WealthGenius Podcast

Revolutionizing Real Estate: Wealth Shift Opportunities and The Golden Rule of Success

• Alfonso Cuadra • Season 2 • Episode 9

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In this episode, Alfonso interviews Kyle Ford who highlights the evolving landscape of real estate in 2024, stressing the need for caution when dealing with private money and encouraging strategic partnerships over excessive borrowing.

Ford discusses the importance of treating Other People's Money (OPM) with responsibility and the impending wealth shift. The conversation explores the value of having multiple exit strategies and reflects on the opportunities for both seasoned and new investors in the current market conditions.

ABOUT KYLE
Kitchener-Waterloo native Kyle Ford entered the financial services sector in his early twenties, evolving into an independent financial advisor. Amidst conventional financial planning, Kyle sought alternative investment avenues, envisioning accelerated retirement goals for himself and his clients.

At 23, he ventured into real estate, acquiring a pre-construction condo, followed by two single-family rentals within a span of three years. In 2018, Kyle sold his financial advisory portfolio, shifting focus to real estate and concurrently launching a career as an independent mortgage agent. His meteoric rise at Mortgage Alliance ranked him in the top 20% his first year, 10% the second year and the top 1% the last two years.

Balancing his roles as a real estate investor and mortgage agent, Kyle Ford and his team established CapGap Mortgage Trust. This innovative trust aims to bridge capital market gaps, prioritizing the interests of both lenders and borrowers. Personally rooted in Kitchener, Kyle relishes family time, pursuing hobbies like golf and hockey, and cherishing summer moments at his Grand Bend cottage.

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Carl Richards:

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:

Yes, sir. 2024.

Kyle Ford:

I'm excited.

Alfonso Cuadra:

We've been buds for a long time we were on the road together. So thank you for coming on the show I wanted. I wanted to dive deep on who Kyle Ford is, and your story. So why don't you start there?

Kyle Ford:

I appreciate it and appreciate being here. And always a pleasure to spend some time with you.

Alfonso Cuadra:

Yeah!

Kyle Ford:

You're someone I look up to and I credit a lot to where I've gotten in this business. So those times on the road-

Alfonso Cuadra:

Like roadies!

Kyle Ford:

Roadies! Yeah, we go deep, right. You know, traveling, traveling the country with with friends and investors. So-

Alfonso Cuadra:

Yeah, beautiful times.

Kyle Ford:

Beautiful times beautiful times. So I always start with a husband and a father first.

Alfonso Cuadra:

Yes. Congratulations, by the way.

Kyle Ford:

Thank you. Number- Number two now. So we have two boys the three and a half year old and a six week old. So-

Alfonso Cuadra:

Wow!

Kyle Ford:

That's amazing.

Alfonso Cuadra:

The first thing I said to you "how you doing?" You said "I barely got any sleep!"

Kyle Ford:

Tired, tired. Not as tired as Chelsea but-

Alfonso Cuadra:

Yes yes yes yes.

Kyle Ford:

But tired nonetheless. So you know. And that's something you've heard my story when we were on the road. I always used to talk about, you know, helicopters and Ferraris.

Alfonso Cuadra:

Yes.

Kyle Ford:

And you always talk about your purpose and your why. And when you have kids that you really start to appreciate that right? Over the last. It's crazy to say this. I've been in financial services for 12 years. But I've been investing for nine. And I still feel like the newbie, I still feel like the young guy in the back of the room. And- but it's almost almost a decade in real estate and over a decade in financial services. So, it's amazing, the- how your journey changes and your investment strategies change and your clarity becomes much more straightforward. So-

Alfonso Cuadra:

Do you find that you you found newfound purpose or drive? Because when I met you, you were not married and you did not have any kids. But you were still very driven. And, but you wanted again the Helicopters, Ferraris? Do you find that having a family just gave you more of a drive?

Kyle Ford:

Yeah, the drive was for dollars in the bank account. And I didn't know what- know that- that's what it was. But I did I was chasing, chasing dollars. But now what I you know what, what I chase is being present at four o'clock when my little guy gets home from school or daycare.

Alfonso Cuadra:

That's beautiful.

Kyle Ford:

Right? When being able to help him with dinner and help him you know, just being present and available and, and creating the- and using real estate to create that freedom for me. So a lot of things that I'm doing in my portfolio right now, are really about alignment with my personal life and making sure that my investments are solving the problems, not the reason for my problems. So-

Alfonso Cuadra:

So how do you do that? Like, how do you align with your- obviously you need to spend time with the family?

