Episode 4 – Scott Gannon from MGM Wealth

You’re listening to Your Happy Place Podcast. Each week we will be bringing you interviews with real estate experts and investors. The show features interviews and discussions on real estate investments, property management and inspiration. With your host Jenna Ross.

Jenna: I would like to say welcome to Scott Gannon. Wealth Building Strategist with   MGM Wealth. Hi Scott.

Scott: Hi Jenna, thank you for having me.

Jenna: Can you tell us about your experiences as a real estate investor.

Scott: Well, I am a little old in that area. I started studying in it in the 2000’s. I spent several years studying it as an alternative way of building wealth as I was working as a financial advisor and after 2008 I started studying a lot harder at it and started studying investing in the US as well. I started doing that did it for a couple of years. I took a course in Chicago in 2012 and it was specifically on multi family investing in the US. My wife and I both went down,spent six days there,learned a wealth of information,came back all excited,gathered up whatever capitol we had,we refinanced our house,line of credit make sure we had capitol ready to go. We ran into some road blocks just starting off,even as late as 2012, US banks especially to foreigners weren’t real forthcoming with mortgages.

We kept at it and eventually at the end of 2012, December we closed on our first property be bought a ten unit apartment building in Florida. A little over fifteen months later we bought another twelve unit in Florida as well. We did really well with them,they cash flowed well. They gave us growth because we bought them at a good time and in 2017 we closed on the last one 2016-2017 we sold those to bring capitol back mostly because we were making money not only with the growth of the buildings, the exchange was very favorable when we bought them and of course we made money on that as well so we were able to bring a fair amount of capitol back.

Now going backwards again maybe we should have been looking at refinancing because they were making money. We did do well on them took some lumps along the way,went through some property management headaches which I guess are inevitable being 3000 miles away. We did well with it, we brought money back here we since bought a 22 acre of development lands. We’re working on commercial development that’s a bit of a headache as well. The city doesn’t do anything unless all the ducks are in a row and we are living and learning that all though we are partners on this and there are people with more experience then us in development doesn’t bring cash flow real fast. But we are still going and actively looking.

Jenna: That’s excellent and what a big project to jump in to the project in the States, that’s very brave of you. I have always been curious about that certainly in the past it’s been something very enticing and something I wish I knew more about,I would have liked to had that experience just to know what that’s all about and like. That is really exciting.

Scott: What I did learn and was that and again these were some, they were the management from a distance I think works better with size and I just don’t think that we were big enough to get the management cost or inherit cost one way or another they paid we had some hiccups along the way, we went through a couple property managers we had to either dig in our heels and drive this to a whole lot more units or bring it back home.

We decided to bring it back home so that Tammy could be more active with it because that is more her thing,I do a lot of the calculation part of it.

Jenna: The analysis so you guys make a great team which is very important.

Scott: It helps there for sure.

Jenna: Yes. Moving on to what you provide for your clients in wealth strategy, Who would be your ideal client?

Scott: My ideal client is a business owner or at least part time which if it is part time is almost always real estate. He must be opened mined, coachable and decisive. Reason I say that is the way I do things is going to be, I do the opposite of what other financial advisors do that is why they have to be open minded because it’s not what something they necessarily have heard before from an advisor.

Many of my clients are actually realtors that invest as well which makes them business owners on both sides of the fence. They are business owners when the start, whether they are investors first or realtors first they are business owners.

Jenna: Interesting. How has you being a real estate investor yourself and having that experience enable you to help your clients?

Scott: Being a real estate investor is a business. Understanding the new challenges of owning a business enables me to me to relate well to their aspirations and easily see how they can be improved. I have been a business owner myself right from the start. I have never actually since graduating from university I have been employed anywhere. I have always been in business myself either being a financial advisor or a real estate investor I believe I bring a very unique perspective from both sides of the fence whatever business you are in I can certainly relate.

Jenna: That is really neat because I don’t know and I can’t think of another financial advisor that I have some across that openly invests in real estate, I think it is an asset for sure.

Scott: A lot of the times they may but they won’t necessarily share either.

Jenna: That is true too. How do you help to accomplish your clients goals?

Scott: First thing is mindset. This goes back to being open minded or the ideal of being open to new ways of thinking. Once clients understand this we work on control. That is with cash flow and capitol always being in control of both when you are accumulating and when you are deploying you always need to be in control of your capitol. When you are in control it tremendously reduces your risk.

