George: Ladies and gentlemen, thank you for tuning in. I’m George Almastri, the host of the Well Off podcast. And on this episode, I interviewed Michael Dominguez, who is the founder of Doors to Wealth Real Estate Group. It’s a team of Realtors that focus on educating and helping people get into real estate investments and also buy residential real estate. Michael bought his first property in 2008 after getting his licence and then continued to buy real estate for the next ten years. Since then, he’s kind of retired, not exactly, but he’s taking a little step back from real estate sales and from everything and just enjoying life. He’s the author of Armchair Real Estate Millionaire. And on this episode, we talked a lot about what his mentors helped teach him. We talked about advice for newer investors, why you shouldn’t buy the cheapest property. A lot of people talk about that today, buying the cheapest property in whatever city. And he argues against doing that. We talked about the importance of focus and building relationships with your trades people, your plumbers, your electricians, and then also how to treat your real estate properties, your rental properties like a business, rather than just saying I own one or two properties. Michael: Thank you so much for inviting me. I’m really looking forward to chatting.

Michael’s mentors and what he learned from them

Michael: I was buying the house that actually I’m in right now. And my realtor, who was also a manager, said, I think you’d be a really good realtor. And I sort of said, oh, yeah, I’m sure you say that to everybody. And she said, no, I think you’d be really good for it. But within a year, as you said, I started to focus on the investors. I just again gravitated to my people and helped a few of them buy some really great properties. And a lot of them were single family homes with additional dwelling units. Duplexes. And I thought, this is my future. I could just see myself becoming an investor agent. And honestly, I bought my first couple of properties as much to build wealth as it did to provide you with credibility as a realtor. And that’s sort of how I got started. George: Nice. Isn’t that amazing how sometimes somebody just says something to you and then it just clicks and the course of your life changes from that one thing? Michael: Yeah. I would never, ever have thought of becoming a realtor. Right or wrong. I sort of had a negative connotation with being in sales and stuff like that. And meanwhile, I was kind of in sales anyway. I was selling franchises. I left the security of the nine to five job where I was making, 70, 80 grand a year. And my first year as a realtor, I make just as much money and never looked back from there. And now it’s ridiculous how much I used to work so hard for so little money and be happy to do it, too. George: Yeah. You wrote a book, Armchair Real Estate Millionaire. Tell us a little bit about that. What does that even mean? Michael: When I got started, I was very fortunate to have some incredible mentors along the way, people who you may know of Donna R. Campbell, for example, Patrick Franci with Rain. Honestly, Durham, Rei, Quent D’Souza was a great influence as far as helping me out. And as a realtor, I had people like Brian Buffini, who was an incredible mentor from that perspective as well, and not necessarily always in person, but just simply some of their writings and teachings and such like that. So it always kind of surprised me, especially with Don Campbell, for example, where in many cases he actually physically took me aside and he helped me out along the way. And I remember asking him a number of times, I said, why the heck are you leaving British Columbia and coming all the way to Ontario to do these events? Because you don’t need to do this anymore. And he says, yeah, you’re absolutely right, I don’t need to. But I just enjoy helping out the next generation. And it was an AHA moment for me because I always thought when I was in my 20s and teens that the wealthier people, they were almost like this exclusive club. Michael: And as I was making my way up the corporate ladder, the life ladder, the wealth ladder, I’d have the richer people that were kicking me down. And that’s the impression that I thought I was going to have. But in actual fact, they were reaching behind them and pulling up a couple of runs. And I always swear to myself that if I ever reached a point where I was at a level of success that I would pay it forward to the next generation of investors. And that’s kind of where it happened. Is the book came from that Genesis. I’m a bit of a storyteller. I like to have put my little spins on things. And the book was written as a way of teaching people to buy their 1st, second and third investment properties and to really get started in real estate. And I often I said this in the book many times is this is a part time job that can make you a millionaire. And so that’s the term armchair is it can be. It’s not absentee, but it’s certainly a very casual part time job. And if you buy the right properties, quality properties and quality neighbourhoods, you can actually attract quality tenants, have very little day to day work and hold on the properties long term and make some quality profits. You don’t need to do flipping, just simply buy and hold and buy the right assets. That’s what we do. George: Yeah. I agree with you 100%. I love what you’re saying about wanting to pay it forward. I think a lot of people, when they reach a certain level of success, that becomes a really important factor for them. And it’s cool that this is your way, the book is your way of kind of exposing what you’ve done so that other people can do it as well. Michael: Yeah. And at first my focus was going to be a little bit of my story and then it was going to be how to. But there are so many books that are out there that are how I went from nothing to a gazillionaire in ten years. A lot of people read these books and they say, oh, that’s cool. And they give it a little flaws and stuff like that. But I really felt that to really make a difference was to focus on the person buying that 1st, second and third property, because in my opinion, those are the most difficult ones to do. Obviously, you use a lot of the same tips and tricks to buy that 10th property that you did for bought property number one. And maybe you maybe, perhaps didn’t buy the right type of properties somebody listing here and they’re dealing with crappy tenants at a crappy location. Take a look at some of the education we provided the book. I use a lot of the mindset of finding a quality location. What makes a quality location? Because again, it seems obvious once you’ve read it. But until you’ve read it, it’s an AHA moment in some cases.