Kyle Ford:

Yeah,

Alfonso Cuadra:

And most people think about a sacrifice, right? So I have to sacrifice, you know, going out there making money to, to not spend time with my family. So I'm going to give up spending time if I'm going to build a business, even though the- I'm building this business for the family. But it's almost like, you know, I feel sometimes people think they have to sacrifice certain things.

Kyle Ford:

Yeah. And I feel like I did. And I don't think there's it's part of your your learning and your growth. And I think I did and I did for a lot of times I talk about being present when my three and a half year old is home. The truth was in the first two years of his life, I was working like a dog. And I wasn't particularly present. And it's in the last 18 months that I've really, you know, realized that I've missed that. And that I have a second chance with a second son. And I want to be more present in his early years because you don't get that time back. So in terms of my investments, you know, and my business, the last 18 months have been a lot of "nos". Saying no to things.

Alfonso Cuadra:

The power of the"no".

Kyle Ford:

The power of the no and it's empowering, saying no. And that means turning down deals that are good. It's a good deal, and maybe even a great deal. But if it takes time away from my business, my family and I can- I can do other great deals that don't take that time away. So now it's not just dollars in a bank account. It's dollars in a bank account is what's helping buy the freedom. So it's still relevant where the money is important. It's- it's kind of up there with oxygen you know?

Alfonso Cuadra:

You gotta breathe.

Kyle Ford:

You gotta breathe.

Alfonso Cuadra:

And you gotta make money.

Kyle Ford:

You got to make money. But a great deal isn't just about the dollars and cents, it's about the measure of time it takes and stress. I don't want to be stressed out, I don't want to be, you know, I don't want to- I don't want to die of a heart attack. I want to, I want to live to enjoy what we've created. So-

Alfonso Cuadra:

So how does someone make a decision? I feel when people get in real estate. It's like, shiny object syndrome, right? So they want to do everything, I want to do this, I want to do that. And so how do you make that decision of saying no and you don't get caught up with the FOMOs? Right, you know, "fear of missing out", this is the most powerful force in the universe, it gets people to do dumb stuff. You know? And that is why some people, unfortunately, are in trouble. Because of trying to do everything, and all- be all things and do everything, and trying to take on every opportunity. And, you know, maybe not every opportunity was for them.

Kyle Ford:

Right.

Alfonso Cuadra:

So how does someone navigate through that? Like, what would you say?

Kyle Ford:

Well, I did it. I've done every strategy. I did everyone and and most of all, they went good. Like I actually had success in basically every strategy I've done: single family rentals, single family flips, small multis, large multis, cottage rentals, major construction new builds, large multifamily, land development, lending. I've really done it all. But what I've learned in that is that's what stretching me thin. That's what's taking the time. Instead of digging a deep hole and building a high rise. I built a low rise subdivision.

Alfonso Cuadra:

Yeah.

Kyle Ford:

Right. I built- I'm spaced out I'm thin. And the challenge that- that caused for me, it was difficult to hire. Because it wasn't- was like, okay, so you're gonna help me with this. And then they get the hang of it. And now-

Alfonso Cuadra:

We're doing this!

Kyle Ford:

We're doing this and you're like "what do we do? What company is that? There's another corporation?" So it became Yeah. difficult to hire. So kind of went back over to that last 18 months, I've been streamlining my business, streamlining the number of companies, streamlining the partnerships, getting rid of deals that- prop-, some of the properties that I liked, like I liked the property it was I liked it. But it didn't align with the company's direction, which was also my personal time. So I had to get rid of those properties. I had to end some partnerships. And it- not on a bad note. It was that partner and I weren't going to do multiple deals together anymore.

Alfonso Cuadra:

No longer in alignment with where you're going.

Kyle Ford:

That's right. So I can't have a company with that person; filing the taxes, doing all that work for one or two properties wasn't a good use of my time. So I need to be in partnerships that had more vertical integration, that had more, and we were going to do more deals together.

Alfonso Cuadra:

Yeah.

Kyle Ford:

So I guess to net that out where I'm at in my business right now, is we still have some some assets that maybe we don't see long term, and we're looking at selling this year. So some of those are the more singles, big buildings, big apartment buildings.

Alfonso Cuadra:

You know, you see the singles, you know, that makes that brings a warmth to my heart, because you know, I've been playing this drum for a long time. The ones and twosies these are gonna get people in trouble. And it's really tough to make a make a go out of it.