Jenna: One thing I am kinda thinking and hearing a lot these days from a lot of financial advisors and finance people is to right now especially is to have a lot of cash on hand. Can you speak to that?

Scott: Certainly, that is the thrust of the ways I do things. Cash or I like to define as liquidity because cash is inherently liquid. It is what you have available to you is liquid you can lay your hands on it in lets say 3-5 days or zero days. The opportunities that you come across will be that much more exponential if you will if you can act quickly and real estate is no different then any other business or investment vehicle in that way. The best gains come from jumping at opportunities. That doesn’t mean you do it carelessly obviously you have to do you due diligence. Those who can move the quickest gets the best deals.

Jenna: How are you adapting to the current COVID 19 situation?

Scott: Me adapting to it, I am in a very nice prison here. It’s a three level so I am living a dream as a prisoner I guess. From a business perspective adapting really hasn’t changed much for me in that all though I love being eyeball to eyeball with people and meeting  people, actually going to your guys meet ups physically obviously I have been to one on line, the technology today in my world allows me to keep working. I have been busy and actually first going off,getting first locked down so to speak the first three weeks I was just as busy if not busier then I was before but a lot of that was things I had in the works before we got locked down.

So adapting I am a little more savvy with doing stuff online being visible. I have done a few clients in Ontario and Newfoundland that I deal with and was constantly was afraid of doing the Zoom idea and I don’t know why I was afraid I was just better off on the phone. It was just something new to me that got thrust on me now I can’t imagine not talking to client A in Oakville without actually seeing him now. Some of the adaptions have been very positive that I am a little more comfortable sitting at a screen.

Jenna: It is something that everyone has kind of had to adapt to and personally I have actually enjoyed it with team meetings and Zoom calls that we are doing now, our listeners will here the audio piece but there are a lot of nonverbal communications that come across and especially if you are talking sales or guiding somebody through something you need to see their body language, are they understanding what you are saying or completely confused, are they folding their arms and saying no thanks.

Scott: Exactly and you talk about doing things on screen or see things on screen. As you know my lacking in text savviness I brought a white board when I did my presentation at your meet ups and go figure there is a proviable white board you can do online just go to pf animator is my new best friend I can actually draw pictures. Jenna, that one was created for you. That’s great. Scott, they were thinking of me when they created that.

Jenna: So what is your number one goal you have when your are working with your clients?

Scott: The number one goal is for them to think differently about money and banking. I haven’t really brought this up yet but the thrust of what I do is help people control their money but also to think like a banker and they must learn to control the banking function of their lives. A big thing that people don’t necessarily think through and if you do you certainly see it very clearly is what is the most important business in the world? And that is banking because nothing else happens without banking. You and I can’t do business together without a bank involved. Banking is every where. So if you can control the banking function in your life by controlling your own money you are going to be a step ahead. The number one goal is to get them to think differently about what I am bringing to the table.

Jenna: Excellent, I never really thought of banking that way, that nothing happens without banking and that is certainly true these days. What unique perspective do you bring to your clients that’s different from working with a typical financial advisor?

Scott: Again, the thrust is mindset and control. When you think financial advisor you likely think asset gatherer I do the opposite. Instead of putting money away and hoping  that position for equities position and control. Again it goes back to that equity we talked about earlier there about holding cash and having equities. Having equities and control of your assets at the right time is paramount to above average or exponential wealth building. When you are in control it also helps you eliminate risks or at least tremendously reduce it. Put it another way rather then planning a second area that I think that makes me different then the typical is rather then planning for the end of working or planning for the end or putting out of service, I don’t know if you know this but the definition or the meaning of the word retirement is defined to take out of service. So for all intent and purposes your active life is dead. So I don’t like to plan for the end of working days I like to tell people is to more help them with a lifestyle, more here and now versus waiting and hoping.

Not that tomorrow isn’t important but if you take care of things properly today basically expand your lifestyle believe it or not will help you down the road. Most of your listeners will understand that anyways if they are involved in any kind of rental real estate. That is the ultimate inflation protector and income protector because as long as you do your due diligence and go into an opportunity like that coming out with cash flow it’s only going to get better with time. Not that isn’t not without risk obviously there are hiccups along the way something like what we are dealing with now could be a real big hiccup. Generally speaking it’s a vehicle that’s going to give income for as long as you want it and it will be an excellent (inaudible).

