Note Investing From Canada with Chad Urbshott

Note Investing From Canada with Chad Urbshott. Note Investing: 7E Investments Morning Drive: New Year Goals

Note Investing From Canada with Chad Urbshott video duration 52 Minute(s) 36 Second(s), published by We Close Notes on 02 09 2018 - 23:18:09.

Episode 337 http://www.WeCloseNotes.com Scott: We are excited to have this episode because we've got a guy who's doing some cool stuff taking advantage of Note Investing: 7E Investments Morning Drive: That One System When investing in mortgage notes, what is the one system in note investing you must have?

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Episode 337
http://www.WeCloseNotes.com

Scott: We are excited to have this episode because we’ve got a guy who’s doing some cool stuff taking advantage of opportunities from North of the border and that’s our buddy, Chad Urbshott. Welcome, Chad. How is it going?

Chad: I’m great. Thanks, Scott, for having me on. I’m excited.

Scott: I’m glad to have you. You were down in Texas for a sneak peek for our Mastermind, but then also you hung around for the Quest Expo. For our audience who don’t know who you are, tell them a little about yourself. What’s your background?

Chad: I’m Canadian. I started real estate investing back in 2006, 2007. I was by myself in Canada doing rentals, rent-to-owns, and then I transitioned into student apartments. That was fun having a couple of animal houses. I’m a structural engineer. I had a background in development as well. I got into developing some commercial properties and that kind of thing. I went to a seminar in Toronto and on the way down, a buddy of mine, a colleague who is also a real estate investor said he was interested in investing. He does it in Atlanta or something at that time. I was like, “Are you crazy? I can hardly handle my properties from half an hour drive away. How can you handle it from a two-hour flight away?”

When I went down to the seminar, there were three or four vendors there that were US-based and they were touting some of the numbers on rental properties. That was in 2011 or 2012, so that was in the bottom of the crash. I was blown away by some of the numbers I was getting presented with, buying a property for $50,000 and he was renting for $900 a month. The returns on the investment were phenomenal and that was an unlevered cash-on-cash return. I was like, “That’s incredible.” I was sold at that point. At that time, I’d been going back and forth to Florida for quite a few years with my family members. I thought, “Why not start investing in a place that I know?”

I started investing down in Florida. It wasn’t long before I realized that even though the market was saturated with foreclosures, it was hard then to find good deals, especially for newcomers. I jumped into the deep end of the pool and started buying foreclosures initially from the auctions and that was definitely a learning experience. It’s not something I would recommend to anybody. I learned the ropes the hard way on a few of them. I did that for a while. Then I met a guy down in Florida who was doing turnkey rentals up in Cleveland and I had no idea what a turnkey rental even was. I started doing a few deals with him.

I was the funding partner bringing in funding to the table. I got to know the Cleveland market and the Midwest Market. While doing that, I transitioned from buying foreclosure down at the courthouse in Florida to just doing fix and flips. It was another introduction to Bill Bymel from RSI Asset Management and his team. They’re doing some incredible things with luxury flips for some hedge funds. They had a good contractor that everybody trusted and did a good work. I worked with them and their team. I was doing that and jumped into the note business full-time switching back and up.

I started getting interested in notes and educating myself and reading BiggerPockets and what have you. It was in 2015 or 2014 up in Toronto, someone was hosting a Meetup who was Canadian who was buying notes. I was like, “That’s exactly what I was looking for.” I ended up teaming up with that person and we did about six deals together. I was getting frustrated trying to find deals in the Florida market and so I jumped both feet into the deep end on the note side of things and I’ve been doing that full-time ever since.

Scott: Are you still working full-time too?

Chad: No, I gave up that corporate gig.

Scott: Where are you buying? Where are you investing? What markets are you investing and buying notes in?

Chad: If you go by state, I’ve got Indiana, Missouri, Michigan, Pennsylvania, Ohio, Florida and Illinois.

Scott: Six or seven states is good. Enlighten us a little bit about the mortgage market in Canada. Is it a lot of banks? Is it different? How is it set up there North of the border?

Chad: There are about six big banks in Canada. They underrate all their loans and home mortgages. They keep them on their books, they keep them in-house. They don’t typically sell them off, but sometimes they do. They keep most of them in-house. There is what they call B lender here in Canada where they’ll do not quite as analogous as a subprime loan or non-prime loan. It’s halfway between them. You still need a credit score of 600 and up. You need to put a lot down and the interest rates are going to be a lot higher. They typically package those up and sell them off into a mortgage-backed security. They are ensured by a CMHC, Canadian Mortgage and Housing Corporation, which is very similar to a Fannie and Freddie Mac.