053 – High Cash Flow investment property?

Are you looking for cash flow, but don’t want the hassle of being a landlord? Do you think owning an investment property is out of your reach? In this episode we discuss investing in the Hassle Free Landlord program with Epic Alliance. Eunice from Victoria joins us to discuss her experience with Epic Alliance. We discuss how the program works, our first hand experience and how you can own a high cash flow investment. Here in the FI Garage, we’re all on the path to FI, however, we consider the RE part optional. #FIRE

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Beers – [2:30]

Hassle Free Landlord [4:45]

Download the pdf presentations from Epic Alliance below

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  1. Hey Guys,
    This was a great podcast and something my wife and I have been looking for since we sold out AirBNB cottage. We love buying and investing in properties but hate dealing with the renters. This idea is perfect for us!
    We are still doing all our homework but if we do buy or fund a flip how can we thank you? Do you have a referral link to epic Alliance? We want to make sure you guys get your $1000 as we would never of heard of this if it wasn’t for your podcast.
    Thank you all so much.
    Cheers 🍻

    1. Hey Gary,

      Right on, I’m glad we could introduce you to an investment that might work well for your situation. Thanks for offering to use our referral, I will split it with Eunice to help fund her cross Canada bike trip!! I’m email you with the details. Cheers, MM

    2. Look at us creating win-win-win-win solutions! I appreciate spreading the word and the wealth! I will definitely raise a glass with you, Gary, and the Mechanic in celebration.

  2. MM – seeing as how you borrowed the 20% from your HELOC are you employing the Smith Manoeuvre to maximize the financial impact? This is something my wife and I are discussing if we invest with Epic Alliance. Essentially if we take the 20% + closing costs from our HELOC we can get the tax credit from the interest incurred on the HELOC, pay down our mortgage faster using the cash flow from the EPIC rental using the SM (saving mortgage interest), invest the newly created room on the HELOC (index funds) and do it all with none of my own money. Thoughts?

    1. Hey J,

      Well as I always like to point out, there’s a difference between the SM and leveraged investing. For my situation, I am leveraging the 20% + closing costs. The cash flow I get from EPIC does not ‘specifically’ pay my mortgage. I don’t get too specific with where things go. I have monthly ‘profits’ and monthly ‘expenses’, it’s all one big account for me. I will be keeping the HELOC total and just pay the interest.

      I like your plan though, you leverage for the purchase of the rental, then pay down your mortgage with the extra cash flow, then re-borrow the room you have created for index funds. This is the SM, and I think if it works for your overall financial plan, it’s a winner. Just make sure you track all the money movements, and keep records and dates. Happy to chat more about this if you want to zoom sometime. Remember to use Eunice as a referral so we can help fund her bike trip across Canada!! Cheers, MM

      1. Thanks for the reply MM, I’ll send you some background info via email, I may take you up on the Zoom offer as it’s always good to get another perspective on potential investments. I’m also a novice home brewer with about ten 20L brews under my belt on the Brewzilla – I know you and the boys are getting into home brewing so we could chat a bit about that too if you like.

        1. Yes! we’d love to compare notes on the Brewzilla. I just brewed the 4th batch last night. We could definitely use some help fine tuning our execution. I bottled the first batch that we fermented in the Fermzilla yesterday too, so I’m interested to see how that does. Sounds like you’re an honorary member of the FI Garage, talking investments and beer!

  3. Loved this podcast and have done a bit of research with Epic. I was just wondering if you put into account being taxed on the 15% which is obvious but do you also get taxed on the principle paid down? And with Epic receiving all the money from the principle paid down and you being taxed on that, what would the return would be? Thanks for podcast.

    1. Hi Sean,
      You bring up an excellent point. One that we completely neglected to mention in the podcast. (I’m going to edit a section in) I have to admit my ignorance to this as I haven’t dealt with the tax consequences of RE investment before. As I understand it now Epic pays you a lump sum every month. That sum is the total of your mortgage payment, property tax, insurance, and the 15%. At the end of the year, for taxes, you will have the 15% return taxed, and the amount of principal paydown on the mortgage taxed. Unfortunately you are not seeing any of that paydown returned to you, so the result will be a reduction in your rate of return. I did some basic math on my situation, and after taxes that 15% is more like 8% net. As always it’s important for people to do their own due diligence and make sure they understand their investments.


  4. Hey MM,
    Now that some time has passed would you still recommend the Epic alliance option? Would you purchase multiple properties with them in the future?
    Also, isn’t the house Insurance and property Tax a write-off on your taxes with rental property income? If so, this would boost your ROI.

    1. Hi Kyle,

      Yes I would still recommend EA. I think the single house for higher purchase price is the better option, but they have a promo on right now that offers 17% on houses below $250k. At least I think it’s below $250, anyway the math on that might work out. Yes, you do write off the property tax and insurance. We’re going to record a short follow up to this episode with some things I didn’t think about as far as taxes go. Anyway, all in for my $400k house, my annualized after tax return is 9%. That does not include the cost of borrowing no my HELOC. Feel free to email me with specific questions, I’ve been working through this with a few other listeners that are interested.

  5. Hi Money Mechanic,

    Big fan of both your podcasts! I’m seriously considering investing with EA and am wondering why you chose the HFLP instead of funding a flip at 10% return. You mentioned in the comments above that after taxes etc. you net ~9% with the HFLP, any idea what the ROI might be on a flip after tax considerations?

    1. Hey Jules,

      Thanks for listening to the shows! I went with the HFLP because I already have private lending and wanted a little more diversification. With the HFLP I own the house, and potentially could keep it, or choose to keep and sell it at my discretion. The 10% return on the fund a flip would only make sense if it is tax sheltered with TFSA or RRSP. The ninja flip is a pretty cool concept, but I just don’t have the funds in the right place at the moment. Without actually running the numbers, which you should do if you’re considering any investment, for my situation borrowing to invest in the flip would be around 4.9%. Feel free to shoot me an email if you want to chat further about the EA options. Cheers,MM

      1. Ah I see. Thanks for the response. From cursory calculations, the fund a flip seems like it’ll work better for me. I’ll be booking a discovery call with Rochelle from EPIC to find out more. In one of the online EPIC videos, Rochelle mentioned that there is a referral bonus for new investors. Since I learned about EPIC through you, it would only make sense for you to have the bonus! How do we make that work? Can I just tell them the Money Mechanic sent me?

        1. Hey Jules, Thanks for offering to mention us. Let them know you heard about the Fund a Flip from FI Garage. Cheers! Hope it’s the right investment for you. I think it’s good if you can use your RRSP or TFSA and ninja it.


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