Born and raised in Toronto, Ontario, Canada, Jay’s entrepreneurial flame was fanned on a 1987 trip where he saw firsthand the successful business his grandfather built. “The only way to be truly free is to own your own business” his grandfather told him. This statement had a profound effect on Jay. Upon his return home, he told his parents… “I’ll be working for myself by the time I’m 25 years old.”
At his parents’ urging, Jay continued his education and acquired a degree in chartered accounting from the University of Waterloo and worked in Big 4 accounting firms. He left the accounting world the day before his 25th birthday, thus setting the stage for his entrepreneurial career. Ever since, Jay has had failures and successes in the various businesses he has owned.
After his first child was born in 2005, Jay jumped into the world of real estate investing. Based on his experience as an entrepreneur, Jay was well-equipped to make the transition into real estate investing. Even though he experienced several challenges along the way, he built a multiple seven-figure real estate portfolio.
Having that portfolio help Jay resiliently deal with a heartbreaking personal tragedy in 2014. This experience lead Jay to reevaluate the purpose of his life while taking a multi year sabbatical. Before his wife passed away in 2014, Jay thought he was financially prepared. After going through the experience of being the executor of his wife’s estate, he realized he wasn’t.
Today, Jay makes an impact raising his three children and empowering Fathers to secure their Family’s Financial Future as the founder of Prepared Fathers.
Find out more about Jay Gabrani at:
www.jaygabrani.com
Looking to grow a real estate empire but don’t know where to start? Pick up a copy of Money, People, Deal by Stefan Aarnio for only $3.95 at www.moneypeopledeal.com/podcast.
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Stefan Aarnio: Ladies and gentlemen, welcome to the show Respect The Grind with Stefan Aarnio. This is the show we interview people who have achieved mastery and freedom through discipline. We interview entrepreneurs, athletes, authors, artists, real estate investors, anyone who’s achieved mastery, examine what it took to get there. Today on the show, we have my friend Jay is it Gabriani is that how I said?
Jay Gabrani: Gabrani.
Stefan Aarnio: Gabrani, man, I can’t read the Italian. We got my friend Jay. He is a real estate investor famous up here in Canada, referral from my friend or Erwin Szeto invest in the Zed together. Oh my goodness. Erwin. He said, “Jay is the best guest I’ve ever had on my podcast”. So I said, “Man, I have to have him. He’s a mortgage broker. He’s a Rain member. He’s a real estate investor. He’s a father of multiple kids. I saw his kids before we started the show, they’re helping him with all the tech, it’s great. Jay, welcome to the show Respect the Grind. Thanks so much for joining me.
Jay Gabrani: What a thanks, Stefan. Great to be with you.
Stefan Aarnio: Awesome. Thanks so much Jay. You’re a Canadian, I want to say, a Canadian legend. I was looking on Erwin site, Erwin’s Facebook page, and he said, “Who is the best podcast you’ve ever heard”? And most of you were saying Jay! Jay! Jay! Bring out Jay, multiple times. People were saying, “Man Jay’s episode was the best episode.” So I thought, Man, I have to talk to Jay. For the people at home we don’t know you. Can you tell people a little about who you are, where you came from?
Jay Gabrani: Certainly, yeah. You mentioned already born and raised in Toronto, Ontario. First, let’s say for 16 years of life pretty good. Then I took a trip, family trip to India and it was there certainly that I basically got my first exposure to business. My grandfather built a nice business there in selling socks and underwear to everyone in India and he had seven kids. My father was the eldest and that was my first exposure to business and when I came back from that trip Stefan, I told my parents, I’ll never work for anyone after the age of 25. They did the whole roll your eyes thing and they said, “Yeah, and get your education”.
Jay Gabrani: I did that, University of Waterloo Chartered Accounting designation all that stuff but I knew, did the big four accounting for jobs first one was [inaudible 00:02:35] knew it wasn’t for me and be my last day ever of working for anyone else besides my own companies was the day before my 25th birthday. Ever since then, I’ve been on my own entrepreneur different businesses, real estate investor and you mentioned already most importantly, my most important role is a single father of three.
Stefan Aarnio: That’s incredible. Now, Jay, I have to ask because I’ve heard the old seminar story about the shoe salesman who ends in India and he looks around and says, “Nobody here is wearing shoes there’s no market for shoes.” He gets back on the plane flies home. Then there’s the second shoe salesman he lands in Indian and says, “No one here is wearing shoes the market is great I can sell to everybody.” Is that a little cliche story? Is that true if you’re selling socks and underwear in India was that a time when they’re selling these things and was that a newer thing? Were they were breaking into that market? I want to know about that ’cause I’ve never been to India myself.
Jay Gabrani: Great, so basically you know what, anything that is, let’s just say a consumer products there’s a billion plus people in India. If you have half the business sense you don’t have to be in a [inaudible 00:03:45]. Okay, if you got half a business sense, you can put together a business and start something, then the market is there and now it’s even bigger now it’s like 1.2 billion if I’m not mistaken. A nice big middle class is grown. When my grandma started this business, we’re going back almost 60 years ago. It wasn’t like that. It was really 1% of India and all, like 90% of the wealth. Now it’s much more evenly distributed so consumer products business. Yeah, you can do it and do it very well in India and just you can stay in India, you don’t even have to go outside of that, the market is so huge. It’s business sense anywhere you are in the world. Well, yeah, India is a great market.
Stefan Aarnio: It’s like the Chinese money that comes over to Canada. If you had a factory in China, and you’re selling like one toothbrush to everybody you’re a billionaire and I guess same kind of idea in India. That’s amazing Jay. You decided you want to get into business. You’re 25 years old. Tell you about that first business experience. What was it? Did it work? Did it fail? What happened?
