Real Estate Investing Morning Show ( REI Investment in Canada )

Edmonton Garden Suites Are One of Canada's Biggest Real Estate Opportunities Today's episode is all about one of Wayne's favourite real estate investment opportunities right now: Multi-unit garden suites in Edmonton. Wayne and Gabby break down why Edmonton's current zoning creates an unusual opportunity to keep an existing house at the front of a property while developing multiple additional rental units in the backyard. For the projects Wayne is currently working on, the attraction comes down to three major things: Cash flow. Forced equity. The potential to refinance and redeploy capital. And unlike traditional infill development, the strategy does not necessarily require tearing down a perfectly good house. Why Wayne Started Looking at the Backyard When Edmonton changed its zoning rules to encourage more housing density, much of the development community focused on tearing down existing houses and building more units on the front portion of the property. Wayne looked at it differently. Instead of asking: How much more can we build if we tear the house down? He asked: What if we keep the house and develop the unused land behind it? That led to the multi-unit garden suite strategy. On the right Edmonton lot, Wayne says investors can potentially keep the existing house and add as many as four additional rental units in the backyard. Why Edmonton? According to Wayne, Edmonton currently provides a unique combination of: Flexible development rules Affordable land and housing Strong rental demand High-paying employment A strong tenant profile Alberta's landlord and tenant operating environment That combination is what makes the opportunity especially interesting to him. Wayne says that if this same development opportunity existed in a market where he did not want to operate a rental business, he would be far less interested. The market still matters. The Housing Accelerator Fund Wayne explains that Edmonton's zoning changes followed broader efforts to increase housing supply and density. He discusses the federal Housing Accelerator Fund and Edmonton receiving significant funding in exchange for housing and zoning initiatives designed to allow more homes to be built. Those changes opened the door to development opportunities that previously did not exist. Why the Opportunity May Not Last Forever One of Wayne's biggest warnings: Do not assume today's zoning rules will exist forever. Rules change. Municipalities adjust development regulations. Neighbourhood opposition can increase. Height, setback and density rules can all be modified. Wayne points to Calgary as an example of a city where development rules have already started changing. His concern is that investors may discover the opportunity after the rules have already become more restrictive. The Lots Are Limited Too Zoning is not the only constraint. The property itself needs to work. Gabby explains that multi-unit garden suites require enough usable backyard space. Wayne calls it needing a: "Big booty." A large backyard. That means investors are competing for a limited number of properties with: Large enough lots The right configuration A usable existing house A purchase price that still makes the development profitable Today, Wayne says much of the competition for those properties is still homeowners. But if more investors and developers begin targeting the same lots, demand could increase. Wayne's First Fourplex Garden Suite Is Almost Finished Wayne and Gabby also give an update on their High Park multi-unit garden suite project. The four suites are essentially complete internally. Remaining work includes exterior items such as: Sidewalks Landscaping Fencing Wayne is preparing to begin marketing the four one-bedroom suites. This is one of five projects Wayne says they currently have underway. The Cash Flow This is where Wayne believes the strategy becomes especially compelling. On the type of fourplex garden suite projects he is developing, Wayne says there is potential for: $1,500+ per month in additional cash flow after financing and operating expenses. That is not gross rent. That is the projected remaining monthly cash flow from the additional units based on the project assumptions Wayne is discussing. How Does It Perform on the 5% Rule™? Wayne then applies his 5% Rule™ Cash Flow Test. His framework: 5–6% = minimum acceptable 7–9% = strong 10%+ = exceptional For the garden suite project discussed in today's episode, Wayne says the projected result is approximately: 13.8% or roughly: 14% on the Cash Flow Test. That is why Wayne considers these projects unusually attractive from a cash-flow perspective. Actual results will depend on construction cost, financing, rents, operating expenses, property price and the specific project. Cash Flow Is Only Part of the Opportunity Wayne says the bigger opportunity may be what happens to the value of the property after construction. Suppose the total amount invested into the property and development is one number. But the completed property appraises for significantly more. The difference becomes created equity. On some of Wayne's current projects, he says he expects to create: More than $250,000 in equity upon completion. That creates another potential strategy. The BRRRR Strategy — But With Development Traditional BRRRR: Buy Renovate Rent Refinance Repeat Wayne proposes changing the renovation step. Instead: Buy Build Rent Refinance Repeat Rather than renovating a kitchen or adding a basement suite, the investor develops multiple new rental units in the backyard. If the completed property appraises high enough, refinancing may allow the investor to recover a significant portion of the capital invested. In the right project, Wayne believes there may even be an opportunity to recover most or potentially all of the initial capital. That capital can then be redeployed into another property. Cash Flow + Equity + Refinance Potential This is what makes the strategy so exciting to Wayne. One development can potentially provide: Strong monthly cash flow Significant new equity Mortgage principal paydown Long-term appreciation exposure Additional rental units The potential to refinance The ability to redeploy capital And the original house can remain in place producing rental income. A New Property Closing Today Wayne and Gabby also discuss another rental property they are taking possession of today. Their projected cash flow: Approximately $700 per month. Wayne plans to leave that cash flow inside the property reserve. Starting with approximately three months of rent in reserves and adding $700 per month would contribute another: $8,400 per year before any future rent increases. His point: Cash flow is not necessarily spending money. Cash flow builds resilience. A healthy reserve protects the investment against repairs, vacancy, changing rents and higher interest rates. Want to Know What You Can Build? If you already own an Edmonton property or want to purchase one for a garden-suite development: www.edmontongardensuites.com You can book a consultation and have the team assess what may be possible on a specific property. The site also includes information on existing garden-suite models and development options. The 5% Rule™ Learn Wayne Hillier's cash-flow framework for Canadian rental properties. Search: The 5% Rule by Wayne Hillier on Amazon. REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, market analysis, financing, joint ventures, property management and building a profitable Canadian real estate portfolio. www.reimasters.ca Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions: info@reimorningshow.com Upcoming Event REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

Should You Invest in Vancouver, Montreal or Laval? Plus the 2 Numbers Wayne Uses to Analyze Deals Can you find a good rental property in Montreal or Laval? Should you invest in Vancouver? What numbers actually matter when analyzing a rental property? And if you already bought a bad deal, should you hold it and hope it recovers, or sell it and move on? Today's episode of the Canadian Real Estate Investing Morning Show is another investor Q&A covering exactly those questions. Wayne and Gabby break down how to evaluate a market, how borrowed down-payment funds affect cash flow, why Wayne would personally avoid certain provinces even when the numbers appear to work, and the two metrics he actually uses to compare real estate deals. The main message: Don't force a market to work. Find the market, property type and deal that actually fit your investment criteria. Can You Cash Flow in Montreal or Laval? A listener from Laval, Quebec asks whether it is realistic to find a property in Laval or Montreal that meets Wayne's cash-flow criteria. Wayne says it may be possible. But instead of starting with one predetermined property type, investors should study the entire market. Look at: Apartment condos Townhouse condos Duplexes Single-family houses Houses with secondary suites Small multifamily Larger multifamily Then compare purchase prices across different neighbourhoods with the rents those properties can realistically achieve. The goal is to become a master of the market. You need to know: What different property types cost. What different neighbourhoods cost. What tenants will pay. What areas attract stronger tenants. Which property types produce the best rent-to-price relationship. Only then can you determine which opportunities deserve deeper investigation. Don't Start With the Strategy and Force the Market The listener specifically mentions wanting to purchase a plex. Wayne's approach would be slightly different. Instead of deciding: "I want to buy a plex." Start with: "Which asset type in this city produces the best combination of cash flow, tenant profile, risk and long-term potential?" Maybe that is a plex. Maybe it is a townhouse. Maybe it is a suited house. Maybe it is something completely different. Do not force the property type. Follow the numbers. Borrowing Your Down Payment From Home Equity The listener is also considering borrowing against their existing home to fund the down payment. Wayne likes the concept of taking otherwise unused equity and redeploying it into another productive asset. But there is an obvious trade-off. Borrowing the down payment creates additional debt. Additional debt means additional monthly interest. That increases the risk. If the investment property itself produces $500 per month in cash flow but the borrowed down payment costs $300 per month to service, the investor's actual financial position is very different. That needs to be considered. Look at the Entire Portfolio When investors use equity from one property to fund another, Wayne sometimes prefers looking at the cash flow of the entire portfolio instead of judging only the new property in isolation. Maybe one property produces excellent cash flow. Another is tighter. Together, the portfolio may still be healthy. The question becomes: Does the entire portfolio still pass the cash-flow test and remain resilient? Borrowing money to scale increases potential profits. But it also increases risk. The goal is finding the right balance. Borrowed Investment Funds May Be Tax Deductible Gabby also points out an important tax consideration. When money is borrowed and used for qualifying investment purposes, the interest may be deductible. That can reduce the true after-tax cost of the borrowed funds. Investors should confirm the exact treatment with a qualified accountant based on their specific circumstances. Why Wayne Still Wouldn't Choose Quebec This is where Wayne's answer changes. Could somebody potentially find a property in Quebec that produces good cash flow? Yes. Would Wayne personally want to operate his rental-property business there? No. The issue is the landlord and tenant laws. Wayne views real estate as a business. And if the jurisdiction makes it unnecessarily difficult to operate that business, enforce agreements or manage risk, that becomes a major negative. Even if the numbers work. For Wayne, that can be enough to eliminate the market. A Great Deal in the Wrong Province Can Still Be the Wrong Deal Wayne compares Quebec with other provinces where investors have historically found strong deals. The purchase price might work. The rent might work. The appreciation potential might work. But if the operating environment creates significantly more landlord risk, the deal becomes less attractive. Wayne would rather invest in a market where: The property works. The cash flow works. The tenant profile works. The long-term fundamentals work. And the laws support the operation of the business. Wayne's "Ice Age" Theory Wayne again discusses the idea of real estate markets entering an "ice age." A market can become temporarily unattractive when prices rise faster than rents and household affordability. That does not mean the city is permanently bad. It means investors may need to wait. Calgary is one market Wayne currently describes this way. He believes Edmonton will eventually reach a similar stage. When that happens, he will look for the next market where the fundamentals work better. What Numbers Should Investors Actually Follow? Another listener asks which indicators they should use when analyzing deals. They currently look at: Cap rate Cash flow ROI DSCR The 1% rule Other rules of thumb Wayne simplifies it dramatically. He primarily focuses on two things: Return on Investment and The 5% Rule™ Cash Flow Test That is it. Metric #1: Return on Investment ROI tells Wayne how profitable the investment is. It allows him to compare completely different properties using one common measure. A townhouse. A suited house. A multifamily building. A condo. A garden-suite development. Whatever the property type, the question is: For every dollar I invest, how much profit am I receiving back? Wayne looks at total profits from: Cash flow Mortgage principal paydown Appreciation Then compares those profits with the initial investment. He generally prefers looking over longer holding periods rather than focusing only on year-one returns. Real estate is a long-term investment. Metric #2: The 5% Rule™ Cash Flow Test Profitability is only half the equation. The other half is risk. Wayne uses cash flow as his primary risk measure. The more cash flow a property produces, the greater its ability to absorb: Lower rents Higher mortgage payments Repairs Vacancy Increasing expenses Unexpected economic changes Imagine one property produces $500 per month. Rent falls by $200. You still have $300. Another property produces only $100. Rent falls by $200. Now you are losing money. Multiply that across a 20-property portfolio and suddenly a small monthly problem becomes a very large one. That is why Wayne created the 5% Rule. Profitability + Risk Wayne's approach is to balance: ROI = profitability with Cash flow = risk protection A property can have an incredible projected return but still be dangerously fragile. Another property can be extremely safe but produce disappointing returns. The goal is finding investments that score well in both areas. Wayne Doesn't Use the 1% Rule Wayne considers rules such as the 1% rule outdated and overly simplistic. The bigger question is: Why 1%? What exactly is it measuring? Profitability? Risk? Financing? There is often no clear reasoning behind the number. Wayne prefers metrics where he understands exactly what they are measuring and why they matter. A Listener Bought a Vancouver Condo and Regrets It Another listener writes in after purchasing a condo in the Greater Vancouver area. They say the property is losing several hundred dollars every month. They relied heavily on their realtor. They did not educate themselves first. And after finding the Morning Show, they realized they had done exactly what Wayne warns investors not to do. Their questions: Should they continue investing in Vancouver? Should they invest somewhere else? And how do they get out of the condo? Would Wayne Invest in Vancouver? Wayne's answer: No. He does not believe Vancouver currently fits the five fundamentals he uses when selecting markets and investments. His issue is not whether Vancouver real estate can appreciate. It obviously can. His problem is that Wayne does not buy properties primarily to speculate on appreciation. He wants to purchase a profitable rental business. If the rent cannot pay the operating costs and produce sufficient cash flow, he is not interested. Appreciation Is Not Enough Someone can buy a Vancouver condo and hope it goes up in value. That is a strategy. It is simply not Wayne's strategy. Wayne wants: Positive cash flow Mortgage paydown Long-term appreciation potential A strong tenant profile A supportive operating environment The property needs to make sense without requiring appreciation to rescue the investment. Should You Invest Outside Your Home City? Yes. Wayne believes investors should go where the fundamentals work. You do not need to live in the same city as your rental property. Wayne and Gabby already manage properties they rarely or never physically visit. The solution is building: The right team Communication systems Maintenance systems Inspection systems Contractor relationships Documentation systems Location matters far less once the management system works. How Do You Get Out of a Bad Vancouver Condo? Wayne's first answer is straightforward: Talk to your realtor and understand what the property can realistically sell for. Then calculate: Mortgage penalty Realtor fees Legal fees Current market value Remaining mortgage Potential loss Tax implications Net proceeds Then determine whether continuing to hold the property actually improves the situation. Wayne warns against holding a bad investment indefinitely simply because you want to "break even." Sometimes the best decision is to accept the loss, learn from it and redeploy the remaining capital into a better opportunity. Don't Make the Next Decision Based on the Last Mistake A bad deal does not mean real estate investing does not work. It means that particular deal did not work. The most important thing is learning from it. Get educated. Understand the market. Understand the numbers. Create proper criteria. Then try again with a stronger foundation. Ghost Listings for Rental Research Another viewer asks about posting a rental listing before the property is actually available to test the market rent. Wayne explains that investors sometimes use "ghost listings" to gauge demand at a particular price. But Gabby raises an important concern. If tenants currently occupy the property, posting their home for rent before it is actually available can create unnecessary problems. There is also a timing issue. If you post the listing in September to determine what rent you can get in December, you are collecting September data. Rental markets are seasonal. The information may not accurately reflect what tenants will pay months later. Ask the Right Professional Wayne closes the discussion with another important principle: Use professionals for what they actually specialize in. A realtor brokers real estate transactions. A mortgage broker arranges financing. A lawyer provides legal guidance. A contractor performs construction. That does not automatically make any of them qualified to provide investment strategy. Build a team of strong professionals. But remain the CEO of your own real estate business. Remote Property Management Course – 50% Off This Week Gabby's Remote Property Management Course is currently 50% off. The eight-module course teaches the systems Wayne and Gabby use to remotely manage their own rental portfolio. Use code: 50OFF at: www.reimasters.ca Edmonton Real Estate Investing Course Want to learn Edmonton neighbourhoods, property types, tenant profiles and investment opportunities? The Edmonton Real Estate Investing Course is available at: www.reimasters.ca REI Masters Mentorship Work directly with Wayne and Gabby on market selection, acquisitions, deal analysis, financing, property management, joint ventures and building a profitable Canadian real estate portfolio. www.reimasters.ca The 5% Rule™ Learn Wayne Hillier's cash-flow framework for Canadian rental properties. Search: The 5% Rule by Wayne Hillier on Amazon. Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions: info@reimorningshow.com Upcoming Event REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

Mortgage Rates Are Rising: How Real Estate Investors Should Prepare Mortgage rates are moving higher again. For real estate investors, that raises an obvious question: What should you actually do about it? In today's episode of the Canadian Real Estate Investing Morning Show, Wayne and Gabby are joined by investor-focused mortgage broker Keaton Kirkwood of Kirkwood & Brennan Mortgage Group to break down what is happening with rates, why fixed mortgage rates are already reacting, how variable-rate borrowers should think about the next several months, and how investors can protect their portfolios before higher borrowing costs become a problem. The biggest message: You cannot control interest rates. But you can control how prepared your portfolio is for them. Why Rates Are Moving Keaton explains that there are two major forces investors need to understand: Bond yields and The Bank of Canada overnight rate Bond yields react in real time to market expectations, global capital flows and inflation. Fixed mortgage rates are heavily influenced by bond yields. The Bank of Canada overnight rate, on the other hand, directly affects prime-based borrowing products such as variable-rate mortgages and HELOCs. Keaton points out that bond yields have already moved higher. That means fixed mortgage rates can increase even before the Bank of Canada changes its overnight rate. Why the U.S. Matters The conversation also covers what happens when the United States raises rates. Canada does not operate in isolation. If other major economies increase rates while Canada does not, that can put downward pressure on the Canadian dollar. A weaker dollar can make imported goods more expensive. That can contribute to inflation. Eventually, Canada may be forced to respond. Keaton compares global economies to a conga line. The largest economies are closer to the front. Canada is somewhere in the middle. We do not control the direction of the entire global financial system. This Is Not the First Time Wayne points out that investors have seen versions of this before. Inflation. Rising rates. Higher mortgage payments. Financing stress. The causes may change. The pattern does not. That is why the goal should never be to perfectly predict rates. The goal is to build a portfolio that can survive when rates move against you. Higher Oil Prices Could Help Alberta There is one interesting wrinkle. The current inflation pressure being discussed is connected partly to geopolitical conflict and rising energy prices. Higher oil and gas prices are painful for consumers. But Alberta can sometimes benefit economically from stronger energy prices. That may support: Employment Investment Migration Housing demand Property values Keaton cautions that the effect is not equally positive for everybody. A drilling contractor may benefit directly. A teacher or accountant may not. Still, Alberta can sometimes perform relatively well during periods when global energy prices rise. What Investors Should Do Now Wayne asks the question most investors actually care about: Should you pause? Wait? Switch mortgage products? Rush to refinance? Keaton's answer: It depends on when you are exposed to higher rates. If you are in a variable mortgage, you should be paying attention now. If you have a fixed mortgage renewing within approximately 18 months, you should be paying attention. If you locked into a relatively high fixed rate previously, it may also be worth reviewing whether restructuring creates an advantage. That does NOT automatically mean you should refinance. It means you should investigate. Keaton's Four Pillars When deciding whether to restructure a mortgage, Keaton recommends evaluating four things: Cost Qualifying power Risk Tax efficiency If a change improves three or four of those areas, it may be worth considering. If the only benefit is saving $50 per month but it costs $15,000 to make the change, that may not make sense. The decision needs to improve the overall portfolio. Know Your Break-Even Interest Rate One of the most important pieces of advice from today's episode: Know the interest rate at which each property stops cash flowing. Then calculate the same number for your entire portfolio. For example: What happens if rates increase 0.25%? How much does that reduce monthly cash flow? What about another 0.25%? And another? At what point does the property become cash-flow neutral? At what point does the entire portfolio require money from your pocket? Investors should know these numbers before the rate increase arrives. Stress-Test the Portfolio Keaton recommends going even further. Calculate the impact of each quarter-point rate increase. If every 0.25% increase costs your portfolio $300 per month, you can quickly determine how much room you have. Maybe your portfolio can absorb: Three increases. Five increases. Seven increases. The specific number matters less than knowing it. Uncertainty creates fear. Knowing the numbers creates a plan. Cash Flow Is Your Protection Wayne comes back to the 5% Rule™. The reason he places so much emphasis on buying strong cash-flowing properties is not because high cash flow simply feels good. Cash flow creates safety. If interest rates rise: You have room. If rents temporarily fall: You have room. If expenses increase: You have room. If vacancy rises: You have room. The investor who bought a property with almost no cash-flow cushion can be wiped out much faster. The 5% Rule™ Wayne created the 5% Rule as a simple minimum cash-flow test for Canadian real estate investors. Its purpose is to ensure investors are not buying properties with such thin margins that one market change destroys the investment. Search: The 5% Rule by Wayne Hillier on Amazon. Longer Amortizations Can Reduce Risk Keaton also explains why he often prefers longer amortizations on investment properties. Longer amortization means: Lower mortgage payments. Higher cash flow. Greater ability to absorb rate increases. More liquidity. That does not mean you can never pay the mortgage down faster. You can use prepayment privileges if you want to accelerate the mortgage later. But starting with a longer amortization gives the investor more flexibility. Don't Rush to Pay Off Tax-Deductible Debt Another important point: Not all debt costs the same. Interest on qualifying investment debt may be tax deductible. Interest on your principal residence generally is not. That means a 5% tax-deductible investment mortgage may effectively cost less after tax than a 4% non-deductible home mortgage. Keaton's view is that investors should generally prioritize paying down more expensive non-deductible debt before aggressively eliminating tax-deductible investment debt. Always confirm the tax treatment with your accountant. Variable vs Adjustable Rate Mortgages Keaton also explains an important distinction. An adjustable-rate mortgage changes the payment as rates move. A variable-rate mortgage with a fixed payment keeps the payment the same, while the amount going toward principal changes. For an investor concerned primarily with cash flow, a fixed-payment variable structure can provide more predictability. The specific product still needs to fit the investor's goals. What About Leverage? One listener asks how to hedge rising variable rates when heavily leveraged. Keaton explains that loan-to-value is only part of the picture. For cash flow, amortization can be more important. An investor could have relatively low leverage but a very short amortization and therefore extremely high monthly payments. That investor may actually be more exposed to rate pressure than someone with more leverage and much lower payments. The real question is: How much cash flow does the debt structure require every month? Liquidity Matters Keaton also recommends maintaining liquidity. Cash reserves can make an enormous difference during periods of rising rates. An extra $20,000 or $30,000 in accessible reserves can give an investor time to work through: Higher payments Vacancies Repairs Refinancing Renewal timing Selling an underperforming property Liquidity gives you options. Should You Sell a Weak Property? Keaton gives an example. Imagine your portfolio is healthy until rates reach 6%. But one property is already barely cash-flow neutral today. That property may deserve a closer look. If rates rise further, it could become significantly negative. The question becomes: Does that asset have another compelling reason to hold it? Or would selling it now strengthen the entire portfolio? Asset management means evaluating each property individually, not blindly holding everything forever. Don't Let Rates Stop You From Buying The goal of today's conversation is NOT: "Rates are going up, so stop investing." It is: Understand the risk. Prepare for it. Then continue executing the plan. Higher rates can change the numbers. They can change which properties make sense. They can change financing strategies. But they do not automatically eliminate good real estate opportunities. Remote Property Management Course – 50% Off This Week Wayne and Gabby also discuss the response to Gabby's Remote Property Management Course. The eight-module course teaches the systems Wayne and Gabby use to manage their own rental portfolio remotely without personally attending every property issue. This week, the course is available for: 50% off Use code: 50OFF at: www.reimasters.ca About Keaton Kirkwood Keaton Kirkwood is an investor-focused mortgage broker with Kirkwood & Brennan Mortgage Group. He works with Canadian real estate investors on financing structures designed to protect cash flow, preserve future borrowing power and avoid mortgage decisions that make the next acquisition harder. www.kbmortgages.ca keaton@kbmortgages.ca REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, financing, market selection, joint ventures, property management and building a profitable Canadian real estate portfolio. www.reimasters.ca Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions: info@reimorningshow.com Upcoming Event REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

