Strategic Mortgage Mastery: Dalia Barsoum's Guide to Financial Freedom

Recognized as one of the top 100 Global Mortgage Professionals, Canada's mortgage broker of the year for 2023 and a member of the Forbes Finance Council. 

Dalia Barsoum is a best-selling author of ‘Canadian Investor Financing’ and is the founder of Canada's top brokerage in income property financing and multi-award winning team, Streetwise Mortgages and Real Estate advisory firm Streetwise Wealth. 

Dalia and her team are known for taking a strategic and a holistic approach to financing income properties and they helped thousands of Canadians build the real estate portfolio of their dreams and achieve financial freedom while managing leverage risk. 

The team has  funded over 1.5 billion dollars of mortgages and is on a mission to :

Help Canadians financially prosper through property investing and create abundance, peace of mind and time freedom.

Connect with Dalia:
Website: https://streetwisemortgages.com/

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Transcript

SPEAKERS

Carl Richards, Alfonso Cuadra, Dalia Barsoum

Carl Richards  00:05

Welcome to The WealthGenius Podcast. The WealthGenius Podcast; strategies for multifamily real estate investing, mindset, community, success. The WealthGenius Podcast with your host, The Godfather of Real Estate, Alfonso Cuadra, who has expansive experience in business and massive success as a real estate investor. The WealthGenius podcast, let's dive in to today's episode.

Alfonso Cuadra  00:33

Dalia!

Dalia Barsoum  00:35

Alfonso!

Alfonso Cuadra  00:37

Good to have you here. Love your name Dalia. I don't know if I know any other Dalias, by the way. 

Dalia Barsoum  00:42

Thank you!

Alfonso Cuadra  00:42

Very unique. your background? 

Dalia Barsoum  00:44

Egyptian. 

Alfonso Cuadra  00:45

Nice, nice. So we know each other for a while. And when I thought about having our podcast and doing all our episodes, I knew at some point you would make your visit. And so now you're here. I respect you in the industry and everything you've done, you should be very proud of yourself. 

Dalia Barsoum  01:05

Thank you. 

Alfonso Cuadra  01:06

And I want to know all about you. How did you get started in this crazy world of real estate and mortgages. And I know that you love it, because you're really good at what you do. So how did it all start?

Dalia Barsoum  01:19

It all started while I was at corporate world, I worked for the banks for 15 years for one of Canada's top banks, I got to a level where I got to senior management working downtown in a mahogany office wearing suits and dining and wining with executives and I was very proud of myself back then. And I wanted to climb the corporate ladder. 

Then I got to a point where I got you know, tired of politics and bureaucracies. And in corporate world, I mean, there is support for individuals, but at some point, it becomes a little bit political. So I'm like, I'm tired of the politics. And at the same time, I had a four year old at home, and I was pregnant with my second son. And I had lost money in the stock market, my husband and I, that was 2008, 2009. I was in the-

Alfonso Cuadra  02:14

Along with a lot of other people.

Dalia Barsoum  02:15

Yeah, I was in the wealth management business, and the back office, really not advising at the frontline, but supporting a lot of financial planners. And we personally lost quite a bit in our stock portfolio and mutual funds. During these days, that's when I learned about real estate and I was sitting in my office thinking, okay, there must be a better way to actually live my life and get excited every day about what I do and have more control. 

And you know, there were times where my kid would be sick. And I would call in and I felt that that was not welcome to work from home. And I had to go and get on the Go Train and go to corporate. I'm like, You know what, between losing the stock market and getting a little tired from corporate culture and wanting control over my time and- 

Alfonso Cuadra  02:15

Having to ask. 

Dalia Barsoum  02:19

Yeah, having to ask and wanting to be with my kids. I got very curious about what's out there. And that's how I started reading real estate books. The classic Rich Dad, Poor Dad, and then it became an obsession of mine. And I would go to investment clubs, I would get the books.

Alfonso Cuadra  03:19

Did someone introduce that book to you?

Dalia Barsoum  03:21

No, no.

Alfonso Cuadra  03:22

You just, you just kind of like googled it and you're like- 

Dalia Barsoum  03:24

Yeah. 

Alfonso Cuadra  03:24

This is the book that I have to read or?

