CanadianSME Small Business Magazine had the privilege to sit down with Michael Sarracini, the CEO of Keyspire. An award-winning entrepreneur and seasoned real estate investor, Michael delved into his motivations for venturing into real estate. He highlighted that the first week of October 2023 is the optimal period for real estate acquisition and explained the data and insights behind this prediction. Michael emphasized the allure of transitioning from active to passive income through real estate and discussed essential strategies and mindsets crucial for success in today’s market. A firm believer in personal development and community engagement, he shed light on how these principles shape the vision and direction of Keyspire and The Sarracini Group. Addressing the current challenges in housing affordability, Michael shared his foresight on property investment’s evolving landscape in the forthcoming decade and imparted invaluable advice for those keen on this sector. Reflecting on his two-decade-long journey, Michael offered sagacious advice to those aiming to navigate the complexities of today’s volatile real estate market effectively.
Michael Sarracini is an award-winning entrepreneur and real estate investor. Starting over 20 years ago as a university student with nothing but debt and the drive to succeed, he turned a small government loan into a multimillion-dollar real estate empire that allowed him to retire at 25. With his new freedom, he then explored other industries including television, e-commerce, real estate development & private education. Today Michael is CEO of Keyspire and Chairman of The Sarracini Group. He focuses on adding value to people through personal development and education as well as adding value to land through strategic partnerships and development. Michael’s team has trained more than 100,000 real estate investors and helped them generate tens of millions of dollars in net worth.
1. Beginning as a university student deep in debt and managing to retire at 25 after building a multimillion-dollar empire is quite the transformation. What factors or events ignited this journey into real estate investment?
Being a broke person creates a frustration. I was more than broke, I was in debt with my first student loan so I guess I had negative money saved. I wanted more, I didn’t need it now but I wanted a bigger future. One of the benefits of this situation was that I had nothing to lose. So I was willing to try things that most people wouldn’t. After some investigating I learned that most of the wealthiest people throughout history were land owners. Owned property turned into my core focus. I spend almost a year learning; through seminars and talking to everyone in the industry I could find. My roommate felt the same as me and we made a commitment to each other to figure this ‘real estate investing’ thing out. We became business partners and worked together to raise the money for our first income property. We dialed in this business model over many properties and about 5 yeas later I have more passive monthly income than I needed to live. That is what we at Keyspire call Lifestyle Freedom Day.
2. The first week of October 2023 has been identified as the prime window for real estate acquisition. What data and insights led to this conclusion, and how does this time frame differentiate from other months or seasons?
Right now people are afraid of Real Estate, they are afraid of the economic indicators that the headlines attributes to real estate. Interest rates are at a muti-decade high. Inflation is not dropping as expected. Home values in many markets have softened or even declined the greatest amount since the 2008 financial crisis. This fear results in a massive uncertainty in the market. This uncertainty causes most people to pause and ‘wait it out’. It’s easier to do nothing than make a move (buy a property). At the same time, October sees the beginning of seasonal lows in the marketplace, that hit the bottom in January/February. There are less buyers in the cold month and around the holidays. Combine this uncertainty friction with the natural market annual cycle, and you have less buyers out there. Since supply and demand still drive the core of real estate values, as we decrease demand we decrease competition, decrease options for sellers. All of this put the ball in the buyer’s court. Those who hit play when others are hitting pause will get the benefit of this perfect storm and acquire properties at the low point of the price curve with incomes from rents at an all-time high, and rising.
3. Replacing active income with passive income, especially through real estate, is an aspiration for many. What foundational strategies and mindsets are deemed critical for success in the current market?
Our purpose at Keyspire is to put people in control of their future by removing the mystery of real estate investing. We do this with the goal of Lifestyle Freedom Day: the day that your passive income meets your lifestyle expenses. The first thing we teach our Keyspire members is to know where you want to go. Why do you want passive income and how much? We teach our members a unique “Lifestyle be Design” philosophy. This is where they decide the lifestyle they want FIRST, and then use Real Estate to earn the income to reach this Lifestyle Freedom Day. The “reverse budget’ is a significant change in their mindset, and goes against all traditional teachings on personal finance.
4. Personal development and community involvement appear to be central pillars in a successful entrepreneurial journey. How do these values shape the business strategies at Keyspire and The Sarracini Group, and influence their trajectories?
Ever since attending my first real estate investing seminar I have been hooked on improving through personal development. One of my team cores values is personal development that we all live by. Our right-fit member filter includes personal development. I love to surround myself with people who want to get better. In particular, I love coaching. I love coaching people and seeing their success, so… I started a coaching organization! I love being coached; I hire a coach for everything I want to get better at. From my nutrition and fitness to imporving family communication to my entrepreneurial journey, I include coaching in almost everything I do. I also love getting involved with the community. From feeding hungry children as a Childrens Foundation board member to being on School council, I like to give as much of my time and skills as I can.
5. With housing affordability posing significant challenges, how do you foresee the landscape of property investment changing in the upcoming decade? For those eager to dive into this sector, what key advice would you emphasize?
Property is unaffordable, and it will only get worse. Across North America, house prices have risen far faster than incomes. People both young and older cannot come up with the down payment and cannot make the monthly payments. Buyers today MUST be educated because the margin for error is the smallest it’s ever been. Other than being educated, Buyers must address the two biggest financial obstacles: money for the down payment and covering the monthly property costs. Our Keyspire members have solved for this by applying my original business model from 23 years ago. This is, get a partner to provide the cash and get a tenant to cover some or all of the monthly payments. This is one of the core strategies that we teach at Keyspire and every investor will need it at some point.
6. Drawing from over two decades of experience and understanding of market nuances, what expert advice would be pivotal for individuals aiming to make wise and profitable real estate investment decisions in today’s volatile market?
Pay for shortcuts when you see them because your time is much more valuable than your money. A shortcut appears when you can achieve years of learning in a matter of months. The best shortcut is getting a coach or mentor. They don’t have to make all the mistakes themselves. Others (like me) have already made them. So learn from others success and failures as much as possible. Replicate the successes and avoid the failures.