Investor Q&A: Garden Suites, Ontario Real Estate, Exit Plans & More Today's episode of the Canadian Real Estate Investing Morning Show is a full investor Q&A. Wayne and Gabby answer questions live from Canadian real estate investors about: How to eventually exit a real estate portfolio Capital gains and tax planning When to use a financial planner Ontario real estate investing Variable vs fixed mortgage rates Corporations and rental properties Saskatchewan real estate Garage door replacement costs Assignment deals Edmonton garden suites And how investors can use education to recognize opportunities faster The biggest theme throughout today's show is simple: Ask better questions, get better information, and keep moving forward. What Does an Exit Plan From Real Estate Look Like? Craig asks: What is a realistic exit plan when you're done investing in real estate? Or are you ever actually done? Wayne's answer depends heavily on what the investor wants next. Some investors may want to: Sell everything Convert the portfolio into cash Move into lower-maintenance investments Create retirement income Keep real estate but simplify Hand assets down to family Continue holding for cash flow If the plan is to fully liquidate, Wayne recommends building the plan with the right professionals before selling. That could include: An investor-focused accountant A qualified financial planner A wealth-planning professional A real estate coach who understands long-term portfolio planning The key is knowing what the money is supposed to do after the properties are sold. Don't Forget the Tax Bill Wayne emphasizes that investors should not assume every dollar from a property sale becomes spendable cash. There may be: Capital gains tax Capital cost allowance recapture Legal fees Realtor commissions Mortgage discharge costs Other closing costs If you sell several properties at once, those tax implications can become significant. Talk to an investor-focused accountant before liquidating so you know what your actual net proceeds will be. Selling Is Easy. Planning What Happens Next Is Harder. The mechanics of selling real estate are relatively straightforward. Hire the appropriate broker or realtor. List the properties. Sell them. The harder part is deciding what happens to the capital afterward. If somebody sells a portfolio and ends up with several million dollars, they need to know whether that money is intended to: Grow. Generate income. Preserve wealth. Fund retirement. Support family. Or move into another investment vehicle. The answer should be based on the investor's goals, not a generic product recommendation. Be Careful Who You Take Financial Advice From Wayne also warns investors to be cautious with titles like: "Wealth planner." "Investment strategist." "Financial expert." A title does not automatically mean somebody has real experience. Make sure the person has actual qualifications and understands what you are trying to accomplish. The goal should be building the right plan, not simply moving your money into whatever product that person happens to sell. Kyla and Fabian Complete Their First Assignment Deal Kyla shares a big win during the live show. She and Fabian recently completed their first wholesale assignment. The deal came through a lead-generation system they originally built to find properties for their own fix-and-flip business. Normally they would have purchased the property, renovated it, and sold it. Instead, they recognized a different opportunity. They assigned the contract to another investor for: $10,000. No renovation. No construction risk. No holding costs. No resale risk. Just fast cash. Wayne explains that this is exactly what happens when investors understand multiple strategies. As Barry McGuire says: "If you understand the strategies, you recognize the opportunities." Pivoting vs Giving Up Wayne also talks about why he generally dislikes the word "pivot." Too often, people use "pivot" to describe quitting when something gets difficult. They start moving toward one goal. Hit resistance. Then change direction. Hit resistance again. Change direction again. Eventually they never reach any destination. That is different from recognizing a genuinely better path. Kyla and Fabian were not abandoning their business. They recognized that assigning the contract produced a faster, easier return with less risk. That is not quitting. That is making a better business decision. Garage Door Replacement Costs A live viewer asks about the rough cost of replacing a garage door. Wayne estimates approximately: Single garage door supplied and installed: $2,000–$2,700 plus applicable tax Insulated double garage door supplied and installed: Approximately $2,700–$3,500 plus applicable tax Labour-only costs may vary significantly by contractor and location. These are rough estimates and should be confirmed locally. Would Wayne Invest in Ontario? Another listener asks: What do you think about Ontario real estate? Would you invest there? Wayne's short answer: He has researched it. But he does not personally want to operate a rental-property business there. The biggest issue is not necessarily the individual property. It is the regulatory environment. One of Wayne's core investment fundamentals is investing in a jurisdiction that supports the operation of the business. If the landlord and tenant laws create too much operational risk, that can be enough for Wayne to move on. Real Estate Is a Business Wayne explains the distinction again: He is not simply buying an asset and hoping it goes up in value. He is operating a rental business inside that asset. That means the laws governing the business matter. If the province limits: Rent increases Lease termination Enforcement Non-payment remedies Control over the asset Then that becomes a major part of the investment risk. Ontario Real Estate Is in an "Ice Age" Wayne describes much of Ontario's real estate market as being in an "ice age" right now. That does not mean every market in Ontario is identical. It means affordability has become severely disconnected from property values in many areas. After the pandemic, very low borrowing costs and pent-up demand caused prices to accelerate rapidly. Prices then moved beyond what many households could realistically afford. Now the market needs time to rebalance. Wayne believes the long-term opportunity may return, but affordability, borrowing costs and income all need to move back into a healthier relationship. Garden Suites Explained Another listener asks: How do garden suites work? A garden suite is an additional residential unit built on the same property as an existing house. It can be: Ground-level Above a garage A garage suite A duplex-style garden suite Multiple units, where municipal rules allow The exact rules depend on the municipality. Edmonton's Garden Suite Opportunity Wayne explains that Edmonton currently offers a very unusual opportunity because recent zoning changes allow multiple garden-suite units on certain lots. This allows investors to do something that is not currently possible in the same way in most Canadian cities. Instead of simply building one small backyard suite, investors may be able to create: Duplex garden suites Multiple ground-level suites Multi-unit garage suites Four-plex garden suites Wayne and his team recently completed their first four-plex garden-suite project. Why Wayne Built Edmonton Garden Suites Wayne explains that he began developing this strategy when he saw traditional investment opportunities becoming harder to find. He spent approximately two years working through: Design Zoning Permits Construction Builder selection Cost control Financing Appraisal strategy Rental projections The result became Edmonton Garden Suites. Four-Plex Garden Suites Wayne says the multi-unit model is where the investment economics become substantially more attractive. Rather than building one unit in the backyard, multiple units create much more rental income. Wayne says certain projects may be able to create approximately: $250,000 in equity upon completion with some projects potentially creating even more. He also discusses potential cash flow of more than: $1,500 per month when the right property, development model and financing are used. These results are project-specific and depend heavily on acquisition cost, construction cost, financing, appraisal, rents and execution. Edmonton Garden Suites Is a Limited Window Wayne believes this opportunity exists because of current City of Edmonton zoning rules. Those rules can change. If the city changes the rules in the future, the strategy may no longer be available in its current form. That is why Wayne sees the current period as a window of opportunity. For more information: www.edmontongardensuites.com Should Rental Properties Be Owned in a Corporation? A listener asks: How many rental properties should you own before creating a corporation? Wayne's answer: Zero. For passive rental properties, Wayne generally prefers personal ownership or joint ventures using personal ownership where possible. His view is that corporate ownership often creates less favourable tax treatment for passive rental income. He says corporate ownership can become relevant when an investor can no longer qualify personally or when the structure is required for another reason. Before making any ownership decision, investors should speak with a qualified accountant and lawyer about their specific situation. Variable or Fixed Rates? A listener asks whether they should move out of variable-rate mortgages. Wayne explains that he personally remains in variable mortgages. He does not present that as a recommendation for everyone. The correct financing decision depends on: Risk tolerance Cash flow Portfolio structure Time horizon Future purchases Mortgage terms Personal financial situation Tomorrow's Morning Show will feature investor-focused mortgage broker Keaton Kirkwood to discuss rising fixed rates and how investors can prepare their portfolios. What About Saskatchewan? Wayne says he likes Saskatchewan. He believes Regina and Saskatoon can offer strong real estate and rental fundamentals. But if he compared Saskatchewan with Alberta today, he would still choose Alberta. His reasoning is simple: If two markets are relatively close in quality, Wayne prefers investing in the market that currently produces the strongest overall result. He will continue investing there until that changes. Then he will move to the next market. Tomorrow: Rising Interest Rates Tomorrow's Morning Show will feature: Keaton Kirkwood of Kirkwood & Brennan Mortgage Group The conversation will focus on rising fixed mortgage rates and what real estate investors can do to: Protect cash flow Prepare for renewals Structure financing Continue buying Avoid letting higher borrowing costs derail the long-term plan REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, financing, market selection, joint ventures, wholesaling, property management, garden suites and building a profitable Canadian real estate portfolio. www.reimasters.ca Edmonton Garden Suites Learn more about Wayne's multi-unit Edmonton garden suite strategy: www.edmontongardensuites.com The 5% Rule™ Learn Wayne Hillier's rental-property cash-flow framework. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions: info@reimorningshow.com Upcoming Event REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

The Best Real Estate Investing Advice From REIcon 2026 REIcon 2026 is officially over. After a packed weekend of presentations, panels, live coaching, deal analysis and conversations with investors from across Canada, Wayne and Gabby are back on the Canadian Real Estate Investing Morning Show sharing some of the best advice they gave from the stage. In today's episode, they recap several of the biggest lessons from the weekend, including a creative way to negotiate inspection repairs, the three real estate opportunities Wayne believes are strongest in Edmonton right now, why residential real estate should not automatically be considered inferior to multifamily, and why buying the property is only the beginning. One of the biggest messages from the weekend: You don't make all your money when you buy the property. How you manage that property afterward determines what you actually keep. Don't Leave an Event Without What You Came For Wayne's final advice before leaving REIcon on Saturday was simple. If you paid to attend an educational event and still have a question preventing you from taking action, do not leave without getting it answered. Find the person who knows. Ask the expert. Talk to the lender. Talk to the lawyer. Talk to the investor. Talk to the contractor. The entire point of attending an event like REIcon is to leave with more clarity than you arrived with. Monday morning eventually comes. Motivation fades. What matters is whether you actually learned something that allows you to take the next step. A Creative Way to Negotiate Inspection Repairs One of Gabby's favourite conversations happened Friday night. An investor had a property under contract. The numbers worked. He liked the property. Then the home inspection revealed several repairs. The seller did not want to reduce the price or complete the work. The investor was considering walking away because every additional dollar he personally invested into repairs would reduce his return on investment. Gabby suggested a different approach. Instead of asking the seller to lower the purchase price: Increase it. Then require the seller to complete the repairs before closing. Why? Because the increased purchase price may allow more of the total acquisition cost to be incorporated into the mortgage financing, while the seller uses the additional proceeds to complete the required work. The seller can potentially walk away with roughly the same net amount. The buyer avoids funding the entire repair bill separately out of pocket. And the deal may stay together. It will not work in every transaction and needs to make sense with the lender, appraisal and contract structure, but it demonstrates an important investing principle: Price is only one part of a negotiation. Stop Obsessing Only Over Purchase Price Investors often become fixated on negotiating the lowest possible purchase price. But the better question is: How do I structure the entire transaction so the investment works? Price. Repairs. Closing date. Financing. Conditions. Credits. Terms. Possession. All of these can matter. Sometimes paying slightly more for the property can actually create a better investment if the overall structure reduces the amount of additional cash you need to contribute. The Three Edmonton Opportunities Wayne Highlighted at REIcon During Saturday morning's live Morning Show, Wayne shared the three opportunities he currently believes are among the strongest in Edmonton: Legal suited houses Edmonton townhouses Multi-unit garden suites Each opportunity serves a different investor. Different capital. Different experience. Different risk tolerance. Different return expectations. There is no single asset class that is automatically superior to everything else. #1: Legal Suited Houses If somebody forced Wayne to choose a straightforward Edmonton rental property for an investor with limited experience, he would choose a legal suited house. Why? They are relatively simple. They have diversified rental income. They serve a broad tenant base. They tend to be resilient. And Wayne believes they are difficult to completely mess up if they are purchased properly. The trade-off? They may not produce the highest returns. Wayne describes them more as a safe and dependable strategy than the highest-return strategy available. For someone wanting a relatively straightforward long-term rental property, that can be exactly what they need. #2: Edmonton Townhouses Edmonton townhouses remain one of Wayne's favourite opportunities. He has been buying them for years. His students are buying them. And he believes the opportunity still exists today. A major advantage is accessibility. A typical Edmonton townhouse may sell for approximately $200,000 to $220,000. At 20% down, that means an investor may need approximately: $40,000 to $44,000 for the down payment. Compare that with a suited house requiring closer to $100,000 or a development requiring hundreds of thousands of dollars. That lower entry point makes townhouses accessible to far more investors. Why Wayne Likes Townhouses So Much Wayne says the returns he has achieved on carefully selected Edmonton townhouses have been exceptional when combining: Appreciation Mortgage paydown Cash flow Some properties were purchased for approximately $160,000 and are now worth well over $200,000. On certain investments, Wayne says the combined return relative to the original invested capital has exceeded 100%. That does NOT mean every Edmonton townhouse will produce those results. The complex matters. The neighbourhood matters. The condo corporation matters. The purchase price matters. Due diligence matters. The property still needs to be selected properly. But Wayne believes investors continue to overlook the strategy because it does not sound as impressive as owning a large apartment building. Residential vs Multifamily One of Wayne's messages throughout the weekend was: Residential and multifamily are apples and oranges. Multifamily is not automatically the "next level." Residential is not automatically beginner investing. Some multifamily deals will outperform residential deals. Some residential deals will dramatically outperform multifamily deals. The correct comparison is the actual investment. Capital required. Cash flow. Risk. Return. Financing. Management. Exit options. Potential appreciation. Wayne believes investors sometimes chase multifamily because it feels bigger rather than because the actual numbers are better. #3: Edmonton Garden Suites The third major opportunity is multi-unit garden suites. This strategy requires considerably more capital and sophistication. Wayne and Gabby are currently developing multi-unit garden suites behind existing Edmonton houses. Instead of demolishing the original house, they retain it and build additional residential units on the property. The finished property can then potentially operate more like a multifamily asset. The strategy combines: An existing house. Newly created units. New rental income. Value creation through development. And potentially an income-based appraisal upon completion. Creating Hundreds of Thousands in Equity Wayne says their current garden-suite developments are projected to create substantial equity upon completion. Depending on the individual property, he discusses potential value creation in the range of approximately: $250,000 to $400,000 The strategy may also allow them to refinance the completed property and recover a significant portion, and potentially all, of the original invested capital. The remaining property then continues operating as a cash-flowing asset. This is effectively a development version of the BRRRR strategy. But Wayne emphasizes that this is considerably more complicated than simply buying a townhouse or suited house. Execution matters. Financing matters. Development costs matter. Property selection matters. Appraisal methodology matters. And investors need enough capital to complete the project. The Window of Opportunity Is Closing Wayne has been discussing Edmonton's investment window for several years. His view remains that Edmonton prices are still relatively affordable compared with the rents certain properties can produce. But that relationship will not last forever. Prices have been increasing. Certain rents are now softening. And eventually the rent-to-price ratio will become less attractive. Wayne believes Edmonton is already partway through that window. The goal is not to panic-buy. The goal is to recognize opportunities while the fundamentals still work. Buying the Property Is Only the Beginning One of Gabby's strongest messages from the weekend came during their property and asset management presentation. Investors spend enormous amounts of time learning: How to find a deal. How to analyze it. How to negotiate it. How to finance it. How to close it. But ownership can last 20 years. The acquisition may take a few weeks. The management lasts decades. Gabby's point: Once you take possession, how you manage the property ultimately determines your profits. A fantastic deal can become a terrible investment through poor management. You Can Self-Manage a Large Portfolio Wayne and Gabby also challenged the idea that investors automatically need a professional property manager as their portfolio grows. They have self-managed their rental portfolio remotely since they started. That does not mean personally doing everything. It means building systems. Communication systems. Maintenance systems. Inspection systems. Rent collection systems. Renewal systems. Contractor systems. Bookkeeping systems. Documentation systems. Then, as the portfolio grows, specific tasks can be delegated. Wayne and Gabby now use an assistant for portions of the communication and administration. But the assistant operates inside systems they created. That distinction matters. Trust the System Wayne describes seeing rental-property emails during the REIcon weekend and barely registering them. Years ago, those issues might have consumed his attention. Today, he trusts the system. That allows him to focus on: Acquisitions. Developments. New businesses. Joint ventures. Raising capital. Family. And everything else requiring his attention. That is the real purpose of systems. Not simply organization. Freedom. Remote Property Management Course – 50% Off This Week Following the response to their REIcon presentation, Gabby is offering a temporary 50% discount on the REI Masters Remote Property Management Course. The course teaches the systems Wayne and Gabby use to manage their rental portfolio remotely. The eight-module course covers how to create a property-management operation that does not require the owner to personally attend every showing, inspection, maintenance call or tenant issue. Visit: www.reimasters.ca Use discount code: 50OFF for 50% off during the promotional period discussed on today's show. The Main Lesson Buying a great property matters. But buying the property is only the beginning. A great acquisition with terrible management can still become a terrible investment. The goal is to: Buy correctly. Finance correctly. Manage correctly. Build systems. And hold great properties for the long term. That is how real estate becomes a wealth-building business instead of a series of transactions. REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, financing, market selection, due diligence, joint ventures, property management, BRRRR strategies and building a profitable Canadian real estate portfolio. www.reimasters.ca The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions: info@reimorningshow.com Upcoming Event REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

