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Show Summary
In this episode of the Real Estate Pros Podcast, host Micah Johnson interviews Ryan Carr, a multifamily investment expert. Ryan shares insights into his journey in real estate, focusing on sustainable growth without cash calls from investors. He discusses the importance of diligence, mentorship, and building a strong team in the real estate business. The conversation emphasizes the need for a long-term perspective in real estate investment and the significance of creating win-win scenarios for all stakeholders involved.
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Investor Fuel Show Transcript:
Ryan Carr (00:00)
Another thing I always like to say is real estate is a we business. It’s not a me business by any means, right? There’s no way that you can truly get to any point of scale doing it alone. You’ll end up with too many grays. I’ve already got a few, but, ⁓ you know, I’m not a lawyer. I’m not an accountant. I’m not a property manager. I’m not a builder. I’m not all these things. Nor do I want to be. Cause if you try to be a jack of all trades, you’re going to keep fumbling the ball.Micah Johnson (00:14)
breath.Mm, nailed it.
Hello everyone, welcome to the Real Estate Pros Podcast. I’m your host, Micah Johnson. And today I’m joined by Ryan Carr, who’s been making some serious moves in the real estate investment space since 2018. Ryan, welcome in, man. Glad to have you.
Ryan Carr (02:15)
Micah, thanks for having me. Pleasure to be here.Micah Johnson (02:18)
Absolutely. I’m excited for our talk today. I think our listeners are really going to take something away from you and your wife’s journey through real estate, the way that you have gone about doing it so that you’ve never had to have a cash call from investors and that you’ve understood how to build sustainably. And I think that is such a valuable lesson for folks in the real estate space because it’s how you remain successful. So let’s dive in on that. For folks who may not know you yet, what’s your main focus right now and what markets do you operate in?Ryan Carr (02:47)
So our main focus is multifamily investment predominantly, both legacy product. finding those distressed assets. We’ve never been one to buy turnkey quite frankly, because there’s just not enough meat on the bone. You find those distressed assets that need some love, strategically put in the work. And particularly, I will say, in what we term as commercial residential up in Canada. So five plus units.You know, we moved away from the, we started there, but residentially versus commercially financed value very differently. And when you look at the income approach, which some listeners should be familiar with, we can elaborate on it if you wish. ⁓ So when you look at the income approach, it looks at the net operating income of the asset. So your top level gross income, rent, storage, laundry, parking, whatever brings you money in, less your operating expenses, not your debt yet.
just your operating expenses. So property management, utilities, pest control, cleaning, landscaping, snow removal up in Canada anyway, not down in Florida necessarily, although right now. And that gets your NOI. And so net operating income. And then they look at the net operating income and the capitalization rate or the cap rate as some people hear. And that’s derived by big economists and the big brains at banks. And it’s basically a commentary on how stable a market
and or an asset are. There’s going to be a market cap rate and then there’s going to be a cap rate on your asset. And for us, we have found that that allows you to make more informed decisions. If I spend X to improve this property, what is the effect on the net operating income and what is sort of the multiplier effect I’m going to get on the value of the building? Right? So can we justify those spends? And that’s why we catapulted into the commercial world some time ago.
Micah Johnson (04:37)
Right.Ryan Carr (04:43)
I spent myself, I almost two decades in corporate sales in the HVAC industry, HVAC, refrigeration, plumbing, and high performance construction at that. So I was helping as my role as a partner in the sales agency, know, builders and developers all over Canada, not only build code, code was simple, but Energy Star, Lead, Net Zero even. And I really geek out on building science and high performance.And so we’ve come to sort of integrate some of that into our portfolio because frankly, it builds more resiliency. And then my wife, you know, we compliment each other very well. Process engineer by trade, lots of ⁓ nitty-gritty process refinement skills, the Lean Six Sigma, Kaizen, ⁓ ISO certifications. So she keeps the back end tight. You I drive the front end and we’ve managed to scale.
Micah Johnson (05:16)
Hmm, interesting.I want to stop there for a second and let folks understand how important that is that you have both of those, especially for long-term sustainable growth. Because in the end, every high-level professional real estate investment company I’ve ever dealt with, they built a machine that trades in real estate. It’s not random. It’s not hope that gets them their deals. They’ve built systems out, processes out.
They didn’t do it upfront. They didn’t know to do it then. But as you got into it and realize, okay, next step, next step, next step. And for y’all having that where you had, and you also have to have your sales side. So it’s powerful when you have that built into relationship and the partnership already inside your marriage where you offset each other super well to have that long-term success available.
