Leslie grew up around entrepreneurship and investing in real estate. Her family invested in real estate when she was growing up, and she and her brother had to clean the houses and paint them. Joe and Leslie discuss how and what she plans to do with her family when she passes the torch to her son and she shares the six steps from her book Legacy “A guide to successfully transferring wealth from one generation to the next.”
Leslie Quinsay Real Estate Background:
- Has a real estate portfolio of around 30 properties, with experience in both commercial and residential
- Previously owned and sold a 30,000 sq. ft. office building
- Based in Toronto, Canada
- Get her book at https://amzn.to/2Tka0XI
- Say hi to her at https://lesliequinsay.com/
Best Ever Tweet:
“At the end of the day your role is to be the captain of this team, so you pull all these experts together, but it’s really up to you to guide the team and make sure that the things they put together are things you want for your family.” Leslie Quinsay
Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Leslie Quinsay. How are you doing, Leslie?
Leslie Quinsay: I’m doing great, Joe, thank you. Thank you for having me on as well, I truly appreciate it.
Joe Fairless: I’m glad you’re doing great, and it’s my pleasure. You are the second Canadian I’ve talked to today, so what a treat. Two Canadians in one day, I’m looking forward to it.
A little bit about Leslie – she has a real estate portfolio of around 30 properties, with experience in both commercial and residential. Previously owned and sold a 30,000 sqft. office building. She is based in Toronto, Canada. With that being said, Leslie, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Leslie Quinsay: Absolutely. Joe, I’m actually a second-generation business owner, and also a real estate investor. In my family, over the years, what we’ve really had as our pillars of wealth has been business real estate, some paper assets, but the biggest part of it has really just been the knowledge that we’ve been passing along through generations.
For me, currently in life, one of the things I’ve come to realize is that as part of the sandwich generation, where we’re in the stage of life where — I have a young son who’s 17, so I’m still in the midst of raising my son… But my parents are also aging, so I find that there’s needs on both ends of the spectrum, which can be sometimes quite exhausting. And what it’s caused me to realize as well is that — I watched my parents come to North America from the Philippines, with barely anything to their name, and they built up a wonderful business. They were wise enough to invest in knowledge, in themselves…
Joe Fairless: What business did they build there?
Leslie Quinsay: We have an engineering company that’s called AMAG. We provide flow measurement equipment and services to the power and process industry…
Joe Fairless: Okay.
Leslie Quinsay: So I watched my parents grow that business over the years. But the other thing they always did was invest in real estate. So growing up, I was just really lucky that as a child I got to watch all of these things happening… And to be honest, when you’re young you don’t necessarily know what’s going on. For a long time, my brother and I could not figure out why on Earth our parents would drag us to these townhomes and have us clean them and paint them. We thought for a little while that maybe they owned a cleaning company… And it was only later that we realized they were actually investing in real estate.
So I grew up really surrounded by entrepreneurship, by investing, by the positive attitude of investing in yourself and your knowledge… And as we’ve gone on through the years, I’ve begun to realize how important it is that as a family we try to figure out how we can continue to grow this wealth from generation to generation.
One of the things that really stands out for me – there’s a quote, it’s actually by Robert Kiyosaki, that goes “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” And I find there’s so much out there in terms of — when it comes to growing wealth, or investing, or learning how to invest, there’s tons of resources out there for those types of things, and it’s human nature to wanna continue to grow, and build. That’s all the fun stuff.
So we often don’t think about what’s next, because we’re not gonna be here forever… So you spend a lifetime building out this wonderful legacy, and I think if you don’t plan wisely, a lot of that can go to waste just from a lack of planning.
That’s kind of as a family where we’ve started to go, because we’ve had discussions around what’s gonna happen to the family business, or what’s gonna happen to the family investment company once my parents choose to fully step away, or should something happen to them, what’s the game plan for that.
For myself and my husband as well, it’s kind of just trying to understand where my [unintelligible [00:04:32].00] to figure out “Is this something that he’d like to continue?” and if it’s not, then what are the ways we can do things so that we can pass the wealth on, and not just the business, by transitioning the wealth so he can then continue to grow it in whatever way he is best at.