Jenna: Certainly from personal experience were are very happy with our real estate investments and we’re happy that we have them. We would be in big trouble if a lot of that money was in the stock market in something like oil all kinds of things. It is something that even stands the test of time even right now because people need homes. They need to rent homes.

Scott: You start bringing up the stock market I have a few clients call me lately. This doesn’t happen to me very often by the way people actually calling me and thanking me. When things are good I never hear from people but when things are bad I hear from people. So I have actually had people call and thank me has been helpful. I have had some people frustrated sitting in cash and they weren’t my suggestion to them was it’s coming, it’s coming. . Something is going to happen, I have been saying it for three years so I had become the boy who cried wolf for a couple of years but they are thanking me now because cash doesn’t go down.

Jenna: We were kinda due for something like this to happen since at adage. You know it was going to come, it’s going to come again it is very cyclical. But here we are. One thing that I wanted to ask you. If you could provide one piece of advice to real estate investors who are newly getting started and looking at investing in real estate what would that be?

Scott: I guess I would go back to this banking thing. I would get them to thinking like a bank. Take some time to study and gain a clear understanding at how banks make money. Two words to keep in mind our control and velocity. Banks don’t let money stay still. Banks use what we call velocity. They are constantly moving money. You deposit money into your bank account, they are lending it out and as soon as the person starts paying s it back they are lending it out again all the while and that is what velocity is multiple use money and I talk a lot about multiple use money probably a little more in depth than our conversation today but the multi use aspect if you can position yourself in that way you are going to be in a great position as an investor.

You mentioned there about newly starting with someone just starting in real estate the first and foremost thing I would, it is one thing about mindset or thinking like a bank but real estate investing takes education just like the way I teach people how to manage their money it’s education. Real estate absolutely education.

Two things that I would absolutely say to do is pay attention to Facebook groups like you guys have, the investors facebook group. People there are willing to help all the time you just have to be willing to ask questions. But first and foremost it’s I’m a walking billboard for Rich Dad Poor Dad. That book is, it’s funny that book is recognized as the top selling real estate book of all time but if you ask Robert Kiyosaki he tells you real estate just happens to be the vehicle that he used. The book is about mindset and thinking like a business owner. That’s what he tells you the book is a business book not a real estate book but it is the top selling real estate book of all time.

Jenna: It is excellent and it is certainly the book that got a lot of people started, myself and Greg included. That book was definitely big up on the inspiration list for getting us going. Can you tell us a little bit about the work that Christina helps your clients with as a cash flow specialist?

Scott: Christina she is awesome. Christina is what is called a certified cash flow specialist and what that means is that she has taken a course to understand how people manage their monthly cash flow or weekly whatever and she helps her clients gain perspective to where they are. A lot of times there really isn’t anything wrong except maybe the timing of the payments or the timing of of deposits or it maybe as simple as say your car insurance paying it annually versus monthly if you know you have the capital to do that it will save you money.

There are certain things that, she basically gets into the weeds a lot of things that I can help people with myself but Christina is just way better at it. She can get into the weeds and understand very quickly how to bring some thing to the table whether it be just a method of getting out of debt or getting cash flow positive. I have had clients that I brought to her they send in their financial questionnaire and they are negative a thousand dollars a month so after she goes through it and has a couple meetings with them the next thing you know there is money on the table. She is a bit of a wizard.

Jenna: That is awesome and I have personally met her and she is really exceptional and that is a very important thing to look at your finances your business finances and a lot of business are taking a look now and trying look at their spending and finding that they spend a lot of money on stuff that’s not really adding value they just let slide, different subscriptions just different Amazon Prime maybe not ordering from Amazon. Who knows,it all adds up.

Scott: She takes it and she teaches people. It’s funny her business, she took this course 3,4,5 years ago and she has even evolved since then. She does it herself, she lives and breaths it. She offers tips and tricks she uses herself to her clients. When it comes to part of her groceries she will get a side of beef and freeze it. She doesn’t buy meat in the grocery store. Those kind of things depending on how eager you are to be ruthless with your cash flow. There are things you can do that really free up money that people just don’t necessarily think of nor should they. People are busy and that is why certified cash flow specialists have something to offer.

Jenna: Yes a second set of eyes to look from outside in a non judgemental way. And the idea of buying a side of beef or something like that is also the healthy aspect of it too. There are a lot of choices that might be better for cash and also better for your health. Which is a perfect segue to to the next question. What do you do personally to keep your mind set and your body fit to be able to have the energy to bring your clients the value that you bring.