Why you shouldn’t buy the cheapest property

George: I’ve been investing since 2017 and every property I bought so far, other than my primary home, has been in a crappy location like every single one. And I’ve had a lot of crappy. I shouldn’t say crappy. I’ve had a lot of difficult tenants. But I think in time we’ve been able to fix this up and increase the quality of the work of the kitchen and everything, make you look really nice. And we’ve been able to draw good tenants that way. I’m not trying to downplay what you’re saying at all. I agree. If you have a great location, you usually eliminate the problem of attracting certain tenants. I think that would be a huge help for a lot of people because not everyone has the patience and the ability to improve these properties and draw the right people. You have to be very careful about who you put into your units if you’re in a bad location 100%. Michael: And the reality is that if you’re truly in a weaker location, and even if you did fix up your place and made it so, it’s the prettiest house on the street. The reality is if you’re truly in a poor location, likely all the houses around you are crappy. The school district where your tenants potential child is going to go to school is a crappy area. It’s a bad scenario all around. I also focus on one of the things that I really feel is so important and we don’t spend enough time talking about it or thinking about it, but I’m looking for a market that is in Appreciating area. Now, for those of us listening in the GTA, we’ve been very blessed that we’re in one of the best markets in North America. The challenge with that is that we’ve got raising house prices. So the temptation is to go to a secondary or even a tertiary market where the population hasn’t changed in the last 25 30 years. But we spend a lot of time talking about just because the property is cheap doesn’t mean it’s a good deal. And buying a quality property in a quality neighbourhood also includes having a market where there’s growing GDP, there’s a growing population base, growing job force, growing transit, and those are all positive situations that lead to eventual increases in rental values and eventually increases in property values. George: I agree 100%. And you touched on like a good property. In a good neighbourhood, you’re going to have good schools and if you’re in a bad neighbourhood, you’re going to have bad schools. I think one thing that’s really important in that is to know what kind of tenant you want. If you’re looking for a family, then yes, being in a good location is great. But if you are looking for a young professional where they don’t really care too much about the school, then maybe that secondary, secondary, like A level B or C grade location might work for that person. Michael: You’re right. But I had some properties that were in B and C locations which I’ve now sold them all. And the reason for that is I was able to attract some good tenants, the people that weren’t from the area, but typically within a year they’d be moving out because they realised that if they were making real good money, they said, you know what, the police have been by our street 20 times in the last year. I don’t need this crap. Yes. And that’s really what’s happened: all we were able to attract with the B and C tenants with lower credit scores, other issues didn’t pay the rent as much. I can tell you that during the pandemic we had not only us but many of our clients because I’ve been a full time realtor in the past as well, focusing on investors for many years. And pretty much none of our clients had missed rent payments because again, we had quality tenants. We actually in the last six months, we placed a tenant in one of our units. She’s a lawyer that just got out of school making six figures. Her husband works at the city, one of the towns. Michael: And so between the two of them, they’re making close to 70,000 a year with credit scores about 800 like, Holy crap. And the reason why they can’t buy is because she’s got all of her student loans and she’s probably two or three years away from buying. But that’s as guaranteed of a tenant as you could possibly have. And they’ve taken care of the place. And you just simply can’t attract that. If you go in that crappy property in a crappy neighbourhood, you’re just not going to attract the A-plus tenant. You’re just not 100%. George: And I think what you’re trying to share is your model armchair investing. If you want to have a good long term tenant, then you need to be in a good location 100%. I think what I’m trying to share is just like for those people that maybe are just starting out and they don’t have the budget to buy a million dollar property, they might be forced if they want to get started, to buy in a worse location and then build some equity and maybe move on to the better location later on. Michael: Nothing’s ever black and white. If you are having to find a discounted property, it doesn’t hurt to still look at some of the stuff I talked about. Chapter two and three, as far as I use the term, becoming an insider trader, the more knowledgeable you can be about a region, the better you are. And some of the insider stuff that a good investor should have are things like where is the transit going, what’s the population estimates going forward? Is there a new employer