Ryan Carr (07:14)
100 %Micah Johnson (07:16)
So take us into what you’re excited about for this year. What’s that thing that y’all are pumped about to get going with?Ryan Carr (07:27)
So we pivoted a bit in more recent years and although we still continue to pursue again that legacy multifamily product where you get a chance to reposition it and stabilize it, we’ve gotten into ground up infills. ⁓ And I think that it’s positioned very interesting because so many cities around North America are desperate for more density.Micah Johnson (07:44)
Okay.Ryan Carr (07:56)
Right? We see that continued influx. Although immigration has cooled a little bit, there’s still a massive need for new housing and affordable units at that. so couple that with what is interesting financial times and tightening fiscal policy.there’s certainly going to be a lot of opportunities, I feel. Because when you look at that whole process, it sort of couples the residential sector, your initial acquisitions, know, granny’s old bungalow, perhaps, that ⁓ is just really not something that’s worth flipping anymore. You know, it’s 80 to 100 years old, you know, probably some foundation or structural issues, not really worth flipping. Let’s repurpose that land. Let’s…
Micah Johnson (08:33)
Right.Bye.
Ryan Carr (08:49)
get, let’s tear it down, let’s create more density. Respectfully though, I understand that there’s a lot of NIMBYism, you’ve probably heard that term, people that say, not in my backyard. And we want to respect that. So I mean, for example, some of the product we’re building, ultimately there are eight rental units on the property. It’s a four plex with legal basement suites. However, we are very, very targeted with respect to our lot selection, which allows for…Micah Johnson (08:56)
Mm-hmm.Ryan Carr (09:18)
proper parking allowances, because part of the NIMBY-ism, if you will, and not in my backyard, is people being concerned about street parking, the extra congestion. So we’re trying to address that. And also the designs are respectful, right? They’re not garish. You know, we’re not putting a very modern design in a neighborhood that has a bunch of character or century homes. You know, we’re respectful of that. And at the end of the day, when you look at our facades, it actually really looks, from the front end,⁓ or for the back, because in Edmonton it’s common to kind of have a detached rear garage. come in and the front facade is basically identical to the rear. It looks like a duplex, right? So it’s not this big, massive, garish thing. But coming from my previous experience, you know, we’ve really worked carefully with the builder to lay out our floor plans very well ⁓ and make them desirable places to live. So when we, again, so when we look at
people potentially starting to have issue with rising interest rates, not being able to hold onto their houses, being positioned to create that win-win scenario where we can help them out of that home, solve one problem. The next win is we’re traditionally utilizing OPM. So now we get to help our investors win, their capital, build their equity, build their financial future. And then the third win, ultimately when the product is finished, we’ve created more density.
and we’ve earmarked some of those units as affordable. So it’s all about trying to align and create as many wins as possible in our view.
Micah Johnson (10:49)
Right.And it makes sense though, because that goes into, and that whole mentality goes into how y’all been able to run this long without any cash calls to the due diligence that goes behind things. Thinking about taking into consideration the neighbors, right? Taking into consideration the lots and all the different little nuances like you’re saying with parking. That’s a simple one that folks overlook, especially building a multifamily property somewhere. You get, I got the zoning. I got everything. But now, wait a second, where are all these cars going to go? And then
Folks are upset about it. You really get into that NIMBYism there and you see why, right? Like some NIMBYism’s a little out there for me, but some of it I get why. I understand why that would upset you. Cause it’s like you said, you got a modern home inside a whole area of century specific homes. You’ve got people just throwing eight cars right off the front of the street in a line and no one wants that, right? Like it just creates these things where life gets hard for people.
Where did that ultimately come from? Take us into that diligence cycle and why that became so important to y’all.
Ryan Carr (12:35)
I think it was really, part of it was from seeing at a much larger scale in my previous life. You know, as I said, I served as a partner in a sales agency and we helped bring industry leading products to market. So things like air source heat pumps, tankless water heaters, know, ventilation, the internet of things, you will, EqualB thermostats was a client back in the day when I was in that world.Micah Johnson (12:42)
Mm-hmm.Ryan Carr (13:02)
And so we worked with very progressive builders and developers from small guys right up through, mean, some of them you even know down in the US, know, Maddamy, Minto, Green Park, Tridel. ⁓ And so seeing it done on a much larger scale, the intricacies, the planning, you know, and I figured, okay, you know, we can maybe one day get there. Who knows? We have aspirations, but I mean, we can scale that back.But let’s really look at that process. know, Shafali, my wife, is stellar for that because, again, being a process engineer, even seemingly when something ain’t broke, she always finds a way to really break that process down into bite-sized segments and evaluate each of them individually and reverse engineer and say, can we find efficiencies? You know, and so we’re constantly doing that ourselves.