How Are We Finding So Many Great Real Estate Deals? If great real estate deals really exist, why isn't everybody buying them? That was the question that came into the Canadian Real Estate Investing Morning Show today. A listener wanted to know how Wayne keeps finding strong deals, how REI Masters students keep buying cash-flowing properties, and why those opportunities seem almost invisible to everyone else. Wayne and Gabby's answer is simple: You don't know what you don't know. The properties are not hidden. The MLS is not secretly showing Wayne different listings. The opportunities are sitting in front of everybody. The difference is understanding what you are actually looking at. Today's episode also covers the growing infill controversy in Edmonton, a suspicious fire in Parkview following an anti-infill protest, the current Edmonton rental market, and several recent deals being completed by REI Masters students. "Something Seems Off" The listener's email asked: How can Wayne and his students keep finding all these great deals if everyone else can see the same properties? Wouldn't somebody else buy them first? Wayne's response is that most people are looking at real estate one-dimensionally. Experienced investors are looking at it from multiple angles. Two people can look at the exact same property. One sees: An old townhouse. A condo fee. A property that has been sitting on the market. Something that needs work. Another investor sees: Strong tenant demand. Cash flow. A below-market acquisition. A refinance opportunity. Long-term appreciation potential. A BRRRR. A wholesale assignment. Or simply a property that fits a very specific investment framework. The property did not change. The investor's knowledge changed. Buying the Property Is the Easy Part Wayne explains that even when he tells people exactly what type of property to buy, that does not guarantee success. He could say: Buy three-bedroom townhouses in Edmonton. He could narrow it down further. West end. South side. Certain neighbourhoods. Certain price ranges. But there are still plenty of ways to make a mistake. Which complex? What condo corporation? What reserve fund? What future repairs are coming? What tenant profile? What rent? What condition? What purchase price? What financing? What cash flow? What due diligence? And once you buy it, how will you manage it for the next 20 years? The purchase is only one piece of the puzzle. Why Education Changes What You See Wayne compares real estate knowledge to assembling a puzzle. The Morning Show gives investors pieces every weekday morning. Over time, listeners begin understanding how those pieces fit together. But somebody who hears only one episode may hear: "Buy an Edmonton townhouse." And think that is the entire strategy. It is not. The strategy is the complete framework surrounding the acquisition. Gabby summarizes the difference: Education. Someone who understands an industry will recognize opportunities that somebody without that education will completely miss. That principle applies far beyond real estate. The Deals Are Right in Front of You Wayne explains how his own acquisition process often works. Every month or two, he decides he is ready to buy. He messages his Edmonton realtor, Calvin Hexter, and tells him: I'm in buy mode. Then Wayne reviews the available inventory. He may look at seven properties. Write three offers. Get two accepted. And buy them. There is no secret inventory. There is no hidden database. The opportunities are already available. The key is recognizing which properties meet the framework and knowing how to evaluate them quickly enough to act. Wayne Has Already Locked Up Three Properties Wayne says he has already locked up three properties recently and still wants to purchase two more. The reason he has not bought the additional properties yet is not a lack of money or financing. He simply has not seen anything good enough. That is another important lesson. Being ready to buy does not mean forcing a deal. You wait until the property fits. Then you move. Opportunities Constantly Change A great real estate strategy today may not be a great strategy three years from now. Markets change. Prices change. Rents change. Interest rates change. Inventory changes. Investor competition changes. That means opportunities appear and disappear. Wayne says there are currently two particularly strong opportunities in Edmonton. Eventually, everybody may recognize them. Prices will increase. Competition will increase. Returns will compress. And the opportunity will disappear. Then investors need to recognize the next one. The Cost of Waiting for Proof One of Wayne's biggest warnings is waiting too long for proof that a strategy works. People often want to see everybody else doing it before they feel comfortable. But once everybody else is doing it, that creates the very competition that removes the opportunity. Wayne says his best deals often happen because he recognizes the opportunity before the broader market does. His students may then enter shortly afterward. Eventually everybody catches on. By that time, prices may already be 15%, 20% or 25% higher. Education allows investors to recognize opportunities earlier. REI Masters Student Deals Wayne and Gabby also highlight several deals currently happening inside the REI Masters community. Dennis Dennis recently took possession of another rental property generating approximately: $580 per month in cash flow. Wayne says Dennis and Andrea have acquired several properties during their first year and have added substantial monthly cash flow to their portfolio. Kyla and Fabian Kyla and Fabian found an off-market property through their We Buy Houses marketing. Instead of completing the flip themselves, they found another buyer and are assigning the opportunity for approximately: $10,000. Kane Kane recently locked up his first wholesale deal. Wayne describes it as an excellent potential Edmonton BRRRR opportunity. The property is a three-bedroom townhouse requiring approximately $15,000 to $20,000 in renovations. The potential strategy: Buy. Renovate. Refinance. Recover the invested capital. Keep the property. Cash flow approximately $300 per month afterward. Wayne says the property scored approximately 9% on the cash-flow test. Jas and Rupinder Jas and Rupinder recently acquired another property for approximately $30,000 to $40,000 below market value. They plan to complete renovations and may potentially use a BRRRR strategy. Anya Anya recently acquired a commercial property worth approximately: $2 million. Amanda Amanda has secured her first joint venture partner. Her challenge now is finding the right deal for the available capital. Additional Students Wayne also highlights several other students who have been acquiring properties, raising joint venture capital, building rent-to-own businesses and expanding their portfolios. The common thread is not luck. It is education followed by action. Edmonton's Infill Debate Gets Hotter The episode also covers a very different Edmonton real estate story. Residents in Edmonton's Parkview neighbourhood recently held a protest against increasing infill development. Residents have raised concerns about: Density Parking Traffic Garbage collection Snow removal Construction disruption Neighbourhood character Property values Shortly after the protest, a vacant house slated for redevelopment caught fire. The property reportedly had approval for a four-dwelling row house with four secondary suites. Fire officials considered the blaze suspicious, and Edmonton police began investigating. Wayne makes clear that nobody knows whether the fire had any connection to the protest. But the timing intensified an already heated debate around infill development in mature Edmonton neighbourhoods. Another Infill Fire Had a Different Cause Wayne also discusses another recent Edmonton infill-related fire. That fire was reportedly connected to a lithium-ion battery inside an electric scooter. Wayne says Edmonton fire officials reported numerous lithium-ion battery-related fires and millions of dollars in associated damage. The two fires were unrelated, but both highlight risks surrounding increasingly dense residential development. Wayne's Complicated View on Infill Wayne openly admits he has mixed feelings about Edmonton's infill boom. He participates in infill development. He believes new housing supply is necessary. He also understands why existing homeowners may be frustrated. Wayne believes Edmonton went too far in certain areas and added too much competing rental supply too quickly. That additional supply has created significant pressure on some segments of Edmonton's rental market. But not every property type is being affected equally. Edmonton Rents Are Down — But Not for Every Property Wayne says Edmonton rents overall have softened year over year. However, rents within his own portfolio have continued increasing. Why? Because he deliberately purchased properties that serve a different tenant profile than much of the new rental supply being built. This is another example of why understanding property type matters. Citywide averages do not tell you everything. You need to understand exactly who your tenant is, what alternatives they have and what type of property they actually want. The Main Lesson If you look at Wayne's deals or the deals being completed by REI Masters students and think: "Something seems off. Why don't I see these?" The better question may be: "What am I not seeing yet?" The listings are there. The opportunities are there. But opportunities only become obvious when you understand: The market. The numbers. The property type. The tenant. The risks. The financing. The exit. The operations. And how all of those pieces work together. Education changes what you see. Action determines what you do with it. REIcon – The Summit Series REIcon starts tonight in Edmonton. September 11–13, 2026 Wayne and Gabby will be there Friday and Saturday. The Canadian Real Estate Investing Morning Show will broadcast live on stage Saturday morning at 8:00 AM. Wayne will also be teaching due diligence, while Wayne and Gabby will present together on property and asset management. Get tickets at: www.reiconference.ca Use discount code: REIMASTERS15 for 15% off. REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, financing, market selection, joint ventures, wholesaling, BRRRR strategies, due diligence, property management and building a profitable Canadian real estate portfolio. www.reimasters.ca The 5% Rule™ Learn Wayne Hillier's cash-flow framework for evaluating rental properties. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions: info@reimorningshow.com Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 www.reiconference.ca Discount code: REIMASTERS15 REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

What You Need To Know Before Investing in a New City How do you know whether a city is actually a good place to invest in real estate? A market can have cheap houses. It can have great-looking cash flow. Population might be increasing. Property values might be rising. And it can still be a terrible place to build a long-term rental portfolio. In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby answer a question from listener Carmen: What do you look for when deciding whether to invest in a new city? Wayne breaks down five of the major factors he looks at before putting money into a new real estate market. The goal is not simply finding the city with the highest appreciation or cheapest properties. The goal is finding a market where you can buy a profitable rental business, operate it successfully, and have confidence that it can remain sustainable for the next 20 years. The Framework Comes Before the City Wayne explains that he does not start by falling in love with a city and then trying to make the numbers work. He starts with his investment framework. Then he asks: Does this market fit? If it does not fit the fundamentals, he moves on. Gabby describes it as trying to fit the correct peg into the correct hole. You do not start sanding the corners off because you really want the deal to work. The standards stay the same. The market either meets them or it does not. 1. Landlord and Tenant Laws One of Wayne's first considerations is the legal environment where the rental business will operate. A city can have: Great cash flow. Strong population growth. Excellent rents. Good appreciation potential. Low vacancy. And attractive properties. But if the landlord and tenant laws prevent you from operating the rental business effectively, that can be enough for Wayne to walk away. Wayne uses Ontario as an example. Issues such as restrictions surrounding lease termination, rent increases and lengthy dispute processes can materially change the risk profile of owning rental property. Gabby makes an important point: Managing the property properly is how you ultimately make money. You can make money when you buy. You can have great appreciation. You can have positive cash flow. But poor operations can destroy all of it. Wayne wants to know that both landlord and tenant are held accountable to the agreement they signed and that there is a reasonably efficient process when somebody does not fulfil their obligations. Before researching individual cities, understand the landlord and tenant laws of the province. 2. Cash Flow Potential Cash flow is one of the most important filters Wayne uses. If the type of property he wants to purchase cannot generate sufficient cash flow in that market, he will not buy there. Why? Because Wayne does not view rental real estate as simply purchasing an asset and hoping its value increases. He is buying an asset and operating a business from it. A business consistently spending more every month than it generates is not attractive simply because the building might eventually appreciate. Cash flow is also Wayne's primary risk mitigator. The greater the cash-flow cushion, the more room the investment has to absorb things outside the investor's control: Higher interest rates Vacancy Lower rents Increasing expenses Job losses Economic changes Unexpected repairs Wayne uses the 5% Rule™ Cash Flow Test as a minimum standard for evaluating this. Understand the Specific Neighbourhood Do not simply search: "What is the average rent in this city?" That is not enough. Different neighbourhoods attract different tenants. Different property types command different rents. One side of a city may perform very differently from another. Wayne and Gabby recommend researching the actual properties competing with the one you intend to purchase. Wayne gives an example from recent market-rent research. There were only a handful of comparable rentals available, and his property was clearly superior to the competition. Instead of simply copying the average asking rent, he decided the property could justify charging more. Market rent is not just a statistic. It is the price your property can command relative to the alternatives available to tenants. 3. Market Size Small towns can sometimes produce incredible-looking cash flow. Properties can be inexpensive. There may be almost no rental competition. Rents may appear exceptionally strong relative to purchase prices. That can be tempting. But Wayne sees a major problem: Sustainability. Everything can look fantastic while the town is booming. Then one employer closes. One construction project ends. One mine shuts down. One mill disappears. One economic event hits the dominant industry. Suddenly the rental demand that supported your investment disappears. Wayne generally prefers major cities with populations of approximately 500,000 or more . That is not a universal rule for every investor. It is his preference because larger markets generally provide more diversification and resilience. What About Smaller Cities Around Major Centres? Gabby adds an important exception. Smaller communities immediately surrounding a major metropolitan area can function as extensions of the larger city. Examples around Edmonton include: St. Albert Sherwood Park Spruce Grove Beaumont Residents may live there while still working, shopping and participating economically in the larger metropolitan area. Sometimes those communities offer lower purchase prices while maintaining similar rental demand. The important distinction is whether the smaller community has a genuinely diversified economic connection to the larger centre or exists primarily because of one local employer. 4. Industries and Employment Once Wayne identifies a potential market, he wants to understand: Why do people live there? Where are the jobs? How much do those jobs pay? Are those jobs sustainable? Are more jobs being created? Is the city dependent on one employer or industry? A market dominated by a single mill, mine, manufacturing plant or temporary infrastructure project creates more risk. If that employer disappears, the rental market can change extremely quickly. Wayne prefers markets with diversified employment and industries capable of producing good-paying, long-term jobs. Temporary Growth Can Fool Investors Imagine a small community suddenly gets thousands of workers because a major highway, mine, pipeline or infrastructure project is being built. Rental demand explodes. Vacancy disappears. Rents increase. Investors see the numbers and rush in. But what happens when construction finishes? If those workers leave and there is no permanent economic reason for people to remain, the rental demand can disappear just as quickly as it arrived. Wayne wants investments that can survive for 20 years. Not just the next construction cycle. 5. Population Growth and Migration Population growth is another major factor. More people moving into a city creates additional demand for housing. Initially, many newcomers rent. Eventually, some become homeowners. That can create pressure on both: Rental demand and Real estate values. Wayne wants to study the history of population growth and net migration. But historical numbers are not enough. He also looks forward. What projects are being announced? What employers are expanding? What new industries are arriving? What infrastructure is being built? What will cause people to move there over the next five, ten or twenty years? Follow the Jobs Wayne gives a theoretical example of a major new project creating thousands of construction jobs followed by thousands of permanent jobs. During construction, many workers may become renters. That puts pressure on rental supply. Later, some of those workers may take permanent jobs and become homebuyers. If you own the right type of property, you can potentially benefit from both phases. First, strong rental demand. Later, increased homebuyer demand for the same type of property. That is exactly the kind of long-term market dynamic Wayne looks for. Real Estate Prices Going Up Is Not Enough A city can have rapidly increasing real estate prices and still be a poor rental market. Gabby discusses communities where outside buyers drove prices higher while local residents increasingly struggled to afford either rents or homes. That creates a disconnect. Wayne repeatedly comes back to the same principle: You are not simply buying a box and hoping the box becomes more valuable. You are operating a business from the property. The market needs to support that business. The Five Filters When Wayne begins evaluating a new real estate market, five of the major things he considers are: Landlord and tenant laws Cash flow potential Market size Industries and employment Population growth and migration These five factors are only the beginning. Once a market passes those filters, deeper due diligence begins. What neighbourhoods? What asset classes? What tenant profile? What vacancy? What property values? What rents? What long-term development is happening? The purpose of the first analysis is not to prove that you should invest somewhere. It is to determine whether the market deserves further investigation. A Rare BRRRR Opportunity in Edmonton Wayne and Gabby also discuss an opportunity brought to the previous night's REI Masters coaching session. One student operating a wholesaling business found an Edmonton property that Wayne believes could potentially make an excellent BRRRR. The renovation appears relatively simple, potentially around $10,000 to $20,000 in cosmetic improvements. The strategy would be: Buy the property. Complete the renovation. Increase the value. Refinance. Recover the invested capital. Then hold the property as a cash-flowing rental. Based on the analysis discussed during the coaching session, Wayne says the property performed exceptionally well on the cash-flow test. He describes opportunities like this as increasingly rare and says Edmonton has not offered many comparable BRRRR opportunities in several years. Weekly REI Masters Coaching Wayne and Gabby also share several wins and challenges discussed during their weekly REI Masters coaching session. Students are currently working through: Condo document due diligence Off-market acquisitions Wholesale assignments Joint venture partnerships Finding deals for money partners BRRRR opportunities Financing Legal issues Market selection The coaching sessions are designed around helping students solve the actual roadblocks preventing them from reaching their next objective. REIcon – The Summit Series REIcon begins tomorrow in Edmonton. September 11–13, 2026 Wayne and Gabby will be there Friday and Saturday. On Saturday morning at 8:00 AM, the Canadian Real Estate Investing Morning Show will be recorded live on stage. Wayne and Gabby are also presenting during Saturday's sessions. Get tickets at: www.reiconference.ca Use discount code: REIMASTERS15 for 15% off. REI Masters Mentorship Work directly with Wayne and Gabby on market selection, acquisitions, financing, deal analysis, property management, joint ventures, wholesaling and building a profitable Canadian real estate portfolio. www.reimasters.ca The 5% Rule™ Learn Wayne Hillier's cash-flow framework for evaluating Canadian rental properties. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions for the show: info@reimorningshow.com Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 www.reiconference.ca Discount code: REIMASTERS15 REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

Is Calgary Still a Good Place to Invest in Real Estate? Calgary real estate investors have had an incredible run. Properties that once sold for under $300,000 are now worth significantly more. Rents increased. Investors who bought several years ago benefited from cash flow, mortgage paydown and substantial appreciation. But that creates a different question in 2026: Does Calgary still make sense for someone buying today? In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby answer a listener who already owns Calgary rental properties and wants to know whether they should buy more, continue holding what they own, or sell. Wayne's answer comes down to one important relationship: The rent-to-price ratio. Property values can continue increasing, but if rents are no longer high enough to support the cost of owning the property, the investment stops functioning as a profitable rental business. Don't Fall in Love With a Market Wayne starts with an important reminder. Being from Calgary is not a reason to invest in Calgary. Loving Calgary is not a reason to invest in Calgary. Having made money there previously is not automatically a reason to buy there again. Real estate investing decisions should be based on the numbers and fundamentals available today . Markets change. Strategies need to change with them. The Difference Between Holding and Buying Today This is one of the most important distinctions in the episode. Someone who bought a Calgary property five years ago may be in an excellent position today. They may have: A much smaller original mortgage Years of mortgage principal paydown Increased rents A large amount of equity Positive cash flow A substantial reserve fund That does not mean someone purchasing the exact same property today will get the same result. The existing owner and the new buyer are working with completely different numbers. The Calgary Investor Who Bought at $280,000 Wayne walks through a simplified example. Several years ago, an investor might have purchased a Calgary house for approximately: $280,000 At 20% down, that investor would have contributed approximately: $56,000 Their mortgage would have been around: $224,000 At the time, similar properties could potentially rent for approximately $1,700 to $1,900 per month depending on the property and neighbourhood. Interest rates were also dramatically lower. The property could cash flow. Then rents increased. And property values increased significantly. That investor may now be sitting on an asset worth well over $500,000 while still carrying a relatively small mortgage. That is an excellent position. Now Buy the Same Property in 2026 The problem is the next investor is not buying it for $280,000. They may be buying it for: $550,000 At 20% down: $110,000 Mortgage: $440,000 Now add today's mortgage rate, property taxes, insurance, maintenance, vacancy and other operating expenses. The same rental income that produces great cash flow for the person who bought five years ago may produce negative cash flow for the buyer purchasing today. That is the problem. The Rent-to-Price Ratio Is Out of Balance Wayne describes the rent-to-price ratio as the relationship between: What the property costs and What the market will pay to rent it. Calgary property prices increased extremely quickly. Rents increased too. But eventually prices outpaced rents. And rents cannot simply keep increasing indefinitely because tenants still need to be able to afford them. Once purchase prices increase faster than rental income, cash flow begins disappearing. That is where Wayne believes Calgary is today for many residential rental properties. Appreciation Does Not Fix Bad Cash Flow Wayne believes Calgary property values can continue to increase over the long term. Residential real estate generally trends upward over long holding periods. But it does not move upward in a straight line. Interest rates change. Oil prices change. Inflation changes. Employment changes. Government policy changes. Immigration changes. Economic conditions change. Investors cannot reliably predict every short-term movement. That is why Wayne does not want to purchase a negative-cash-flow property simply because he believes it may appreciate. The business still needs to work. The $550,000 Example Wayne runs another simple example. Purchase price: $550,000 20% down: $110,000 Mortgage: $440,000 At approximately 4% over 30 years, the mortgage payment alone is around $2,100 per month. Then add approximately: $300+ per month in property taxes $150 or more in insurance Repairs Maintenance Vacancy Other expenses If the market rent is approximately $2,200 to $2,300, the numbers do not work. You are negative before even accounting for several real operating expenses. That is not the type of rental business Wayne wants to buy. Don't Follow the Headlines This is where investors can get confused. They see headlines saying: Calgary prices are increasing. Calgary is appreciating. Calgary is growing. Calgary remains desirable. Those things may all be true. But the important question for a rental-property investor is: Can I buy this property today and operate it profitably at today's price, today's rent and today's financing costs? If the answer is no, rising property values do not automatically make it a good investment. Wayne Is Still Holding His Calgary Properties Wayne makes an important distinction between buying more and selling what he already owns. He is not currently looking to buy more Calgary residential rental properties. But he is also not rushing to sell the Calgary properties he already owns. One example from his portfolio was purchased for approximately: $350,000 Today, Wayne estimates that property is worth around: $575,000 That represents roughly 65% appreciation over approximately five years. Even more interestingly, Wayne estimates the property increased from around $530,000 to $575,000 in the last year alone. That is approximately an 8.5% increase. The property still cash flows because Wayne's mortgage is based on the original purchase price, not today's value. Why Wayne Isn't Refinancing All That Equity That property now contains a significant amount of equity. So why not refinance it and pull the money out? Because increasing the mortgage could destroy the cash flow. Wayne's existing mortgage started at approximately $280,000 and has been paid down over time. Refinancing against today's $575,000 value would dramatically increase the debt and potentially eliminate the profitability of the rental business. So Wayne is comfortable allowing the equity to sit there. The property cash flows. It continues paying down debt. It has a healthy reserve. And it may continue appreciating. That is enough. Calgary Was an Incredible Opportunity Wayne is not saying Calgary was a bad investment. Quite the opposite. For investors who purchased the right properties before prices accelerated, Calgary created exceptional returns. Some properties appreciated 50%, 60% or more over several years. At the same time: Rents increased. Mortgages were paid down. Cash flow accumulated. That combination produced tremendous returns. The problem is that once everybody recognizes the opportunity, capital rushes in. Prices rise. Eventually the original opportunity disappears. The Opportunity Moves Wayne explains this as a pattern. A market has a strong rent-to-price ratio. Investors recognize it. Capital enters. Homebuyers enter. Prices increase. Eventually the rent-to-price ratio gets squeezed. Investors then start looking for the next market where rents still support the purchase prices. Wayne believes this is part of what happened as attention shifted from Calgary toward Edmonton. Edmonton then experienced substantial appreciation as more capital entered that market. Eventually another market may become the next opportunity. The investor's job is to recognize it before everybody else does. Wayne's Answer: Hold Calgary, But Be Careful Buying More For the listener who already owns successful Calgary rentals, Wayne's approach would generally be: Keep the profitable properties. Continue collecting cash flow. Continue paying down the mortgages. Let the equity grow. Be cautious about refinancing if it destroys the cash flow. And wait for the right time to eventually sell. But for someone looking to purchase a typical Calgary residential rental today, Wayne believes it is difficult to find properties that meet the investment fundamentals he teaches. There may still be specific opportunities. But they are much harder to find. The Main Lesson Do not ask: "Are Calgary prices going up?" Ask: "Does this rental property make sense at today's price?" Understand: Purchase price Market rent Financing Property taxes Insurance Repairs Maintenance Vacancy Cash flow Then determine whether the property meets your investment criteria. The goal is not to predict which city will increase the most next year. The goal is to buy a rental business capable of surviving for the next 20 years. Coming Tomorrow A listener asked another important question during today's live show: What do you look for when deciding whether to invest in a new city? Wayne and Gabby plan to tackle that question on tomorrow's Morning Show. REIcon – The Summit Series REIcon takes place in Edmonton this weekend: September 11–13, 2026 Wayne and Gabby will be there Friday and Saturday. The Canadian Real Estate Investing Morning Show will broadcast live on stage Saturday morning. Wayne will also be teaching due diligence and pre-purchase analysis. Get your tickets at: www.reiconference.ca Use discount code: REIMASTERS15 for 15% off. REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, market selection, financing, deal analysis, joint ventures, property management and building a profitable Canadian real estate portfolio. www.reimasters.ca The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and determining whether a property produces sufficient return relative to your investment. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions for the show: info@reimorningshow.com Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 www.reiconference.ca Discount code: REIMASTERS15 REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