that’s coming into town that’s going to have an influence? Is there an employer that’s moving out of town that’s going to really affect the market? These are things that don’t take a lot of time to research. It really doesn’t. But by doing a little bit of front end work, you can either say, yeah, this is the market for me, or, hey, maybe I’ll look at a different opportunity as well. There’s a lot of opportunities out there. Just make sure that you don’t make a drastic mistake and you’re stuck with a real dog that you can’t even sell or rent sure. George: 100% earlier on, you touched on a few people that kind of, like, inspired you and motivated you. You touched on Brian Betheny, which I think a lot of people don’t know about because they’re not Realtors, the people that are listening. But I’ve also been influenced a lot by him. In fact, a part of the reason that I met my wife was through their groups, like their group meetings that they used to have. Tell me a little bit about what you learned from specifically Brian Betheny and some of the things that you’ve carried with you into other aspects of your professional life. Sure.

The importance of focus and building relationships with tradespeople

Michael: One of his greatest slogans he does. And even though whether you’re a realtor or not, I do recommend that you listen to some of his education, his teachings, he teaches a lot of non Realtors, some of the same stuff. And if you’re in sales in any way, one of his taglines is work by referral and live the good life. And I made it my mission as I built my realtor business, that I was going to build a really strong database and use all of my advertising and efforts towards my existing database and not to try to find some stranger and try to bring them on board. And I’ve used that in many elements of my life, where instead of trying to always make new acquaintances and friends, you build your power team, you build your network, and then you don’t take them for granted. You treat them well. And that can include everyone from an HVAC guy to a plumber to whatever. Working with someone like that, you treat them well, and then you get that furnace that goes out the worst day in February. There’s a pretty good chance that you’re going to get put to the top of the list. And I’m not doing it from a self-serving standpoint. I just feel it’s the right thing to do, and it’s great to build relationships like that. So that’s one thing that I’ve learned from him. Another thing he taught me was to make your business larger, make your focus smaller. And how that can apply to investors is I talked to a number of young investors that are thinking about investing on this one because they got this great opportunity in Sudbury, and then they got another great opportunity in Saskatoon. Then, oh, Jeez, I found something in Florida. And you can’t be an expert in all those areas. You just cannot have power team. You can’t know everything about those things. You’re, in many cases, the weakest link in that tire acquisition. I strongly recommend that you really learn a market well and then to make that your focus. And I can tell you that in my city that I invest in, which is mainly Australia, Ontario, I don’t even invest in all of Oshawa. I invest in one or two regions within Oshawa is where most of my properties are but everything that ever came out on those streets, I knew when it was on the market because I used to drive up and down, I used to bike up and down those streets. I knew it really, really well and when a property was available, I knew most everything I could tell you about that property when it was built, likely scenarios and issues with that property, stuff like that. And it just simply made me a better investor. George: Yeah, 100%. And I love what you’re saying about being good to like everyone you work with the HVAC guys and everyone else. I think that’s a huge thing. Even like sometimes you might have a conflict with certain people, but being good to them, that’s one thing that I’ve learned as well. It goes a long way because like you said, they will understand that you’re treating them a certain way because they often get treated the opposite way by a lot of other people. It’s nice to have that attitude. Michael: Yes, they get taken for granted so often and they’re only called when they’re needed. And again, it doesn’t take a lot to just simply keep them in the loop. And about certain scenarios, maybe. Again, I’m in the real estate industry. One of the things that I would often do is if I knew they lived at and there was a house that sold on their neighbourhood, I would just simply give them an FYI. Hey, the house down the street just sold. Here’s what it sold for. It didn’t take more than 30 seconds of my time, but again, that just let them know that I was thinking about them. Sometimes I take them out for lunch because honestly, I’ve always been a big believer. Never eat alone, always take people out for lunch. If you’re in sales, you shouldn’t be doing that. And I took that to heart and I did take out a lot of my contractors and service professionals and stuff like that and just touch base. And in many cases I would give them even before I was author, I would give advice and ideas and help them find ways of building their wealth and taking action. George: Yeah, that’s awesome. I never actually