Kyle Ford:

Well, and here's the thing, Alfonso, these are short term rentals, we are actually making money on them. But not relative to the amount of effort that goes in from-

Alfonso Cuadra:

The output.

Kyle Ford:

The output.

Alfonso Cuadra:

Yeah.

Kyle Ford:

We can- I can make money on it, I can turn a- I can be in the black on it. But when I factor in the mental energy that I'm putting in to the black; is that time better spent on bigger deals? And it is.

Alfonso Cuadra:

Bandwidth.

Kyle Ford:

Bandwidth. This is this is a major thing that the"ROB"? What's the return on the bandwidth? What's my mental capacity, what is it worth and what can I allocate that to that generates a higher rate of return? And a higher rate of return in alignment with my my wife and my family, so.

Alfonso Cuadra:

So what are the I guess, what is the business look like now for you? And then further, I want to go back to the beginning. So first of all, tell us where are you at right now? What are the companies? What are you building? What are we growing?

Kyle Ford:

Yeah, so my major bandwidth my major focus is on CapGap Mortgage Trust.

Alfonso Cuadra:

Yeah.

Kyle Ford:

So that is my private fund, designed to help real estate investors or passive investors, invest in real estate, generate passive returns, with secured mortgages, no napkins, no IOUs and no promissory notes, secured mortgages.

Alfonso Cuadra:

Yeah.

Kyle Ford:

So CapGap is my major focus as we see it as the industry starts to change around private lending and compliance and restrictions and hearing some some horror stories that have happened. CapGap is going to be an amazing solution for investors to get that consistent secured return in real estate, while getting- while having underlying security. So CapGap is my main focus. I'm blessed to have a very successful mortgage business. I've been a mortgage agent now for six years, finishing in the top 1% of Mortgage Alliance last three years.

Alfonso Cuadra:

Nice. Congratulations!

Kyle Ford:

Thank you. Well, we'll see I may be number one this year with the results come out in a couple of days. So we're going to find out if I finished number one overall. We have the cottage and hotel business. And that's, that's a business that we are getting out of the cottages, to focus more on the hotel. And this is classic monopoly. We had at one point, 14 cottages.

Alfonso Cuadra:

Wow!

Kyle Ford:

Singles, and we were making money. We were making money on everyone. But we've been selling the singles, and we bought the hotel because there's vertical integration, economies of scale. And then, I'm not planning on growing the hotel business too much, but just keeping the one that we have.

Alfonso Cuadra:

What- I don't want to cut you off, but what drove you to the hotel business? You know, is it- was it attractive to you? Because people ask me about the hotel business. And I'm like, "Guys, it's not. It's real estate. But it's a business. It's like you're operating a company, you got to have, you know, General Manager, employees, marketing. I mean, this is- was a whole other- this is an all other, whole other playing field." So, what got you into it?

Kyle Ford:

Well, it was the same integration from the onesies, twosies and fouresies into big buildings. Hiring a GM actually sounded good to me, when my wife and I were driving ourselves crazy managing 14 cottages all over the place. And I- just like having small rental properties all over the place, buying the big building and hiring a property manager versus having all of these individual cottages. It was the natural integration, natural evolvement. I'm also, you know, I'm a big believer in going with the direction of the government, in the sense of not trying to fight them.

Alfonso Cuadra:

Yeah.

Kyle Ford:

The government at all levels. And there's a all out attack on short term rentals, I'm not going to use the specific websites, because that's just a booking platform. They're going after short term rentals.

Alfonso Cuadra:

Yeah.

Kyle Ford:

And so by going into the hotel space, you're zoned and licensed. So you can still use those same platforms to generate bookings. But you're not under the same restrictions. So the hotel to me was a more long term-

Alfonso Cuadra:

Scalable.

Kyle Ford:

Scalable, and not at risk to government intervention, not at risk to the government coming in and saying you can't do this. To put it into perspective, throughout the pandemic. hotels were allowed to operate, individual cottages weren't. So that was a big"aha", for me being like, this is a more long term protected strategy.

Alfonso Cuadra:

I like that. I like that. Sorry, I cut you off. But you're explaining your business, a CapGap, the hotels and the mortgage business.

Kyle Ford:

And big, big buildings. So mor- the mortgage business and CapGap are very much intertwined. The hotel is something that we're gonna keep long term and not grow. And then I'm really gone back to my roots and something that you- you've talked about for years and I- I went and- I went and tested all the other theories to make sure you are right, and you were, and I'm back to the big buildings. So buying under- you know I like to buy underperforming buildings that are in really, really rough condition and turn those buildings around. Now we're not in the business of of kicking people out. But there- we are buying buildings that are in extreme dilapidated, repair and need major overhaul.