Fall Rental Property Maintenance Checklist: What Landlords Should Do Before Winter Winter problems are expensive. A furnace that fails during the first cold snap. A frozen exterior water line. Clogged gutters sending spring melt toward the foundation. Too much humidity creating condensation, ice and eventually mold. These are predictable problems, which means landlords should be dealing with them before they become emergencies. In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby walk through their fall rental-property maintenance checklist and explain the systems they use to prepare their portfolio for winter. The goal is simple: Be proactive instead of reactive. A relatively inexpensive preventative repair in September can save you from a much larger emergency repair in January. Why Every Landlord Needs a Seasonal Maintenance System When you own your own home, seasonal maintenance can happen naturally. You notice something in the yard. You walk past the furnace. You see leaves accumulating in the gutters. With multiple rental properties, that does not happen automatically. The more properties you own, the more important systems and checklists become. Wayne and Gabby recommend creating a repeatable fall inspection checklist, saving it permanently and putting a recurring reminder into your calendar every year. You should not have to remember everything. The system should remind you. Start With the Furnace One of the most important fall checks is the furnace. Do not wait for the first -30°C night to discover that the furnace does not work. During the fall inspection: Turn the furnace on Confirm it fires properly Change the furnace filter Consider servicing it if it has not been checked recently Make sure airflow is not being restricted Deal with known issues before winter The worst time to discover a furnace problem is late at night during the first major cold snap when every HVAC company in the city is already dealing with emergency calls. Preventative maintenance gives you options. Emergency maintenance usually gives you a bill. Check the Humidifier Gabby considers humidity control one of the most important seasonal checks. If the property has a furnace-mounted humidifier or HRV system, the settings may need to change as outdoor temperatures drop. Too much indoor humidity during very cold weather can cause condensation and ice around: Windows Window frames Exterior walls Corners Areas behind furniture Other cold surfaces That ice eventually melts. Then you have water entering drywall, flooring and framing. And moisture problems can quickly become mold problems. Make sure the humidifier is set appropriately for the season and outdoor temperature. Winterize Exterior Hose Bibs Exterior water lines are another major concern. Before freezing temperatures arrive: Disconnect exterior hoses Locate the interior shutoff Shut the water supply off Open the exterior hose bib Drain the remaining water from the line Close everything properly for winter Water expands when it freezes. If water remains trapped in the pipe, the line or hose bib can burst. You may not even discover the damage until spring when somebody turns the water back on. Wayne and Gabby have purchased properties where exterior hose bibs did not survive the previous winter. A simple preventative step can save hundreds or potentially thousands of dollars. Clean Gutters and Check Downspouts Make sure gutters are clear and downspouts direct water away from the house. In Alberta, snow may accumulate for months before melting rapidly in spring. When that happens, you want the water moving away from the foundation. Clogged gutters or poorly positioned downspouts can contribute to: Foundation moisture Basement leaks Water intrusion Landscaping damage Properties surrounded by mature trees may require gutter cleaning every spring and fall. Wait until most of the leaves have fallen before completing the final fall cleaning. Check the Roof While inspecting the exterior, look at the roof. Check for: Missing shingles Damaged shingles Storm damage Fascia issues Soffit damage Areas where water could penetrate A small roof problem in September is much easier to repair than a roof problem buried beneath months of snow. Don't Ignore the Attic Attic issues can create serious winter problems. Look for: Inadequate insulation Poor ventilation Disconnected vents Bathroom fans exhausting incorrectly Signs of moisture Previous water staining Heat escaping into the attic can create condensation and ice. When that ice melts, the water can end up inside the ceiling, insulation or walls. That can lead to stains, leaks and mold. Wayne and Gabby emphasize another lesson here: If your home inspector identifies an attic issue when you buy the property, do not simply file the inspection report away and forget about it. Fix the important items. Test Smoke and Carbon Monoxide Detectors Every seasonal inspection should include life-safety equipment. Test every smoke alarm and carbon monoxide detector. Check: Operation Batteries where applicable Expiry dates Proper placement These devices are not decorative. They exist to protect the people living in your property. Check Windows and Doors Look closely at exterior windows and doors. Check: Caulking Sealant Weather stripping Visible gaps Signs of water intrusion Areas where daylight is visible around doors If you can see daylight around a door, cold air can get through too. Wayne and Gabby have become increasingly focused on exterior sealing after dealing with water-intrusion issues in their portfolio. Water will find surprisingly small openings. Seal them before weather makes the problem worse. Check the Rest of the Property While You're There If you are already inspecting the property, use the opportunity to perform a broader maintenance review. Consider checking: Hot water tank Appliance filters Plumbing Exterior drainage Interior moisture Property condition Previously identified maintenance items Treat the rental property the way you would treat your own home. The goal is to leave knowing the property is prepared to operate safely through winter. Document Everything Do not simply walk through and rely on memory. Take photos. Record what was inspected. Document repairs required. Keep the inspection record. Then compare it against the next seasonal inspection. If something does not need immediate attention but should be reviewed again in spring, document it and schedule the follow-up. Proactive Beats Reactive Wayne summarizes the philosophy behind the entire episode: Good property management is not about fixing things when they break. It is about identifying predictable problems before they become emergencies. A $150 preventative repair in September can easily prevent a $2,000 emergency repair in January. The exact number is not the point. The principle is. Preventative maintenance is almost always easier and cheaper than emergency maintenance. Build the System Once For investors with multiple properties, the solution is not becoming better at remembering everything. Build a system. Create a fall checklist. Create a spring checklist. Put recurring reminders into your calendar. Delegate inspections where appropriate. Document the results. Schedule repairs automatically. The simpler the system is, the more likely it will actually be followed. That frees up your mental bandwidth for higher-value activities: Finding deals. Building relationships. Raising capital. Growing your portfolio. And spending time on the things outside real estate that actually matter to you. REIcon – The Summit Series REIcon takes place in Edmonton this weekend: September 11–13, 2026 Wayne and Gabby will be there Friday and Saturday. On Saturday morning, the Canadian Real Estate Investing Morning Show will be recorded live on stage. Later Saturday, Wayne will participate in a due diligence and pre-purchase session with Patrick Francey. Wayne and Gabby will also present together on asset management and property management . Get tickets at: www.reiconference.ca Use discount code: REIMASTERS15 for 15% off. REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, financing, deal analysis, property management, joint ventures and building a profitable Canadian real estate portfolio. www.reimasters.ca Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions for the show: info@reimorningshow.com Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 www.reiconference.ca Discount code: REIMASTERS15 REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

September 2026 Edmonton Real Estate Market Update What is actually happening in the Edmonton real estate market heading into fall 2026? Inventory has climbed dramatically compared with the last couple of years. Months of inventory has increased. August was slower. Buyers have significantly more choice. But that does not mean the opportunities are gone. In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby are joined by Edmonton investor-focused realtor Calvin Hexter of Calvin Realty for a September 2026 Edmonton real estate market update. They break down the latest inventory numbers, months of inventory, days on market, pricing, rental vacancy pressures and what investors should expect as Edmonton moves into the fall market. They also discuss why September may create an important buying window, why investors need to look beyond citywide averages, and why some of the best deals Wayne and his students have seen in years are showing up right now. Edmonton Inventory Has Changed Dramatically One of the biggest changes in Edmonton is inventory. Calvin says available inventory is now around 8,050 properties . For comparison, Edmonton had roughly 3,000 to 4,000 available properties during much tighter periods in the previous couple of years. That means buyers now have considerably more selection. For sellers, that creates competition. For buyers, that creates opportunity. Months of Inventory Climbs to 3.88 Edmonton moved from roughly 3.3 months of inventory to approximately 3.88 months . That is a meaningful shift. For comparison, during some of the tighter periods in 2024, Edmonton was around 1.7 to 1.8 months of inventory. The market is now much more balanced. That does not mean every property is easy to negotiate. Real estate is still hyper-local. Different neighbourhoods, property types and price points can behave very differently. But overall, buyers have more leverage than they did during Edmonton's extremely tight market. August Was a Sleepier Month Calvin describes August as a slower month, which is not unusual. People are travelling. Families are preparing for school. Sellers sometimes allow listings to expire or temporarily remove properties from the market. Calvin expects activity to start increasing again around the second week of September. His prediction is that the market begins waking up around September 10 . That combination can create an interesting opportunity for investors: More inventory. Some sellers becoming frustrated. Listings that have been sitting. And buyers beginning to return. Prices Were Mostly Slightly Lower According to Calvin, most major property categories declined approximately 1% from July into August . Townhouses were the exception, increasing by roughly 2% . Properties that are selling are averaging around 40 days on market . But citywide averages only tell part of the story. A townhouse in one neighbourhood can behave completely differently from an infill property or multifamily asset somewhere else. Not Every Property Has the Same Vacancy Rate The same principle applies to rental vacancy. A citywide vacancy number does not tell you exactly what is happening with your property. Calvin gives the example of newer west-end infill projects. While the broader Edmonton vacancy rate may be somewhere around 4% to 5%, certain concentrated property types could be experiencing vacancy closer to 10%. That is why investors need to drill down. What neighbourhood? What property type? What tenant profile? What rent? How much competing inventory? Wayne recommends talking directly with other landlords who own similar properties. Ask them: How long did it take to rent? How many inquiries did you receive? What rent did you achieve? That real-world information can sometimes tell you more than a citywide statistic. Wayne and Gabby Are Seeing Rental Pressure Too Gabby also provides an update on September rent collection. On the morning of September 1, only about 45% of their expected rent had been received. Normally, Gabby likes to see closer to 60% to 65% collected before the first because many tenants pay early. Ultimately, everything was collected. But there were a couple of tenants who needed an extra day or some clarification around credits. Wayne and Gabby believe affordability pressure is becoming more noticeable. Groceries are expensive. Fuel is expensive. Households are feeling stretched. At the same time, Edmonton has more rental supply than it did previously. That means landlords may occasionally need to be slightly more flexible while still maintaining strong systems and boundaries. More Rental Supply Does Not Mean Stop Buying This is an important distinction. Wayne is actively purchasing properties. REI Masters students are actively purchasing properties. And Wayne says some of the deals they are finding right now are among the best they have seen in approximately a decade. The rental market may require stronger management. But the acquisition market is creating opportunities. The answer is not necessarily to stop buying. The answer is to buy properly and manage properly. Strong cash flow gives you room to handle vacancies, slower leasing periods and occasional tenant payment issues without putting the investment at risk. Why Toronto and Vancouver Investors Changed Edmonton The conversation also touches on the wave of Ontario and British Columbia investors who entered Edmonton aggressively during the previous market cycle. Calvin says there was more resentment in 2024 when Edmonton buyers were regularly being beaten by aggressive out-of-province offers. Wayne shares a story about a Mill Woods property he wanted to flip. He submitted an aggressive offer over asking. Another investor from Toronto beat him by approximately $45,000 over asking with no conditions and without seeing the property . Wayne watched the deal afterward. The buyer eventually lost money. That is the difference between buying because you believe prices will keep increasing and buying based on fundamentals. Wayne and Gabby were also able to benefit indirectly from rising Edmonton values by refinancing properties they already owned and redeploying that capital later. Edmonton Investors Have More Choice Again The key takeaway from Calvin's September update is that Edmonton is no longer experiencing the same extreme shortage buyers faced during the tightest parts of the market. Inventory is higher. Months of inventory is higher. Sellers have more competition. Buyers can be more selective. For disciplined investors, that can create excellent buying opportunities. But investors still need to understand the specific neighbourhood, property type and tenant market they are buying into. REIcon – The Summit Series Wayne, Gabby and Calvin also discuss the upcoming REIcon Summit Series in Edmonton. September 11–13, 2026. The event is structured more like an investing workshop than a traditional conference. The goal is to walk investors through the process of completing a real estate deal from beginning to end. Topics include: Finding opportunities Determining what makes a good deal Negotiating Due diligence Financing Joint ventures Seller financing Residential investing Multifamily investing Raising capital Building the right professional team Wayne and Gabby will be presenting during the event. The Canadian Real Estate Investing Morning Show will broadcast live on stage on Saturday, September 12 . Wayne will also be teaching due diligence alongside experienced Canadian real estate professionals, including his Edmonton real estate lawyer, Richard Bell. REIcon takes place September 11–13 in Edmonton. Use discount code: REIMASTERS15 for 15% off tickets. www.reiconference.ca About Calvin Hexter Calvin Hexter is an Edmonton investor-focused realtor and the founder of Calvin Realty. Calvin and his team work with real estate investors purchasing and selling residential, multifamily and investment properties throughout Edmonton. www.calvinrealty.ca REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, financing, deal analysis, property management, joint ventures and building a profitable Canadian real estate portfolio. www.reimasters.ca Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Questions for the show: info@reimorningshow.com Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 www.reiconference.ca Discount code: REIMASTERS15 REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. www.kbmortgages.ca keaton@kbmortgages.ca

The Basement Suite Cashflows - But Is It Actually Legal? A basement suite can make a rental property look fantastic on paper. Two rents. Better cash flow. Stronger returns. But there is one question investors sometimes forget to ask before removing conditions: Is the basement suite actually legal? In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby explain how investors can verify whether a secondary suite is permitted, why an illegal or non-conforming suite can create serious financial risk, and what could happen if the city, lender or insurance company eventually starts asking questions. They also discuss the Bank of Canada's latest interest-rate announcement, why investors shouldn't build deals assuming rates are going to fall, and why sufficient cash flow is what protects a rental portfolio when borrowing costs change. What You'll Learn Why the Bank of Canada holding rates doesn't mean investors should assume rates are headed lower How variable-rate mortgages and HELOCs are affected differently than fixed-rate mortgages Why Wayne believes deals should work at today's interest rates How the 5% Rule™ Cash Flow Test creates a cushion against higher borrowing costs Why reserve funds make property repairs and renovations much easier Why a basement suite can make a mediocre property look great on a spreadsheet How to determine whether a basement suite is actually legal Why pulling a permit does not necessarily mean the suite received final approval Why investors should confirm that the existing suite matches what was originally approved Why you should never automatically treat rent from an illegal suite as guaranteed income How an illegal suite can affect property value Why neighbours and former tenants can create unexpected problems What could happen if the municipality orders a secondary suite to stop operating Potential tenant relocation costs when a suite can no longer legally be occupied Why insurance becomes particularly important with non-conforming suites How Edmonton, Calgary, Winnipeg, Toronto and Vancouver differ when researching secondary suites Why Wayne and Gabby recommend buying or building legal suites whenever possible Bank of Canada Holds at 2.25% The Bank of Canada held its overnight rate at 2.25% in its September announcement. Wayne points out that the bigger story for investors is not simply that the rate stayed the same. It is the possibility that the environment could change. His message to investors is straightforward: Do not buy a rental property assuming interest rates are going down. Make the property work at today's numbers. If rates eventually fall, great. But your investment should not require that to happen. Variable vs. Fixed Mortgages Wayne also explains an important distinction. Changes to the Bank of Canada's overnight rate directly influence prime-based borrowing products such as: Variable-rate mortgages Adjustable-rate mortgages Home equity lines of credit A fixed-rate mortgage does not immediately change simply because the Bank of Canada changes its overnight rate. For investors with variable borrowing, however, rate increases can mean either higher interest costs or higher monthly payments depending on the mortgage structure. That makes cash flow especially important. Could Your Property Survive Higher Rates? Imagine your mortgage payment increases by $50 per month. Probably manageable. What if it rises by $500? Now the question becomes much more serious. Over a 20-year investment period, investors should expect interest rates to move. The property needs enough cash-flow cushion to survive those changes. Wayne points back to what happened when investors purchased properties during extremely low-rate environments and built their deals around financing conditions that did not last. When rates increased, some properties and projects could no longer support themselves. That is exactly the type of situation the 5% Rule™ Cash Flow Test is designed to help investors avoid. Why Cash Flow Creates Options Wayne and Gabby share another example from their own portfolio. One of their properties recently became vacant after several years. The property now needs repairs and improvements. But they are not scrambling to find the money. Why? The property's cash flow has been accumulating inside its reserve fund. That reserve can now pay for the work. No emergency credit card. No unexpected cash call to the joint venture partner. No panic. The rental business generated the money needed to maintain the rental business. That is how Wayne and Gabby believe a long-term portfolio should be built. Is That Basement Suite Actually Legal? The second major topic today begins with a situation Wayne recently heard about. An investor had been renting a basement suite when the municipality contacted them and wanted to inspect it. The problem? The suite was not properly permitted. Now the investor is facing questions about whether the tenant can continue living there and what happens to the economics of the property if that basement rent disappears. This is why Wayne believes investors need to verify secondary-suite status before purchasing the property. The Numbers Can Look Amazing Non-conforming suites can be tempting. Imagine two similar properties. One has a fully legal secondary suite. The other has a basement suite that looks almost identical but was never properly permitted. The non-conforming property may sell for less while producing almost the same advertised rental income. On a spreadsheet, that can look like an incredible deal. But that additional rent comes with risk. If something happens and you can no longer rent the basement separately, does the property still work? The Question Wayne Would Ask If you are considering purchasing a property with a non-conforming basement suite, Wayne suggests running a worst-case scenario: Does this property still cash flow if I cannot rent the basement separately? Assume the suite gets shut down. Assume you must rent the entire house as one unit. Does that rent still cover the property's expenses? Does it still pass the 5% Rule? If the answer is no, you need to understand exactly how much risk you are accepting. Wayne and Gabby's preference remains much simpler: Buy or build legal suites. Don't Overpay for an Illegal Suite Wayne gives a simple example. Imagine similar bungalows in a neighbourhood are worth: $400,000 A comparable property with a properly permitted legal suite might be worth: $500,000 Now imagine another $400,000 bungalow has an unpermitted basement suite. An investor sees the additional rental income and pays: $450,000 They think they received a bargain because it is cheaper than the legal suited property. But that unpermitted suite does not necessarily create the same market value as a fully legal one. You may have simply paid $50,000 too much for a $400,000 house. How to Check Whether a Basement Suite Is Legal Before buying a suited property, investigate it. 1. Check the Zoning Determine whether secondary suites are permitted under the property's zoning and municipal rules. 2. Check the Permits Find out whether the correct permits were actually issued for the secondary suite. Do not simply take the seller's word for it. 3. Confirm Final Inspections A permit being opened does not necessarily mean the work received final approval. Ask whether all required inspections were completed and the permit was properly closed. 4. Compare the Current Suite to What Was Approved A previous owner may have obtained approval and then changed the property afterward. Make sure today's layout and use still correspond with what was permitted. Some Cities Make This Easier Depending on where you are investing, your municipality may provide online tools that can help with the initial research. Wayne and Gabby discuss several examples. Edmonton has tools investors can use to research secondary-suite permits. Calgary has a secondary-suite registry. Winnipeg allows investors to search issued permits by address. Other cities, including Toronto and Vancouver , have permit and property-research tools, but investors may still need to contact the appropriate municipal department to confirm the actual status of a secondary suite. The easiest approach is usually: Search the city's online tools first. Then, if there is any uncertainty, contact the municipality directly and ask: "Does this address have a permitted secondary suite, and were all required final inspections completed?" What Causes the City to Investigate? Municipalities generally are not driving around neighbourhoods searching for illegal basement suites. Problems often begin because somebody complains. Two obvious possibilities are: Tenants. And: Neighbours. A tenant who becomes unhappy with the landlord may discover that the suite is not legal. A former tenant may complain. A neighbour who is frustrated with parking, noise or repeated rental problems may report the property. Everything can operate smoothly for years. Until somebody makes the phone call. What Happens to the Tenant? This is one of the risks investors sometimes overlook. You may have a valid residential tenancy agreement with someone living in the basement. If the municipality determines they can no longer legally occupy that space, you now have two problems. You lost the rental income. And your tenant may need somewhere else to live. Depending on the circumstances and applicable law, the landlord could potentially face costs resulting from being unable to provide the premises promised under the tenancy agreement. That could include temporary accommodation, moving, storage or other expenses. This is an area where investors should obtain proper legal advice for their specific situation. Don't Forget the Insurance Company Another major concern is insurance. Imagine you buy a property with an illegal secondary suite. You obtain landlord insurance. You collect rent. Everything appears fine. Then there is a major claim. A fire. Serious water damage. Liability involving an occupant. The insurance company investigates and discovers the property was being used differently than represented or that an unpermitted secondary suite was being occupied. That is not the time you want to discover that your coverage may be affected. Wayne recommends being transparent with your insurance professional and making sure the property is properly insured for the way it is actually being used. The Liability You Don't Want Wayne also discusses the extreme scenario investors sometimes hear about involving fires in illegal basement suites. If a landlord knowingly operates an unsafe or prohibited suite and someone is seriously injured or killed, the consequences could go far beyond lost rent. The circumstances surrounding any legal liability would depend heavily on the facts, but the underlying lesson is simple: Do not knowingly ignore serious safety or permitting issues. Saving money by avoiding permits is not worth taking a catastrophic risk. The Main Lesson A beautiful basement suite does not automatically mean you have two legal rental units. And a spreadsheet showing two rents does not mean you can count on receiving both rents forever. Before buying: Check the zoning. Check the permits. Confirm final inspections. Verify what was actually approved. Speak with your insurer. And run the property numbers assuming that basement rent disappears. If the entire investment collapses without the non-conforming suite, understand that you are taking a significant risk. Wayne and Gabby's preferred approach is straightforward: Buy legal. Build legal. The additional cost is usually much easier to deal with than discovering years later that the rental income your entire investment depended on was never guaranteed in the first place. About Your Hosts Wayne and Gabby Hillier are Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they provide practical Canadian real estate investing education, lessons from their own portfolio and free coaching every weekday morning. Send Your Questions to the Show Have a question you want Wayne and Gabby to answer? 📧 info@reimorningshow.com REI Masters Mentorship The REI Masters Mentorship Program is a 12-month real estate investing coaching program with Wayne and Gabby. Students receive education, courses, resources, contracts and ongoing coaching to help them analyze deals, build systems and grow their real estate investing business. 🌐 www.reimasters.ca The 5% Rule™ Learn Wayne Hillier's framework for determining whether a rental property produces sufficient cash flow relative to the investment. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Morning Show Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Wayne and Gabby will be at REIcon Friday and Saturday. The Canadian Real Estate Investing Morning Show will broadcast live on stage Saturday morning , followed by Wayne and Gabby presenting later that day. 🌐 reiconference.ca Use discount code: REIMASTERS15 for 15% off your tickets. REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 🌐 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

