A Success Story: Trevis McConaghy

 

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I was a farmer near Melfort, Saskatchewan. I was the next generation of “farmer” in a line of farmers who had come from Ireland and Norway. Growing up, we had lots of pigs and a few cattle (for 4H and food). I was cleaning the barn before I started kindergarten so I learned how to work at a young age.

In high school, my parents backed my brothers and me as we bought our first farmland and started farming. This was the early 90’s when farmland was somewhat available at a decent price. It had just fallen in price after the high interest rates of the 80’s and we were buying out farms in trouble in many cases. I bought my first personal land in Grade 10 and set up my “farm” company in 1995 (at age 19). We kept growing our farm and grew to about 10,000 acres, 3000 of which I still own.

Early Education

After completing my second degree at the University of Saskatchewan in Saskatoon, I came back to farming full-time in 2000. As the winters were slower, I decided to get my hands dirty and bought my first home, which was a suited home. We took the basement and made one two-bedroom unit into two one-bedroom units. I learned about drywall, framing, flooring, electrical and plumbing in the process. 

In 2001, I once again bought a home and put a unit in the basement. I was very naive and this resulted in all kinds of trouble. I ended up selling the house a few years later and ate the costs of the renovation. In 2003, I moved a farmhouse into Melfort and added on a new basement, added a garage, and redid the home. This was a huge learning curve. In the end, two of us put in a winter of labour and the net result with no labour charged was a profit of $644. “quote this”. There was no market for homes at the time. I continued learning construction in during the winters and completed a primary residence in 2006-2007 and an office for our travel business in 2007-2008.
 
In the fall of 2008, I bought the small house next door to my primary residence on a refinance of my original rental, and taking more capital, bought another small house in the winter of 2010 the same way.

By 2010, farming had dealt us a huge number of blows and more were sure to come. These blows were not due to poor management but a result of weather and markets. We had a major drought, hail, frost, wind, bugs, early snowfall, price collapse…. and the list went on. I was able to deal with million dollar overnight losses because of the weather. I become resilient and very good at adapting and moving forward. Even though we were very financially sound having great machinery, great quality land, and great systems, things beyond our control impacted us immensely.
 
I replied to an internet ad in June of 2010 and went to the Trump Entrepreneur Apprenticeship – a 3 day course put on my some fast-talking, likely not-so-successful real estate guys from the US. I took a fall course with the Canadian arm of this called CANREIG. What I realized is that I could buy real estate creatively, and in many cases without “money” per se. This set the path for me and a colleague to start buying buildings in the spring of 2010. We each contributed a little house (remember the house I bought in 2008 next door?) and set up Cobalt Bay Capital Ltd. With two little houses used as equity, we bought a 4-plex, a small rental, and a flip. That company grew to 14 doors after pulling out the initial homes a few years later.

When that company hit a roadblock because of financing, I went on my own, took a Home Equity Line of Credit (HELOC) on my primary residence and went to town, literally. I personally bought a series of small homes creatively and hired my first full-time employee. Fast forward to the fall of 2011 and I attempted to buy an apartment building. As I was too naive, a bit slow to react, I lost the deal. I put a quote on my computer – “Fear is holding you back” –  and that was the spark that got the fire going. I closed six deals that fall and activated my first personal rental company – Exito Equity Corporation. I also set up a company that did a conversion of two one-bedroom townhouses into two two-bedroom units. I grew Exito briskly and wanted to get to the next level.
 
The Introduction of REIN

In spring of 2012, I flew to my first REIN meeting in Calgary. I met an investor from Kelowna that had a huge multi-unit complex. My eyes were opened. That fall was an interesting time on the farm, and as the wind blew, all our canola was spread throughout our fields. I put over 400 engine hours on my John Deere combine that fall in one month and was also running my rental companies and prepping machines on the start/end of the day.
 
A twin apartment building to the one I had wanted a year previously came up. I wanted to buy it but was stuck on the how. I decided to attend the ACRE event that fall in Edmonton and joined REIN at that time. I soaked up what was taught, heard inspiring people, and was reignited. Having driven to Edmonton, I headed back after the event. By the time I got to Lloydminster, I knew exactly how to buy the building, and I phoned the realtor the next day. Unfortunately, the building was conditionally sold. In turn, I closed on an 8-plex and a 4-plex that fall. REIN taught me what was necessary to do the deals.
 
I thought I was going fast prior to REIN, but by getting monthly CD’s, attending a number of ACRE programs, and some special events, my whole business has truly taken off. I got unstuck, then stuck, then unstuck and kept moving ahead. REIN’s forum, myREINspace.com, has provided some great answers when searching for solutions to problems. I was shocked when I got a call to attend the December meeting in 2013 to receive a Top Investor Award, and then again in 2014.  I realized that by surrounding myself with great people and building a solid team over time, amazing things really were possible. After joining REIN, I didn’t again seed a crop. That’s why I say I was a farmer. Now I am a “Strategic Investor” as Don would say. 
 