Alfonso Cuadra:

Yeah. Which is good for the community, it's good for-

Kyle Ford:

It is-

Alfonso Cuadra:

-the people living there. You know, I was talking to someone, they're like, oh, you know, you go in these buildings and you you're gonna kick people out of their apartments, but they're not living in good stead like good conditions, right, some of these some of these underperforming buildings, because probably the owner bought it probably overpaid, didn't calculate the expenses doesn't have enough money to put into the building or doesn't want to put in money in the building. And then these buildings deteriorate over time. And people are not living in good conditions. Right. And so in some cases that I've seen some real health concerns for some of these people.

Kyle Ford:

I couldn't agree more and the conditions that they're living in are- I'm of the belief are making them sick. Yeah, these buildings are disgusting. Yeah, and whoever's fault it is is irrelevant.

Alfonso Cuadra:

Yeah.

Kyle Ford:

But when we're gonna go in, and we're gonna get these buildings up to today's standards, so we're not we're not slumlords we're gonna get them in good shape. So yeah, I make my money in my businesses. And I park my wealth in real estate, which is going to be big buildings.

Alfonso Cuadra:

Which is, this is the formula of all the wealthiest people in the world. Right. And, you know, I've been, I've been playing the same, the same beat for a long time, and I've been sharing that with people for the longest time, this is the best way to hedge against inflation, you know, market changes, city changes or municipality changes. And, you know, we talked about short term rentals where it's good on Friday, but maybe on Monday, we're going to take it away. And so this is, you know, out of all the lords, there's only one lord left; is the landlord.

Kyle Ford:

Yeah, yes. I love it.

Alfonso Cuadra:

So okay, so you built this beautiful real estate business. So now let's go back to the beginning. And how did it start for you? Where did it all start?

Kyle Ford:

Yeah, so I got serious about investing in 2015. In 2012, I started off at 22 years old as an independent financial advisor. So as an independent financial adviser, I was with a major insurance company, and they teach you that they're gonna go, they're gonna teach you how to get clients. But the truth is, is you go into your friends and family.

Alfonso Cuadra:

Yeah. Warm up- warm market.

Kyle Ford:

Warm market.

Alfonso Cuadra:

People, they're going to do it for you to get you going.

Kyle Ford:

To get you going.

Alfonso Cuadra:

Yeah.

Kyle Ford:

And I guess I was just mostly shocked by the people that I thought were in a good financial position. And I'm the one doing the calculations and understanding that they really weren't in that great of a position. And but the only thing that I knew-

Alfonso Cuadra:

How old were you?

Kyle Ford:

I was 22 at the time.

Alfonso Cuadra:

22. So now you've seen these adults grown people.

Kyle Ford:

50 plus parents, aunts, uncles-

Alfonso Cuadra:

All the people that you were maybe holding up in, like high regard in terms of like, "Oh, they've they've done it, they've made it."

Kyle Ford:

Yeah, exactly. And it's not that they were going to lose everything. But there were they had no retirement, there was no retirement plan. It was- and if there was a retirement plan, there was a massive pay cut. But what I did start to notice is the real estate, the all the other investments weren't going so well. Maybe they had a pension, and that was their saving grace. But those aren't particularly available, like they were to our parents generation. So I really noticed that and, and then I would run into people with a rental property or two. And I started looking how that- started looking how that was going to impact their retirement. And I really started gravitating towards real estate. 2015, I went, you know, an HGTV star was coming to my town. So I went to went to the event, and I candidly was going there to solicit for insurance sales, like these people are buying real estate, I'm gonna try to get insurance sales. But I was very humbled by the strategies, and very humbled by what I was seeing, and this different way of thinking. So I got involved with that organization and learned a lot. And between 2015 and 2018, I was kind of living a double life, I was the financial advisor-

Alfonso Cuadra:

By day.

Kyle Ford:

-Mutual funds, RSPs TFSA, is by day, and I was going out buying real estate, on weekends and in the evenings and on the road. And at the end of 2018, the branch manager kind of pulled me in and said, "Listen, I love you, I think you're a great guy, and you're going places, but you gotta leave, you gotta go. And I'm like, why? He's like, because all the guys back at the table are too busy talking to you about real estate, not selling insurance. So you're going a different direction-

Alfonso Cuadra:

You're a distraction.