Your Tenant Is Running a Business From Your Rental. Now What? Your tenant starts operating a business from your rental property. Do you care? Maybe not. But your condo corporation, municipality, lease agreement and insurance company might. In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby break down a real situation happening inside their own rental portfolio after a condo corporation discovered that one of their tenants was advertising childcare services from the property. The tenant may simply have been trying to earn some additional income. From Wayne's perspective, that alone is not the problem. The problem is what that business could potentially do to the risk and liability attached to the property. Customers entering the rental. Children being cared for inside. Additional traffic and parking. Increased wear and tear. Business equipment or inventory. Potential injuries. And most importantly: What happens to your landlord insurance policy if the property is being used for something your insurer never agreed to cover? This is the kind of boring property-management system that becomes extremely important the day something goes wrong. What You'll Learn What happened when Wayne and Gabby discovered a tenant advertising childcare from their rental Why the condo corporation became involved Whether landlords should automatically prohibit every home-based business The difference between working from home and operating a customer-facing business Why customer traffic may dramatically change the risk How a business can create parking issues in a condominium Why certain businesses may increase wear and tear Why condo bylaws matter even if the landlord personally approves of the business Why municipal permission does not necessarily override condo bylaws Why Wayne recommends prohibiting businesses by default in the lease How landlords can later approve specific activities individually Why landlord insurance is based partly on the property's intended use How business activity could change coverage, exclusions, deductibles or premiums Why the tenant may need separate business liability insurance Whether the landlord may need to be added as an additional insured Why you should get insurance approval in writing Why landlords should confirm the facts before confronting a tenant How Wayne and Gabby communicated with their tenant Why simply sending an email is not the end of the process How landlords can verify compliance Why a property manager does not eliminate the owner's responsibility Why regular inspections and systems still matter even with professional management Why Wayne Doesn't Obsess Over Daily Real Estate News Wayne starts today's episode responding to a listener who complained that the Morning Show does not spend enough time discussing inflation, trade negotiations, interest-rate predictions and daily real estate-market news. His response is that most of that information has very little impact on how he operates a properly structured long-term rental portfolio. Wayne's strategy is not built around predicting what property values will do next month. It is built around buying properties capable of surviving 20 years or more . That means strong cash flow, strong returns without relying on appreciation, strong tenant demand, the right landlord environment, promising long-term market fundamentals and systems capable of protecting the investment when something inevitably goes wrong. Wayne does pay attention to market information when it could influence an actual decision. Should he buy? Sell? Refinance? Take equity out? Change financing strategy? Those forecasts matter because they affect the operation of the business. But endlessly predicting whether values will move slightly up or down is not the foundation of his investing strategy. Long-Term Investors Need Systems This leads directly into today's primary topic. If you are planning to own a property for 20 years, you need systems for situations that may only happen once or twice during that ownership period. A tenant operating a business from the property is one of those situations. The probability may be relatively low. The consequences could still be significant. And Wayne's philosophy is that the investor should have the system before the problem appears. The Real Situation: A Tenant Advertising Childcare Wayne and Gabby recently received an email from the manager of one of their condominium corporations. Someone had discovered a social-media advertisement from their tenant offering childcare or day-home services from the rental property. The condo corporation provided Wayne and Gabby with a screenshot of the advertisement, the applicable condominium bylaw and a request that the activity stop. The condo bylaws prohibited this type of commercial activity from the townhouse. Wayne's personal reaction was not: "How dare our tenant make money?" Quite the opposite. If the tenant can earn additional income, that may improve their financial situation and ability to pay rent. The problem is that Wayne's personal opinion does not override the condo bylaws. And even without the condo restriction, there would still be several other issues to investigate. Working From Home Is Not Necessarily the Same Thing A home-based business can mean many different things. Someone working remotely on a laptop is obviously different from operating a daycare. Someone selling T-shirts online and shipping them through the mail is different from running a salon with customers coming through the door every hour. Gabby says one of the most important dividing lines is often: Are customers attending the property? Once customers begin arriving, the potential liability changes. That can also affect parking, neighbours and common-property usage in a condominium. A childcare business creates another level of concern because multiple children may be on the property for extended periods. Increased Wear and Tear Insurance is not the only concern. Different businesses can also affect the physical property. Consider customer traffic, equipment, furniture, inventory, frequent use of entrances, additional plumbing or electrical usage and changes made to rooms to accommodate the business. The question becomes: How is this business changing the way my rental property is being used? That matters to both the landlord and insurer. Check the Condo Bylaws For condominium properties, this is one of the first checks. A tenant must comply with the condominium corporation's bylaws. A landlord cannot simply tell the tenant: "I'm okay with it." If the activity violates the condo bylaws, the landlord's permission does not solve the problem. That is exactly what happened in Wayne and Gabby's situation. The activity was prohibited under the condo bylaws, so it could not continue. Check Municipal Requirements If the property is not governed by restrictive condo bylaws, or if the bylaws permit the activity, the next question is whether the municipality allows it. Some businesses may require licensing, permits, specific zoning, parking requirements, occupancy restrictions or other approvals. However, municipal approval does not automatically mean the landlord or condo corporation must allow it. There can be multiple layers of requirements. Put It in the Lease Wayne recommends that landlords address home-based businesses directly in the lease. His preferred default is: No business activity without landlord approval. That does not mean the landlord can never approve one. It means the tenant must first ask. The landlord can then investigate: What exactly is the business? Will customers attend? Is it permitted by the municipality? Is it permitted by the condo corporation? Does it affect insurance? Is additional coverage required? Once those questions are answered, the landlord can make an informed decision. Leaving the lease silent creates unnecessary ambiguity. The Biggest Issue: Insurance This is where today's episode becomes especially important. A landlord insurance policy is written based on the expected use of the property . The insurer believes it is insuring a residential rental. If that rental begins functioning partly as a commercial operation, the risk may change. That could affect policy eligibility, liability coverage, premiums, deductibles, exclusions or required coverage. Wayne uses the example of someone operating a hair business. Imagine a customer gets injured. Or a hot styling tool causes a fire. The insurer investigates the loss and discovers that a commercial hair operation was being run from a property insured simply as a residential rental. That is not something Wayne wants to discover after the claim. Questions to Ask Your Insurance Broker If you are considering allowing a tenant to run a business from your rental, Wayne and Gabby recommend speaking directly with your insurance broker. Ask: Does my landlord policy permit this specific activity? Does customer traffic change my coverage? Does childcare change the coverage? Does business equipment or inventory change anything? Does the tenant require separate commercial liability insurance? Should the landlord be added as an additional insured? Are there new limits, exclusions or deductibles? Can the insurer confirm its approval in writing? That last question matters. A phone conversation with a broker is useful. Written confirmation is much better. Don't Accuse the Tenant Before Confirming the Facts Gabby emphasizes another important part of the process. Just because somebody tells you that your tenant is running a business does not automatically make it true. Verify first. Ask for evidence. Review the advertisement. Review the condo bylaws. Confirm what the tenant is actually doing. Check municipal requirements. Speak with your insurer. Then communicate with the tenant. In Wayne and Gabby's situation, they already had screenshots of the advertisement and the applicable condominium rule. That gave them enough information to address it properly. How Wayne and Gabby Addressed the Tenant Their assistant sent the tenant a professional written message. The tone was not aggressive. They acknowledged that the tenant may not have realized the activity would create an issue. They explained that the childcare services were contrary to the condominium bylaws and their lease agreement. They asked the tenant to discontinue providing the services from the property. And they invited the tenant to respond if there had been a misunderstanding. That is a much better approach than immediately sending an angry threat. Get the facts. Explain the issue. Put it in writing. Don't Stop at the Email Sending the email does not finish the process. The landlord still needs to verify compliance. That may mean a follow-up. It may mean an inspection with proper notice. It may mean monitoring whether the activity continues to be advertised. The important part is having a documented process rather than simply assuming: "I told them to stop, so I'm sure they stopped." Property Managers Don't Remove Your Responsibility Wayne finishes with an important warning for investors using property managers. Hiring a property manager does not mean you should completely stop paying attention. A tenant could pay rent on time, have excellent credit, never complain, remain in the property for five years and still be operating an activity that creates significant liability. If nobody ever checks the property, how would you know? Wayne is not criticizing property managers. His point is that the risk ultimately belongs to the property owner. If something goes wrong, ignorance does not automatically protect you. You need systems that ensure these issues are actually being checked. The Main Lesson Home-based businesses are not automatically bad. Some may create almost no meaningful additional risk. Others can fundamentally change how the property is being used. The landlord's job is not to make assumptions. The landlord's job is to investigate. Check the lease. Check the condo bylaws. Check municipal requirements. Check the insurance. Confirm the facts. Communicate in writing. Verify compliance. That may not be as exciting as predicting next month's interest-rate decision. But these are the systems that help you keep a rental property profitable and protected for 20 years. And that is where long-term real estate wealth is actually built. About Your Hosts Wayne and Gabby Hillier are Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they provide practical education, free coaching and lessons from operating their own Canadian rental-property portfolio. Resources & Contact Send Your Questions to the Show Have a question about tenants, insurance, property management, buying rental properties or building your portfolio? Wayne and Gabby answer investor questions on the Morning Show. 📧 info@reimorningshow.com REI Masters Mentorship Work directly with Wayne and Gabby on acquisitions, financing, landlord systems, tenant management, deal analysis and building a profitable Canadian real estate portfolio. 🌐 www.reimasters.ca Remote Property Management Course Learn Gabby's systems for managing rental properties without needing to personally attend every inspection, showing or property-management issue. 🌐 www.reimasters.ca Get The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and reducing investment risk. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Join Wayne and Gabby for real estate investing education in Edmonton. 🌐 reiconference.ca REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 🌐 www.reimasters.ca Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

Real Estate Is a Business, Not a Gamble Why did Wayne Hillier choose real estate investing over stocks, traditional investments, or other ways of building wealth? Because Wayne never wanted to rely on simply hoping an asset would increase in value . In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby answer two investor questions: why they chose real estate investing in the first place, and how to approach friends or family about becoming joint venture partners without making the relationship weird. Wayne explains the realization that changed how he looked at real estate: A rental property isn't just an asset. It's a business. You can buy a property for its ability to generate revenue, control expenses, create cash flow and build equity — without requiring the property value to increase for the investment to work. The second half of today's episode tackles another common investor roadblock: raising money. If you have a great deal but need a money partner, how do you ask your friends? Wayne and Gabby's advice is surprisingly simple: Stop being weird about it. Have the conversation. 🧠 What You'll Learn Why Wayne prefers turnkey rental properties at this stage of his investing journey Why investors do not always need to buy distressed properties Why "make your money on the buy" is not a requirement for a profitable rental How Wayne and Gabby choose the path of least resistance when investing What happened when they recently took back possession of a rental after a three-year tenancy Why strong cash flow and reserve funds make expensive property decisions easier Why Wayne treats rental properties as businesses rather than speculative investments Why appreciation is a bonus rather than a requirement How Wayne compares a rental property to purchasing a franchise The two numbers Wayne focuses on when evaluating the business Why the Five Fundamentals matter before buying How the 5% Rule helps Wayne assess cash flow and risk Why Wayne believes investors should focus on what happens inside the property financially , not only what the property might eventually be worth How to approach friends and family about investing with you Why asking someone about a joint venture does not need to damage a friendship Why a real estate partnership should be presented as an opportunity, not a request for a favour What a basic 50/50 joint venture structure can look like Why a "no" does not need to become awkward Why your friends may become interested later after watching your progress What to do if everyone in your existing network says no Why sometimes the solution really is: go meet more people Two More Rental Properties Under Inspection Wayne and Gabby start today's episode with another update from their own portfolio. They recently completed an inspection on one of their newest potential acquisitions. Gabby had not previously seen the property but liked what she saw. It had already been renovated, appeared well suited to their target tenant profile, and looked like the type of property that could potentially be rented quickly without a major renovation. There were some areas that looked somewhat DIY or rough around the edges, but nothing immediately appeared catastrophic. Wayne was also heading to inspect another recently renovated property immediately after the show. That reflects where Wayne and Gabby are today in their investing journey: They like easy. Turnkey. Minimal renovations. Minor repairs. Get the property rented. Then move on to the next opportunity. You Don't Have to Buy the Worst House Wayne pushes back against a common message in real estate investing education: That investors need to find the ugliest, smelliest, most distressed property possible. Those properties can create opportunities. But they are not required. You also do not have to manufacture massive equity on every purchase for the investment to be successful. If the property functions properly as a rental business, generates good cash flow and produces an appropriate return, buying something turnkey can be completely reasonable. The strategy should depend on the investor. What are you trying to accomplish? How much time do you have? How much work are you willing to take on? What risks do you need to avoid? Wayne and Gabby describe their role as coaches as helping investors reverse engineer the life they actually want , then finding the path of least resistance to get there. The objective is not to become really good at renovating terrible houses. The objective is to use real estate to create the outcome you want. When the "Smell of Money" Is Your Own Property Ironically, Wayne and Gabby also walked into one of their existing rentals yesterday and immediately noticed a smell. The tenant had lived there for approximately three years and had always paid rent. But after getting possession back, the property was rougher than expected. It needed a substantial deep cleaning. There were damages and worn finishes. Some things needed repairs. And replacing one item could easily start pulling the thread that turns a small refresh into a major renovation. Wayne joked that this time it was not the "smell of money." It was the smell of money leaving their pocket. Their goal is to find the balance. They do not want to be cheap landlords. They also do not want to over-renovate a rental property and spend money that will never generate an adequate return. The property needs to meet the expectations of the tenant profile and market it serves. This Is Why Cash Flow Matters There is one reason this situation is not particularly stressful: The property has been extremely profitable. Wayne and Gabby keep their rental-property cash flow inside the portfolio rather than pulling it out personally. That money builds reserves. So when a property eventually needs repairs, cleaning, renovations or updates, the money is already available. There is no panic. No scrambling for a credit card. No wondering how they will afford the work. The business has generated the money required to maintain the business. As Wayne explains: Good cash-flowing properties are easier to operate. That is one of the reasons his investment criteria place so much emphasis on cash flow from day one. Why Wayne Chose Real Estate Investing The first listener question today was: "What made you decide to invest in real estate?" Yesterday's episode explained part of Wayne's origin story before real estate. Today he explains why, once he was earning good money in Alberta, real estate became the investment vehicle he ultimately chose. Wayne had reached a point where his career income had grown significantly. But he could also see the ceiling. The next major promotion was not immediately coming. The next huge raise was not coming. And he watched people around him make great incomes while spending almost everything they earned. Wayne did not want to do the same thing. He needed somewhere productive to put the additional money. That led him to investing. Why Traditional Investing Didn't Appeal to Wayne Wayne started researching stocks and traditional investments. But he struggled with the concept. From his perspective, putting money into something and then hoping its price increases felt too much like gambling. Give money to a financial advisor. Hope they choose the right investments. Buy a stock. Hope the company performs. Buy an asset. Hope demand increases its value. Wayne wanted more control. His previous experience playing poker actually helped shape the way he thought about this. Poker involved uncertainty, but Wayne could still make decisions throughout the game. He could evaluate information. Control his bets. Change his strategy. Manage his risk. He wanted an investment where his own knowledge and decisions could similarly influence the outcome. Then he started understanding rental real estate. A Rental Property Is Like Buying a Franchise This became the key realization. Imagine someone offered you several franchises. Every franchise costs: $300,000. Forget about whether the franchise itself will eventually increase in value. Instead, evaluate the business. How much revenue does it generate? What are the expenses? How much profit remains? What return are you receiving on the money you actually invested? What is the demand for its product? What are the risks? Wayne realized that rental properties can be evaluated in much the same way. Except instead of paying $300,000 cash for the entire business, you may invest approximately: $60,000 as a 20% down payment. Now evaluate what that $60,000 produces. Cash flow. Mortgage principal paydown. Return on invested capital. Tenant demand. Operating expenses. That is the business. Forget Appreciation Wayne says he could theoretically buy a $300,000 rental property and have it remain worth exactly $300,000 for decades. If the business itself produces strong profits and acceptable returns, the investment can still work. That changes everything. Instead of asking: "Will this house go up in value?" Ask: "Does this rental business make money?" Wayne argues that too many investors obsess over the value of the box while ignoring what is happening financially inside the box . His investment strategy does not require appreciation. If appreciation happens over a long holding period, great. That is a bonus. But the property should already work without it. The Five Fundamentals + The 5% Rule That does not mean rental properties are guaranteed to succeed automatically. There are still variables outside an investor's control. Tenant demand. Rental supply. Economic conditions. Interest rates. Market conditions. That is why Wayne developed a set of fundamentals for determining where and what to buy. He wants properties that: Cash flow from day one Generate strong returns without requiring appreciation Operate in a strong landlord and tenant environment Attract a strong tenant profile Exist in markets with promising long-term growth He also uses the 5% Rule™ Cash Flow Test to determine whether the property produces enough cash flow relative to the investor's down payment. The objective is not to predict the future perfectly. It is to build enough margin into the investment that it does not require everything to go perfectly. How Do You Ask Friends to Invest With You? The second listener already has a deal. Their problem is money. They want to bring on an investor but are concerned that asking friends to partner could damage the relationship. Wayne's first piece of advice: If they are genuinely good friends, respectfully asking them about an opportunity should not destroy the friendship. You are not demanding money. You are asking a question. If they say no? Cool. Move on. Continue being friends. Stop Treating It Like You're Begging for Money Gabby makes an important distinction. A joint venture is not: "Please give me money because I need it." It should be: "I have an opportunity that may benefit both of us." A basic example discussed in the episode could look like this: You have the deal, experience and ability to operate the investment. Your partner brings the mortgage qualification and capital. You manage the real estate investment. When the deal eventually exits, the investor receives their contributed capital back according to the partnership structure, and profits are shared — in Wayne's example, potentially 50/50 . Both parties bring something valuable. Both parties benefit. That changes the conversation. How Wayne Would Ask It does not need to be a presentation. It does not need to be a dramatic meeting. And you probably do not need a PowerPoint projector in your basement. Have a normal conversation. You are investing in real estate. You found a good opportunity. You are looking for people who may want to partner. Explain what each person contributes. Explain how the economics work. Ask whether they are interested. If the answer is no: "No problem. I figured I'd ask." Then continue with your friendship. Do not make it weird. They May Say No Today and Yes Later There is another reason Wayne believes investors should consider letting people know what they are doing. Your friend may say no today. But now they know. They may begin watching. They see you buying properties. They see deals succeeding. They watch your knowledge improve. They watch your portfolio grow. Six months or two years later, they may come back and ask: "Are you still looking for partners?" That conversation never happens if nobody knows the opportunity exists. What If All Your Friends Say No? Wayne's solution is uncomplicated: Go make more friends. If you have spoken respectfully with everyone in your existing network and nobody wants to partner, expand your network. Meet more investors. Attend events. Build relationships. Keep doing deals. Keep improving your knowledge. Keep demonstrating what you can do. Your current social circle does not have to define the eventual size of your real estate business. The Main Lesson Both topics today ultimately come down to the same idea: Take control of the things you can control. Wayne chose rental real estate because he could focus on operating a profitable business instead of relying entirely on asset appreciation. And if capital is currently the obstacle preventing you from buying another property, you can control whether you actually have conversations with potential partners. Stop waiting. Stop imagining every possible negative outcome. Evaluate the opportunity. Understand the numbers. Have the conversation. If somebody says no, move on. If they say yes, you may have just created an opportunity for both of you. But you will never know if you never ask. 👥 About Your Hosts Wayne and Gabby Hillier are Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they provide practical real estate investing education, coaching and lessons from their own experience buying and operating rental properties. 💡 Resources & Contact Send Your Questions to the Show Wayne and Gabby provide free coaching by answering real estate investing questions on the Morning Show. 📧 info@reimorningshow.com Join the REI Masters Mentorship Program Work directly with Wayne and Gabby on acquisitions, deal analysis, financing, joint ventures, raising capital, property management and building a profitable Canadian real estate portfolio. 🌐 www.reimasters.ca Get The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and reducing investment risk. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📅 Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Join Wayne and Gabby for an intimate real estate investing education weekend in Edmonton. 🌐 reiconference.ca REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 The annual REI Masters mentorship retreat brings the community together for education, planning and long-term real estate investing strategy. 🌐 www.reimasters.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