Jay Gabrani: Sure. Basically, from being … You got to understand I went to university because my parents … I’m Indian by background obviously. Like a lot of religions and cultures, education is stress in a very big way. That’s why I did the professional designation thing. My dad was an accountant, I went and became an account. Then when you finish school, I didn’t want to do anything to do with accounting. So my first business was a restaurant, a cafe restaurant, a franchise called William Coffee Pub big in Ontario here. I opened it, even though, I had left my job the day before my 25th birthday, I had signed the franchise agreement for that store in Burlington, Ontario, Canada. And I owned it for 13 years. It was definitely the place where I cut my teeth like literally that was like a business where you were serving 5000 to 7000 people a week.
Jay Gabrani: They’re coming through the doors, some of them just for coffee but it was a busy place. 30 to $45 million plus in sales so it was a big place that was my first … That was my exposure to business and you have to be frontline. It’s not online. So I open that 98 Stefan so you know Internet obviously really wasn’t around back then. This will appear offline face to face customer centered and you got to be ready, every single day without fail and your team has to be ready. That was the first business and like I said that one went well so I know traditionally most people don’t do well in their first business. For whatever reason, that one went well. I’ve done several other ones that didn’t go well, several stops and starts, several little failures but that was the first one.
Stefan Aarnio: Wow! You went in with a franchise that’s interesting, had quite a few people on the show real estate investors who are now doing multifamily apartment, buildings, things like that.
Jay Gabrani: Yes.
Stefan Aarnio: And a lot of guys had pizza franchises actually. And the pizza franchise they talked about how brutal, it is how hard it is, the royalties are too high. While these things, with the coffee business you’re selling, you said a million dollars in 1998 of coffee. That’s a lot of money back then. I think in 1998, I was at home skateboarding and listening to Limp Bizkit. It’s how cool I was in ’98. You had the coffee business? Did you sell it? Did you? Where did it go from there?
Jay Gabrani: Yeah. Basically, we’re going to start really tying it into real estate here and my own personal life. I started that business in ’98. And the first seven years, I was the owner and the operator. I was working in the business, the working in versus working on. I got married in 2004 and the first kid the first child you just saw Jayden, he was born in 2005.
Stefan Aarnio: That’s your tech guy there came [crosstalk 00:07:35]
Jay Gabrani: The tech department. Exactly. When he was born, certainly that was the defining moment in life. That was the life change. Before it was business always kind of worried worrying about myself and all that stuff. Then when you have a child there’s just someone else to think about. It’s important to me that I teach them and your question, basically to tie it back. What did you want to know there?
Stefan Aarnio: Where’d you go next? You had the coffee business, you’re working. You said, “In the business that’s hardcore man”. I mean I’ve been building my business here for 10 years and I said to somebody, they said well go Stefan and I said I’ve done 20 years of work in 10 years and I can imagine running your business and in the food services. You probably were doing 12-hour days, 14-hour days, 18-hour days, especially if you’re a single guy. You go home. There’s nothing, you just go back to work. I mean, that’s what men do without women and children. You said things changed when your little boy came along, then I guess you started getting to real estate.
Jay Gabrani: Yeah. It was a chain reaction. He was born August 2005, I then started searching, nothing to operate, no real estate, just business, any business. I didn’t know anything about real estate stocks, nothing like that, private lending. When he was born, then started educating and basically reading. You can see there’s a bookshelf behind me. That’s like one of 10 that I have. I have literally hundreds and hundreds of books which I read. And a lot of them were real estate based, a lot of them success based, business based, et cetera. But your question was, did I sell the business? So yes, if he was born 2005, I started educating about real estate, did my first investment 2007 and then I said, “I love this. I want to do this full time.” I approached William’s head office and said, “Yeah, I want to sell my business.”
Jay Gabrani: They said, “Well, before you sell, or before we let you sell … ” Very important point I’m going to make here, “Before we let you sell, you have to put in about $100,000 and renovate the bus so that we can resell it to somebody else.” The one thing I want noted is and that was my first big lesson in exit strategy in that I thought that if I had owned my own business, I controlled my exit. Franchises not necessarily.
Jay Gabrani: Let’s just say even though I wanted to sell in 2007 ’cause I saw the credit crisis kind of coming. I saw signals and I thought let’s just sell this and put money into real estate. Let’s just say that it took me four years before I was able to finally sell. I went through the downturn of credit crisis and everything like that because they controlled my exit. They stock me for two years before we were able to kind of do deal back and forth before they finally let me. I’ll never doing a franchise again and that’s how I exited. I did sell and I made money but let’s just say if I was able to sell in 2007, probably would exited with another 150,000 would have been over and above what I got.
Stefan Aarnio: Wow! The hooks do come out. The hooks on the franchise business do come out and get you at some point.
Jay Gabrani: 100%
Stefan Aarnio: I had a guy my show Nico Sanchez I don’t know if you know him. He’s a local Winnipeg real estate investor. He’s a pretty cool guy. He had a pizza franchise and I think they wanted a 7% royalty or something and he kept negotiating them down. I think they were taking 2%, and he still couldn’t make money. And they were coming out. I guess you might have seen the movie, The Founder. Have you seen that movie?
Jay Gabrani: Oh, yeah. Michael Keaton definitely.
Stefan Aarnio: Yeah. Did that kind of bring back some memories of the franchise business watching the founder?
