”
–Matthew Lee
How else do I measure ROI?

@volitionproperties
Don’t buy cheap, buy for *value*
Cheap and expensive are
relative concepts
Buy for value, not on
price alone

@volitionproperties
Building Your Team

@volitionproperties
Building your team
● You’re running a small business
● You’re the CEO
● The success of your business
hinges on getting *the* best
people
● You pay everyone pretty much the
same $$, why not go for the best?

@volitionproperties
Building your team
● Key people
○ Accounting
○ Financing
○ Insurance
○ Legal
○ Realtor
● Are they investors? How many
properties do they own? How many
sophisticated clients with complicated
portfolios have they dealt with?

@volitionproperties
Get an Investor Realtor – Not Uncle Joe
● Want to buy an investment property -
most real estate agents will go “OK
GREAT!! Let’s go buy you a condo!”
● Get a customized plan that is speciﬁc to
you and your situation. This is NOT a
one-size-ﬁts-all.

@volitionproperties
Get an Investor Realtor – Not Uncle Joe
● What’s the difference between a good
investor realtor and uncle joe? Expertise.
○ Legal conversion, triplex, basement suite
○ Tenant proﬁles, potential rents?
○ Laneway suites
○ Construction strategy
○ Personal residence
■ How does this ﬁt as a key part of your
investment portfolio?

@volitionproperties
Financing!
Vine Group

@volitionproperties
Our Guest Speakers

@volitionproperties
Q&A #7 - Questions for our
Mortgage Experts?

@volitionproperties
Masterclass 201: Advanced
Business Models

@volitionproperties
Masterclass 201: Advanced Business Models
● Deep dive into the EXTREMELY complex world of Legal
Luxury Multi Conversions & Laneway Housing.
● Bigger $$$$$, but bigger ROI.
● Overview of:
○ Process (Volition’s Stepping Stone Approach, COA, Permits, etc.)
○ Financials
○ Timelines
○ Costs
○ How to avoid major pitfalls that can make or break
● You will walk out being familiar with the process and
the business model.

@volitionproperties
Now What?

@volitionproperties
Take Massive Action!
Book a complimentary Advisory Consultation:
http://www.calendly.com/volitionprop
Consult our Vine Group mortgage experts:
Hugo@vinegroup.ca / David@vinegroup.ca
Join our community of like-minded investors
for monthly Meetups:
https://www.meetup.com/Volition/

@volitionproperties
Video Testimonial - FREEBIE!
We would love your feedback!
If you ﬁlm and send us a video testimonial,
you can join our Masterclass 201 FREE!
E-mail info@volitionprop.com for details

@volitionproperties
Upcoming Events

@volitionproperties
Meetups - Build Your Real Estate Tribe!
RSVP on https://www.meetup.com/Volition/
February 24
● Virtual Street Smart Tour - Renovation Projects
March 17
● Insurance for Investors
July 21
● Masterclass 201 - Legal Luxury Multi Conversions and Laneway Housing

@volitionproperties
Now that we are at the end… Which guy do you
think knows more about real estate – The one in
the back or the one on the right?
Burning Question

@volitionproperties
THANK YOU!

@volitionproperties
Networking Time!
Your network is your net worth
Some questions to get you started:
● What is your key takeaway from today?
● What actions will you be taking next?
● What do you want to learn in future meetups?
● Are you already invested?
● Where do you invest?

Toronto Real Estate Investing Masterclass | Volition Properties

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