So that’s been a focus for me over the last little while, and it’s caused me to really just share my stories and my experiences with my family around that in the form of a book… Because I thought if we can create awareness around estate and succession planning, and just maybe shift the attitude about it – because it’s always seen as something that’s so negative, and depressing, and worrying. No one ever wants to talk about that kind of stuff, because death is not a fun topic, or illness. So we focus on the growing, the building, and we forget sometimes to figure out “How are we gonna pass that baton on to the next generation?”
So that for me has been something that I’ve been really thinking about and focusing on, as I’m going through it myself in my own family. So that’s kind of where I’m at in life, and a little bit of my background in terms of my experience with business and real estate investing.
Joe Fairless: And I’d like to focus the conversation on this, because it’s something that isn’t talked about a lot, and especially isn’t talked about a lot from a real estate investor standpoint… If there’s a state planning attorney that I’m interviewing, they have one approach, but it’s gonna be a little bit different than how you and I would approach it.
Your book, “Legacy: a guide to successfully transferring wealth from one generation to the next” is on Amazon, and in many other places, so Best Ever listeners, you can go get it there. You said you have a son – how old is your son?
Leslie Quinsay: My son is 17 right now. He’s graduating high school this year, and hopefully off to university starting in September.
Joe Fairless: Okay. You know the cliché, and I’m sure your son doesn’t fit in the cliché… But you know the cliché where — I’m gonna butcher it a little bit, but the first generation earns it, the second keeps it, the third one loses the family wealth. And the thought process, as you’re aware, in that cliché, is that the first generation – as you said, you saw your parents come from the Philippines, didn’t have anything, built an engineering company… You were seeing that first-hand, and you experienced the bad and the good. And then when the third generation, in this case your son – and we’re just using as a placeholder; I’m just talking about the concept, not your family, by the way…
So the third generation – they don’t see the poor part of it; they don’t necessarily see that. And I’m sure you were mindful of that, given how you are so self-reflecting now… So how did you prepare your son to have that mentality, that the first and second generation have, because he didn’t have the benefit of seeing what you saw when you were growing up?
Leslie Quinsay: Well, I think what was important for me in raising my son was always having him involved in what we were doing… Whether it was taking him out to meetings, or having him come see the properties we were working on… We always tried to keep him involved from a very young age. But the other thing for me that’s very important is that he follows a path that’s meaningful to him.
In my case, I went straight into the family business shortly after graduating from university, and if I’m to be completely honest, it was really more out of a sense of obligation. You watch your parents build this up, and they built this out of love… But it sometimes can feel a bit like a burden when you suddenly have something to carry on that wasn’t necessarily something you wanted to do.
So for my son – I always tell him that we support him in whatever endeavor he chooses to take, and if he is interested in participating with us in the family business, or if it’s something that he thinks he’d like to do in the future, then we’ve always spoken openly with him about finding ways that he can buy into the business… Because we want him to have his own skin in the game, and I don’t want him to have a feeling of entitlement that one day something may happen to us and “This is just going to be yours.”
For us, obviously – I’ve only got the one son, so at the end of the day really whatever I build up, most of that is just going to go to him… But what we wanna do is make sure that if he has no interest in money and in the family ventures that are currently operating right now, then I would have to see it kind of transition and then just fall apart because of a lack of interest and a lack of ability to run it… So for me what’s more important is that we start the conversations with him now. If it’s not something he’s interested in, then it’s important for myself, for my husband that we position the business so that it’s sellable down the road, for instance.
So for us it’s kind of looking at what we’ve got and figuring out if passing a business on is not something that is likely with our son, then at least what are the things we can do to be able to ensure that we can actually transition wealth to him in a meaningful way… And then that way he can grow that wealth using whatever skillsets he’s got, and whatever he can bring to the table.
But for us, I think it all starts with communication, and I think a lot of the time we just skip that step. There’s just a lot of assumptions. I’ve got many peers who are also in family businesses, so a lot of the time you get into conversations and — the businesses are all different; different sizes, different industries, different products and services, but the issues and challenges that are faced during times of transition are all the same. And it’s really those who have actually started talking about it, who start planning early, that seem to have a much better time transitioning.
So for me that’s been very important – just keeping my son involved, talking to him about what his future plans are, sharing with him “This is how the business works, this is what it does, this is how it runs.”