*]:pointer-events-auto R6Vx5W_threadScrollVars scroll-mb-[calc(var(--scroll-root-safe-area-inset-bottom,0px)+var(--thread-response-height))] scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]" dir="auto" data-turn-id= "request-6a7495ae-8138-83e8-af4d-0964d8c65345-9" data-turn-id-container= "request-6a7495ae-8138-83e8-af4d-0964d8c65345-9" data-testid= "conversation-turn-16" data-turn="assistant"> Wayne Hillier Before Real Estate: Debt, Gambling & Rock Bottom Before the rental properties, businesses, coaching and real estate investing success, Wayne Hillier was living a very different life. He was working at a gas station for roughly $14–$16 an hour, carrying credit-card debt, gambling, trying to keep up with friends who were progressing in their careers, and feeling increasingly stuck. Then one weekend, Wayne bought a sports lottery ticket. For several hours, he believed he may have won approximately $340,000 . What happened next became one of the pivotal moments that eventually pushed him to leave Ontario, move across the country to Alberta, meet Gabby and ultimately discover real estate investing. It is a chapter of Wayne's story he says he had almost completely forgotten — and had never shared on the podcast before. The lesson that came from it would eventually shape much of what happened next: No one is coming to save you. 🧠 What You'll Learn What Wayne's life looked like before real estate investing Why his original plan to become an accountant fell apart What it felt like watching friends move ahead while he remained stuck How debt and trying to keep up with others affected his decisions Why gambling became part of that period of his life The Proline Pools ticket that made Wayne think he had won approximately $340,000 Why the result turned into only about $350 How Wayne lost that money shortly afterward playing online poker Why that experience became part of his rock-bottom moment The late-night conversation that convinced him to move to Alberta How one decision led to another and eventually led Wayne to Gabby Why small decisions can completely change the trajectory of your life Why money alone would not have fixed Wayne's problems at that stage Why education eventually became more valuable than luck How Wayne went from making bad decisions to deliberately making better ones Why knowledge changes what you are capable of doing with money Why action matters more than waiting for something to rescue you Before Real Estate, Wayne Was Stuck Wayne says he has told the story of how he got into real estate investing hundreds of times. Usually, the story starts with him leaving Ontario and moving to Alberta. But today he realized there was an important part missing. Around 20 years ago, Wayne was in his early twenties and had effectively abandoned his original plan to go to school and become an accountant. He had paid for school and had a plan, but the path did not feel right. He talked to people already working in accounting and realized that the life he was building toward was not the life he wanted. The problem was that once he walked away from that plan, he had no replacement. He was working at a gas station, making close to minimum wage, while many of his friends were progressing through the trades, earning more money, buying cars and moving forward. Wayne felt like everyone else's life was moving while his was standing still. Debt, Gambling and Keeping Up Instead of solving the bigger problem, Wayne started trying to keep up. His friends were earning substantially more than he was. They could afford the bar. They could afford the casino. They could afford nicer cars. Wayne could not. That led to increasing credit-card limits and spending money he did not really have. The casino became part of the routine. Online poker became another outlet. Wayne says he was actually a decent poker player, but a terrible gambler. He could win repeatedly and then lose everything by increasing the stakes. That was the pattern. Win. Get confident. Bet bigger. Lose it. The $340,000 Ticket One of the gambling activities Wayne and his friends regularly participated in was Proline Pools . They would select the winners of a group of NHL games, and everyone who correctly picked every game would split the prize pool. Most weeks, Wayne remembers there being only one, two or maybe three winners. That meant the payouts could become very large. One weekend, Wayne got almost everything right. By the final night, only a few games remained. One by one, his picks won. Eventually it came down to the final game. The team Wayne had selected fell behind badly. He basically gave up on it. Later, the game became close again. With very little time remaining, the team he picked scored and won. Wayne had selected every game correctly. The prize pool was approximately: $340,000. For a Few Hours, Wayne Thought His Life Had Changed At the time, Wayne was making roughly $14 an hour, working limited hours and carrying debt. Suddenly he believed he might be about to receive life-changing money. He started imagining what that money could mean. He thought he had bought himself years of freedom. He did not have a real investment plan. He did not know anything about real estate investing yet. He simply thought: I finally have options. But the official results did not appear. Wayne kept refreshing the website. Nothing. He eventually went to sleep. He woke up early. Still nothing. Then he had to go to work. This was before smartphones were common, so Wayne spent most of the day wondering whether he had just won hundreds of thousands of dollars. From $340,000 to $350 When Wayne finally checked the results, he understood why they had taken so long to process. There were not one or two winners. There were more than: 800 winners. His portion of the approximately $340,000 prize pool was roughly: $350. The emotional swing was enormous. For hours, Wayne believed life had finally handed him an escape. Instead, he received a few hundred dollars. The Spiral Got Worse That was not quite the bottom. Wayne then took the money and entered an expensive online poker tournament. For someone making roughly $14 an hour, spending hundreds of dollars on a single poker tournament was a major risk. He played for hours. He finished just outside the payout positions. The money was gone. The imagined $340,000 was gone. The $350 was gone. Wayne says he nearly threw his computer monitor through the wall. That week forced him to face something he had been avoiding: His life was not going to change because he got lucky. "No One Is Coming to Save Me" Wayne describes this as one of the moments when he realized: The world was not going to take care of him. The lottery was not coming. Nobody was going to arrive and fix his life. If something was going to change, he had to change it himself. That realization led to another decision. Late at night, Wayne drove to the gas station where another employee was working. That employee had previously moved to Alberta and had done well financially before eventually returning to Ontario. Wayne stayed there for hours asking questions. What was Alberta like? Could he find work? How much money could he make? Where would he live? How would he get there? What would he need? Less than a week later, Wayne loaded up a U-Haul and drove across the country. One Decision Led to Another That move changed everything. Moving to Alberta eventually put Wayne in a townhouse complex across the walkway from Gabby. Then another small decision changed his life again. Wayne happened to work overtime one day. Instead of arriving home at his usual time, he got home later while Gabby was celebrating her birthday. Someone invited him over. Wayne said yes. He met Gabby. They have been together ever since. None of those decisions looked life-changing in the moment. Taking overtime. Talking to a coworker. Moving provinces. Choosing one rental property. Accepting an invitation. But each decision moved Wayne in a different direction. Together, they completely changed his life. What If Wayne Had Actually Won the Money? During the episode, Wayne asks an interesting question. What if he really had won the $340,000? His conclusion is that the money probably would not have saved him. At that point in his life, he did not have the knowledge, discipline or experience to use it properly. He believes he probably would have spent it. He may have gambled more. He may have bought expensive things. And eventually he may have ended up in exactly the same position — just later. That is the important distinction. Money alone does not create wealth. You need to know what to do with it. Knowledge Changed Everything Today, Wayne says if someone handed him $340,000 and asked what to do with it, the situation would be completely different. Now he understands: Cash flow Return on investment Risk Financing Property selection Market fundamentals Asset management How to deploy capital intelligently That knowledge came from years of reading, coaching, education, experience and actually investing. Wayne's biggest asset was not getting lucky. It was becoming the person who knew what to do when opportunities appeared. The Main Lesson If you are in a difficult place right now, the message from today's episode is not that everything changes overnight. It usually does not. Start with one decision. Ask a question. Learn something. Talk to somebody who has already done what you want to do. Stop waiting for the perfect opportunity. Stop waiting for luck. Stop waiting for somebody to rescue you. Wayne went from making bad decisions to making better ones. Those better decisions eventually led him across the country. They led him to Gabby. They led him to real estate investing. They led to businesses, investments and opportunities he could not have imagined while working behind the counter of a gas station twenty years earlier. The turning point was recognizing: No lottery is coming to save you. No one is coming to save you. And that means you are allowed to start changing your own life. 👥 About Your Hosts Wayne and Gabby Hillier are Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they provide practical real estate investing education, coaching, personal experiences and lessons for investors across Canada. 💡 Resources & Contact Send Your Questions to the Show Have a real estate investing question or something preventing you from taking action? Send it in and Wayne and Gabby may answer it on an upcoming episode. 📧 info@reimorningshow.com Join the REI Masters Mentorship Program The REI Masters Mentorship Program is a 12-month coaching and education program designed to help investors shorten the learning curve, analyze deals, make better decisions and build a real estate investing strategy. 🌐 www.reimasters.ca Get The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and reducing investment risk. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📧 info@reimorningshow.com 📅 Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Join Wayne and Gabby for an intimate real estate investing education weekend in Edmonton. The Canadian Real Estate Investing Morning Show will also be recorded live on stage during the event. 🌐 reiconference.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca _:empty]:hidden">

Agreements for Sale Explained: Real Seller Financing Deals With Zero Money Down Seller financing sounds almost too good to be true. An investor buys a property with little or none of their own money. The seller leaves financing in place. The investor operates the property, collects rent, benefits from cash flow and mortgage paydown, and eventually pays the seller out according to the terms of the agreement. In Canada, one strategy Wayne used extensively to accomplish this is an Agreement for Sale . In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby continue yesterday's seller-financing discussion by breaking down two real Agreements for Sale Wayne negotiated himself . These are not hypothetical examples. They show how Agreements for Sale can work in the real world, why a seller might agree to one, how Wayne found these opportunities, what he listened for during conversations with sellers, and why the best Agreement for Sale deals create a legitimate win for both sides. As Wayne says: "If you understand the strategies, you'll recognize the opportunities." 🧠 What You'll Learn What an Agreement for Sale is How Agreements for Sale fit into seller financing Why Agreements for Sale are sometimes compared conceptually to "subject-to" investing in the United States Why the Canadian legal structure and documentation are different Why Agreements for Sale are considered an advanced real estate investing strategy Why Wayne became obsessed with Agreements for Sale for several years How Wayne built an entire lead-generation funnel around finding Agreement for Sale opportunities Why understanding seller motivation matters Why a seller does not have to be desperate for an Agreement for Sale to work How Agreements for Sale can solve problems for sellers with little or no equity How a property can potentially be acquired with zero money down Why the length of the Agreement for Sale term matters How mortgage paydown, cash flow and appreciation can benefit the buyer Why Wayne wanted multi-year Agreement for Sale terms rather than short terms How Wayne structured an eight-year potential term in one real deal Why listening is more important than convincing How Wayne structured another Agreement for Sale for a seller who was not financially distressed Why delaying the seller's payout can sometimes create a better financial outcome for them How Wayne assigned Agreements for Sale to other investors How the two example contracts generated approximately $15,000 in assignment income Why ethical seller financing matters What Is an Agreement for Sale? An Agreement for Sale is a form of seller financing where the buyer and seller enter into a contractual arrangement that allows the buyer to acquire control and economic benefit from the property while some or all of the seller's existing financing remains in place for an agreed period. Wayne explains that the concept is often compared with "subject-to" investing in the United States, although Canadian Agreements for Sale have their own legal structures, documentation and requirements. This is not a strategy Wayne recommends trying after watching a handful of social-media videos. The contracts matter. The financing terms matter. The legal protections matter. The underlying property still needs to make sense. And the more complicated the financing structure becomes, the more important proper education and professional advice become. Why Wayne Loves Agreements for Sale When Wayne first learned Agreements for Sale, he says the strategy completely changed what he believed was possible in real estate investing. Before understanding creative financing, investors often think their growth is limited by two things: How much cash they have. And how many mortgages the bank will approve. Agreements for Sale can potentially create another option. The seller may become part of the financing solution. Wayne became so focused on the strategy that, for approximately three years, he says he lived and breathed Agreements for Sale and developed systems specifically for finding these opportunities. Agreements for Sale Must Be Win-Win Wayne also explains that he initially struggled with seller financing because he did not want to build wealth by taking advantage of people in difficult circumstances. The solution was changing the objective. The goal was not: Find desperate sellers and convince them to sign an Agreement for Sale. The goal became: Understand the seller's problem and determine whether an Agreement for Sale genuinely solves it. If it does, great. If the seller has a better option, they should take the better option. Wayne and Gabby describe that approach as ethical sales. You listen first. Then determine whether you actually have a solution. Agreement for Sale Deal #1: The Couple Who Needed to Move On The first example involved a couple who had purchased a home together and later decided to separate. They had only recently purchased the property and had very little equity. Their mortgage balance was approximately equal to the property's market value. They had already attempted to sell conventionally and privately, but selling would potentially require them to bring money to closing. They also did not want to keep the property as landlords because that would force them to continue operating something together after their relationship ended. Their real problem was simple: They wanted to separate financially and move on with their lives. An Agreement for Sale provided a possible solution. Why This Became a Zero-Money-Down Agreement for Sale Under normal circumstances, Wayne was not particularly interested in the property. The cash flow was not exceptional. There was no significant renovation opportunity. And if he needed to put 20% down and obtain a traditional mortgage, there were better investments available. But the financing changed the economics. The sellers had essentially no equity. If they sold conventionally, they were not going to receive a large cheque anyway. So Wayne asked: Why would he need to give them a traditional down payment? Instead, the Agreement for Sale could allow the underlying mortgage to remain in place while the buyer assumed the contractual responsibility for operating the property and making the required payments. The sellers could walk away. The buyer did not need to bring a conventional down payment. That created a potential zero-money-down Agreement for Sale . Why the Agreement for Sale Term Matters Wayne did not simply want seller financing. He wanted enough time for the strategy to work. A one-year Agreement for Sale would have created pressure to refinance or sell almost immediately. Instead, the sellers had approximately three years remaining on their mortgage term. Wayne proposed: Three years, with an option to extend another five years. Potential total term: Eight years. During that time, the buyer could potentially benefit from: Rental cash flow Mortgage principal paydown Property appreciation Increased rents Multiple exit options At the end of the Agreement for Sale term, the remaining mortgage balance could be paid out through refinancing, sale or another agreed strategy. What Did the Sellers Get? The sellers got the thing they actually cared about. They got to move on. Wayne proposed taking responsibility for the expenses and operation of the property while the existing financing remained in place. A joint bank account could be used so the sellers could see that the required mortgage payments were being funded. There was no need for an aggressive pitch. The Agreement for Sale simply solved their problem. Wayne ultimately assigned the Agreement for Sale contract to another investor rather than keeping it. Based on his original projections, Wayne estimates that the investor may eventually generate somewhere around $150,000–$200,000 from the deal, depending on the final rents, financing costs, appreciation and exit. Agreement for Sale Deal #2: A Seller Who Was Not Desperate The second Agreement for Sale example had a completely different seller. This seller was not facing foreclosure. He was not desperate. He simply wanted to sell privately and maximize how much money he kept. His expected outcomes were approximately: Private sale: $30,000 in his pocket versus approximately: Traditional realtor sale: $10,000 in his pocket Wayne stayed in contact but did not try to force an Agreement for Sale on him. Eventually, after struggling to sell privately, the seller came back to Wayne. That is when Wayne asked one very important question: "What are you going to do with the money?" Turning the Agreement for Sale Into an Investment for the Seller The seller did not actually need the $30,000 immediately. He said he would probably invest the money. That gave Wayne a completely different way to structure the Agreement for Sale. Instead of receiving approximately $10,000 immediately after a traditional sale, Wayne proposed that the seller wait roughly seven years and receive approximately $30,000 later . For that seller, the Agreement for Sale was no longer just creative financing for Wayne. It became an investment decision for the seller. Wayne framed the alternatives clearly: Take approximately $10,000 today and invest it yourself. Or allow the Agreement for Sale to remain in place and receive approximately $30,000 later. The seller understood the numbers and agreed. Wayne says the seller signed the Agreement for Sale very quickly once the structure made sense to him. You Don't Convince Sellers to Do Agreements for Sale This may be the biggest lesson from both examples. Wayne did not convince either seller to accept an Agreement for Sale. He listened. He asked questions. He learned what they were actually trying to accomplish. Then he determined whether an Agreement for Sale could provide a better solution. If it did, he presented it. If it did not, he was prepared to walk away. Gabby points out that this is why trust matters so much in creative financing. Seller financing is not about high-pressure sales. It is about problem solving . Agreements for Sale Can Also Be Assigned Wayne did not keep either of the two Agreements for Sale discussed today. Instead, he assigned the contracts to other investors. One Agreement for Sale assignment produced approximately: $5,000 The second produced approximately: $10,000 Total assignment income: Approximately $15,000 That means understanding Agreements for Sale does not only create opportunities to build your own portfolio. It can also create an additional source of off-market deals and assignment income for wholesalers and other real estate investors. The Main Lesson Agreements for Sale can be incredibly powerful. They can potentially allow investors to: Acquire properties with very little capital Buy properties without immediately qualifying for new traditional mortgages Generate cash flow Benefit from mortgage paydown Benefit from appreciation Structure longer-term seller financing Solve difficult problems for sellers Assign creative-financing opportunities to other investors But none of that means Agreements for Sale are easy or risk-free. This is advanced real estate investing. You need to understand the underlying property. You need to understand the financing. You need proper contracts. You need legal guidance. You need to understand your responsibilities to the seller. And above all: The Agreement for Sale needs to create a legitimate win for both parties. 👥 About Your Hosts Wayne and Gabby Hillier are full-time Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they share practical lessons from buying, financing, operating and managing rental properties across Alberta. 💡 Resources & Contact Learn Agreements for Sale & Seller Financing Agreements for Sale, seller financing and creative real estate strategies are covered through the REI Masters education and mentorship programs. Learn how to find opportunities, understand seller motivation, structure financing and use proper systems and agreements. 🌐 www.reimasters.ca REI Masters Mentorship Program The REI Masters Mentorship Program is a 12-month coaching and education program covering: Agreements for Sale Seller financing Off-market deals Wholesaling BRRRR Rent-to-own Fix and flips Multifamily investing Financing Joint ventures Property management Deal analysis Portfolio strategy 🌐 www.reimasters.ca Send Your Questions to the Show Have a question about Agreements for Sale, seller financing, creative financing or Canadian real estate investing? 📧 info@reimorningshow.com Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📅 Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Wayne and Gabby will be presenting during the Summit Series, including education around due diligence, asset management and property management. The Canadian Real Estate Investing Morning Show will also be recorded live on stage Saturday, September 12. Use promo code: REIMASTERS15 for 15% off registration. 🌐 reiconference.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