Kyle Ford:

You're a distraction, love you, we're gonna- everything's good. But you're, this is better for you and better for me. And it was and in January 1st 2018, I made a big

Alfonso Cuadra:

Was that a natural transition for you? Like was it like, did some of the skill sets or maybe not skill decision. And that dates irrelevant in the in the industry, because that's when the stress test started. And the sets, but some of the, the knowledge that you gained being an insurance agent did it help you in the mortgage space? B20 rules came down. And a lot of brokers started leaving the

Kyle Ford:

It did. And- and the major thing is just space. And I made the decision that I'm going to get out of understanding how to talk to people about money, right, and financial advising, and I'm going to become a mortgage being being a person, a money manager and a person who is agent, I'm going to start helping people. handling money and dealing with people's money. So absolutely, it was a fairly easy transition. So yeah, 2018 got into the mortgage space and kind of just went crazy from there. And I did

Alfonso Cuadra:

I think it was 2021 all the strategies. I was doing all sorts of different real estate flipping, ho- buying and holding cottages, growing my mortgage business. Yeah. So in 20-uh, kinda the tipping point for me. A year after becoming a mortgage agent, I got a call from my lawyer, January 2019. And he goes, "Tell people that you have private money." And I said, "Do I? Do I have private money?" He's like, "Yeah, I've got I've got a lot of clients with private money. Let your clients know that you have access, don't say it's you, say you have access to private money." Okay. And what a change that was from being a financial adviser asking people to give me money to now being a mortgage agent offering not only conventional money but saying I have private money. Well, the business trajectory just went like this. When you're the person who has the capital to fund people's deals. I got it in the way. There's a big transition from the restrictions around conventional lending. There was massive demand for private capital people looking

Kyle Ford:

2021 or 2022, maybe 2022. for secured lending solutions. And I just kind of got in the way of all that. And it was gotta call Kyle. Kyle has access, Kyle, Kyle can do secured lending. Olympia, I believe it was in 2021 changed the rules that you had to have an administration license in order to handle some of the mortgages.

Alfonso Cuadra:

As a result of that one thing. Out west.

Kyle Ford:

Well, so just, I guess a stroke of luck. My broker already had one. So every- all these other brokerages were scrambling, deals were falling apart, because Olympia changed this rule. And within a week, were like, "Hey, we're good to go, we can administer." So just kind of being in the way of the private money in the wave of the private money was a massive benefit to me.

Alfonso Cuadra:

And this isn't- this is a question that just came up right now, it really has nothing to do with your with your story. But why do you think Olympia changes things? Are they liable? Because really, they're just a platform? I mean, they're just, they're just holding the money, right? The decisions are made by the individuals. But are they liable in some way for any bad decisions that someone's going to make?

Kyle Ford:

I really want to be careful about how I answer this question.

Alfonso Cuadra:

It just occurred to me. I mean, they changed things so much. And I'm wondering, is it because there's a liability there? Or is it because, you know, because it's government, the government is pushing for that? Or?

Kyle Ford:

So I would say there is a lot of pressure, understanding that most people are using Olympia Trust to handle their registered plans. Okay. So their registered plans are dictated by CRA. CRA is the one who's dictating the terms. And Olympia has always aligned with CRAs broader guidelines.

Alfonso Cuadra:

Yeah.

Kyle Ford:

And what happened recently is Olympia is coming a little inside the guidelines. These are the guidelines you can go here and Olympia aligned with that. But I think what what's happening in that case out west, people were going to the guidelines, Olympia was at the guidelines. And then when people were pushing those guidelines it created off-sides. So I think Olympia is looking and-

Alfonso Cuadra:

Tightening things up.

Kyle Ford:

Just tightening things up. So they're like there's the line, we're gonna just be a little inside it to- in case something goes wrong.

Alfonso Cuadra:

Yeah fair enough.

Kyle Ford:

And I want to give this example, the RSP limit loan devalues 100% LTV. Olympia recently reduced their internal LTV to 90%. There's uproar over this. Here's what people don't understand. If you are a lender, if I'm lending money to Alfonso and I met 100%, loan to value, and a year after that deal happens, you need an extension. If something happened, you need some more time. If the extension just happens, it's okay. But if there's any change on that required, Olympia now, or Olympia will require a CRA will require an updated appraisal. If you're- if my loan is now above 100%, loan to value, my funds are at risk of deregistration and fully taxable.

Alfonso Cuadra:

Wow.

Kyle Ford:

So I think that this reduction into 90%. I'm in

Alfonso Cuadra:

Listen, put 10% on the deal.