Jay Gabrani: 100% and now you know what, Stefan. It’s like, once people want to talk to them, what … Let’s just say when you’ve gone through business, and you have a lot more experience, you just see things that other people don’t see. And I get sad when I actually hear stories about people who are investing their life savings into franchise companies, that quite frankly don’t give a shit about them. Like just they want to turn the store over, they want a royalty, they want to franchise fee. I would definitely encourage people, I’m a sure business guy. I trained my kids in business they’re being trained now that they’re expected by grade nine to have their own business. I’m a business guy so I believe everyone should be doing something whether if it’s not their main gig they should have a side hustle as a business and grow from there. You got to have that ability to kind of control your destiny and I just don’t see that in the working world or the franchise would for that so.
Stefan Aarnio: How are we training the kids? I had I was on podcast yesterday with a lady down in California and she said well you know Steph and you don’t have kids but when you have kids how are you going to train them to learn the lessons you know and I’m curious you got three … Is it three boys?
Jay Gabrani: I have an older boy 13 Jayden and two younger girls, three and [crosstalk 00:12:25]
Stefan Aarnio: Okay so you got a boy and two little girls you got three kids.
Jay Gabrani: That’s right.
Stefan Aarnio: How are you training them to have a business by ninth grade? I mean this is going for the parents at home. It’s going to change some minds because, I came from a family, immigrant dad, Canadian mom and it was interesting, up to a certain point business was encouraged. I was encouraged to print up some T-shirts and sell them, have a lemonade stand or whatever, but when it came out of being an adult, when the gloves came off, and it was adult business, they’re like, “No! No! No! No! No! Be a banker. Be a teacher. Don’t do business. Don’t go into sales.” How are you training the young kids your three little kids on how to be a business owner from a young age?
Jay Gabrani: Great question. Basically, this has been since day one. It’s not something I started two years ago, three years ago. Pretty well, since day one, when they were able to talk. I live in Oakville. Oakville is about 20 minutes west of Toronto and let’s just say that the number one thing I do to teach them is drive them around the neighborhood. The way I did my investing I was very tight focus. Every house that I bought and rented out is within a five minute drive of my house where I live in Oakville. When we drive the neighborhoods, this is also a heavily gentrifying area, orange transits, tree protection et cetera. Whenever we see these type of things, I’m talking to them about it. I’m talking to them about tree protection. I talk to them about real estate agents. They know about mortgages, they know about … They’ve been to my lawyer’s office with me several, several times.
Jay Gabrani: They’re just immersed in it. It’s an everyday thing, they see dad doing it and the osmosis of it all is most important. How I’m I training them for grade nine? I basically, Jayden is in grade eight. This is his last year of elementary school. I plan on homeschooling starting in grade nine and part of the homeschooling curriculum will be business. Something they love, something that they’ll enjoy, something that they will get valuable, valuable training. I’m sure a lot of your audience knows the cost of university these days has skyrocketed. When I went in the early 90s to Waterloo for accounting maybe 5,000 to 7,000 a year all in. The room living, board books all that stuff. Now you’ll be lucky if you spend like 20,000 and that’s all you got to spend. In my mind Stefan the way I tell people, parents is, “You’re all probably pushing your kids to go to university. That was the right advice 25 years ago.”
Jay Gabrani: Now with the internet and now just with the way the world is opened up, I don’t think it’s the right advice anymore. The right way to prepare them is to get them started early. I’d rather give them 50, $100,000 to start their own business, even if they fall flat on their face I think they’ll learn many, many more important lessons than if I sent them to four years of university and paid that hundred thousand. It’s all encompassing. It’s basically that is how I plan on doing it. But it’s been ingrained in them. My 13-year old can have a highly intelligent and advanced conversation about real estate with any adult, with any investor and so can my two girls pretty well but that’s how I do it. It’s just constant immersion and they … And unfortunately in the Gabrani household that’s non negotiable. That’s something that must be done.
Stefan Aarnio: That’s huge what you just said there, I posted a post on my Instagram school sucks and I was talking about the education system for ten thousand years in human history has been mentors and coaches. What’s mentors? Mostly, if you wanted to be a baker, you live with the baker, if you wanted to be a blacksmith, you live with the blacksmith and you’ll learn and it’s crazy. The go to school, get a job comes from 1930, the great depression, when there was 3% of people are 4% were attending university and that was valuable. I just looked at some stats right before our call and today, 33% of the population has degrees. We went from like a 3% of the population had degrees now it’s 33%, and those same degrees … We’re in Canada. We’re blessed to have government subsidized education, whether that’s a blessing or not.
Jay Gabrani: Sure.
Stefan Aarnio: And the American education is like 45,000 a year and you got off four years and then you make an extra dollar an hour working somewhere. I was on a feature article as an employer when people have degrees in their resumes I usually throw them in the trash because they’re not thinking anymore. Can you speak to that? Or do you think that going to school can cut your thinking or make you less creative or make you think in maybe the wrong way.
Jay Gabrani: All of the above. Obviously when I go to my kids schools right now, like parent teacher meetings or interviews and all that stuff. Literally Stefan, I could have been the school myself the school hasn’t changed in the 40 years since I went to elementary school. The schooling system is the same. The curriculum is the same. Maybe they’ve introduced a little more technology. The schooling system was designed for people to get factory jumps. You said it, it was like, go to work, get a break, which is training in school is called recess, take a break, go for lunch, or go back to work, go for lunch break, go back to work and take recess. It’s training people to be in the box. Whereas entrepreneurship-
Stefan Aarnio: Yes.
Jay Gabrani: 100%. That’s the other reason why it’s because … There are first of all in entrepreneurship, there’s no right or wrong answers a lot of the time. A lot of the time it’s situation and personal dependent and business dependent. Your business model. If you have a different business model you have to do different tactics, different strategies and those things are taught to you in school, of any sort. So yes you get hampered in my mind, by being taught these things and I have super successful friends, many of whom I went to university with but they’ve always been employed and they wouldn’t share the same thoughts that I do. But I just am so kind of into it, how the world has changed drastically in the last let’s say even five years. Okay now with the advent of Internet and mobile web, I think you’re doing a disservice to your children if you’re forcing them to go to university. I think you’re weighing, the thing you mentioned about the US. They’re coming out with debt …
Stefan Aarnio: Debt slavery. It’s debt slavery. You can’t even bankrupt out of it. And bankruptcy was one of the freedoms that America … I got my America sweater on, that America came up with, because in Europe you had debt prison. In the Middle East I’m sure in India, do they have debtor prison still?
