The Calgary young man quickly found his success formula and was a millionaire before he was even 21
By Gurmukh Singh
How do you describe Bob Dhillon when you know him well?
Suffice it to say that this dynamo of a Sikh is the king of niche real estate in Canada.
Owning over 10,000 apartment units across western Canada with $1.5 billion in assets, his Mainstreet Equity leads the niche mid-segment market by miles.
‘‘We are the Holiday Inn of mid-market apartments (with monthly rent in the range of $1,000),’’ he sums up his business empire.
Bob is THE leader because he gave himself a head-start.
At age 19 when most youngsters can barely think for themselves let alone plot their future, he was out there in the dog-eat-dog world of real estate, living out of the trunk of his car and scouting around for run-down properties so that he could renovate them and make a quick profit.
‘‘I bought two old houses, renovated them and sold them, making a neat profit of $19,000. This was enough to take care of my college education. Over the next 10 years, I worked like hell, slept very little, operated my office out of the trunk of my car and made millions,’’ narrates the self-made man who is one of the richest Sikhs in Canada.
Not surprisingly, Bob was already a millionaire before he turned 21. He then went on to become the first Indian to list his company on the Toronto Stock Exchange in 2000. But even as Mainstreet Equity has posted a whopping return of almost 1,300 percent over the past decade, he says he has just hit his stride.
‘‘We want to become one of the best performing companies in the world in the next decade,’’ says Bob who is also developing a 3,000-acre island in Belize.
A sort of contrarian in his business philosophy, he says he sells when the market is hot and buys when the market is low.
Bob extends the same philosophy to his investments, including buying back shares of Mainstreet Equity. ‘‘We are opportunistic investors,’’ says the CEO and president of Mainstreet Equity.
And he sets great store by education for business people. ‘‘Without education, you have limitations,’’ argues Bob who took time off his business to earn his MBA from the Richard Ivey School of Business at the University of Western Ontario in the 1990s.
His family comes from Tallewal village near Barnala in Punjab. His grandfather left the village for Hong Kong where he built a business of ferrying goods to and from Japan. Later, Bob’s dad joined him.
Bob was born in Japan in 1965. The family then moved to Hong Kong. Later, business opportunities took the family to Liberia even as he was sent to India to attend the Bishop Cotton School in Shimla.
The civil war in Liberia forced the family to move to Vancouver in the early 1970s.
But Vancouver was not a welcoming place at that time because the large-scale immigration of coloured people was fuelling widespread anger among Canadians. New immigrants were called Pakis. Bob’s own mother lost her job because of the rampant racism.
In this interview, the Sikh real estate mogul goes back in time to narrate his Canadian success story.
Q: Tell us about the kind of racism you faced while growing up in Vancouver.
I am trying to stay positive on this topic. When I was a kid, a small colonial town called Vancouver was bombarded with disproportionately large number of Sikhs in the 1970s. Obviously the fabric of the city was going through tremendous changes.
The collateral damage of these changes was called racism. But the positive thing is that my family survived that storm and we have become a much more beautiful and stronger country today.
The great example of this is our House of Commons and our civil servants and the business community. We owe this success to this great country called Canada.
Q: What was your childhood dream?
Today everyone wants to replicate the success of Facebook and Google. Kids dream of being an app creator or a tech guru.
But my generation was obsessed with real estate developers. And my dream was to be a real estate developer. Before the super commodity cycle and glamorous hedge funds managers, what was chic was real estate.
Q: How much did your parents influence you as a kid?
My dad gave me visions with no blinders. From the day I was born, he exposed me to the world in every way, from education to politics to social awareness.
I was very fortunate that my dad was highly literate and a global thinker. The sky is the limit was his daily mantra to me.
Q: Did you plan your entry into real estate or it just happened?
First came the dream, then came a lot of strike-out attempts, and then I hit a single (using baseball analogy). I started flipping houses at the age of 19, and today we have over 10,000 apartment units, $1.5 billion in assets and $100 million in revenue.
Q: When did you realize that you could make it big in real estate?
I have just started to hit my stride. The next decade will be big.
Q: How did you choose the name Mainstreet Equity for your company?
Every downtown in the Western Hemisphere has a Mainstreet. And Mainstreet has become
synonymous with real estate.
Q: Name five things which have made Mainstreet Equity such a big success story.
- Taking action
- Understanding capital markets
- Understanding the debt markets
- Creating a business model on a unique niche on distressed mid-market add-value Western Canadian apartment buildings. It is called Mainstreet Value Chain.
Q: Do you think education helps in business success? Did your MBA help you in furthering your business?
In today’s world, without education, you have limitations. For example, to understand capital markets, debt markets, read balance sheets, creating business model strategies, you need a higher level of education.
Q: Do you plan things or just go with the flow?
Life is as simple as you can make it, or as complicated as you make it. I follow the wisdom of Osho.
I live in the moment and not worry about tomorrow, and forget yesterday.
Q: How will you describe yourself as a businessman?
I don’t call myself a businessman, I am just being me. It’s not work, it is my passion. That’s how I describe myself – and enjoy every minute of it.
Q: Any business mogul who is your role model?
I know this may seem like an easy way out, but Buffett is the business model that I admire the most. The reasons are:
- Not a one-hit wonder, what I mean is that he continues to perform year after year, decade after decade.