Dalia Barsoum  03:26

I actually don't remember exactly how I came across the book. I think I found it myself. I don't remember someone giving it to me, but I just don't remember how. So my curiosity for real estate started as a result of these circumstances. And then it grew, it became a thing and I, you know, said you know what, 2011 I was like, Okay, I'm having my second child now. And I think I should now jump into real estate. I had owned one or two properties. Yeah, by then, but didn't have the courage for several years to make like a full jump. 

Alfonso Cuadra  04:01

And did you go into mortgages right away, or you were an investor first?

Dalia Barsoum  04:06

I was an investor first. So I started investing in Barrie. That's where I bought my first townhouse. And yeah, when I left the banking system, I had a few investment properties, townhouses in Barrie.

Alfonso Cuadra  04:19

And was this like welcomed in your family? Was it something like, "Yes, you're going to do it you leave your job that your career that you've built for, you know, whatever many years went to university for and all of this and buy townhomes?"

Dalia Barsoum  04:34

No, actually, not at all. My husband was very supportive. But the rest of my family was shocked that I am giving away- 

Alfonso Cuadra  04:44

Security.

Dalia Barsoum  04:44

My security my nice paycheck, my prestige you call- if you want to call it prestige, right? And they were like, "Why are you doing this? Why?" Nobody understood. And I had a lot of friction and resistance with that move, but I just, I was ready to make a change. Because if you wake up every day and you feel that it's mundane, and there is something that is nagging at you all the time going to try this, you should try this. You should try it. There's this nagging and nagging. That's the time.

Alfonso Cuadra  05:17

If someone feeling that right now, right? Like, what's the first move? Like, they they're listening? And they're like, Well, you know, I like what Dalia's saying, like, you know, I'm just gonna make that move. And the reason I asked that is because a lot of people feel that they're kind of stuck. And they got the bills every month. Because you see what, what the job does, it gets you used to that every month or every two weeks, there's a paycheck, right? 

And then usually your bills are in alignment with that paycheck, your paycheck comes in this is when the phone bill automatic debited. It's debited from your account, your mortgage, your car payment, or whatnot. And so it really doesn't leave room for people to breathe. And so they're listening to you, you know, you left this corporate job, I can only imagine, you know, how cushy was that salary? And then you're leaving that behind, and you're moving forward, and you're betting on yourself. And so if someone's listening to that right now, and maybe you're talking to yourself, what would you say to yourself,

Dalia Barsoum  06:20

I would say to myself, trust your gut, trust the power within you to make the moves you want to make. Looking back, this was the best decision, one of the best decisions of my life to actually say, you know, what, I want to pursue something that I'm passionate about that I know I can do well, at I got into the mortgage industry and not knowing much about mortgages to tell you the truth. I didn't have any clients. I did not. I mean, I was in finance all my life in the banks in different capacities, wealth management strategy, a little bit of lending a commercial, personal, but I I wasn't part of the mortgage industry. 

So I stepped into an industry as much as it's related to money. Right. It's a new industry in a way. But looking back, have the courage, but also plan, right. It's not about jumping in a pool headfirst and going, "Oh, my God", or jumping in and scrambling to make it work. No, there is planning, when you have a vision of what you want to do, or a direction you want to take, have the courage to pursue that, but also plan. So what did I do back then I of course, I had a beautiful cheque coming through every two weeks, and I was pregnant with my second son, I was three months pregnant. So in my personal case, my husband was working and that helped, but I still had to replace my income. 

When you're building a business, you're not gonna immediately see the fruits. My first check in the mortgage industry, I still have a picture of it was $7,000. I worked my entire year for $7,000. That was my first check. And I was driving all over the place all, over the place, Durham Mississauga downtown, like Barrie, $7,000 at the end. But how did I plan for it? Well, one way was to take a secured line of credit on my house and use that in private money. I've lined up about $500,000 line of credit back then the rates were at three point something. So you became a lender, I became a lender, I became a private lender. 

Alfonso Cuadra  08:27

So the transition was investor, then mortgage broker and lender or you started lending money, and then like how  did you get into being a mortgage broker? 

Dalia Barsoum  08:37

Yeah. So I was working in my full time job, I took a line of credit, and I started to invest in private mortgages started to see interest come through that venue. Right? And that became a cushion, right? And then I made the jump when I started to see a cushion. That was my style, right? Not everybody would do it the same way. 