Can You Fully Finance an Investment Property? Can you buy an investment property without bringing your own down payment? Sometimes. But there is a big difference between what is technically possible and what is actually smart . In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby answer a listener question about borrowing the down payment for an investment property, using home equity, private lenders and seller financing. The biggest takeaway is simple: You can sometimes borrow the money — but the source of that money, the cost of that money and the risk you are taking matter enormously. 🧠 What You'll Learn Why traditional lenders generally require investors to bring their own down payment What 80% loan-to-value actually means Why lenders want borrowers to have "skin in the game" When higher loan-to-value financing may be available for a principal residence Why investment properties are treated differently How home equity can be used toward the down payment on another property Why a HELOC is very different from an unsecured line of credit How moving equity from one property into another can help investors scale Why borrowing 100% of a rental property through private financing can become extremely expensive When private financing may make more sense for short-term investments What seller financing is How vendor take-back mortgages, lease options and agreements for sale can work Why seller financing is an advanced strategy How Wayne and Gabby used seller financing to build their own portfolio Why zero-money-down deals can still create significant long-term risk How one of their seller-financed properties has generated approximately $160,000 to date Why balancing leverage with strong cash flow matters Why the most aggressive strategy is not always the best strategy Why Banks Usually Want 20% Down For a typical investment property, major lenders generally work around an 80% loan-to-value limit . That means if you are buying a $500,000 property, the lender may finance approximately: $400,000 The remaining: $100,000 needs to come from an acceptable down-payment source. Lenders want the borrower to have some financial exposure in the deal. If the investor has no money at risk, the lender may reasonably worry that it becomes much easier for that borrower to simply walk away if the investment starts going badly. That is why the source of the down payment matters. What About 5% Down? Higher loan-to-value mortgages can be available in certain circumstances for an owner-occupied principal residence. That is different from buying a traditional rental property. Wayne also gives an important warning in this section: Do not misrepresent an investment property as your principal residence in order to qualify for financing you would otherwise not receive. That can cross into mortgage fraud. Can You Borrow the Down Payment? Yes — under the right circumstances. One of the most practical examples discussed in the episode is using equity from a property you already own . Imagine your home is worth: $500,000 And you owe: $250,000 If a lender is willing to lend against the property up to 80% of its value, that would be approximately: $400,000 Since you already owe $250,000, there may be approximately: $150,000 of accessible borrowing room , subject to qualification and the lender's requirements. That equity can potentially be accessed through a home equity line of credit and used toward the down payment on another property. The important distinction is that the new debt is secured against existing equity . You are effectively moving some equity from one property into another. You Are Not Creating Equity Out of Thin Air Wayne walks through the concept visually during the episode. If you have $250,000 of equity in one property and borrow $100,000 or $150,000 against it to purchase another property, your equity in the original property goes down. But you now have equity in the new property. The money did not magically appear. It moved. The potential advantage is that you now own two assets instead of one . If both properties appreciate, both mortgages are paid down over time and the rental property produces cash flow, you have created more opportunities for your net worth to grow. But that only works if the property you buy actually makes sense. Do Not Borrow Against Your Home for a Bad Investment Wayne is very clear on this point. Using home equity can be a powerful tool. It can also be a terrible idea if you use that money to buy an investment that depends on speculation, excessive leverage or appreciation just to survive. The fact that financing is available does not mean the investment is good. The property still needs to produce strong enough economics to justify the risk. What About Private Lenders? Private lenders operate differently from major banks. They can create their own lending criteria and may be willing to finance deals that traditional lenders would not. Some may provide higher loan-to-value financing or permit borrowers to obtain the remainder of the capital from another source. The problem is: You pay for that flexibility. Wayne uses an extreme example of a $500,000 property financed around 15% interest . At 15% interest, the annual interest alone would be: $75,000 That works out to approximately: $6,250 per month in interest before property taxes, insurance, repairs, vacancy or any other expenses. For a long-term rental property, those numbers become very difficult to justify. Private Financing Can Have a Place Wayne does not say private lending is always bad. For a short-term strategy such as a fix and flip, higher-cost financing may sometimes be acceptable if the investor has enough margin in the deal. If you borrow expensive money for three to six months, renovate the property, create substantial equity and sell it, the carrying cost can potentially be absorbed into the project. That is very different from trying to operate a long-term rental property indefinitely with extremely expensive debt. Seller Financing The other major option discussed is seller financing . Instead of the bank providing all of the financing, the seller may agree to finance part or potentially all of the purchase. Seller-financing structures can include strategies such as: Vendor take-back mortgages Agreements for sale Lease options Other negotiated seller-financing arrangements These can create opportunities where the buyer does not need a traditional down payment. But Wayne emphasizes that these are advanced strategies . The contracts, protections, risks and responsibilities matter. It is not something he recommends learning from a five-minute social media explanation. How Wayne and Gabby Built Their Portfolio Seller financing played an important role in Wayne and Gabby's early portfolio growth. At the time, raising capital was more difficult and social media did not provide the same opportunities to build an audience and attract investment partners. So they learned how to structure deals directly with sellers. They acquired properties where the seller financed the purchase, in some cases allowing Wayne and Gabby to buy with none of their own money invested into the acquisition . A Zero-Money-Down Property That Has Made $160,000 Wayne shares an example of one property they acquired using seller financing in approximately 2017. They invested: $0 of their own money into the deal. The seller financed the property. Today, Wayne says the property cash flows approximately: $400 per month And has generated approximately: $160,000 in total profit/equity to date. He estimates they may be around $200,000 ahead by the time the property is eventually sold. That demonstrates the potential of seller financing when it is done properly. But Zero Money Down Does Not Mean Zero Risk This is where Wayne adds an important warning. Just because a strategy produces an incredible return on the amount of cash invested does not mean you should fill your entire portfolio with highly leveraged deals. Wayne and Gabby deliberately moved toward building a portfolio with stronger cash flow and a more balanced debt structure over time. Why? Because eventually something goes wrong. Interest rates rise. Vacancies happen. Properties flood. Expenses increase. A pandemic arrives. An investor needs enough margin in the portfolio to survive. The Main Lesson Can you fully finance an investment property? Yes, there are ways. You may be able to: Access equity from another property Use secured borrowing for the down payment Work with a private lender Negotiate seller financing But every additional layer of leverage introduces risk. The objective should not be: "How can I buy as many properties as possible with no money?" The better question is: "How can I structure this investment so that it produces strong returns while still giving me enough margin to survive when something goes wrong?" Financing can help you scale. It should not become the reason the investment fails. 👥 About Your Hosts Wayne and Gabby Hillier are full-time Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they share practical lessons from buying, financing, operating and managing rental properties across Alberta. 💡 Resources & Contact Send Your Questions to the Show Have a question about financing, down payments, seller financing, rental properties or building your portfolio? 📧 info@reimorningshow.com Join the REI Masters Mentorship Program Work directly with Wayne and Gabby on acquisitions, financing, seller-financing strategies, deal analysis, cash flow, risk management and portfolio growth. 🌐 www.reimasters.ca Get The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and reducing investment risk. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📅 Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Wayne and Gabby will be presenting on real estate investing, due diligence, property management and asset management. Calvin Hexter from Calvin Realty joins tomorrow's Morning Show to discuss the Edmonton real estate market and the upcoming Summit Series event. 🌐 reiconference.ca REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 The annual REI Masters mentorship retreat brings the community together to build investing roadmaps, work on long-term goals and strengthen the relationships within the mentorship community. 🌐 www.reimasters.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

Scared to Buy Your First Rental Property? Start Here Fear is normal when you are about to invest tens or hundreds of thousands of dollars. The question is not whether you are scared. The question is whether you understand enough to know what you are actually scared of, how to manage it, and what systems need to be in place before you take action. In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby respond to a listener who wants to buy her first rental property but is worried about buying the wrong property, choosing the wrong tenant and eventually losing somebody else's money through a joint venture. The conversation becomes a live coaching session about fear, education, trust, relationships, joint ventures and why confidence in real estate investing comes from understanding — not blind optimism. 🧠 What You'll Learn Why fear is normal for new real estate investors Why Wayne and Gabby were not always on the same page How their relationship evolved as their investing experience grew Why simply telling your spouse to "trust me" usually does not work How education creates trust between investing partners Why fear and anxiety often come from uncertainty How understanding landlord laws helped Gabby become more confident Why couples can actually benefit from having different personalities Why one partner's confidence and another partner's caution can create balance Why real estate strategies should change when market opportunities change Why Wayne and Gabby are not loyal to one property type or strategy How fundamentals matter more than trends Why a property strategy that worked four years ago may not be the best opportunity today How one former student generated approximately a 275% ROI over four years on a property that fit the opportunity at the time Why new investors should focus on fundamentals instead of copying a strategy Why Wayne believes inexperienced investors should be extremely careful with joint ventures Why using somebody else's money magnifies the consequences of mistakes When a coach or experienced partner can help fill knowledge gaps Why asking better questions is one of the fastest ways to build confidence Fear Is Not the Problem The listener who wrote into the show described three main fears: Buying the wrong property. Choosing the wrong tenant. And potentially losing somebody else's money through a joint venture. Gabby's response is that those fears are completely reasonable. Real estate investing involves significant amounts of money. You should take it seriously. The mistake is assuming the solution is to simply become fearless. It is not. The solution is to understand the risks well enough that they are no longer unknown. Education Comes Before Trust Gabby explains that in the early years of their relationship, Wayne would often tell her: "Just trust me." The problem was that she did not understand enough to know why she should trust the decision. Blind trust was not enough. The turning point came through education. Gabby learned how rental properties worked. She studied Alberta's Residential Tenancies Act. She learned what would happen if a tenant stopped paying rent. She learned how evictions worked. She learned what to do if a tenant damaged a property. She learned the processes behind the situations she was afraid of. The more she understood, the more comfortable she became. As Gabby explains in the episode, fear and anxiety often come from not knowing what is going to happen or not knowing how you would handle it if it did. Once the process becomes understandable, the fear starts to shrink. Are Wayne and Gabby Always on the Same Page? Today? Usually. In the beginning? Absolutely not. Wayne describes Gabby as someone who often went along with the plan even when she was uncomfortable with it. Gabby says she would not recommend that approach to other couples. What eventually made their partnership work was understanding that they brought different strengths. Wayne brought confidence, drive and a willingness to solve problems. Gabby brought caution, risk awareness and a desire to understand the details. Those traits can clash. But they can also create a very strong investing partnership when both people communicate and respect what the other brings to the table. The aggressive partner may need somebody to slow them down. The cautious partner may need somebody to keep them from becoming permanently stuck. One person provides the accelerator. The other provides the brakes. You need both. Stop Falling in Love With Strategies A major part of today's conversation is about something Wayne sees constantly: Investors becoming attached to a particular strategy. Townhouses. Single-family homes. BRRRRs. Rent-to-own. Fix and flips. Multifamily. Wayne and Gabby say they are not loyal to any particular strategy. They are loyal to fundamentals . Cash flow. Return on investment. Risk. Tenant demand. Good systems. Strong long-term economics. Then they look at the market and ask: What opportunity currently fits those fundamentals? That answer changes. Four years ago, Wayne was recommending certain single-family properties because the numbers made sense at the time. He recently re-ran the numbers on one of those properties purchased by a former student and calculated an approximately 275% ROI over four years . Today, that same opportunity may no longer exist. Different properties may now offer better economics. That is why investors should understand the fundamentals rather than simply copying the property type somebody else is buying. You Do Not Know What You Do Not Know Wayne explains that coaching a new investor is difficult because sometimes the person thinks they understand the entire picture when they are actually missing important context. A new investor might ask: "Why can't I just do this strategy?" The answer may require months of understanding cash flow, market conditions, financing, tenant profiles, risk, returns and property management before everything finally clicks. That does not mean the strategy is automatically bad. It means the investor may not yet understand why it does or does not work in their particular market. Real confidence comes from understanding those relationships. Joint Ventures Raise the Stakes The strongest warning in today's episode is directed at the listener's husband, who wants to begin using joint venture partners. Wayne sides with the cautious spouse. If you are still worried that you might buy the wrong property and do not yet understand how to deal with the problems that can arise, Wayne does not believe you should immediately begin investing somebody else's money. Joint ventures add responsibility. You need to understand: How the partnership should be structured Who is responsible for what How reserve funds work What happens when additional money is required How decisions are made How disagreements are handled What happens if somebody wants out How profits and losses are shared What happens when a tenant stops paying What happens when repairs exceed expectations How the deal continues when something goes wrong Those are not things you want to learn for the first time while somebody else's money is already at risk. Experience — or Access to Experience That does not mean you must personally experience every possible problem before doing a joint venture. But Wayne believes you need one of two things: Experience yourself, or direct access to somebody who already has it. If you have an experienced coach, mentor or partner who can answer questions when unfamiliar situations arise, that experience can help fill the gaps. Without that support, you may be making important decisions for the first time with your partner's capital on the line. That is unnecessary risk. The Goal Is Not to Eliminate Fear Gabby still experiences anxiety when something completely new happens. The difference today is that most situations are no longer new. She has seen them. She understands the processes. She knows what to do. And if she does not know, she trusts that they can find the answer. That is what confidence actually looks like. Not: "Nothing will ever go wrong." But: "If something goes wrong, I know how to deal with it." The Main Lesson If you are scared to buy your first rental property, that does not mean you should quit. It probably means you need more information. Identify exactly what you are worried about. Then learn it. Scared of tenants? Learn tenant screening and landlord law. Scared of buying the wrong property? Learn deal analysis, market research and cash-flow requirements. Scared of repairs? Learn inspections, capital expenses and reserve planning. Scared of joint ventures? Learn how partnerships are structured before taking somebody else's money. Fear becomes manageable when the unknown becomes known. Keep learning. Keep asking specific questions. Keep building your understanding. Eventually the goal is not to blindly trust the process. It is to understand it well enough that you actually believe in it. 👥 About Your Hosts Wayne and Gabby Hillier are full-time Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they share practical lessons from buying, financing, operating and managing rental properties across Alberta. 💡 Resources & Contact Send Your Questions to the Show Have something holding you back from buying your first property, growing your portfolio or making an investing decision? Wayne and Gabby answer listener questions on the show. 📧 info@reimorningshow.com Join the REI Masters Mentorship Program Work directly with Wayne and Gabby on real estate investing fundamentals, acquisitions, joint ventures, tenant management, financing, systems and portfolio growth. 🌐 www.reimasters.ca Get The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and reducing investment risk. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📅 Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Wayne and Gabby will be presenting on due diligence, pre-closing preparation, property management and asset management. 🌐 reiconference.ca REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 The annual REI Masters mentorship retreat brings the community together to build investing roadmaps, work on long-term goals and strengthen the relationships within the mentorship community. 🌐 www.reimasters.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

The Tenant Move-Out Checklist Every Landlord Needs A tenant tells you they are moving out. What happens next? For many landlords, the move-out process becomes unnecessarily stressful because they wait until the final few days to start thinking about inspections, cleaning, repairs, utilities, advertising and the security deposit. In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby walk through the tenant move-out system they use in their own rental portfolio — from the moment a tenant decides not to renew all the way through the final inspection and security-deposit accounting. The goal is simple: Prepare early, reduce vacancy, protect the property and make the transition to the next tenant as smooth as possible. 🧠 What You'll Learn When to contact tenants about lease renewal Why Wayne and Gabby start the process roughly 45 days before lease expiry How to prepare a new rental listing before the tenant leaves Why you should complete a fresh market-rent study When you can begin advertising and showing the property in Alberta How to schedule the final move-out inspection Why noon on the final day can create a useful turnover buffer Why tenants should receive a detailed cleaning checklist What areas tenants commonly forget to clean Why exterior areas and yards should be included Why Wayne and Gabby send tenants their original move-in inspection How that inspection helps identify tenant damage versus pre-existing damage When a pre-move-out inspection may make sense How an early inspection helps landlords prepare contractors and cleaners Why vacancy can be a good time to evaluate strategic upgrades Why Wayne generally avoids unnecessary renovations When an upgrade may make sense if the increased rent justifies the expense Why landlords need to transfer utilities back into their name How to complete the final move-out inspection What can potentially be deducted from a security deposit Why the goal should be returning the tenant's entire deposit Why proactive systems protect your time, profit and freedom The final Alberta security-deposit accounting step landlords cannot forget Start Before the Tenant Moves Out Wayne and Gabby typically begin thinking about renewal approximately 45 days before the end of a fixed-term lease . In the example discussed today, the tenants had lived in the property for approximately three years. Wayne and Gabby offered to keep the rent the same because they were happy with the tenants, even though the rent was already slightly below current market levels. The tenants ultimately chose not to renew because their financial circumstances had changed. Once Wayne and Gabby knew the property would become vacant, the turnover system started immediately. Step 1: Prepare the Rental Listing Do not wait until the tenant has already moved out to begin creating your advertisement. Most of the listing already exists. The number of bedrooms has not changed. The bathrooms have not changed. The neighbourhood has not changed. Your previous photos and property information may still be useful. The variable that does need to be reconsidered is rent . After several years, the market may have changed considerably. That is why Wayne recommends completing a new market-rent study before advertising. Look at comparable rental properties currently available and determine where your property fits within the market. But do not only look at the asking rents. Consider the competition. Does your property have features others do not? Is supply limited? Is there something about the layout, yard, parking or location that makes it more valuable? The objective is to determine the highest reasonable rent the market will support without pricing the property out of consideration. Step 2: Schedule the Move-Out Inspection As the end of the tenancy approaches, establish the exact date and time for the final move-out inspection. Gabby's preferred starting point is: 12:00 PM on the final day of the lease. That timing can create a useful buffer. If the next tenant is scheduled to move in the following day, the landlord still has several hours to deal with anything unexpected. Maybe the outgoing tenant needs another hour to remove boxes. Maybe a quick repair is required. Maybe something was left behind. Creating that buffer is much better than having the next tenant sitting outside with a moving truck while the previous tenant is still inside. Step 3: Send a Detailed Cleaning Checklist Do not simply tell the tenant: "Please clean the property." Be specific. Gabby sends tenants a detailed cleaning checklist covering the property from top to bottom. That may include: Baseboards Walls Appliances Behind the refrigerator Behind the stove Blinds Windows Window tracks Floors Bathrooms Cabinets Exterior entrances Yard maintenance Weeding and trimming Other areas expected to be returned clean Window tracks are one of Wayne's favourite examples. They are easy to forget. But if every tenant skips them, years later the tracks can become extremely dirty and potentially stained. The standard should be clear: Return the property in the condition it was provided, subject to normal wear and tear. Step 4: Send the Original Move-In Inspection Wayne and Gabby also provide the tenant with the original move-in inspection report before move-out. Why? It gives the tenant a reference point. If there was already a scratch in the flooring when they moved in, they know it was documented. If there is now a new hole in a wall that was not there before, they have time to address it. Wayne would much rather give the tenant several weeks to repair something than discover it at noon on the final day when another tenant is scheduled to move in the next morning. Being proactive reduces everyone's workload. Step 5: Consider a Pre-Move-Out Inspection Gabby does not do this for every tenancy. But if there is reason for concern, she may schedule a quick inspection during the final month. This gives the landlord an early look at the condition of the property. Are there damages? Does the property need professional cleaning? Will a handyman need to come in? Is repainting required? The purpose is not to hassle the tenant. It is to prevent the landlord from walking into the property on move-out day and discovering a week's worth of unexpected work. If you already know what needs to happen, you can line up the people required before the property becomes vacant. Step 6: Evaluate Strategic Improvements Vacancy can also create an opportunity to assess whether an upgrade makes financial sense. Wayne generally does not recommend continuously renovating rental properties after purchase. Every additional dollar invested affects your return on investment. But occasionally the market creates an opportunity. The property discussed on today's episode has a partially finished basement. Wayne is considering completing the space and potentially adding a fourth bedroom because the current rental market may reward that additional functionality with substantially higher rent. The important distinction is this: Do not renovate because something would "look nicer." Renovate when the numbers justify it. If a relatively small investment can create enough additional rental income to produce an attractive return, then the upgrade may make sense. Step 7: Put the Utilities Back in Your Name This sounds obvious. It is also easy to forget. If the outgoing tenant is responsible for utilities, make sure those utilities are transferred back into the landlord's name for the vacancy period. Otherwise, you may discover the problem when an agent arrives for a showing and none of the lights work. Give the utility company enough notice so everything transfers smoothly when the tenant leaves. Step 8: Complete the Final Move-Out Inspection On move-out day, complete the final inspection using the same inspection documentation that was completed when the tenant moved in. Compare the two conditions. What existed before? What is new? What is normal wear and tear? What is tenant-caused damage? What was clean when they moved in but has been returned dirty? That documentation becomes extremely important when determining whether any legitimate costs need to be deducted from the tenant's security deposit. The Goal Is NOT to Keep the Deposit Wayne sees some landlords approach the security deposit as though it is extra money they are trying to capture. That is the wrong mindset. If a tenant caused $1,500 in legitimate damage and the landlord spends $1,500 repairing it, the landlord did not make $1,500. They simply recovered the cost of fixing the damage. Wayne and Gabby's preferred outcome is: Give the tenant their entire security deposit back. Why? Because that means the property was returned clean and in good condition. There is less work. Less downtime. Less vacancy. And the next tenant can move in faster. The Final Step: Security-Deposit Accounting Gabby makes sure Wayne does not end the episode without one final important step. In Alberta, landlords must properly account for the security deposit after taking possession back from the tenant. Gabby notes that the required statement of account needs to be sent within the applicable 10-day period . Do not forget the paperwork after the keys have been returned. The process is not complete until the security deposit and accounting requirements have been properly handled. Systems Protect Your Freedom The bigger lesson from this episode is not really about window tracks or utility accounts. It is about systems. Rental properties are supposed to help create freedom. They should not become another full-time job. A simple move-out checklist reduces the chances of forgetting something, scrambling at the last minute or unnecessarily extending the vacancy between tenants. Prepare the listing. Know the market rent. Schedule the inspection. Send the cleaning checklist. Provide the original inspection. Inspect early if necessary. Plan repairs. Transfer utilities. Complete the final inspection. Handle the security deposit properly. None of these steps are complicated individually. But together, they protect your property, profit, time and sanity. 👥 About Your Hosts Wayne and Gabby Hillier are full-time Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they share practical lessons from buying, operating and managing rental properties across Alberta. 💡 Resources & Contact Need Help Determining Market Rent? Wayne offers one-on-one coaching to help investors complete rental-market studies, evaluate comparable properties and determine appropriate market rents. 🌐 www.reimasters.ca Join the REI Masters Mentorship Program Work directly with Wayne and Gabby on acquisitions, tenant management, property-management systems, deal analysis and building a profitable Canadian rental portfolio. 🌐 www.reimasters.ca Get The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and reducing investment risk. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📧 info@reimorningshow.com 📅 Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Wayne and Gabby will be presenting on real estate investing, due diligence, property management and asset management. 🌐 reiconference.ca REI Masters Annual Retreat Edmonton, Alberta October 17–18, 2026 The annual REI Masters mentorship retreat brings the community together to build investing roadmaps, work on long-term goals, strengthen relationships and plan for the year ahead. 🌐 www.reimasters.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