Another thing I always like to say is real estate is a we business. It’s not a me business by any means, right? There’s no way that you can truly get to any point of scale doing it alone. You’ll end up with too many grays. I’ve already got a few, but, ⁓ you know, I’m not a lawyer. I’m not an accountant. I’m not a property manager. I’m not a builder. I’m not all these things. Nor do I want to be. Cause if you try to be a jack of all trades, you’re going to keep fumbling the ball.
Micah Johnson (14:15)
breath.Mm, nailed it.
Ryan Carr (14:30)
And you’re gonna tear your hair out too. So there are people that are passionate about their respective roles. Take the time, find the right people. Again, something else I like to say is, hire slow, fire fast. Respectfully, right? Never burn a bridge. But ultimately, these people, you want to align with your mission and your purpose. So you’ve got to find the right ones.Micah Johnson (14:47)
Yep.Ryan Carr (14:59)
And when you find the right puzzle pieces, magic can happen.Micah Johnson (15:45)
Agreed, man. A friend of mine says it this way, real estate is a team sport. And like you said, you’re never all the things. Especially in America, one person can’t close a deal. You need a whole bunch of people just to buy a house. Even if you’re buying one to live in, There’s a lot of folks you need to know. And like you’re saying, all the little pieces don’t line up with you typically just for the type of person you are. One of the groups I’m in, we have a thing we reference called the Deal Triangle, whereThere’s the deal finders, there’s the deal funders, and there’s the operators, the ones that bring it actually get the work done. And it’s very common for you to be two of the three, but most nobody is all three. It’s just not, because the personality differences that go with them and knowing that about yourself, like going back to the, you know, how you and your wife are set up, you’re both pitched to your strengths. You know, you know, the part you’re good at and you’re setting yourself up to spend the majority of your time in that part you’re good at, which is
critical to being successful in real estate long-term. Because as you niche down more and more, you realize the more people that you need, the more like, my spot is focused here. This is where I absolutely own. What are the next steps and who do I need in those places to make sure that this keeps flowing? Because that’s where it goes back to where I say it’s a machine that you built that trades in real estate. It’s not random, right? Our first couple of deals we get are like the
⁓ wow. Just came out of nowhere kind of feeling, but the rest of them, you, you build a way for you to know that they’re going to get there. That’s what a good business owner does. And you even do some teaching on that. said, where you teach a course on business fundamentals where behind the scenes, like the fundamentals of business are completely applicable. Like it only gets later in real estate that it niches down to real estate specific things. But at that beginning level, it’s not a mystery.
We all, lot of folks know what to do and how to build it. The discipline comes and like you’re saying, building it, are you taking that time to do it? We mentioned this pre-call real estate is not a get rich fast scheme. It’s a, it’s a get rich slow scheme. And you said it a different way. How’d you say that? Cause it was like guaranteed, get rich for sure.
Ryan Carr (17:56)
Well,it’s not a get rich quick scheme, but ⁓ I guess just to make it simple, I say get rich for sure. But I think it’s more get wealthy for sure with time. There’s very much a difference between being rich and being wealthy. ⁓ To go back to the teaching, I think that there is a really nice parallel between the business fundamentals and real estate. And the way that I like to introduce the topic is you wouldn’t build a house.
Micah Johnson (18:06)
Love that.Ryan Carr (18:25)
or a building without a proper foundation. Nor should you build a business without the proper foundation. So we talk about your power team, lawyers, accountants, property managers, realtors, whomever you need for your specific strategy, proper insurance to cover your assets. ⁓ I like using that, a little bit of fun. just building the systems like you said.Micah Johnson (18:47)
Yeah, that’s good. I love it.Ryan Carr (18:55)
And it’s amazing, you know, in that role. Candidly, it’s made me a far better investor, right? Because, you know, I get to see the light bulb moment, but I get to help people work through challenges as well, because part of that role is also mentoring with Trust Your Talent Academy. And, you know, I’ve had the privilege of helping dozens of people now reach financial freedom. And I won’t pretend to know it all. And I think it’s foolish for anyone to ever…think, assume, state that they know it all. Because, candidly, I’ve had mentees come to me and say, hey, what about this, Ryan? And I’m like, huh, yeah, you know what? I don’t have an answer. But I think maybe the only benefit I might have, because of some longer time in the trenches, is perhaps a bigger Rolodex. So let’s figure it out together. And so now, not only are getting hit over the head,
with your own issues, you’re helping others, and it just makes you a far better refined individual to drive your business.