But when you're making a transition, I think your brain opens up to possibilities, you start to think if you ask the right question, how can I generate income while I am building a business? If you ask that question, you'll probably come up with several ideas you may not have thought about before. For me it was to do this. That's how I did it while I was building the business, so that carried me a little bit. And then obviously, staying consistent in what I did and doing what I did well built up over time. 

Alfonso Cuadra  09:33

So when you got into the mortgage business, did you go into it, thinking this is going to be like I want to be known for this thing. Like I'm going to be Dalia you know, the Dalia we see on stage. Is it going to it was at the vision or was it like "Oh, I'm just gonna do you're gonna make a few bucks to supplement my income while I do the investing."

Dalia Barsoum  09:53

Now, it's interesting that you asked this question because I actually made the move, knowing exactly who I want to be as I stepped into this? So I was, I was part of the real estate investment group and there was a mortgage broker there that spoke on stage. And he was my idol back then. And I would look at him and go, "Oh my God, this guy knows so much about income properties. I wish I had talked to him when I financed my rentals, and he's educating he's a superstar. I'm gonna be the next this person." 

Alfonso Cuadra  10:25

Yeah. 

Dalia Barsoum  10:26

And that was my mission all along to become that person. So yeah, I went in aspiring to be that person and doing everything that I could to be on that- these stages, and that's how it unfolded over time.

Alfonso Cuadra  10:43

And how long now? 

Dalia Barsoum  10:45

11 years.

Alfonso Cuadra  10:46

Okay. So, you know, that's a good time in this space. Right? And, you know, just for the to give context to the viewers and listeners, what is the the scope of the business? Like, what is your mortgage business look like?

Dalia Barsoum  11:00

So 2023, I ranked as Canada's top mortgage broker, and Ontario's top mortgage broker, over the year, we won-

Alfonso Cuadra  11:08

Congratulations. 

Dalia Barsoum  11:09

Thank you very much. We won many awards, and also ranked one of the top 100 global mortgage professionals so very blessed that, for all of that recognition. My business focuses on investment properties, because that was my passion. I lost money in the stock market, I tasted a little bit of what owning a rental properties like I like this stuff works. 

Why didn't anybody tell me about this before. And then I became so passionate about actually building my own portfolio. And as I built my own portfolio, I learned about the hurdles of income property financing, and I solved my own problem. So I decided I'm gonna go out and solve the same problem for real estate investors, which is how do you scale a real estate portfolio that helps you achieve your goals using the best source of money? 

Okay, so that's what my business does helps Canadians build up the portfolio of their dreams, whether it's residential, multi residential, a mix of both, and scale it up using the best cost of money and managing risk, because I've seen investors build large portfolios that they've lost because they didn't manage the money structure well, so that became a passion. And I started to provide solutions to address that particular problem.

 Alfonso Cuadra  12:22

What's your favorite part about it?

Dalia Barsoum  12:24

I love it when I see somebody achieve one of their goals because of the work that we did. So I had clients, for example, who quit their nine to five jobs. And, and the day they quit, they called me and they said, "Dalia, I wouldn't have been able to do this, if it wasn't for the work you guys do." For me, that is very fulfilling, because I love to see people elevate their lifestyle, create abundance in their life, raise their impact, that's what life is all about. 

We're not here to run on a treadmill, pay the bills, and just, you know, figure out how to deal with stress. That's not what we're here for, we're here to be the best we can and create abundance and create impact and elevate lifestyle and make a difference for us, for our families, for other people. And real estate is a very powerful vehicle to do so. So for me, the best part of it is to see results.

Alfonso Cuadra  13:18

Well, I think we're we're very much aligned in that. And this is why we get along so well. Because those calls and the emails are, you know, someone says that one thing that you did, or you know, you said or you helped us out with, and this is why I'm here. I live for those moments. Right. So I think we're very much the same from that perspective. This is going to be aired, I would say that say it's spring 2024. 