Jay Gabrani: I don’t think so.
Stefan Aarnio: the British got rid of it I guess.
Jay Gabrani: It’s colonized for sure 100%.
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Stefan Aarnio: I want to get a conspiracy theory with you for a minute here Jay and I was really just thinking about this the other day. I trained real estate investors and one of the things I do is that I take people full time. If they want to go full time in real estate investing, they called the Platinum program, they do 12 deals a year, deal every month, whether it’s flipping 12 hours or 12 rentals or whatever, that’s what it takes me full time I think a deal a month. I’m training people and I have a theory and I want to talk to you about this a little bit that to be a full time professional real estate investor. I think it costs 100 grand of training. I have over 300,000 training myself. My top students, they go through over 100 grand of training before they’re good. You can go take a $2,000 course you can get a little membership to a club, but that’s not going to make you pro.
Stefan Aarnio: What do you think it takes to be a professional launch? For how much training does that take as 100 grand in training? What I see, what I measure that’s kind of equivalent to like a university degree in United States. Do you think that’s what it takes to be really good as a business person?
Jay Gabrani: Great question. Basically, let’s separate it, I think people, they throw around into one bucket, they throw education and coaching in the same bucket. To me, they’re totally different. So first of all, when it comes to education, and I was very guilty of this back in 2007/8/9, all the Internet marketing courses and all the guys. I was taking all of them, I was ordering them left, right and center. But the only thing that you do, and I needed to take them at that time, because remember when I said first kid was born, and I started reading. The two things I learned about was one was real estate investing and the other one was about online marketing and internet marketing, et cetera.
Jay Gabrani: These things don’t get taught. So your conspiracy is wise. You can take all the education you want. All you’re doing is increasing your potential, but when you get coaching someone who is side by side with you who’s been there and done that, what it is, I’ll just call it on the curve. The entrepreneurial curve it could take some people 10, 15, 20 years to reach success.
Jay Gabrani: Whereas, if you get a coach, that shortcut is enormous. So really the answer to 100% you should get someone not only to educate you, but someone to hold your hands.
Stefan Aarnio: Luckily.
Jay Gabrani: That’s the thing about the Internet, is that now coaches are available for everything, anything and everything that you can find. You can find them, you can get coached. So yes. And by the way, all the best athletes in the world, all the best business executives, everyone has coaches. I have coaches for different areas of my life. And let’s just say that you’re holding yourself and your dreams and your vision back if you don’t get coached on specific areas. I’m a big believer in it. I’m in that six figure area to education and coaching and training maybe not as high as 300. But yeah, you have to invest the best investment you can make is in yourself that 100% I believe.
Stefan Aarnio: Okay. I’m going to get to the conspiracy theory perks. I stopped before I got the conspiracy theories. I was thinking about this cost 100 grand to train a real estate investor. And that’s two to five years of real intense coaching, lots of training, negotiation training, sales training, marketing training, and just training, training, training. And I thought, man, this really is expensive, training wheels expensive.
Stefan Aarnio: And I have a training company and they’re paying me to learn and then a lot of people do well, that’s cool. But I was thinking men this is expensive. And then in my own company, I had 10 employees now, and had employees for six years. First four years, I didn’t really have employees, and then I started hiring. Now I have employs 10 of them, and I’m going oh, my God 10 employees. I have to train them, I have to manage them, there’s HR and I hate HR. I’m not very good at HR. I’m horrible at that. I’m training people and I’m finding that the talent pool out there in the wilderness if you will, is not that good,
Stefan Aarnio: The talent pool people don’t want to sell, they don’t want to negotiate, they don’t know how to communicate, all the real skills, all these resumes in front of my desk, I’m like, “Dude, can you sell? Can you please sell for me.” I can’t do anything, here’s the conspiracy theory part. Now. I figured something out. I started hiring my own graduate students into my company. Number one, they knew the product.Number two, they were trained, they’d spent huge amounts of money training themselves, they’re doing deals.
Stefan Aarnio: I know, I built my company out of all these successful students, which is something I should have done from the beginning, but I wasn’t smart enough for that. What I realized is these people that are working with me now they spent 80,000 on their education 70, 30, 20 some amount of money and they come in trained and I’m getting these pre trained people from my own university and going, Oh, this is great. And this is what Carnegie and Rockefeller must have designed 100 years ago when they created the university. They said we don’t want to pay for training to train people for 100 grand that’s a Carnegie and Rockefeller probably thinking the big industrials. We don’t want to train people so instead we’re going to create a university make everybody go to it. They have to pay. They have to train themselves, if they work out great, will hire them if they don’t who cares.
Jay Gabrani: Yeah.
Stefan Aarnio: And I realized, I got them on the other side of the fence. Now, I used to be that punk kid going to the university. I hated every minute of it. And now I’m on the other side of the fence. I’m going what a brilliant invention because the employee has two papers on training. If he doesn’t do anything with it. Too bad. You can’t bankrupt himself out of the debt.He’s got the debt forever and the industrialist on the other end gets that pre trained person with 100 grand of sunk training or whatever it costs indoctrinated, jumps at the bell jumps at the buzzer, knows exactly what to do. They had 18 years of indoctrination, and these people come off the assembly line ready for the industrialist on the other side. You see what I’m saying with conspiracy theory.
