Join Ryan, Chrissy, and Money Mechanic as they talk to Fred (aka Mr. Prairie FIRE). We cover how he found the FIRE movement, real estate investing, house hacking, and so much more!
These show notes were written by friend of the show, Shaidah Karim. Thanks Shaidah!
Fred has been living in Saskatoon, Saskatchewan for the past 20 years. He is a father of 3, including a 4 month old. He works as a housing property analyst for the provincial government.
Fred started the journey a couple years ago after a ‘trifecta’ of financial hardships which led him to discover financial independence:
- Fred’s family moved into their dream home in June 2016 with 2 kids. They fixed it up, then water started coming out of the bathroom light switch, ice was falling in the attic, and brown water started coming in from all different places. The repairs came to $15,000!
- Two months after the repairs, Fred’s employer was restructuring and his income dropped by 9%.
- Fred owns 2 rental properties. Due to heavy rains, his rentals started flooding and needed repair.
The Turning Point
These obstacles led Fred to researching personal finance and learning about the FIRE movement. He fell in love with the community, blogs, and Facebook groups.
- Fred blogs at Prairie FIRE Canada, which he uses as an outlet to express himself, connect with people, and as a reminder for why he is going through the financial independence journey.
- People are isolated and desperate for community. It doesn’t matter where you are in your journey, it’s fun to be part of the community and learn from others.
- He encourages people to get offline and have real conversations with people.
- Fred’s primary residence was hit by a “tidal wave” and in spite of costly repairs, he still invested in long term buy & hold real estate.
- He has an advantage as housing has been part of his family, and career.
- His parents also bought rental real estate but didn’t really pass on that knowledge early on. It was just another business that his parents had.
- When he graduated university, his dad encouraged him to buy a home and introduced him to property management. They shared in the costs and in the profits.
- Fred also worked with nonprofits and managed affordable housing and is a housing property analyst for the provincial government.
- Fred and his wife own two rental houses, each with 2 units.
- They use a property manager to manage one of the houses. The other house has an excellent tenant which helps with managing the property.
Mindset required for investing in real estate
At 14:20 in the interview, Fred says:
“You do have to understand it is a business, it’s nothing personal. It’s really about providing a home, serving a customer, and treating it like a business where you take care of a very important asset.
When you have a renter that pays $1000/month, you have a $12,000/year contract with them. You have to make sure that property is up-to-date and you treat it professionally. And worse comes to worse, you get someone else to manage it if you can’t handle the ins and outs of the relationship if you aren’t a people person, that comes at a cost.
Overall, looking at it like a business, crunching the numbers, and realizing that every single rental property is like a mini business for yourself.”
- When Mr. and Mrs. Prairie FIRE started their marriage, they made time for the rentals. Mrs. Prairie FIRE was also involved in the business. To manage time effectively, they:
- selected good tenants;
- purchased relatively well-maintained properties; and
- developed a team of a good handyman, plumber, electrician, and contractor.
- Fred rents out one room to an international highschool student from Columbia who gets along great with the entire family. She’s returned to live with them for 3 years!
- Hosting homestay students was Mrs. Prairie FIRE’s idea as she is also entrepreneurial. When they went down to one income, they had to think outside of the box and decided to host students.
- Fred is very happy that Mrs. Prairie FIRE pushed him into the accepting homestay students as the experience has been wonderful.
- Homestays pay about $800/month, but their student barely eats $200/month.
- Fred and Mrs. Prairie FIRE use Canada Homestay, who finds and vets the students.
- Chrissy also hosts homestay students, and has likewise enjoyed the experience immensely.
More real estate talk
- Fred’s total portfolio value does not include income generated from rentals.
- He was being too conservative at the time of writing Discover Your Financial Independence Number and wants to leave the properties as a legacy for children, or to pay university tuition for his children.
- Chrissy looked into real estate investing and ran the numbers and concluded that real estate investing doesn’t make sense in Canada when passive index investing provides a 7%-8% and is so easy.
- Fred likes real estate as it diversifies his portfolio. There is risk with equity and bonds but real estate can be more consistent and not as volatile. From a business perspective, he likes the active part of running the real estate business.
- Fred agrees that you can reach FI sooner with real estate investing.
Living in Saskatoon
- Fred loves Saskatoon. It is affordable to live, there is so much diversity, culture, food, beer. Summers are amazing. He hopes to live in Saskatoon for a very long time.
- For the downsides, the winters are long and cold but that’s where community comes in to save your life!
- Team FI or Team FIRE?
- Team FI, Fred enjoys working but doesn’t want to work for money.
- DIY anything?
- Fred is getting better at tackling DIY projects. He is proud to have completed two platforms for his rain barrels.
- Tim Hortons order?
- Fred is a coffee snob, he will order a double double and Timbits for his coworkers.
Stuff that didn’t make it!
This is where we include useful or interesting info about our guests… that didn’t make it into the show:
- Fred’s parents immigrated from Malawi, Africa to small town Saskatchewan (and still live there).
- His children are aged 4 months, 3 years and 5 years.
- Fred’s main investment lever is real estate—he has two rental properties and is looking to expand. He has been geeking out like crazy on how to run his rentals like a business and how to analyze good deals (e.g. the 1% rule)
- He also invests in index fund through a private wealth firm.
Get in touch with Fred
- FI Garage Camp Mustache Toronto wrap up
- Million Dollar Journey
- Prairie FIRE Canada: We Are Desperate For Community
- Prairie Fire Canada: Discover Your Financial Independence Number
- Bigger Pockets
- Afford Anything
- Truth About Real Estate Investing
- Breakthrough Real Estate Podcast for Canadians
- Canada Homestay
- Eat Sleep Breathe FI: The Homestay Series
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