Kyle Ford:

Put 10% on the deal! It's not that- And I think a lot of lenders when they realize that's the risk, "Uh yeah, no. Okay, I want a little bit of a buffer. I want it." So yeah, I think it's a- I'm in support of it, but unfortunately, in every industry, there's some bad apples. support of I think 90% is a plenty aggressive LTV.

Alfonso Cuadra:

Yeah.

Kyle Ford:

And their behavior ruins it for the rest of us. And we have an incredible relationship with Olympia, these restrictions that they've put in, I think, ultimately benefit the investors. And the only ones who are complaining or the borrowers who now have to put 10% into the deal. And I don't think that's the end of the world.

Alfonso Cuadra:

Yeah, yeah you want to have some skin in the game.

Kyle Ford:

Have some skin in the game.

Alfonso Cuadra:

So I didn't want to interrupt you. I just had that thought when you said Olympia but you were talking about your your story and how we how we got here.

Kyle Ford:

Yeah, yeah. So the private money is really what helped me grow and scale. I think it's important that we talk about in 2024, the folks that are using private money, need to be careful. Okay? And there was- when we were in this major upswing for multiple many, many years, using private money was a great tool to maintain-

Alfonso Cuadra:

Because everything's going up,

Kyle Ford:

everything's going up and-

Alfonso Cuadra:

Life is good.

Kyle Ford:

Life is good.

Alfonso Cuadra:

Life is good.

Kyle Ford:

I talk-

Alfonso Cuadra:

You know?

Kyle Ford:

Life is good. I say this all the time. When I started in 2015. It's kind of when this the real estate communities got really big. And some of- I grew up in real estate lala land. It only went up, everything was good. You did a bad deal. The value went up. No worries. So in 2024, one of the things that I'm personally going back to on some of my big buildings, is I'm doing partnerships. I'm doing less private capital in the deal, less of a burn rate, bringing in some real equity partners, high net worth folks that are that are looking to park cash in real estate. And I'm giving up a little bit of my upside, but I have less risk, less stress, I'm better aligned with my family, my values, all of those things. So I think it's-

Alfonso Cuadra:

And there's not this a gun to your head, right?

Kyle Ford:

That's right.

Alfonso Cuadra:

Or money's delayed, right?

Kyle Ford:

That's right.

Alfonso Cuadra:

And so, you know, we're going to try to, you know, make sure that we get it to the finish line. And then Like, the second you, you borrow money, the clock is ticking, this is when we're all going to win.

Kyle Ford:

That's right. That's right.

Alfonso Cuadra:

Yeah.

Kyle Ford:

And the- one calculation that's not talked a right? And any time wasted any deviation from the plan, it's lot about on these bigger projects is the burn rate, and how much money the project is eating until it's profitable. going to affect you, at the end of the day, when the mortgage is And the- where problems are happening is when people are due, the payment is due. And you're delayed, you don't have using borrowed money to service that burn rate. And by bringing it, now you gotta borrow from Peter to pay Paul. And it just creates this anxiety in the market where it's not necessary, in equity partners, we have real cash in that's coming out of our you know, bring in partners, we win together, we lose together, profits, but we're not borrowing additional debt to service that if the project gets delayed, we'll try not to make it burn rate. And it's, it has to do with what's called your Risk delayed, but things happen. This is real estate. You know, if Adjusted Return. Yeah, I can get a higher return by borrowing it's delayed, we were all delayed, right? that money for the burn rate, because I own 100% of the deal. But by doing that we're not taking any risk adjustment into- into the factor and am I taking equity partners, my return drops, but my Risk Adjusted Return is so much more comfortable and in line with with what I'm trying to do.

Alfonso Cuadra:

I love it. I think this is a great conversation for 2024. Because, you know, everybody in the industry that I meet, you know, I would say not everybody, but a good majority of the people that I've been meeting these days, you know, I- I they're like, well, everything kind of slowed down and the- the things are dried up, and there's no deal flow. And I'm like, "No, we're kind of back to the way things were back in 2019." And then there were like, "Well, I wasn't an agent back in 2019."

Kyle Ford:

Right.

Alfonso Cuadra:

And so what happened is like everybody magically became a real estate professional and you know, in 2020, right? This is why we can't get people to work at restaurants, the restaurants are closing at 11 at night because no-one, there's no staff, because they- everybody during COVID became agents and mortgage brokers. But, you know, ultimately people are just not aware of, you know, market cycles and how things are in, you know, you can you can make money in any cycle. But ultimately, you got to be careful, right? And if you're going to be boring money, you have to understand you're going to have to pay that back. Right? And what's the plan? What are the exits? What's your exit strategies, and I'm a big believer in having like, 10 different exit strategies. Because you know what? It's a big responsibility to borrow money, and people don't see it that way, because they don't have skin in the game. But when you have skin in the game, you're like, "Well, I don't want to, I don't want to lose my money." You know?