And for me, a part of it too is — it’s not just the wealth, but it’s the knowledge in how to create wealth. For me, that’s probably more important than anything… Because I think if you can share the knowledge and pass that knowledge on, then the next generation has something to build upon. So that’s just sort of been my take [unintelligible [00:10:22].28] and how it’s been in our family.
Joe Fairless: How would he go about buying into the business? How does that work?
Leslie Quinsay: We’ve had really informal conversations with him. He’s 17 right now and he’s got some money that he’s saved up over the years… Some of it we’ve forced to save it; you know, on birthdays we’d tell him “You know what, take some of that, put it in the bank and go nuts with the rest of it.” So as a kid, he was kind of like “Aah…! I wanna buy all these [unintelligible [00:10:46].15] and you’re taking away some of my money…” But I think now he’s starting to realize the benefit of having had some of that socked away, because over time it’s grown.
We’ve just tried to instill habits. I always tell him “Whenever you receive some money (whether it’s from some of the part-time jobs he’s done), sock some of that away.” Because right now he has no expenses, he’s still living at home with us, but we always suggest to him “Put some of that away, and do what you wanna do with the rest of it. But at the end of the day, if you sock some of that away and start investing it wisely, you’ll be much farther ahead.”
The other thing we’ve suggested with him – he’s got a bunch of it saved right now, and about two years ago he was really excited about possibly buying an investment property. So we let him go through the process… At the time he had maybe less than $10,000, so he had it in his mind that he must have had enough to buy a property… So we took him to meet our mortgage broker, and he ran the numbers — my son at the time was 15, and he didn’t really have a job, and he realized “Oh my gosh, this is not nearly enough to buy a property, nor am I qualified for a mortgage…”
So at that time he started thinking about “What are other ways I can grow my money?” So that’s where we really started conversations around “You can put it in the standard things you see the bank offers, you can maybe do some private lending”, which is what he’s seen us do in the past… And we gave him all these ideas. We also suggested “You can invest some of that in our family business.”
So we opened up all these options to him, but for us it’s really important to see that he works through the process and goes through the exercise of seeing the pros and cons and the benefits of whichever he chooses to invest in.
So for him to invest in the family business, our thought process was that he’s got some of this money socked away, and if it’s meaningful enough to him, then he’d be willing to put some of his own money into the business and buy some shares in our family holding company. So that’s kind of like the gameplan and the lesson, if that’s something he’s interested in doing.
Joe Fairless: That’s so helpful. And by the way, I bought your book, so it’s being delivered in two days… So I’m the most recent purchaser of your book. I’m very much looking forward to reading it.
Let’s talk about the lessons that we can learn from your book, “Legacy: a guide to successfully transferring wealth from one generation to the next.” How do you have it organized?
Leslie Quinsay: Well, basically what I’ve done is I really just shared some personal stories, not only my own, but peers that are also in family businesses or who invest… And just stories of transitions. Some that went well and some that didn’t go so smoothly… Just to kind of create awareness around why this topic is so important. And then what I’ve tried to do – because it’s a topic that’s kind of dull, and boring, and something that no one wants to address..
It’s very hard to get attention around it, so I thought if I could begin to just shift the mindset around it and have people perceive it as something that’s a little more positive, as a way to make a meaningful difference, and a way to ensure that all you worked so hard to build up in your life is actually going to continue to make a difference for the generations to come… That’s kind of the gist of the beginning.
But then what I also realized is that when you give people a framework, it’s easier for them to actually get started on doing some of these things that they may not necessarily feel like doing. So I thought I would outline just six steps in terms of things that you can do to begin actually just thinking about transition, and what that transition might look like for yourself and your family in the future. I actually use the word LEGACY to do that, just because I thought it would be easy to remember… And I’m actually not that clever, and it was completely unintentional.
When I called the book publishing company, I told them the title of the book, and they said “Do you realize that some of your chapter titles start with the letters in LEGACY?” and I thought “Oh, that’s really cool.” [laughter] It didn’t really dawn on me, but I took credit for it and I said “Oh, that’s cool! If we tweak it a little bit, we can make it work.” So I did. I’ll give you the steps really quickly…
Joe Fairless: Please do. Yeah, thanks.
Leslie Quinsay: The L is for “Lay the foundation.” That’s really just taking a look at your state of affairs today as a business owner, as an investor. The year just ended and we’re in a new one, so for me, one of the things I do is I update my net worth statement regularly, just so I can see where I am today, but I can also compare the progress I’ve made from last year.