But right now it's, you know, February 2024. When we're filming this, what are we expecting? Right? Let's bring out the crystal ball here. And what's the what's the market going to do in terms of mortgages, interest rates, you know, just recently, there was an announcement in the US, and they talked about potential, reducing the rates. And just the thought of that already, people, it's everybody just got really excited. Yeah. And so you've been in the game for a while. And so what I want to know is, what should we expect? And what should be the strategy that we're using today? And from your perspective, what do you think people should be doing right now?

Dalia Barsoum  14:22

So I'll answer your question in two parts. So the first part is what's ahead of us. And I fired my Oracle a long time ago. And I personally follow some prominent trade analysts in the industry because they breathe that day in and day out and day in day out. And what is becoming apparent based on the indicators is that we're closer to the- we are now at the peak and there is light at the end of the tunnel and it's around the corner. Because if you think about if you listen to the last announcement by the Bank of Canada, they literally unplugged the stove. 

They didn't talk about the rate hike risk, they talked about the length of time, the rate should, to or cook, to feel its impact. So that's a shift in message. And we're starting to see the fruits of if you want to call them the fruits that the impact of that so. And if you look at the bond market, the bond market is a leading indicator of what's going to happen with the overnight rates. 

And if you look at the chart, it's now trending down. Yeah, there are some upticks, there's been some recent upticks. But if you look at any past time, when rate cuts happen, they don't happen like this, like there is this there is a little bit of this. And then there is going this and there is a little bit so leading indicator by the bond yield messaging from the Bank of- tone of the Bank of Canada. 

And the expectation is that we're going to see some relief start in q2 of 2024. Now, we know what the banks do, they always keep the door open for any surprises that may happen. And if there is something wonky that happens, that may change the timing of when that rate cut could take place, but at least now we know it is happening. 

Alfonso Cuadra  16:10

Yeah.

Dalia Barsoum  16:11

 And that's giving people hope.

Alfonso Cuadra  16:13

And the thing about hope is something that I feel is a little bit funny, because people are like, oh, when this happens, then I'm going to take action. And the opportunities are now. 

Dalia Barsoum  16:23

Yes. Absolutley. 

Alfonso Cuadra  16:24

Because if we wait till that happens. Like if we wait to the- you know, Bank of Canada or you know, someone wakes up and says okay, now today it's we're going to drop it by 50 basis points. 

Dalia Barsoum  16:35

Uh huh. 

Alfonso Cuadra  16:35

And that's going to be a frenzy. 

Dalia Barsoum  16:37

Yes.

Alfonso Cuadra  16:38

Right? 

Dalia Barsoum  16:38

Yeah. 

Alfonso Cuadra  16:39

And so the opportunities are now.

Dalia Barsoum  16:41

I can't agree more with you. The opportunities are now if you back at the napkin math, take a property today, let's say at 500,000. And you're buying it at a rate of six point something or five point something. So the rates are still high. Compare the savings, alright, to what's going to happen when the rates go down to three point something. And now prices would go up by let's say, another 100,000. 

Because it there is pent up demand. And you're gonna see that, yeah, it may not cash flow today. But if you're buying in a good market, and you know what the plan is to make it cash flow and the rates go down, or by adding units, you're actually ahead of the game buying at higher rates at discounted prices versus later on. Once the market goes, Okay, now we have the relief, let's go and the prices. 

And we saw that happen in May. You may, if you remember the bank signaled that they're gonna pause. I saw it come on my mortgage broker. I'm like, what just happened? Yeah, competitive offers firm offers. And then let's go. So I agree with you. Now's the time. Yeah. Now's the time to position capital. Now's the time to make moves.

Alfonso Cuadra  17:53

Yes. 

Dalia Barsoum  17:54

Absolutely. 

Alfonso Cuadra  17:54

And you're gonna get a better price because of the where the interest rates are. 

Dalia Barsoum  17:59

Yeah. 

Alfonso Cuadra  17:59

Versus when everybody in their grandmother thinks they're an investor all of a sudden again. 

Dalia Barsoum  18:04

Yeah, yeah. 

Alfonso Cuadra  18:05

So I love that. Now, one thing that you talked about which I live, just looking at the bond yield, that's all I do in my office, like when the bond goes down. I'm like, it's like I start celebrating because I'm always we're closing deals, and all of our interest rates are fixed from the bond from the bond market. 

Dalia Barsoum  18:24

Yeah. 