Stefan Aarnio: It’s a 12-year curriculum from kindergarten to grade 12 not ’cause there’s 12 years of stuff to learn. That’s like three years of stuff and four years of stuff. It’s indoctrination to make you obedient so the industrialist on the other end of the table, which is me now, can pick somebody up and just put them into the machine. What do you think about that?
Jay Gabrani: I think we brushed at it earlier, when school was designed 50 years ago, this little system hasn’t changed the curriculum hasn’t changed so you’re talking about university level. It starts at elementary school. Yes, I agree with you 100% that the way people were brought up first of all, they were brought up to be financially illiterate. Financially dump. That’s how most people unfortunately are. They were never trained. We were never trained. Why is there not a school course about finance? Why is it not school about budgeting, et cetera. There’s someone that wanted you to kind of stay financially dumb. When we talk conspiracy, let’s start talking about the advisory industry, financial planning industry, et cetera.
Jay Gabrani: And when we talk about training you to just be an industrial working a job. Yes, that’s exactly how this was positiond. We can talk about conspiracy theories and the advisory industry, the pharma industry, the banking industry. Yeah, we could go on and on about that, but I agree with you 100%. That’s the way it’s been set up. And that’s why I take it so seriously. My role as a father is to make sure my children do not fall into that.They won’t fall into it. There’s no chance.
Stefan Aarnio: Jay, let’s talk about you know your independence and stuff because you know being a guy like you who’s in real estate investing you got your mortgage broker practice have heard about, tell me a little bit about what are some of the things you’ve done to make yourself independent of some of these systems so that you can live the life you want on your terms. You’re able to be a single dad, you’re able to reject some of these ideas and put your own ideas and what are some of the fundamental financial things you’ve done to have your own independence and freedom there?
Jay Gabrani: Okay. First of all, let’s just start with, I’m thinking Grow Rich Guy that was the first book I think I read after my kid was born.When I look at that stuff, the first thing in that is desire so we can’t coach or we can’t teach desire. Alright? So like I said before my child, my first child was born that was a different lifestyle. That was like bachelor. Right? Every night was a Saturday night, one of my other businesses out the nightclub.I was in party mode, after the kid was born then it became all, Wow ! This is serious stuff.
Jay Gabrani: And the desire let just say, that the day I held him, he was born. Whatever kicked, something kicked and that inner desire just became really strong. Then one step is the inner circle there’s the one that’s the first and foremost. Then everything you do, the books you read, or the courses you attend, the coaches you hire, it all flows from that. I think the starting point is you. You just have to want it and that’s why people these days, unfortunately you don’t see a lot and that’s why I think that for guys who have ambition and drive.There’s not very much competition to be very honest with you. People are lazy people are more into their phones.
Jay Gabrani: I have a saying with my kids. Yes, skills, pay the bills. Alright, you’ve got to learn right skills. And the other thing is, I tell them you better spend a lot more time on your education than your entertainment. Entertainment is everything that we do. Internet browsing any social media pretty well, all of the YouTube videos that my kids watch. I keep trying to tell them that’s just pure entertainment. All right, you can go through your whole life entertaining yourself and you’ll get nowhere. Educating yourself, not universities though. Educating yourself all the subjects that you talked about.
Jay Gabrani: Negotiating sales skills, alright? I buy courses not even for myself sometimes for them. That’s going to be their home education is Brian Tracy. How do you sell stuff like that? That type of thing. Digital marketing all the digital marketing guys. These are the courses that are super important and yes starting desire everything else flows from it but you got to want it. Once you want it then I think anyone’s unstoppable. Everyone has genius but it’s really [inaudible 00:30:35]
Stefan Aarnio: I want to tell you desire for a second because I coach people all over the country can US and I have a one type of like rock star 5% of the people who sign up with me are just absolute rock stars and we’re talking about the demographics of the show a little bit before we went on air and I said I have an 88% male audience right now, 12% female and most of the females are non childbearing.They’re retired, they’re divorced, their kids are grown up.They’re all ladies that something happened to them and they’re now in the masculine role of work and making money.For some reason young females just don’t care to listen to flipping houses and making money they want their husband to go, their boyfriends to go, they want a guy who does it but they don’t want to do it. Cool. Whatever.
Stefan Aarnio: With that being said that 5% of guys I’ve noticed something very, very congruent with what you said there about desire.The best students I have are married men with kids. Married men with kids. Nobody beats a married man with kids and it’s almost sad nowadays because I’m a millennial, born in ’86 and for the young people, the millennials nowadays marriages differ differ differ differ. They got this hookup culture, they’ve got Tinder and people just hook up and hook up and they’ve chain monogamy or polygamy or some sort of and thing.
Jay Gabrani: Yes.
Stefan Aarnio: And a lot of guys don’t get to that married men with kids. It’s interesting when I coach a guy, a married man with kids, like you said, when you had that baby and you held that baby.it got real.The desire got real. And then like a single young guy is 18 years lives with his mom or something. That guy no chance.
Jay Gabrani: Yeah
Stefan Aarnio: What do you think that switch was in your in your brain you said like a switch flipped and so many men have said that when I held my baby it became real as this is it. Why do you think that changed everything? Why married men with kids?
Jay Gabrani: Basically the simple answer is, it’s because it has become a lot more than just you. All right and it’s about a lot more than just you. In the bachelorhood lifestyle, that first like 30 years of life. Yeah, man, I was just interested in, where I’m I going out? Who’s the young lady that’s so in love. That kind of stuff. Then when it becomes real you’re like, “Oh, oh, I’m responsible for that. I’m holding the baby, I’m responsible for you, and what do I do?” That is really the key for me. I didn’t think about it before. It didn’t enter my mind space before. And that’s not just with financial that’s with other things. That now as a parent, seems I might care about today. 15 years ago, it wasn’t even on my radar. I think the number one thing is certainly it’s become a lot more than you and let’s just say in our culture, the father is a very strong individual and I take it super seriously that the father’s got to be a leader and the father has to lead by example. And when people don’t do that, I call them out on it.