Kyle Ford:

Yeah.

Alfonso Cuadra:

And everybody talks about OPM, right? OPM has been huge, had been books written about it, OPM, it's on every infomercial, or, you know, Facebook ad or whatever, you know, come to my my event, you're going to learn about OPM, but people don't talk about LOPM: Losing Other People's Money. And that's important, because, you know, right now, and 2024, there's massive opportunities. And I'm excited.

Kyle Ford:

Me too.

Alfonso Cuadra:

But you can't go in there blind. And you can't be there thinking that, you know, you're going to borrow all of this money and do it with all this other people's money. You got to have some skin in the game. Right? So what do you think about that? Yeah.

Kyle Ford:

I couldn't agree more and there's a couple of things you said in there. And in terms of OPM and other people's money, going back to my financial advising days, and then coming into a mortgage agent, manag- managing people's money. You know, I've raised a significant amount of capital for both I can't lose this. businesses, and I have a substantial amount of money that I manage for people, probably a lot more than people- people understand. And the reason why I've been able to raise that money is because it's not a gimmick to me. OPM isn't a gimmick. OPM is a responsibility, and it's not other people's money. It's Alfonso is home equity that he worked his butt off for, and he's trusted me to put it into his deal. It's Helene's retirement account that she worked at her other business for years to create. It's- It's your daughter's Registered Education Plan. Yeah, you've been scraping and clawing for this for years. And that's the money. So people

Alfonso Cuadra:

Yeah.

Kyle Ford:

I can, I will do everything I can. And you're borrow this money like, "oh, yeah, I got it from an RSP 100% LTV." And they're posting about it. How do you think it makes the lender feel when they see that, and he's seeing that you're treating it as a gimmick and as a game? And I think that's a massive shift that if people start treating OPM like what it is, how important it is that the LPM becomes easy. gonna actually raise way more money.

Alfonso Cuadra:

Yeah. Because people- you know, what, at sometimes I talked to investors, they're they they're like, Well, I'm, I'm, I'm scared of working with other people's money, because I'm scared to lose it. I'm like, you're the best person. You know, if I'm going to be investing with someone, I want them to be scared. I want them to- this is not a game. Right? And, you know, this is important, especially with what's happening in 2024. And so I want to kind of shift there, what what are your, what are you most excited about in 2024?

Kyle Ford:

Well we've talked about this for years, the most massive shift of wealth.

Alfonso Cuadra:

Yes.

Kyle Ford:

Has- it started a couple of years ago, we're in the midst of it. And every year, I think it's getting bigger and bigger. And I want to be in that wave, I want to be in the way of that shift of wealth. I'm really excited about the opportunity on all scales, for large investors to scale up. But I think we have a new window and it's been tough for the last couple of years for a brand newbie to kind of break into this. But I think that opportunity is there. BTBs are back. They're not not back. They've always been there. But they're more-

Alfonso Cuadra:

Yeah, yeah

Kyle Ford:

More appreciated, while longer term, there's- you can negotiate terms.

Alfonso Cuadra:

Yeah.

Kyle Ford:

You can make an offer and with a conditional period, and negotiate it. So I'm super excited for the wealth shift that's happened. I'm excited for the opportunities for season- seasoned investors to scale. And I'm excited for the opportunities for that next wave of investors to come in. And they can, I think this is one of the greatest opportunities that we're gonna have to break in. There's a lot of memes on Instagram right now talking about the people that bought between December 1 And February 28. We're gonna look back at those people, as-

Alfonso Cuadra:

I was gonna say about that. I was gonna say that the Fed recently in the US, they've announced that they are planning to, you know, bring down the rates. You know, I think probably, they're saying three times- three or four times this year. And, and obviously, Canada is always going to follow suit. Right. Yeah. And so what do you think is going to happen? What would happen if we if they just they went down by 50 basis points, what happens?

Kyle Ford:

Here's what I'll say we're you're in very early 2024 right now. And the uptick in the last 30 days, just off them saying they're going to do it? Yeah. The pent up demand is there. There's a supply and demand. There's- we're under supplied with over demand. Canadians have just sat on the sidelines, because we're conservative. We don't want to go first. We want to make sure everyone else- is everyone else going then I'll go too

Alfonso Cuadra:

Yeah.

