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episode # 186

Twelve Properties in Twelve Months with Investors Dave & Melanie Dupuis

Here’s a resume many of us wish we had: twelve properties acquired in twelve months, 100+ doors and counting and best-selling authors… oh right, and they are retired (before they turned 40, we might add!). This week, real estate investors, Dave and Melanie Dupuis, join Adam & Matt to reveal their best investment tips, share their biggest mistakes, and take you through their step-by-step process for buying excellent revenue properties. We cover up-and-coming markets, vendor financing, and how to find a deal! The fall market has arrived – time to finish 2019 strong!

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Episode Summary


 

About Mel & Dave Dupuis:

Mel & Dave are real estate investors from North Bay, Ontario. They have amassed over 100 doors in a very short time, including purchasing twelve properties in twelve months. They are the owners of Dupuis Properties and the authors of the best-selling book, “Real Estate Investing Secrets: A No-B.S. Guide to Creating Wealth & Freedom”.

On how they got into real estate:

Dave was introduced to a real estate investing book when he was in high-school, which planted the seed of interest in real estate. Both Mel & Dave owned a small number of rental properties before meeting each other, but have substantially grown their portfolio in recent years. Although they were apprehensive at first, they have focused on cash-flowing properties and acquiring multi-family units with help of other investors. Their investments allow them to live a certain lifestyle, including family trips and other purchases.

On how they have been able to scale their business:

Initially, they were too cookie cutter and weren’t thinking outside the box – using traditional financing arrangements. After they became a bit more experienced, they started looking into different types of financing, specifically vendor take back mortgages and owner financing. These vehicles allowed Mel & Dave to use other people’s money and leverage. If these things are done right, the sky is the limit. They also learned about other people’s mistakes in real estate and talked to other investors to make sure they addressed risk areas in their own business. This allowed them to learn from other people’s mistakes.

Normally, they pursue different options depending on what the seller wants. When does the seller need their money back? In some instances, private lenders are an option, in other cases, more creating lending works.

The key piece for Mel & Dave is cash flow. They developed a system they felt worked for them of what they would offer to potential sellers with numbers that made financial sense. They became very aggressive using Facebook ads and radio ads offering to purchase properties. They also utilized websites like Craigslist and Kijiji. This allowed them a lot of opportunities to grow their portfolio. They were also conscious of their financing obligations to ensure all payment obligations were met and often repaying debts before the due date. This allowed them to build a great reputation in the industry.

It is the nature of the business to get rejections and no’s. There were a lot of rejections along the way, but there were also deals that came together and their portfolio grew at an incredible rate.  Generally, they only focus on multifamily and not on single family.

On purchasing 12 properties in 12 months:

In 2016, Mel & Dave were on vacation with their kids in Florida. They were listening to the audiobook version of “Rich Dad, Poor Dad” when they felt inspired to tackle real estate investing. In 2017, the aggressively pursued real estate investing, which resulted in them purchasing 12 properties in 12 months. It was a very successful year!

On how a dialogue looks with a potential seller:

Dave is looking for the ‘why’ and the ‘what’ when working with a potential seller. Why are they selling? What are the terms they will agree to? Are they interested in a quick close date? Do they want to utilize a vendor takeback mortgage? The negotiation is normally a back and forth with compromises. The best situation is a win-win for both the buyer and seller. Win-win situations allow for relationship building which can benefit both parties in the long run.

Sometimes Mel & Dave have to say no to deals that might seem attractive on the surface. For example, a building might be completely turn-key, but this will limit the potential to increase rents and there may be limited appreciation left in the building. This is a problem because there is no way for the buyers to increase the building’s value to refinance and payout the seller. Your exit strategy is very important, and this is something you need to control.

On the North Bay, Ontario market:

The North Bay market is currently a perfect storm. Prices are good and the cap rates are between 8-11%. The vacancy rate is very low as well. The per door price for multifamily is approximately $80K-$100K. There are economies to be had when purchasing larger buildings. This is very different than the Vancouver market. If you were investing in the Vancouver market, it would be a bit of a different play. Vancouver investments typically don’t allow for high cash flows, but appreciation would generally be much higher. In North Bay, appreciation is not something Mel & Dave focus on – cash flow is the most important factor.

On what makes a good deal:

Mel & Dave are focused on investments that are worth their time. When they started, they may have pursued a property that cash flowed $500 / month. As they have grown and become more experienced, they have moved away from these smaller investments. Current investments may bring in as much as $8,000 / month in positive cash flow. This is where they have chosen to focus their time.

The perfect deal is different for everyone. How much time and financing do you want to use? Sometimes large buildings with multiple units don’t always cash flow the best. If you can find a smaller building with better cash flow, this could be the better buy because there are less tenants to service. It all depends on how you look at it.

On property management and how to retain tenants:

Initially, they were performing all the property management services themselves. They kept a 0% vacancy rate by being very vocal and advertising their units all over the place. They also did not require contracts that lock in tenants for long periods of time. Their philosophy is that if people want to leave, they will leave, so don’t try to restrict them. This makes people happy and more likely to stay.

Other small things like gift baskets, being pet friendly, and tenant appreciation days keep tenants happy and vacancy rates low. Provide value to keep people happy.

Now, they have a team that services all the properties. Mel & Dave are much more hands off and focused on growing the business.

On their biggest mistakes:

One of their biggest mistakes in the past was thinking and not acting. People need to act and figure it out as they go. If you sit and think about it, you will never learn and never take action. Just do it!

In the past, they didn’t do sufficient due diligence. Make sure you know all the zoning regulations and risk areas. Do your research and do everything by the book to ensure risks are taken care of.

Finally, in the past, they tried to do too much themselves. If you have a plumbing issue, hire a plumber. Build relationships with people that are experts in their fields and pay them for their services. This allows you to focus on what you are good at and leverage people. You only have limited hours in a week, but if you free yourself up to build the business and let other people focus on the other issues, you will make more money in the long run.

On other markets they are excited about:

Sudbury is close to North Bay, so this is a market that is attractive to them. They are generally looking to secondary markets. Ottawa, Toronto and Vancouver are on fire, so they are focusing on markets that are a bit smaller. Windsor, ON is another area and even Winnipeg, MB.

To find out more about Mel & Dave:

https://www.dupuisproperties.com/

Instagram: investorcouplemelanddave

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