What happens to Canadian real estate investors when trade uncertainty, tariffs and job losses start working their way through the economy? The answer may show up in the rental market before it shows up in property values . In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby recap the sold-out Edmonton Real Estate Investing Bus Tour, share details from Wayne's latest property-hunting trip, break down a newly accepted Edmonton rental-property offer, and answer a listener question about how tariffs could affect Canadian real estate. The bigger lesson is about risk. You cannot control tariffs, unemployment, interest rates or the economy. But you can control what properties you buy, how much they cash flow, the tenants they attract and the systems you build around them. 🧠 What You'll Learn Why the latest REI Masters Edmonton Bus Tour was about education rather than pitching What Wayne believes is wrong with parts of the real estate investing education industry Why good investing should be repeatable, ethical and fundamentally profitable What Wayne found while touring seven Edmonton investment properties Why four of seven properties were potentially worth writing offers on How Wayne identified financial problems inside a condo corporation in only a few minutes Why condo documents can completely change an investment decision How Wayne recently negotiated a renovated rental property from a $210,000 original list price down to $192,000 Why Edmonton is currently giving buyers more negotiating power Why Wayne believes the fall market could create strong opportunities for investors The difference between the real estate market and the rental market Why tariffs may affect tenants and rental affordability before property values How employment losses can lead to rent delinquency, vacancies and downward pressure on rents Why investors cannot eliminate economic risk How strong cash flow acts as a safety net Why tenant quality and property desirability matter when the economy weakens How the 5% Rule can help investors determine whether a property has enough cash flow to weather difficult periods Seven Properties, Four Potential Offers Wayne spent the previous day touring seven Edmonton properties . After several weeks of seeing properties with poor condition, bad smells, mold concerns and renovation requirements, the quality of this group was noticeably different. The first property was already renovated, had updated cabinets, countertops and flooring, a finished basement and a newer furnace. It immediately became an offer candidate. Then the second property did too. By the end of the tour, Wayne says four of the seven properties were strong enough that he considered writing offers on them . The common characteristics were exactly what Wayne looks for: Good areas. Strong rental demand. Minimal renovation requirements. Strong projected returns. And approximately $500–$600 per month in potential cash flow on several of the deals. The Condo Documents Changed Everything Three properties Wayne toured were inside the same condominium complex. At first, the numbers looked unusually attractive. Then Wayne entered one of the units and discovered a large package of condo documents sitting on the counter. Within only a few minutes of reviewing the reserve-fund information, financial documents and meeting information, Wayne determined that the condominium corporation had financial concerns. Not necessarily catastrophic problems. But enough uncertainty that the potential upside was no longer worth the additional risk. That information prevented him from wasting time writing offers, submitting deposits and completing deeper due diligence on properties he was unlikely to purchase. The lesson: A good unit does not automatically mean a good condo investment. You are also investing into the financial health of the condominium corporation. A $210,000 Property Negotiated to $192,000 One of Wayne's offers was accepted the night before the show. The property had originally been listed at approximately $210,000 , followed by a price reduction to around $200,000 after spending several weeks on the market. Wayne offered: $186,000. The seller countered: $192,000. Wayne accepted. The property is renovated, has a newer furnace and hot water tank, strong curb appeal and is located in an area Wayne already understands. He anticipates some minor plumbing and electrical work, but believes the property is fundamentally worth significantly more than his purchase price and should produce strong cash flow. More importantly, the negotiation happened quickly. That tells Wayne something about the current Edmonton market: Buyers have leverage. Why Wayne Is Bullish on the Fall Buying Market Several of the properties Wayne toured had been sitting on the market for weeks. There did not appear to be significant competition from other buyers. Sellers were responding reasonably to aggressive offers. And there were multiple properties available that still produced strong cash flow. That combination has Wayne optimistic about opportunities for Edmonton real estate investors heading into the fall. This does not mean every property is a deal. It means investors who know exactly what they are looking for may currently have more opportunities to negotiate than they did during hotter market conditions. Real Estate Market vs. Rental Market A listener asked how tariffs and recent trade uncertainty could affect real estate. Wayne emphasizes an important distinction: There are two markets investors need to understand. The real estate market is driven by the supply and demand of properties being bought and sold. The rental market is driven by the supply of rental properties and the demand from tenants who can afford them. They are connected, but they are not the same thing. Wayne's view is that major trade disruptions may show up in the rental market first . Why? Jobs. If tariffs hurt businesses and employers respond with layoffs, tenants may lose income. That can lead to: Rent delinquencies Tenants leaving properties Increased vacancies More financially stressed applicants Reduced rental affordability Downward pressure on achievable rents Those problems can appear before there is a major change in residential property values. You Cannot Control the Economy There is no property-management system that can guarantee your tenant will never lose their job. There is no screening system that eliminates economic downturns. And there is no investing strategy that prevents recessions, tariffs, interest-rate changes or unexpected economic shocks. Those things are outside the investor's control. So Wayne focuses on what is controllable. Buy good properties. Create strong cash flow. Attract strong tenants. Build good systems. Maintain reserves. And think long term. Cash Flow Is Your Safety Net Wayne describes cash flow as the safety net that protects an investor from things they cannot control. One property shown on the recent bus tour was producing approximately $680 per month in cash flow and approximately a 21% cash-on-cash return based on the investor's original investment. That cash flow creates room. If rents soften, the investor may be able to reduce rent and still remain profitable. If vacancy occurs, there is additional income available to absorb it. If expenses increase, there is a buffer. That is fundamentally different from owning a property that only works if rents continue rising and property values continue appreciating. The Main Lesson Economic uncertainty is inevitable. Today it might be tariffs. Previously it was interest rates. Before that it was COVID. Tomorrow it will be something else. Investors cannot predict every storm. They can build a portfolio capable of surviving one. Wayne's approach is to purchase rental properties that produce strong cash flow from day one , generate strong returns without depending on appreciation and attract tenants who genuinely want to live in them. The objective is not simply to make the most money when everything is going well. It is to make sure you are still standing when things go wrong. 👥 About Your Hosts Wayne and Gabby Hillier are full-time Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they share practical lessons from buying, financing, operating and managing rental properties across Alberta. 💡 Resources & Contact Get The 5% Rule™ Learn Wayne Hillier's framework for determining how much rental-property cash flow is enough to help protect an investment from vacancies, repairs, market changes and other risks. Search The 5% Rule by Wayne Hillier on Amazon. Join the REI Masters Mentorship Program Work directly with Wayne and Gabby on acquisitions, deal analysis, financing, property management, risk reduction and building a profitable Canadian real estate portfolio. 🌐 www.reimasters.ca Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📧 info@reimorningshow.com 📅 Upcoming Events REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Wayne and Gabby will be teaching due diligence, pre-closing preparation, property management and asset management. The Canadian Real Estate Investing Morning Show will also be recorded live on stage Saturday morning. 🌐 reiconference.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca

The Smith Manoeuvre Explained Most Canadian homeowners understand that mortgage interest on their principal residence is generally not tax deductible. The Smith Manoeuvre is a strategy designed to change how that debt is structured. In today's episode of the Canadian Real Estate Investing Morning Show , Wayne and Gabby are joined by Keaton Kirkwood of Kirkwood & Brennan Mortgage Group , a Smith Manoeuvre Certified Professional, to explain how the strategy works, why it can be powerful for Canadian homeowners and real estate investors, and what risks investors need to understand before using it. At a high level, the Smith Manoeuvre is about converting non-tax-deductible debt into tax-deductible investment debt while building investments at the same time. 🧠 What You'll Learn What the Smith Manoeuvre is Why it is not only for real estate investors How a readvanceable mortgage works Why mortgage interest on a principal residence is different from investment interest How homeowners can recycle mortgage principal into investments Why the CRA may allow interest deductions when borrowed funds are used to generate income How the strategy can help Canadians invest sooner Why marginal tax rates matter How tax refunds can be redirected toward investments or debt reduction Why investors need the correct mortgage product How the Smith Manoeuvre can be used with real estate, businesses or non-registered investments The difference between debt conversion and simply taking on more debt What "cash damming" means How rental income can be redirected through a Smith Manoeuvre strategy Why cash damming can increase after-tax returns How conservative and aggressive versions of the strategy differ Why investment quality still matters The risks of borrowing against home equity Why diversification may make sense Whether the Smith Manoeuvre still applies if your home is already paid off Why professional guidance matters when setting everything up What Is the Smith Manoeuvre? Keaton describes the Smith Manoeuvre as a way of optimizing the flow of your money so you can: Minimize non-deductible interest Create investments sooner Potentially reduce the overall taxes you pay The basic strategy uses a specific type of mortgage known as a readvanceable mortgage . As you make mortgage payments and reduce the principal owing on your home, borrowing room becomes available through an attached line of credit. Those borrowed funds can then be invested into assets where there is a reasonable expectation of earning income. Depending on how the strategy is structured, the interest on that investment borrowing may become tax deductible. Converting Non-Deductible Debt For most Canadian homeowners, the interest paid on their principal residence is not deductible from taxable income. But when money is borrowed and used for an eligible income-producing investment, the interest may qualify for a deduction. That is one of the central concepts behind the Smith Manoeuvre. Instead of simply paying down a mortgage and allowing the equity to sit inside the home, the homeowner can potentially reborrow the principal that was paid down and deploy it into investments. Over time, the objective is to gradually convert the mortgage debt from non-deductible personal debt into deductible investment debt. You Are Not Necessarily Creating More Total Debt One of the concerns people immediately have is that the strategy involves borrowing against the house. Keaton walks through a useful example. Imagine somebody has a $400,000 mortgage and wants to save $100,000 to invest. One approach would be to leave the $400,000 mortgage alone and accumulate $100,000 in cash. Another approach could be to direct that $100,000 toward the mortgage first, reducing the mortgage from $400,000 to $300,000, and then reborrow the same $100,000 for investment purposes. In both scenarios, the person effectively ends up with $400,000 of total debt and a $100,000 investment. The difference is that in the second structure, a portion of that debt may now qualify as tax deductible because of how the borrowed money was used. That is why Keaton emphasizes that the strategy is not simply about taking on as much debt as possible. It is about structuring existing debt more efficiently. What Is Cash Damming? For real estate investors, one of the most interesting applications discussed in the episode is cash damming . Normally, a landlord collects rent and uses that rental income to pay expenses such as: Property taxes Insurance Utilities Maintenance Repairs Other rental-property expenses With cash damming, the flow of that money can potentially be redirected. Instead of using the rental income directly to pay rental expenses, the investor may use the rental income to aggressively pay down non-deductible debt on their principal residence. That mortgage reduction creates additional available borrowing room through the readvanceable mortgage. The investor then borrows those funds back and uses them to pay eligible rental expenses. The total amount of debt may not necessarily increase. Instead, debt is gradually shifted from non-deductible personal debt toward potentially deductible investment debt. A Real Estate Investor Example Keaton gives an example of a rental portfolio generating approximately $100,000 per year in revenue . By redirecting those funds through a cash-damming strategy, a homeowner with a $400,000 mortgage could potentially convert a significant portion of that mortgage into deductible investment debt over only a few years. Instead of paying approximately $20,000 per year in mortgage interest and receiving no tax deduction on that interest, part or eventually potentially all of that interest could qualify for tax deductions depending on the structure. For someone in a higher marginal tax bracket, the tax savings can become significant. Those tax refunds can then potentially be used to: Pay down additional mortgage debt Invest more Continue accelerating the strategy That is where the compounding effect can become powerful. The Smith Manoeuvre Is Not One Strategy Keaton explains that there are multiple ways to apply the Smith Manoeuvre. Some households may use it conservatively. Others may use more advanced strategies. Applications discussed in the episode include: Debt conversion Cash damming Investing through non-registered accounts Investing in real estate Investing through a corporation Investing in a business The appropriate strategy depends on the homeowner's financial position, income, investments, risk tolerance and long-term objectives. What Happens When the Mortgage Is Fully Converted? The debt-conversion portion of the Smith Manoeuvre eventually reaches a natural limit. Once all of the eligible non-deductible mortgage debt has been converted into deductible investment debt, there is no additional personal mortgage debt left to convert. But that does not necessarily mean investing has to stop. If the homeowner continues paying principal, they could potentially continue recycling that principal into additional investments depending on their goals and risk tolerance. Some investors may choose to build a larger investment portfolio earlier in life and then transition into a period of aggressive deleveraging later. Others may prefer a much more conservative implementation. There is no single correct version for everybody. What Are the Risks? This strategy involves leverage. And leverage creates risk. Wayne and Keaton are very clear about one important point: The Smith Manoeuvre does not turn a bad investment into a good investment. If you borrow against your home equity and invest that money poorly, you can lose money while still being responsible for the debt. That is why the investment itself still matters. Wayne emphasizes his approach of focusing on investments with strong cash flow, solid fundamentals and lower downside risk rather than simply relying on appreciation. Keaton also explains that his own implementation includes diversified, low-fee global index investments. The takeaway is not that everyone should invest the same way. It is that leveraged investing requires careful risk management. Is Avoiding All Risk Actually Risk-Free? Keaton also introduces an interesting perspective. Avoiding investment risk completely may create a different form of risk. Someone who focuses entirely on eliminating debt and only invests in extremely conservative assets may reach retirement without enough invested capital. The traditional approach is not automatically safer simply because it avoids leverage. Every financial strategy involves trade-offs. The goal is to understand those trade-offs and choose an approach that fits your financial circumstances and long-term goals. What If Your Home Is Already Paid Off? If your principal residence has no mortgage, the traditional debt-conversion portion of the Smith Manoeuvre does not apply because there is no non-deductible mortgage debt to convert. However, homeowners may still be able to access equity from a paid-off property and use those funds to create investments in a tax-efficient manner. Keaton cautions against jumping from zero debt to maximum leverage overnight. The strategy should still be evaluated based on the individual's goals, financial position and comfort with risk. The Main Lesson The Smith Manoeuvre is not simply: "Borrow against your house and invest the money." It is a structured debt and investment strategy designed to optimize how money moves between your mortgage, investments and taxes. Done properly, it may allow Canadian homeowners to: Invest sooner Convert non-deductible debt into deductible debt Reduce after-tax borrowing costs Accelerate investment growth Potentially pay down personal mortgage debt more efficiently But the details matter. The mortgage product matters. The investments matter. The accounting matters. The tracking matters. And the investor's risk tolerance matters. That is why Wayne and Keaton strongly recommend working with professionals who understand the Smith Manoeuvre before implementing the strategy. 👥 About Today's Guest Keaton Kirkwood Keaton Kirkwood is an investor-focused mortgage broker with Kirkwood & Brennan Mortgage Group and a Smith Manoeuvre Certified Professional. He works with Canadian real estate investors and homeowners to structure financing around long-term investment goals rather than simply securing the next mortgage. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca 👥 About Your Hosts Wayne and Gabby Hillier are full-time Canadian real estate investors, entrepreneurs and founders of REI Masters. Through the Canadian Real Estate Investing Morning Show , they share practical real estate investing education based on their own experience building and managing rental properties across Alberta. 💡 Resources & Contact Learn More About the Smith Manoeuvre If you want to determine whether the Smith Manoeuvre fits your financial situation, speak with professionals who understand how the mortgage, investment and tax pieces work together. Kirkwood & Brennan Mortgage Group 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca Finngo Bookkeeping & Tax 🌐 www.finngo.com/rei Join the REI Masters Mentorship Program Work directly with Wayne and Gabby on Canadian real estate investing strategy, acquisitions, financing, cash flow, risk management and portfolio growth. 🌐 www.reimasters.ca Get The 5% Rule™ Learn Wayne Hillier's framework for evaluating rental-property cash flow and reducing investment risk. Search The 5% Rule by Wayne Hillier on Amazon. Watch the Show Live Join Wayne and Gabby every weekday morning at 7:00 AM Mountain Time on YouTube. Follow Wayne Hillier – Real Estate Investing Coach on YouTube. 📧 info@reimorningshow.com 📅 Upcoming Events REI Masters Edmonton Real Estate Investing Bus Tour Edmonton, Alberta August 22, 2026 The August 22 Edmonton Real Estate Investing Bus Tour is now SOLD OUT . Attendees will tour real Edmonton investment properties, including Wayne and Gabby's multi-unit garden suite development approximately two weeks before its expected completion. 🌐 www.reimasters.ca/edmontonbustour REIcon – The Summit Series Edmonton, Alberta September 11–13, 2026 Wayne and Gabby will be presenting on due diligence, pre-closing preparation, property management and asset management. The Canadian Real Estate Investing Morning Show will also be recorded live on stage Saturday morning. 🌐 reiconference.ca 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 keaton@kbmortgages.ca