Micah Johnson (19:59)
Sure, man. There’s nothing like teaching and whether it’s real estate or anything, when you start to teach it, you learn more. I realize that with my kids showing my kids how to do things like, dang, I haven’t really talked through this ever before out loud. And now that I’m saying it out loud, I realized, well, I can do a little better here and I can kind of tweak this and do this over here. it is it’s it’s mentors are very important in this space. I fully believe in them. I have my own like we’ve talked about most of this time. This is a team sport.You want those folks in your corner to show you. Like my mentor says, the solution to your problem’s in your phone, you don’t have much of a problem. What you need to do is make a phone call, right? Just go have it. Go reach out to them. Be intentional about that. Because that’s where longevity comes in. Like the best I know in this business are all connected to folks. And it’s not a business like you’re saying. If you know it all, just wait till tomorrow. Because it changes constantly.
It is one of those businesses where it really benefits the lifelong learner. If you just love to learn, you’re into problem solving and enjoy that. And if you’re teaching it and not doing it, be careful with those teachers because it changes that fast. They’re showing you a technique that may not work anymore. That may have already changed and working with folks who are doing it as well. That is my biggest recommendation. Make sure they’re actually doing the thing that they’re trying to teach you.
at some level so that they didn’t fail at real estate and got really good at selling courses. Because we’ve run into some of those folks in the industry where I’ll tell you, $2,000 course is way easier to convert on than trying to get somebody to sell you their house at a deep discount. Those are not equally created or even bigger deals than that. it’s, education’s a big part to me for folks to know that it’s just, it’s part of it. Don’t negate it. Don’t just…
Ryan Carr (21:49)
And it’sMicah Johnson (21:54)
It’s all about taking action, yes, but you jump into a pool too deep without preparation. You don’t get to play the game anymore. That’s how real estate goes. So making sure that the risk you take, you understand they’re mitigated. They’re not ones where eight things have to go right for the deal to pull off because anytime that’s the case, it’s not going to work. You have added exponential probability of failure.There’s Lean Sigma 6 for you, if I remember correctly, talk with my friend. How many points of failure actually exists? Eliminate as many as possible because the more there are, you’re just inviting trouble into your deal. And by paying attention to the nuance, getting into the details, even how you were talking about before we recorded just about how tightening the financial regulations in Canada are tightening up. Right. And that’s forcing you to be on top of
all your financials, all the documentation that they need, because it’s just the rules of the game. Pay attention to the rules, play the game, right? A lot of folks get upset about it. It just doesn’t matter that much. You can yell, but if it doesn’t change anything, well, don’t waste too much time, because it’s just the rules. The rules of the game, then the people are the other parts. So learning how to stay up with both to make sure that I know my career, the more I understood the rules, the better I help people across the board.
because you just, get it. You know what’s going on.
Ryan Carr (23:18)
Absolutely. And it’s interesting to go back to what you said about teachers and mentors. One, we have one as well. We’re fortunate. You actually ⁓ interviewed a ⁓ cohort of mine, Brooke Sheng, recently. And that’s how we got connected. And so she works alongside me at Trust Your Talent Academy, which is the platform that we were kind of talking about. And that kind of came together and was founded becauseOur mentor, Ray, used to serve with another platform and they ended up going defunct. ⁓ But Ray and his life partner, Tim, ⁓ they wanted to continue helping people and they’ve helped hundreds, probably thousands of people at this point, quite frankly. They certainly collapsed timelines for us. And they reached out to some of their former mentees to kind of help the mission. And the founding principles I love, two.
that I think make us distinctly different or help to elevate us. One, unequivocally, we will not do work with students. We are not bringing people in to create a deal pipeline or a capital pipeline. We teach them to fish, not hand them fish. And two, like you said, we are contractually obligated in our independent contractor agreements to remain active investors. Because you’re right, if we’re not out there,
taking the lumps and getting hit in the jaw, you know, by policy changes, regional bylaw changes, zoning changes, whatever it might be, how effective are we in teaching? You’re not. If your last great deal was three, four, five years ago, that’s not relevant.