Alfonso Cuadra  18:24

Can you explain in layman's terms, the difference between commercial borrowing and how that the interest rates are set versus residential? Because I love explaining that to people because I'm a multifamily guy. I'm the big commercial investor. And for me, it just makes more sense. Longest amortizations, cheapest interest rates. Most people don't even realize that that even exists. 

Dalia Barsoum  18:50

Yeah, 

Alfonso Cuadra  18:50

So let's demystify it for them. And you can explain to them how the bond market works.

Dalia Barsoum  18:56

Okay, so when it comes to interest rates, there are two flavours, as you know, there are the variable rates, and there are the fixed rates. And the variable rates are based on the central bank's what's called overnight rates, you get your rate through a lender, so these lenders go and base the rate they're gonna give you on something behind the scene. When it's variable, it's based on the Bank of Canada, that's their cost of money, and then they lend it to you at a higher rate and make the difference in their pocket. 

So variable rates are based on the overnight rates and they fluctuate. Fixed rates, whether you're actually in residential or in multifamily, the bonds, the Government of Canada bonds play a big role in the pricing of fixed rate mortgages. So that is the place where the banks go and "buy money, buy their money". They turn it around into fixed rate loans that they package on the residential side or on the commercial side. 

The difference between fixed rates in the residential space and the commercial space based on the bond yield is that in revenue potential they can lock it in and they can give you the certainty of what your rate is going to be, let's say within 120 days, in commercial, most lenders are a lot of lenders cannot lock the rate until you're close to getting a deal done. 

So sometimes the lenders call and say, Okay, you're closing in three days, two days, the rate is this Do you want to lock in? That's how they do it. In the CMHC world and the commercial CMHC, they use the Canada mortgage bonds. So it's essentially the same concept as the Government of Canada bonds, but it's a cheaper facility, and therefore, you get better rates on the CMHC front. 

Alfonso Cuadra  20:36

Which is exciting. 

Dalia Barsoum  20:37

Absolutely. I mean, the rates, I think I checked today, and the CMB, or the Canada Mortgage Bond was a three point something. So you add, 

Alfonso Cuadra  20:47

Depending on your lender and who you work with. 

Dalia Barsoum  20:49

Depending on your lender, yes, obviously. So that's not the rate you're gonna get. But the lenders take that number, add their margin to it, 

Alfonso Cuadra  20:56

depending on the relationship that you build with them.

Dalia Barsoum  20:58

Of course, yeah, yeah. And then they offer it to you. But yeah, the rates and commercial CMHC right now are lower than residential.

Alfonso Cuadra  21:05

Absolutely. 

Dalia Barsoum  21:05

It's insane!

Alfonso Cuadra  21:06

And it's gonna continue to trend that way. Because you need to stimulate a building in creation of units. And if they were to go up, I would say the government has to figure out how to pay it down. Which leads me to another question, the idea with commercial rates where you can buy down your rate. And I know that people would appreciate learning about that, you know, especially from you that this is kind of like this is your field. 

Dalia Barsoum  21:06

Yes. 

Alfonso Cuadra  21:07

And when should we buy down the rate? What is the cost of buying down the rate? And what does it even mean to talk about buying down a rate? Because this is, you know, this is probably something that most people don't know about? 

Dalia Barsoum  21:45

That is a very complex question to answer in a few paragraphs, but let me see how I can go about this. So let's say you got a building, and that building qualifies for a $3 million loan. And at the time off approval, you know, the rate was four point something, right? So the debt coverage of the building at that rate, allows it to qualify for that $3 million loan between the time you get qualified to the time you close the deal. Right? The rates have gone up. And that happened, I think, in 2020, or 2021. There was a time where the bond market was going up, up up. 

Alfonso Cuadra  22:30

Well, it happened in November, November, I think we saw a big hike. 

Dalia Barsoum  22:33

Yes, yes, you're right. So now, because of commercial financing is the building that qualifies primarily for the loan. And that is connected to the rate that was used to qualify it. If the rate goes up, technically, you would be getting a lower loan. So as an investor, you have the option to go to the lender and say, Mr. Lender, I want to keep my rate at the four point something and I am going to, "buy it down." Now it's five, you qualified me at four and a half. So for that half a point, I'm willing to use some of the money that I'm getting to bring that rate down so I can continue to qualify for the 3 million. 