So laying the foundation is really just figuring out where you stand today with your finances, with your business, with your investments, but also where you stand with the documents you have; what insurance do you have in place, do you have a will, and if you do, is it current and up-to-date? If you’ve had major life changes – maybe it’s something that you might wanna examine…
So the laying the foundation is really kind of just getting your bearings… And I know everyone always thinks they know exactly where they are, but when you start digging deeper, you realize a lot of people really have a fuzzy picture of where they actually stand. So I think it’s important to get all that out on the table and take a look to see where you are, so you can see where the gaps are and begin to fill them in.
Joe Fairless: Wonderful. Okay. Two?
Leslie Quinsay: The E is for Experts. Just as within real estate investing, when you’re ever going into something new, you wanna surround yourself or build a team of experts that can support you in doing this. In this case, I’m talking about estate planning consultants. Depending on your family situation, you might wanna call someone in that can kind of give you a bird’s eye view of what you’ve got going on, but you’ll also need an estate planning lawyer. Your accountant needs to be involved, your insurance agent – all these sorts of things that you wanna pull together, so that you can make sure that you capture all of the aspects of estate planning that you need to.
Some people actually now are big on doing funeral prepayment; they’re making their own funeral arrangements, so as not to burden their families… So if that’s something meaningful, then making sure you have the right team of people to support you in setting all of these things up.
And with experts – I mean, there’s tons of great technical experts out there, there’s great accountants, great lawyers, but for me it’s really just finding the people that are fit for you. So going out there and interviewing them, and making sure that they understand your family situation, what your goals are and what you’re really trying to accomplish.
At the end of the day, your role is to be the captain of this team. So you pull all these experts together, but it’s really up to you to guide the team and make sure that the things they’re putting together are things that you want for your family.
The G stands for Goals, because obviously, becoming ill or dying is not something that we are hoping happens tomorrow. This is kind of like a long-term thing for most of us. Many real estate investors, many entrepreneurs – they’re very adept at goal-setting. They have their own systems and processes to do that; so the intent wasn’t to really talk too much about how to set those goals, but the point of it was really to begin including aspects of estate and succession planning into your goals.
Just as a quick example, for instance in our case we have a family business — my dad had a heart attack a few years back, and that’s why I came in and I took over the family business… But had we not had that plan in place, the business might have suffered and struggled for a little while.
So recognizing that if your plan is not to necessarily pass a business on to the next generation, then you need to make sure that you start putting systems and processes in place so that your business is sellable and is something that you can exit from down the road.
So whatever your goals are – they’ll be unique to each individual and family – but including aspects of estate and succession planning in there, so that you’re already talking about it and already communicating that to whoever is going to be involved.
The A stands for Articulate, which is really just having some personal clarity around your own vision. A lot of the times – because like I said, we’re so hyper-focused on just the growth, the building… And I’m guilty of that, too; I love going out there and finding the next deal, and figuring out what we’re doing next, in what we’re gonna grow — because that’s the fun part of life; what we’re gonna do when we’re gone is not fun, and for the most part many people just don’t care, because you’re not gonna be here to care. But I think sitting down with yourself and just really being clear on what it is you’re trying to accomplish… You’re building this, and why are you building it, and what do you expect it to look like when you’re not here? So having the personal clarity.
Then the C actually stands for Communicate, because in addition to being clear on it, you need to start communicating that to your family members, the people in your team of experts. You need to be able to share all this knowledge and direction with them, so that they can support you in this growth…
But it also allows you to start to realize where maybe you thought things were gonna go one way, and you might realize that your children have no interest in working with you on a family business, so you might have to shift or change the way you structure things. So the Articulate and Communicate go hand-in-hand.
The last part of it is just Yield, because obviously, as I mentioned before, we’re talking about an event or things that could happen in the future. But in the meanwhile, your goal should always be to be able to maximize your return on whatever it is you’re growing.
So it’s just structures on — if it’s a business, understanding what is the value of your business today, and what things can you do to make sure you maximize the value of that business. Same with your real estate portfolio – what’s the value of it today and what are the things you can do to improve that or make that better down the road over the years.
So it was really just a way to set out a structure that people could follow to get them thinking about the process, or at least begin communicating with their family or the people that are important to them about what they wanna see happen down the road.