have taken any of the people that I work with out to lunch. I don’t know why, but I think I’ll work on doing that. I think that’s a great idea. I wanted to ask you so for anyone listening to this, that maybe they’re a newer investor, maybe they have less than three properties. What advice do you have for people like that? Michael: Well, some of the stuff we already talk based on, first off, was again, I don’t want to just gloss over this. Becoming a market expert just sets you so much ahead of everybody else. And you might have heard it from someone else, but you don’t necessarily take it to heart. And just because it’s cheap doesn’t mean it’s a good deal. You want it to fit your profile. I can’t speak for every listener here, but most of us have a budget of how much money we have available from a down payment standpoint, how many properties we can carry. I don’t care if you’ve got $100,000 or $5 million, you’ve got a limit. So the reality is that you’re in a situation where there’s only so many properties you could buy. You can’t buy everything. There’s opportunities all around. So my advice to you is to eliminate the noise, to sort of narrow in on where you want to invest, the style of property you want to invest. And then when that property does come, the part two to the advice is to put yourself in the best position to be ready. And that includes working with your mortgage specialist and making sure that you can afford it. In today’s market, mainly all across North America, but certainly in the GTA, you can’t go in not knowing your financial situation. You need to be completely ready and just put yourself in a position that you can come in with a strong offer. Honestly, if the location is right, the property is right, the research you’ve done supports the property, and it’s important just to jump in. I can tell you that real estate was a great investment 50 years ago. It was a great investment 25 years ago. It was a great investment five and two years ago. And I could tell you that in 2000 and 32,040 people are going to be looking back to 2021, 2022, and they’re going to say, Geez, I should have bought property with so cheap. So as much as we think it’s expensive right now, all indications are supporting the fact that the values are going to go nothing but up. And we can talk about that if you wanted to. But the supply and demand is just going to keep rising as far as demand. And supply is not going up at all. George: Yeah, for sure. To recap what you’re saying, but the advice that you have would be, first of all, location. Make sure you pick the right one. Keep your focus small. Don’t just buy cheap properties because they’re cheap. Make sure you’re buying the right property for you. And also, you didn’t say this now, but you said it earlier, but also focus on relationships, relationships with your contractors, with your trades people, and also just with other people that you might partner with or whatever the case might be, whatever your model is.

How to treat investing like a business

Michael: And I’ll give you one more as well as treat your business, your real estate business like a business. So many of us don’t think of this as a business. It’s just, oh, I own a couple of properties. Well, whether they’re in a corporation or not, have separate bank accounts, treat them like a business, because honestly, and your tenants are not just tenants. They are your clients and treat them well as well. One thing I’m doing for Christmas is I’m planning on giving everybody a copy of my book. And again, somebody might be offended by that. They say, boy, this guy has become a millionaire just based on owning the real estate property that I’m renting. But my goal is to try to teach them and sort of say, hey, if anybody wants to actually take action, I’m prepared to offer you some counselling and coaching so that you can eventually buy a property on your own. If I can help somebody out who’s been paying me rent every month for the last one or five years, I’ll do it. And the side benefit, of course, if they move out, I’m likely to be able to rent it for a few hundred dollars more. George: And maybe one thing that I’ll add to that is when you’re treating it as a business, don’t get too emotionally involved. If a tenant does something to you or whatever, don’t let it get to you. It’s a business. You’ve got to deal with it. Figure out the best course of action and just go from there. Michael: Excellent point. There are days, believe me, there are days where you look at your business and sort of say, Holy crap, what the hell am I doing? I haven’t done this in a while, but I’ve gone to a property on a Sunday afternoon cleaning up the former tenants dog crap. And before a new tenant moves in, I’m thinking, I don’t clean up my own dog shit. I know I’ve got to clean up some tenants dog crap. But then I sort of think back and I sort of say, okay, but how is this changing my life? And it’s been putting me in a position of pretty impressive of wealth growth that I would never have expected 15 years ago. It’s amazing how it’s changed my life. And so, again, you have to distance yourself from the day to day inconveniences. And if you’re a new person getting going in real estate and you’re afraid of those midnight phone calls from tenants and stuff like that, I’m telling you, if you buy a quality property