Jay Gabrani: To me, I believe like if you are responsible enough to be a sperm donor, basically, then you got to be responsible enough to be a dad and that’s what I tell people. It’s are you a sperm donor or are you a dad? Are you a flop?
Stefan Aarnio: Speaking of sperm donors Jay I mean, the stats are against, fathers and marriages 50% of people in the Western world I think it’s some of the countries like Sweden and stuff. It’s even worse more than 50% divorce. What kind of effects do you think that has on young people to not have fathers? You’re saying, in your culture? Father are real backbone?
Jay Gabrani: Yes.
Stefan Aarnio: What kind of effect do you think that has on people when they don’t have a father? And you’re a single father right now, what does that do for the young people?
Jay Gabrani: Well, you know what, this is not to discount anything that the mothers provide all right?
Stefan Aarnio: Oh, no, no, no, not at all man.
Jay Gabrani: Mothers are awesome. Mothers have things that they do.
Stefan Aarnio: But there usually is the mom, with kids, the mom usually gets the kids. Dad is usually out of the picture. That’s just how the laws work usually, mom gets the kids, dad’s out and then when dad’s out of the picture, a whole bunch of different things happen. I just want your perspective on that.
Jay Gabrani: I have not in my personal life, but in family of mine I’ve seen broken marriages. I’ve seen what they do to kids. So first of all, a child who is the product of a broken marriage, sometimes they end up blaming themselves. Which I think is the worst, worst thing and they don’t tell anyone about it. The parents don’t sit down and explain to the child, “Hey, listen, this is not about you. This is about us. We’re not getting along well. So A, is now they don’t have a role model. They don’t have that fatherly figure to bounce the ideas off of, the things that are father do provide the father’s not in the picture, it ruins kids. To me you don’t have a role model, you don’t have a guiding figure, the guiding light and sometimes it leads to mistrust other people and sometimes leads to too much trust in certain people trying to replace a father figure.
Jay Gabrani: I think not having a dad, not having a complete family unit, it will damage you in one way or another, then it’s just as you get older and more mature, and hopefully you realize the things before it becomes super problematic. But I see a lot of things … And by the way, you mentioned the marriages. So 50% of the divorce rate, and I’m going to hazard a guess that of the 50% that stay married 25 of them, like a half of those guys are just not that happy. They stay together for the kids or whatever. They’re there. So it’s a tough game the married life. But it’s once you have kids … I got married because I wanted to have kids. That’s the plain and simple truth. I didn’t get married ’cause I wanted to spend the rest of my life of one person, it wasn’t that romantic notion that other people may have. It was no, no, it’s 30 I was 32, 33 whatever it was about I want to have kids now, I want someone to carry on my stuff.
Stefan Aarnio: Yeah, well, that’s like Walt Disney they always have the Cinderella movie or Snow White and with the marriage and then you never see what happens after, it’s happily ever after the end done.
Jay Gabrani: Happily ever after is the biggest lie ever told.
Stefan Aarnio: Well there is no end.
Stefan Aarnio: Jay let me ask you this, with with your real estate career. What have you invested most in? Have you been doing multifamily? Have you been a flipping guy? Have you been wholesale guy? I know you’re in the mortgage game. Tell me a bit about your investment strategies. And we talked about family. We talked about where you started, tell me a bit about the investor strategies that you do and how other people can get involved in those kind of things.
Jay Gabrani: Fantastic. So basically think of the chronology. So 2004 married 2005, first kid, all the reading and everything, and then I got out to some events. Rain was the first kind of real estate education I ended up getting. So out of Rain back then in 2005,6/7, I’m sure you remember, Edmonton was super hot because oil prices were going triple digits. From Ontario I started with buying both townhouses up in North Edmonton North 166 av. But seven you could not have bought any higher than I did, I bought a three bedroom towns, the numbers were like 275,000 in 2007 and credit crisis yet within six months they fell underneath 200,000. It was awful my first investment experience was horrible. However remember now by that time my second child was born so here I am sitting with my wife at home having kids busy, busy, busy and be running the business [inaudible 00:39:28] franchise and me starting this real estate investing and absolutely bombing on the first one.
Stefan Aarnio: First stress man, this is the stress.
Jay Gabrani: At that point in time I don’t know anything about the economy I don’t know anything about credit crisis coming. I didn’t know all that stuff at that point. I wasn’t reading the way I read now, and I wasn’t in tune the way I am now. So I got caught, but I had spent so much time investing in learning reading going to the events, seminars, et cetera. I was like, “That can’t be all there is, there’s got to be more than that.” And the one book that changed it, I don’t know, it’s not on this show. It was Acres of Diamonds. When I went through those failures in Edmonton and read Acres of Diamonds and they’re like, there’s diamonds and gold mining right in your backyard. Even though I didn’t moved to [inaudible 00:40:22] in 2006, I never considered it as an investing area. But then when I read that book, and I said, “Let me change … ” This is youngest child basically.
Jay Gabrani: Okay [Angelicabut 00:40:34] not now, mom will [inaudible 00:40:34] sweetie. All right I’ll call you very soon.
Stefan Aarnio: Makes it real.
Jay Gabrani: Oh, yeah. Yes. You just give them [inaudible 00:40:43]. Sorry. I lost my train of thought there.
Stefan Aarnio: So we’re talking about investing in your own backyard.