Alfonso Cuadra  23:15

And get the money that you were expecting in the first place.

Dalia Barsoum  23:17

-the money that was you're expecting in the first place. Exactly. So that is what's called the buy down. How do they actually calculated behind the scene is quite complex. And I, I can't explain it in layman's terms, how they actually go about that buy down, I have the formulas, but I can't explain. 

Alfonso Cuadra  23:34

You're so knowledgeable. And I wanted to have like conversations where you know, someone's gonna get something out of this interview. If someone was going to work with you, what should they expect?

Dalia Barsoum  23:46

Strategy. Our approach to financing is about strategy because I came from a wealth management background, and I live by the concept of planning, I took that mentality to the mortgage world. So on the residential side, for example, we have become known for what's called the financing roadmap, which is the roadmap we give investors on how they're going to go about financing the portfolio that the want and the next set of properties where many just think about the current deal, we think three four steps ahead. So that's on the residential. 

On the multifamily it's same thing, if somebody comes to me says Dalia, I want to buy this building and I have partners, I have corporations, I'm thinking about this and this and that I'm going to renovate it, I'm going to reposition it, then I'm going to do this. Our team thinks strategy, "Okay. You told us what you want to achieve. Now let us connect the dots for you and help you plan out, where is the money going to come from? How do you structure the deal, what you should expect in terms of things? How do you get ready?" 

So it's all about strategy is not about saying, "Oh, you qualify for a million dollars and your rate is going to be x." Or "when you have a deal, please bring it over and we will do it." It's all about strategy.

Alfonso Cuadra  24:57

That's what a mortgage broker I would say, but not The Mortgage Broker. Because it you have to understand the person and what they're trying to accomplish. 

Dalia Barsoum  25:08

Absolutely,

Alfonso Cuadra  25:08

To help them. 

Dalia Barsoum  25:09

Absolutely. 

Alfonso Cuadra  25:10

I love that. Yeah, you know, this has been incredible. Thank you for stopping by I really, I really do appreciate it because I know it was like kind of short notice.

Dalia Barsoum  25:19

When Alfonso says, "Come." I will come.

Alfonso Cuadra  25:24

What's what's a mantra? What do you live by? Like, Dahlia, What is that inspirational quote, or what's that mantra that you live by?

Dalia Barsoum  25:32

That's what my tattoo says, You see, this is a tattoo that I have here to remind myself off what I live by. So what I live by, so this is the Ohm sign. And this is actually a sun. And the Ohm sign these are for those who know the sign, these are the different levels of consciousness. 

So for me, what I learned over time is in order to grow anything, whether it's to grow a business or to grow, raising your level of consciousness and growing as a person, mentally, emotionally, spiritually, physically, is going to determine how far we can go. So I remind myself every day of that and work on different aspects. That's something I live by and then the sun while it goes with the yellow that I'm wearing today. The sun-

Alfonso Cuadra  26:18

Which is- when I looked at you when you came in, I was like, let's go. 

Dalia Barsoum  26:23

Let's go.

Alfonso Cuadra  26:24

It's vibrant. It's bright. It's loud. It sings. Right?

Dalia Barsoum  26:30

Yes, energy, hope, are two big things that I I live by, I believe energy is everything. And staying hopeful, regardless of the clouds that sometimes pass through whether they're, you know, financial or relationship. Everything is temporary, the cloud passes in the sun comes back out again. So these are the two things that I learned over time, it took me a while to decide to put it on a tattoo. But that answers hopefully the question.

Alfonso Cuadra  26:57

I love that so much. Come again, we're gonna do this. Again, this is part one. And all Dalia's information will be right in the show notes so they can get a hold of you. Thank you so much. My pleasure. And we'll see you guys at the top.

Dalia Barsoum  27:13

Thank you.

Carl Richards  27:15

Thanks for listening to The WealthGenius Podcast if you have a question or comment about something you heard today, reach out to The Godfather via social media or email him anytime. All that information is in the show notes. And of course, don't forget to subscribe so you never miss an episode of The WealthGenius Podcast. The WealthGenius Podcast. Until next time, see you at the top.