and get some quality tenants, My biggest challenge is my tenants never call me. I would have to reach out to them and say, is there anything wrong? They say, yeah, but I didn’t want to bother you and stuff like that. And I have to actually do stuff because I don’t want to have any deferred maintenance in my properties because it leads to bigger issues. And they are so appreciative because I’m following up with them before they even come up with the issues. And long term, it’s been building me a lot of wealth, so I’ve been happy. George: I’m going to ask you five questions. You just tell me the first thing that comes to mind. Michael: Oh, that’s scary. Okay. George: I know people get scared by this one, but the first one is what would be the best and worst part of being a cat, in your opinion? Michael: A cat? Well, the best part, undoubtedly, is that your flexibility, that you can pleasure yourself in many different ways, that I won’t have the ability of doing it myself. Has anybody else answered that question? No. George: It’s always random. It’s different every time. Michael: Okay. The worst part for me is I don’t have thumbs so I can’t open and close doors and so I can get trapped in a place. And that would be my worst thing as well. I’m dependent on humans to allow me into houses. George: Number two, what challenge would you like to take on in the next 60 days? Michael: What challenge? I am starting to take on this challenge. So many people have been asking me for the longest time to create an audiobook, and I don’t really have the skill set to do that. I like talking to people and stuff like that, but I’m shitty at reading aloud from grade school on. I just didn’t have that skill set. So I went to a technical engineer last week to try to do it. I did as bad as I thought it would. So now I’m working with a voice actor, and we’re going to put together an Audible book for this. And so that’s the project I’m taking on. I’m sort of coordinating the whole event. George: Cool. It seems like you’re like all in 100%. You’re making this happen and you’re reaching as many people as possible. That’s great. Michael: Well, and the funny thing is, for anybody who thinks that books are going to make you a lot of money, I could tell you that as of right now, I make a whopping $6 per book. I’ve made maybe, I don’t know, like five $6,000 in revenue so far. And I’ve spent about 30 40,000, assuming I’m working for $0. I’ve spent about 30 40,000 in coaching and mentorship along the way to get my book to reality. This was definitely a passion project versus a lucrative project. George: All right. Number three, what’s the most difficult thing that you still do each day? Michael: My life has been changing a lot in the last couple of years. I’m starting to tell people I am retired as a realtor. I’m not officially. I’m still doing small deal. But yes, my life is changing a lot more where I don’t have my nine to five job, I don’t have to get up in the morning if I don’t feel like doing any real estate. Yeah, life is good right now. I’m trying to travel more. If they let me out of the country and my life is good right now, I don’t want to have anything to complain about every day. George: Okay. The most difficult thing for you to do is just relax every day. Michael: Actually, that is more difficult than you think it is. Sometimes I start twiddling my thumbs and I say, okay, what can I do? What can I do? And one thing I’ve been doing a lot of is I’m watching a lot of classic movies. There’s so many movies that I’ve always said, well, one day I’m going to watch this, one day I’m going to watch this. This is the year that’s my one day. George: Cool. I’m glad things are going well for you and you’re getting to enjoy the fruit of your labour. Number four, how long did it take for you to come up with your current signature that actually evolved during my University days? Michael: Again, I mentioned how I was a fan of Michael J. Fox. And so my name became my middle initial actually is J. I was using Michael J. Dominguez. And then during University, I short formed it to MJ Dominguez and then it sort of became MJ and sort of a bunch of little scribbles. And that’s the signature I’ve been doing pretty much for 30 some odd years. Awesome. George: Cool. Number five, what was the last dream you can remember about? Michael: Boy, actually, okay, sometimes I get random business ideas or just concepts and I just wake up and I’ve actually got a notebook or my phone is my notebook and I just make notes on it on a regular basis. So as funny as this is, I don’t know how I got this idea, but I got a potential sitcom that just sort of randomly came in my head and I just started making notes. That was just a couple of days ago. So that’s the idea I have. I’m not going to go into my whole pitch because I haven’t got it all evolved yet. But yeah, I’m just the type of person that I write down business ideas and nine out of ten I never do. But occasionally I’ve turned like my book, for example, some chapters. I just came up with it while I was sleeping at night, and then the next day it just flowed. It just came together. I do that. George: I’m really happy to hear things are going well for you. I wish you all the best moving forward and once again I appreciate you doing this and it was great connecting with you. Michael: Thanks a lot.