Jay Gabrani: And that’s when things started really taking off. So when I started in Edmonton Stefan, I put my own money in and I lost it basically immediately. Within six months, the equity was gone. I didn’t sell, the mortgages were worth more than the houses by the time we were set and done there. But I switched to [inaudible 00:41:09] didn’t have any money left, that’s when I brought a joint venture money and I just said, “Guys … ” My first venture partner was my best man named Phil. I said, “John look men, I bombed in Edmonton. It didn’t go well. But I spent so much time learning. And I’ve done that … ” You know Rain has the gold mine score card?
Stefan Aarnio: I don’t, know Rain man. I’m totally foreign to that. So you’re going to have to tell the people at all with the gold mine scorecard.
Jay Gabrani: So they have a system which is basically how do you evaluate a real estate investment? And there’s 20 different factors. And they have it all in one curve. So Don Campbell’s advice who’s kind of my mentor and guru in Rain, is no matter where you’re looking to invest, take the card and go through the work, do the research and do the work. Well, out of 27, a good thing was seven or eight takes out of 20, was a good market. Also the way I looked at it was 16. 16 takes out of 20, were good.
Stefan Aarnio: It’s hot.
Jay Gabrani: That’s hot. So then that’s where I concentrated. And when I say focus, literally seven. It was a one kilometer by two kilometer area. I knew every house. I knew every sales price. I knew the tenant profile. I knew the buyer profile. And we started buying and basically it was all that tight, tight, tight focus. Someone brought me something from five minutes away. I would just say, “No, I don’t know that area. I know south Oakville better than north Oakville and bring the stuff in south Oakville. That’s what we ended up doing. South Oakville just happens to be a gentrifying area bungalows, 50-year old, 70-year old bungalows sitting on 60-foot wide blocks. They’re all being torn down, big houses up.
Stefan Aarnio: Money yeah.
Jay Gabrani: Money.
Stefan Aarnio: Those bungalows, those Canadian bungalows, those 60s bungalows, I’d always making money on those Autocross in Canada. That’s a Canadian dream, the 60s bungalow.
Jay Gabrani: They’re so beautiful and they’re nice big lots. So when I say my simple strategy was, we buy three bedroom bungalows on 60 by 120 foot blocks down the street from big brother and we hold for the long term. Big Brother meaning or renovated house, 3500 square foot house that was torn down, it was a bungalow flat. As long as you’re down the street from one of those guys everything was great. So the lessons I want your audience to take away here please is, one is, decide on your strategy, flipping long term buy and hold et cetera. Then really focus. All right. That’s the best piece of advice I can give investors is you don’t want to worry about doing 20 gold mines scorecards in all these different markets. Figure out a market that is good, with your coach. Go through it with your coach. Go through your education, determine the market. Once you’ve determine your market and your property types, focus man, just focus.
Jay Gabrani: I focused on a very small area. I focused on one property type. I focused on joint venture partners, what does my ideal joint venture partner look like? It was going to be someone who knows me, someone who has a T4 jobs, qualify for mortgages, someone who’s got money or access to a line of credit, but they are time challenged. All joint venture partners that I ended up having, they fit that criteria. So you have to know what you want, and then it’s a lot easier to look for it and get it. So buy and hold was the answer to your question. That was my model, flipping stepping, I’ve done to family projects here in Oakville, my in laws where we’ve added second stories. So pretty big projects, but me myself personally no flipping for profits simply because it’s not my skill set. That’s another piece of advice. Match, match your skill sets to the type of investment opportunities you’re seeking or you’re going to do.
Jay Gabrani: A great example. I’m sure you’ll appreciate this. It was a 55-year old executive. He worked at Air Canada busy guy. Not a pilot but traveled around a lot. He had a coaching call with me and he’s like, “I want to do flips.” I’m like, what do you want to do flips for?” This is a suit and tie guy, okay like what do you want to do flips for if you’re always traveling you have no experience with flips and like you don’t have the time? Well that’s what I heard brings money. Well different things can bring money. So the best thing is match your skills. I have a saying that I teach my kids is, if you don’t have a competitive advantage in whatever you’re going to do, don’t compete in it.
Stefan Aarnio: Money. That’s good money right there.
Jay Gabrani: It’s just the way it is. So I don’t have any … I’m a two-way pen guy now. I don’t shovel my snow. I don’t mow my lawn. Who cares? Forget it. I’ve never not never, but I can’t remember the last time I lifted a harmer, it’s probably been 20 years. So I’m not in that thing where I don’t enjoy it, I don’t like the detail behind it. But if you are that type of person, where maybe you are trained, you’re a plumber, already an electrician, and you work on houses a lot. I think it’s a natural progression, get into flipping, get into fixing and flipping, et cetera. So the audience please match, match what you’re good at and sometimes that takes work through step. You have to know yourself. And that 55 year old guy even though he was successful in his career, he didn’t know himself in terms of this is really the best fit for my, existing resources. So that’s the best piece of advice I give, match your strengths to what you invest in and understand about it.
Stefan Aarnio: There’s so much wisdom and what you’re saying about zeroing in on the neighborhood. That’s something that I’m doing right now. I’m saying this one neighborhood like a little square on the map. I’m like, “This is where all of my deals are going to happen in the next three years. And this is it. I don’t want to go outside this one border. This is it. And I have not … My office is here, I already own several houses on one street. I’m just buying them piece by piece because this is where everything’s going. I love what you said too, I don’t know if you know this but it’s the Burger King strategy.
Jay Gabrani: Down the street from McDonald’s.
Stefan Aarnio: Down the street from McDonald’s, you said there’s a 3000 square foot big crazy McMansion. I’m going to go next to the McMansion and just have the ugly little stepchild of the McMansion right next door and that one beautiful McMansion is going to make your house lift up.