When I tell people what I do they say, “So you buy and sell property?”   I reply, “Actually, I just buy property.” On average, I have closed one or two buildings per month since 2010. Because of the heated market in my small city of Melfort, buying a listed property from 2012 onwards has been challenging. With that said, my pace has actually accelerated because of the knowledge I have gained. I am closing about two or three or more of my properties privately. When I buy on MLS, it is generally at a huge discount on the list price.

People say that they can’t buy cash flowing property, but creativity lets me keep buying. I took to heart advice from people like Jared Hope and Tiffany Young in the REIN community. Alleyway garages are separate rental units, and power and gas meters have been split so tenants pay separately, thanks to Jared. I bought out my partner in the original Cobalt, merged it with Exito Equity Corporation, and transferred the bulk of my personal rentals to the company thanks to advice from Tiffany.

I am still buying homes and doing the BRRR method of Buy, Repair, Refinance, Rent, as well as buying below value and getting reappraised in time. I am also aggressively doing the same as Jared Hope in creating secondary suites in homes. This spring I am planning to build my first full 4-plex.
 
A Move into Multi-Family

Eighteen months ago, I met another REIN member in Toronto – Pierre-Paul Turgeon. To me, Pierre-Paul was the guy who was always the speaker at REIN, on the panel, on my CD, but in talking with him, I realized that he really does get the REIN message of philanthropy and education. He has a “higher purpose.” When I spoke with him a year ago, I clearly got his message on how to create value by fixing problems in apartments or buildings, revaluing and taking equity for the next deal. That said, I came back from Toronto a year ago with a clear goal for growth. I made a Sophisticated Investor binder and took action.
 
As a result, I reaped another award in 2014 for Taking Action. Here’s why: I had discovered a modular home, more specifically a CSA A277 home in a rural community in Saskatchewan on a bank foreclosure for $35,000. It was a 20×72 or 1440 foot home built in 2000.  A modular home versus a mobile home can be placed in an R2 or single family area in a city with approval. These homes are on steel beams like the old trailer homes but built according to new building standards. This home just happened to be used and sitting in a rural town. The price was 25 percent of new for a pretty new house. As I had moved in five houses previously (remember the farm house in 2003), I knew what I could do in my city. I bought the home, picked it up and set it on a footing on a cheap lot in my city. Lot plus house plus move plus footing, utilities, and repairs averaged about $80,000. The appraisal came in at $145,000. By putting a mortgage on it, just like Pierre-Paul taught us on how to access value in apartment buildings, I could take my cash and do another two deals, or as I did last summer in Melfort, do seven deals. I literally did 1/3 of the “new” homes in Melfort last summer with this strategy and a small team of guys.

Creativity Makes the all the Difference

REIN has taught me to be creative. I actually bought a house in Nanton, Alberta – 905 km away – and dropped it in Melfort. I realized that in rural areas and small towns, people don’t want to travel to look at homes. I don’t care. Kijiji works and the houses can be picked up and moved affordably from across the prairies. I created great homes for seven families in one summer.
 
The Big WHY

Where am I headed in the future? The sky is the limit. I doubled up on a lot of my deals last summer simply because I deeply understood what was going on. I have a great team of people. I have a great knowledge base in the REIN community.

I don’t know the numbers exactly but I have possibly bought or created 50-60 doors since joining REIN. I now have 80-90 units plus some commercial and industrial. My farmland has also appreciated nicely. People in my community come to me before selling because they know that I can do a fair deal quickly where everyone wins. Half of my units are rented by word of mouth without ever posting an ad.
 
The bigger thing about REIN is the ultimate WHY? What did I want in life? Was I living the life I wanted?
When I joined REIN, I had just spent over 400 hours on a combine and I wanted time. I wanted family. I wanted to keep travelling when I wanted, and not when the weather dictated. It has been an amazing transition. I am single and would like a family and now I do have time for a family versus the challenges of the farm.
  
I remember attending a Calgary REIN event where we heard Brett Wilson speak. One of his core elements is philanthropy. I get this and this truly gives meaning to life. I grew up doing a lot of volunteer work, I still do and I now give four scholarships at the University of Saskatoon to students who are active in the community. I find that for every hour I donate, it comes back to me 300 percent. It is amazing how reciprocity works. REIN members get it.
 
The other thing I love is travel and spending time with people I care about. I get it when Pierre Paul talks of being able to get up in the morning and make his wife’s breakfast and spend time with the kids. I get it when he is excited about going to France in the summer. When I had my feet on the sand in Italy last summer and in the Caribbean at Christmas, I thought about REIN.
 
I can say that REIN has been a life changing experience for me. It comes full circle when I can give back to new people in the community. My business has gone way further than I could have ever imagined. I am doing the things I enjoy and love. I am learning new things and meeting great people. I applaud people who come out and give their time willingly to others to help their dreams come true.  I hope I can help mentor new members and help them reach their Belize.
 
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