Kyle Ford:

But even just the talk of them, cutting rates has already triggered the demand. I mentioned those in our mortgage business. We're getting a ton of calls from the folks that had one rental property, but kind of sat on the sidelines because they were nervous. And I don't blame them for being nervous. It was a scary time. There- there,"Hey, can we talk about that HELOC? Can we talk about that Refi? Can we- we're thinking we got a property we've been kicking tires on and that-" It's starting to happen. The second those rates start dropping, we're- it's gonna go bananas.

Alfonso Cuadra:

Whoo!

Kyle Ford:

It's gonna go crazy again, the demands there. We have a- we have a supply issue. I don't want to get political here. But it does appear that some of the gatekeeping is loosening up a little bit. We're-

Alfonso Cuadra:

No choice.

Kyle Ford:

There's no choice. There's so much pressure on it. So could it be better? Yes. But it does look like there I'm seeing a bunch of projects, fellow colleagues are in that have been in site plan approval process for years. We're seeing draft plans come through. We're seeing conditional approvals

Alfonso Cuadra:

Green light, green light, green light. come out-

Kyle Ford:

Green light. So that's all super positive. And the answer that was a long answer to your question, but when when will we see a 50 point drop, just the conversation of a 50 point drop has already started the uptick when it actually drops.

Alfonso Cuadra:

So going back to what you said people that bought real estate all the way up to the end of February, right? I mean, I can only imagine where the people that have been on the sidelines are going to be and what kind of activity we're going to see. So I'm going to wait for it. This is timestamped right here. This is what I love about the internet and podcasts and it's timestamp we're early 2024. We'll see where everything goes. Kyle, you know, I love you. You're my brother. Thank you for for coming on the show. I want to leave it off with something inspirational. Congratulations on your success. Congratulations on your- your family, and everything you've done. What is like a quote that you live by? What's like that one phrase that you know that you put up on your wall? Or you're just inspi- you heard it once and you're just inspired by it you're just driven by? And then ultimately why?

Kyle Ford:

Well the phrase on my wall is "Early Bird Gets The Lambo." And people ask me about that, when all the time they say"Well you don't get up that particularly early." And I'm like, It's not about time of day, it's about time of action.

Alfonso Cuadra:

Yeah.

Kyle Ford:

I don't necessarily wait for the masses to make a decision. I'm investigating early and trying to get ahead of it. So "Early Bird Gets The Lambo." I don't have a 5am routine. I'll be honest about that. But I'll be a little bit facetious there, I'm gonna give another one. And there was a very- this person spoke at an event that I was at many, many years ago. And he was a mortgage broker. And he's recently passed. And he said something at that event that really impacted how I went about getting money, how I went about raising capital, how I behave as a mortgage agent. And this isn't, as you know, this is just, it's kind of tactical advice for investors, which is "He or she that has the gold-", this is the golden neural sorry, this is the golden rule. "They who have the gold makes the rules."

Alfonso Cuadra:

Love it.

Kyle Ford:

So when you're trying to talk to your mortgage broker and you do "Ugh more documents?"

Alfonso Cuadra:

Do you want the money or what?

Kyle Ford:

Do you want the money or what? When, when you're meeting with a private investor, and the one spouse is really on board, but the other spouse is nervous and asking you a bunch of questions. This is their retirement, this is their everything, take your time and answer their questions. Don't just answer their questions listen about their tone and what they're asking for. Because what they're asking is probably not the surface level about the rate of return. They're worried. So they who have- the golden rule in real estate is

Alfonso Cuadra:

Yeah."They you have the gold makes the rules." And we all need capital for our business. So we have to follow those rules. And the good news is, is there is an abundance of capital out there. So if you don't like someone's rules don't burn the bridge. Hey, that doesn't work on this deal. I'm gonna go find somebody else who has different rules on this loan. So the golden rule"they have the gold makes the rules." Also "Early Bird Gets The Lambo." I love that. I love that Early Bird Gets The Lambo. Okay, Kyle, thank you. Thank you, brother. All your information will be down below. So if anybody wants to get a hold of my brother here, Kyle, if anything for a conversation and talk about- talk about real estate, talk shop.

Kyle Ford:

Yeah.

Alfonso Cuadra:

You know you they can find all your information down below. Thank you, brother.

Kyle Ford:

Thanks, Alfonso.

Alfonso Cuadra:

We'll see you soon.

Carl Richards:

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.