Scott: That’s a great question. I meditate and that was brought on by where I actually do my daily workout. Blended Athletics, Dave Rafuse the owner and a member of our networking group. I have been a member there for over 3 years now. I have been in and out of gyms now for thirty odd years and this is the first gym that I have ever gone to that I didn’t take a six month or four month break at some point inside of a year. I have been basically close to forty months now and with the exception of COVID closing down the gyms, I have been in there consistently,may have taken a week of as I have been traveling or something but I have also got back in. It’s a great place to be and they pivoted quite well I now get my daily workouts online and I am working at home, a lot of body weight stuff but it goes back to the meditation too. I started meditating about a year ago and then I stopped about after six weeks as I have mentioned before, if I haven’t mentioned it on this podcast I have ADD. I always thought all those voices in my head meditation wasn’t working but Dave actually taught me how to do it even though he is the exact same way  and really it boils down to be able to let the voices in and if it’s negative kick it out mentally. It’s still mediation even though there is a lot going on in there. It doesn’t mean you have to turn your mind off you just need to control it better.

Jenna: It is so important for a positive mind set and that is certainly something that most entrepreneurs, myself, my husband a lot of people that we meet we have in common Scott  have that going on. It’s where you get all your ideas from but you do need to quiet it some times so you can sleep at night and so that you can shut it off some how and I think meditation some how is the key there.

Scott: It really is. Everything is in the morning before I start my day. Meditate, then work out and ready for bed and a shower of course even though I am still at home the shower is absolutely a part of it

Jenna: You have to do those kinds of things,get dressed comb our hair it’s certainly a new way of living but it makes it a little easier to be productive which we all need when we are running businesses.

Scott: I can easily go back to that COVID question there, and say the one thing that I started adapting to I started combing my hair. I always kept my hair so short that I never ever comb it. It just got shaved off every five weeks. Now I am combing it.

Jenna: What kind of realistic deals are you guys keeping your eyes out for at the moment?

Scott: I am a broken record on that. The current commercial development is taking a lot of Tammy’s time so I am the searcher so to speak now. It’s trying to find income producing multi family. We found out in the past few years trying to look around here is a little more challenging, the cash flow in the US is certainly higher than it is here. We are just actively looking for multi family income producing property.

You and I recently had a chat not that long ago a few months back that. I was going to start looking in Moncton then suddenly my head went down. You know what happened, back in November I ended up going to the hospital for a few days. Suddenly I got busy after that and I stopped looking in Moncton but I have to go back. It seems to be a good spot to me.

Jenna: As I have mentioned on my podcast, it’s my hometown and you will be able to hear an interview from Tony Leblanc who has GroundFloor Property Management in Moncton. He is certainly someone to chat with on that. I feel it’s a good place to invest as well for multi family.

Scott: Ideally you find the perfect opportunity being something you can force the appreciation on right away but renovate it or just get the rents up but as long as the cash flows there or some kind of cash flow starting off, generally if you put your ducks in a row and make the right contingency plans for that they can see, maintenance those sort of things you will be fine.

Jenna: It is a growing city there as we are here. Very exciting things happening there. Can you recommend a real estate investing book to our listeners?

Scott: I think I already mentioned it. I am a big advocate for The Rich Dad Poor Dad. I am trying to remember the first book that I read and I honestly can’t its been so long ago I honestly can’t remember which one it was. It was about twenty years ago I read and got me interested enough but I honestly can’t remember what it was called. It was something along the lines becoming a real estate millionaire with no money down that type of thing. It sounded great in theory but it was challenging in practice for sure. Trying to do things without actually having any money. Not that it can’t be done cause people do it but I don’t have the time resource to do it. You have to commit time to do it that way. The fall back for me would be Rich Dad Poor Dad and be active on the websites and other one out of the states is Bigger Pockets. You will learn a lot just by going on that. They have built in courses there. I think they charge a fee for some of that stuff.

Jenna: For sure, Bigger Pockets is a a big one as well.

Scott: There is some really good information there for learning. The key to learning about now and again it won’t necessarily teach you this in knowing how to analyze a cash flowing property. There is a unique perspective for that and I got a lot of that from the course I took. It wasn’t an actual book it was the 6-8 day course that I took and I have kind of expanded on it myself. I should say not really expanded on it but I just kept practicing and practicing try to see things for what they are. Again, a bit part of that too is mentorship. Really get out and meet people,obviously a little difficult now being active on your guys real estate investors site is a great way to broaden your network. People will share, I will anyways, just ask me I will help and I am sure anyone will. If anyone is interested in it. It’s like it’s not work for me I love this stuff.