Jay Gabrani: I told my joint venture partners that, “Guys, when I went in Edmonton, I didn’t have an insurance policy, I didn’t have backup in case something went wrong, which it did. Whereas in Oakville, when I told them about we’re only going to invest down the street in big brother the way I positioned it to them seven, was that’s our insurance policy. Is that prices are sticking downwards and as long as you’ve got big houses getting put up. It’s tough to the little bungalow to go down in price. So that was really the … That was necessity. We didn’t buy any houses if there was no big house down the street.
Stefan Aarnio: I love that. It’s ultra niche Nice. Real estate is ultra niche. It’s great. Okay, well, let me ask you this. I mean, we got to wrap it up here pretty soon. I got a couple questions I’d love to ask everybody though. I’m going to run you through. Let me ask this. What’s one moment where you thought you were going to fail? And all this was going to come melting down and it’d be over for Jay?
Jay Gabrani: Oh, well, we’ve talked about it, it was basically let’s say, early 2008, I had made those investments in Edmonton price of oil went from 135 down to like 40 bucks, the prices of the properties went below 200 and my second child was born. Stefan there was a lot of days where I had to just kind of take a walk in the park just to clear my head ’cause I didn’t know what was going to happen. Sometimes I’ve had other occasions failures in businesses et cetera. But that one point in time, that was when I didn’t have any experience of being an entrepreneur and a father at the same time. I had some entrepreneur experience but the father thing I have a child at home who’s 18 months. Then I have a second one who is a newborn and I look at my bank account and it’s almost close to negative. Let’s just say man there was a lot of stress there.
Jay Gabrani: But then you just fight great, you decide you never ever, ever give up. That’s the thing about … Remember you said, your best clients are fathers, married fathers with kids. What was I supposed to do? Was I going to give up? Was I going to say, “Hey, man, all right kids, you know what? Thanks a lot. It was nice. But you know, I can’t do this.” But you can’t do that. That’s just to me, why did you … What’s the purpose of life then if you’re going to give up at that point? So fought through and that’s kind of where it was.
Stefan Aarnio: You’re going to get rich or die trying.
Jay Gabrani: That’s it bro. That’s it man.
Stefan Aarnio: Jay. What do you think? What do you think causes failure in other people? You see people or you’re coaching people you see people wanting to do real estate or whatever business what causes failure?
Jay Gabrani: I’ll give you a couple first of all it is that matching thing we talked about. They don’t love themselves well enough to pick the investing vehicle that they should be in. All right that’s number one. Number two, their minds … So they don’t know themselves but then secondly, a lot of people’s mindsets about investing and about money it goes back to that swing system we were talking about that’s like 50 years old and it hasn’t been changed. A lot of people’s money mindset and investing mindset is decades old. Those are the two big things that I see that just hold people back. You just think about it those things can change in a second but the mindset. Mindset stuff can change. It’s your choice and you make a choice that thing can [inaudible 00:50:52] and your listeners will do as well. So that’s really the big one, those are the big two.
Stefan Aarnio: Love it. what’s the one thing that young people need to succeed these days? We’re talking to somebody who’s maybe 20-years old, 18-years old, maybe a millennial 25, something like that. They got a totally different mindset than some of the other generations. What would you say to them to help them succeed?
Jay Gabrani: Very good question. First of all, is we have touched upon it here in our talk. One is, it’s not about … See millennials have been brought up with the mobiles, with the phones and they do a lot of things, they don’t want anything offline, they want it all online. One thing I will reach out to them and say, “Listen, it’s not about multitasking. All right, your success will be determined on your ability to single task on your important thing.” And the other way to say that is focus. So for young people it’s what we talked about, get your strategy in line first. Don’t go running around just doing all this crap without a strategy. So back it up, reflect, get to know yourself, get your strategy first, get a coach execute. But now at least you know what you’re executing on, the focus. If you’re like, “I’m going to do all kinds of stuff and you multitask, multitaskers Stefan, they’re not going to get anywhere in life, man.
Jay Gabrani: Those are the folks who are great in many people ’cause they can do lots of things at once. That’s not business people. Business people aren’t great at doing lots of things at once. I don’t know people know that. They’re good at doing what they do well, and they surround themselves like 10 team members for yourself.
Stefan Aarnio: I’m a high maintenance man, dude, when I go to the airport, I like three suitcases and like a girl carrying my stuff.
Jay Gabrani: Yeah, that’s how it should be man, people every role. People for every role, and then everyone gets their own level. the way they want it. If they want a certain level, they’ll reach it if they don’t stop. But if they stop and they quit et cetera man, hey, their loss.
Stefan Aarnio: Awesome. Well, thanks for being on the podcast, Jay. How can people get in touch with you if they want to know more?
Jay Gabrani: Yeah, sure. So anyone who’d like to get in touch, you can email me at jay at jaygabrani.com I figured you’ll put it in the show notes or something like.
Stefan Aarnio: Yeah we’ll transcribe it we’ll put it all there. This is for the guy driving, they work two hours a day on his commute man, he wants to hear where he can go.
Jay Gabrani: Love it yeah so that’s the best place and yeah I welcome especially like fathers, I love coaching fathers on one side. And it’s not just about real estate investing, it’s about, other asset classes. How do you allocate your assets in real estate, in stock investing, in mortgage lending in selling put options? These are all strategies which I use to pass and we try and make some money and that’s more what I coach. If people are interested in talking about that. Yeah, feel free to reach out.
Stefan Aarnio: Awesome thanks for being on the show Jay. Respect the Grind.
Jay Gabrani: I love it. Thanks a lot, Stefen. Look forward to maybe [inaudible 00:53:59] again some time.
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