Joe Fairless: It’s not something that’s talked about enough, and I’m really glad that you wrote a book on it. I’m very much looking forward to reading it. Anything else that we haven’t talked about as it relates to these six steps that you think we should before we move on to the next part of the interview?
Leslie Quinsay: No. As I mentioned, I was pretty much just sharing an experience that I had gone through. Our family had some bumps along the road with estate and succession planning, and I realized we’re not unique, and I’m sure other family businesses or other families of investors go through these things as well, so why not shed light on a topic that people usually choose to ignore, and show how important it can be to actually just get talking about it.
Joe Fairless: Based on your experience in business, what is your best advice ever for real estate investors?
Leslie Quinsay: I think the best piece of advice I can give is that if you want it to last and you want it to grow and last through generations, then you have to spend some time building a solid foundation for it. So instead of just focusing solely on growth and acquisition, take the time to stop and think about what you’re building and why you’re building it, and how you’re gonna be able to transition all of this wealth and all of this greatness that you build down through the next generation.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Leslie Quinsay: Sure!
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Break: [00:21:07].03] to [00:21:57].29]
Joe Fairless: What’s the best ever deal that you’ve done? I know yo’ve got around 30 properties, so – best ever deal? I’m sure you’ve sold some other ones, like the office building.
Leslie Quinsay: Yeah. I think honestly the best ever deal I’ve done – probably for many reasons – was the office building. They came with a lot of bumps and things along the way. Huge learning curve. But at the end of the day, it generated a great amount of cashflow, and when we exited at the end of the period, we were happy with the return we got from that. So I think that was probably the greatest that I’ve had.
Joe Fairless: What deal have you lost the most money on?
Leslie Quinsay: I can tell you it was intended to be a fourplex, something I had bought out West, and it was meant to be this great property that was gonna cash-flow and be phenomenal, and it ended up being more of a nightmare. Tenant problems, bed bug problems… All kinds of problems; I can’t even — it’d be a whole other show to tell you what happened with that, but it was a complete disaster.
Joe Fairless: What is the most challenging part of building out a succession plan that you’ve come across?
Leslie Quinsay: I think the most challenging part is just communication. Communicating with your family and your loved ones, and trying to figure things out when you’re not always on the same page. I think a lot of the times we just ignore it, because the conversation can be awkward and uncomfortable.
Joe Fairless: What’s an example of having an uncomfortable or awkward conversation? What’s that topic and how does that go?
Leslie Quinsay: I’ll just use an example… Parents – maybe they’ve got two children, and in their minds they’re just gonna leave their business to their kids, 50/50. But maybe you have one child that works actively in a business and one that doesn’t really support the business very much… And you might have different dynamics in terms of communication with the family, or how things are gonna go… So at some point, the kids may have to start having the conversation with the parents about “Does it make sense to have this split?” Do you wanna go for equality or do you wanna go for what’s fair?
And it’s just having conversations like that, because it can be really awkward to bring that up and to suggest you want more, because it does come across sometimes as quite selfish, although really all you’re trying to do is make sure that the contributions you put in are being recognized.
So there’s conversations around split, around fairness, around duties, around who’s doing what… I think that’s just an example of the awkwardness that you can have when you’re discussing family business.
The other thing is just having differences of opinion in how to grow the business or when to take it to the next level… Differences of opinion on whether it should carry on in the family or it should be sold… These are all really conversations that can be hard and awkward. Often founders sometimes get offended when their children don’t wanna take over… So it just leads to a little bit of awkwardness amongst family members until you start getting it out there and really hammering away at what the issues are.
Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?
Leslie Quinsay: I think the best way is really just to pick up a copy of the book. That shares really (like I said) a lot of story-based experiences on what can go really wrong and what can go right if you take the time to plan it out. The book can be found on my website, lesliequinsay.com. I think that’s probably the best way to learn a little bit more about estate succession planning, and some suggestions and ideas around putting a framework in place for it.
Joe Fairless: Thank you so much for sharing your six steps, how they conveniently start with the acronym LEGACY in this case, and shedding light on a topic that’s not talked about enough. I appreciate you talking about your experiences first-hand, and then also educating myself at least – and I’m sure a lot of the Best Ever listeners – on different things to think about.
Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you again soon.
Leslie Quinsay: Great. Thank you so much, Joe. Take care.