Jenna: I do as well and I completely agree that reaching out, connecting with other investors, more seasoned investors. People who have been around doing it for a number of years are generally interested in helping others and especially if they are still coming out to the networking events. It feels go to share stories and connect with others and it’s what it is all about I think.

Scott: I wish I could give you a different book to read but I can’t think of any off the top of my head. I know I have read plenty of them.

Jenna: It’s a good one and there is a reason why it gets mentioned over and over again because it’s kind of a classic because it’s such a good book. What are you excited for this year personally?

Scott: What am I excited for year? I was excited for rugby season for my daughter until that got cancelled. I shouldn’t say cancelled yet. My daughter plays provincial rugby and she also plays high school of course high school is shut down. From a short term perspective just watching the progress she made,the commitment she made over the winter to get better faster blew me away. She surprised me. I knew she was motivated but she surprised me in the commitment she made and the improvement she made and then all of a sudden it just got shut down so that was a big let down for her but hopefully the provincial team happens. That starts mid June or actually they would be starting the ID camps for that pretty much now but that has been abbreviated. They don’t actually play till the summer time so hopefully that happens.

Jenna: That’s great that she has the work ethic and drive to improve so much.

Scott: As from a business or activity I am glad to see the end of this COVID thing that’s for sure. I am actually excited to find something to invest in as well. I am excited about a lot of things. I am very excitable. I have itchy feet so sitting around a lot, I am glad we are doing this as it occupies me. My mind needs to be occupied or I would just go crazy.

Jenna: That’s it. That is so important. Where is your happy place?

Scott: That’s almost a follow up to the previous question really. My happy place is following my kids around. For years and years it was the rink for my son who is in university now or the rugby pitch for my daughter. My daughter has gone through a few things. She was a swimmer, she was a dancer and now she is a rugby player. It’s been diverse but she has been pretty good at everything she has done. I think she is committed now she tried dance and rugby. She took the road of course it may have been a little guided by us. I grew up playing competitive sports, Tammy played competitive fast pitch,soft ball and she plays golf now something that you can score. Dance is subjective so I always had a problem with dance it was always frustrating to understand where they come from in their scoring. Jenna: Absolutely. So funny. Scott: So she came along for the ride. She really loves rugby. It’s a little scary for us she has had a concussion but she’s tough and strong and willing to learn. So that has been fun and my son is at the latter stages, I am hoping he will play a little bit hockey. He played a little bit last year but not much. He was focused on school but yeah. I have to look for the next thing for my happy place because for years and years, I was in a rink five days a week and loved every minute of it,practice game it didn’t matter.

Jenna: That’s awesome. Being active and family is so important and I think this situation we all find ourselves in is bring that back to focus for a lot of people and myself I am kind of happy to see things slow down temporarily. Scott: That little bit of time to breath.

Jenna: Not constantly racing from activity to activity. I do want to say quickly before we wrap us that it has been a pleasure meeting you. It was last summer that we met through a networking group and I am really a fan of your leadership that you have with our group and also it’s just, it’s leadership but also fact that you are willing to help people and that you focus on helping others first and providing value and I know you really care about your clients and outcome and goals. Your goal I know is to help others out first and foremost and that is amazing and I think that is why you are so successful at what you do.

Thank you.

Scott: Wow, and I blushing? Thank you very much Jenna that was awesome. I feel very lucky to have met you I think this past June when I started coming to the group there. The group has really started to grow when Dalene took over and it has been great. You have been very open and helpful to me, you got me to speak at your meet up group that was great. It was a great experience and the networking group I look forward to it every week and I always notice if you are not there. I feel lucky to have met you and several people in that group this year and you are definitely at the top of that list. I appreciate you doing this with me too.

Jenna: Thank you Scott. It was a great discussion and it will definitely have to be a to be continued and we will definitely with you in a few months and I have my fingers crossed that in a few months we will be talking about different things and we will be forgetting about the fact we can’t be leaving our homes much. I guess the final question I should be asking you is where can our listeners go to find out more about you?

Scott: You can call my number 902 478 2620 email: scott@mgmwealt.com you can get me directly there. I am easy to find.

Jenna: That’s perfect. I want to thank you again for coming on the podcast and we will definitely have you back very soon.

Scott: Thank you Jenna

Jenna: Thanks again Scott.

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