Micah Johnson (24:58)
Right? Right?Not at all. Not at all. It’s such a rapid changing environment where it’s again, I couldn’t agree more. I love that y’all have that in your contract because it should be there. It should be there. There are all kinds of different ways people build those out and y’all are doing it the way where the person’s actually gonna benefit. They’re gonna learn how to do the business. It goes back to that education part. Learning exactly how to do it from people who are doing it.
This isn’t a field where who you know is one of the most important things in the industry. You have to build solid relationships because like you were talking about collapsing timelines, there’s no shortcut to it, but the process is the shortcut. If someone can teach you the process without you having to learn it all on your own, that’s how you go faster. Because if not, you’re just gonna follow into the holes that a hundred other people have already fallen into and are more than willing to tell you about.
Right there. There’s that’s what love about real estate at high levels that go giving mentality and the abundance mindset. We all realize there’s not any competition. There’s always a deal. If I do my job, if I wake up today and do my job, there’s going to be a deal. There’s always a deal to find for me to work on. So that’s tuned out. Now I just need to pay attention to the game. What’s changing. What’s in front of me. What’s this to do today.
and just sticking with it. It’s those little boring actions day after day after day that create that wealth where you look up eight years later, you’re financially free, you’re time free, you’re location free. You can do the things that you really wanted to do by focusing on that long game mentality. That’s one thing I love that good teachers teach. We were talking about it earlier, know, the get rich quick. It’s not that you won’t make a lot of money fast, but you’re not going to make what you’re out to get fast.
If you think you are like wrong businessman, you won’t get invited into that deal for about 20 years where you can make crazy life changing money at once. I was talking to a guy yesterday, like a $5 billion project in the middle East that he got invited to be a part of. And I’m just like, but he’s been doing this for 35 years and it took 35 years of being great at it to get invited into a deal like that, which one pumps me up for real estate. Cause we’re not the retiring type.
Typically, we like to keep doing what we’re doing if you got that entrepreneurial drive. We just keep adjusting to the section that we like. That’s again, something I love about real estate. It grows with you. There are parts I don’t do now because I didn’t enjoy them. And as I’ve niched down, I just keep setting myself up to my strength, that peace, that boom, boom, boom. And it’s such a beautiful industry to do that.
Ryan Carr (27:39)
Absolutely.Micah Johnson (27:39)
Well, Ryan, man, I really appreciate your time today, your story, your perspective. I think we need more folks out there doing it like you doing the business, teaching it right, taking that time to serve your customers. Well, serve your clients. Well, build houses for people that they can get into that are filling in those spaces that like you’re saying, we desperately need them all across North America. We’re dealing with that. And it’s one thing I love about investors. Yes, we do a lot of this for money, but there’s still that emotional paycheck. We all need paid where it taps into that.how we get to go help, right? You can help people tremendously and still make all the money you’ve ever wanted. It’s not a one or the other thing. And real estate really allows that to come together. So I appreciate that. For our folks that are listening and watching in that would want to learn more about you, follow along with you, possibly work with you, what’s the best way for them to find you?
Ryan Carr (28:22)
It’s like.We’re ever present on social media. guess it’s kind of a necessity nowadays. Instagram, Facebook, LinkedIn, Instagram, Shery Group, S-H-E-R-Y-G-R-O-U-P. Facebook, again, you can search much the same. And then LinkedIn, goodness, I think it should be much the same. Well, I mean, you can find myself, Ryan-carr5.
on LinkedIn and link to Shery group there as well. ⁓ If I go to, yeah, anyway, and I think you’re gonna provide links down below. I gave them to you as well.
Micah Johnson (29:08)
Absolutely.So if you’re listening or watching, I’m going to put all of Ryan’s links in the show notes. Be sure to check them out there. I always encourage people follow along with real operators, people that are actually doing the business every day. This is a tremendous industry and it’s open to more than you can imagine. There’s there’s that’s what I love about it. Access is not that hard if you’re willing to get in there and do it. Learn from the right people. So you actually pull off that dream that you’re looking for. We are the one we all got in here with.
So Ryan, thanks again, man. Appreciate you being here. For everybody listening and watching, if you got value out of today’s episode, please like this episode, share it with someone else who could get some value out of it as well. As always, please don’t forget to subscribe to our podcast. We appreciate every single one of you that follows along out there with us. We have more conversations coming up with operators just like Ryan who are out there building their businesses the right way in the industry and leading others to success, not just themselves. So thanks again, Ryan.
We’ll see everybody on the next episode. Y’all have great day.
Ryan Carr (30:10)
Take care.