- His commitment to philanthropy.
Q: Your biggest regret in life.
Not taking bigger risks. Many opportunities came my way, but analysis paralysis stopped me.
Q: Your happiest moment in life.
Every day is a gift, and the happiest moment is this very moment.
Q: Do you keep secrets?
Everything is a secret and sometimes nothing is a secret.
Q: What makes you unhappy?
When it is minus 30 degrees in Calgary. Cold Calgary winters.
Q: What is your biggest weakness?
Compassion – sometimes compassion comes in the way of astute business decisions, meaning I am less ruthless.
Q: What is your biggest asset?
Compassion – we are humans first.
Q: Are you religious/spiritual?
I am a proud Sikh and Sikhism is all about a spiritual path to nirvana.
Q: What does Sikh heritage mean to you?
History describes the reason of what we are today. The most fascinating DNA is the Sikh DNA.
We are a hybrid of many warrior races. I did my DNA test and discovered where Sikh’s evolved from. It is a fascinating journey of human evolution.
In terms of percentage, the Sikh population of Canada has surpassed that of India. The growth of the Sikh community in Canada is compounding. And new young Sikh Canadians are looking for icons.
That’s why I bought a sword of Maharaja Ranjit Singh at an auction in London for the Canadian Sikh community.
Q: Are you political?
I used to be political. But since I was appointed to the board of the Canadian Housing and Mortgage Corporation, the largest Canadian Crown Corporation, I am now restricted on how much politics I can be involved with.
Q: One Canadian you admire the most.
Terry Fox. I admire people like him who dedicate their life to others. He was an amazing Canadian.
Q: What is the biggest source of your inspiration?
Oxygen, fire breathing that comes from Kundalini Yoga.
Q: The best book you have ever read.
Beginners Guide to Kundalini Yoga.
Q: So you are deeply into Kundalini Yoga, right?
Yes. Kundalini Yoga is a form of Sikh yoga created by Yogi Bhajan. It is the most powerful yoga you ever know. It ignites your inner chakras (or wheels of energy in the body).
Q: How did you get fascinated with Kundalini Yoga?
I was always fascinated by yoga. I would often go to Rishikesh (India) for the sake of yoga. Then about seven years ago, I got fascinated with Kundalini Yoga. I hired a private instructor to teach me this form of yoga. It was then when I realised that this yoga is for me. Since then, I have been practisingKundalini Yoga regularly.
Q: Your mantra for relaxation.
Fire breathing. It is a technique used in Kundalini Yoga for relaxation. Fire breathing is one of the wonders of the world. You learn to be a lot more alert and you get a lot more focus in life. Fire breathing does wonders for you.
Q: Name your first-choice destination for vacation.
San Pedro, Belize, where I own a 3,000-acre island.
Q: You were also appointed honorary consul general of Belize in Canada a few years ago. Was that honorary appointment given to you to promote Belize?
Well, it is a honorary job. But Belize is one of the last virgin places on earth. It has untouched beaches, untouched rainforest, pristine rivers and the world’s second largest coral reef.
Tourism to Belize is booming. WestJet has just started a non-stop flight to Belize from Canada.
Cruise ships are coming. International investors are rushing in. Belize has a lot going on.
Also, I have written a book on Belize. It is titled Doing Business and Retiring in Belize and it has been the best-seller on Amazon.
Q: Why is your Mainstreet Equity sticking to only mid-market?
Because 80 percent of the apartments in western Canada are in the mid-market segment. That means the opportunities are massive in the mid-market segment.
Q: So what is the Mainstreet business model?
Our business model is called the Mainstreet value chain. In a nutshell, we only buy mid-market add-value apartment buildings in western Canada.
A: Mid-market is defined as generally smaller buildings (below 100 units). We cluster them together and create operating synergies.
B: Add-value means we use our talent to reposition the asset. In financial metrics terms, this means increasing the top line revenue by minimum 25-40 percent on a fixed cost. This usually translates into a bottom-line number, thus adding value.
C: Western Canada has growth cities with less supply in relation to their populations.
In a nutshell, mid-market add-value apartment buildings in western Canada are a strategic play for us.
Q: Where do you see Mainstreet Equity in the next 10 years?
We have been one of the best performing companies on the Toronto Stock Exchange over a ten-year period. I want Mainstreet Equity to be one of the best performing companiesin the world. We want to go global. But even while we focus on taking Mainstreet global, we want to keep improving the life of middle-class Canadians.
Q: Apart from your Mainstreet Equity, do you have other businesses?
Yeah. Apart from our core business of Mainstreet Equity, we are into real estate development in Belize. We also operate a private equity fund. Then we also provide merchant payment solutions through our company called National Payments.
Q: Any future plans to branch into new areas?
You never know what kind of opportunities knock at your door.
Q: Any plans to invest in your ancestral country India?
As I said, you never know when an opportunity comes. India is slowly getting there in terms of making its real estate market attractive for foreign investors.
Real estate plays a big role in the GDP of any country and India now has the opportunity to catch up because demographics are on its side as 60 percent of Indians are below the age of 35. Then the country is urbanizing rapidly.
Once the legal framework is in place, institutional investors will start coming to India.
Q: Do you see the Canadian housing market bubble burst any time soon?
There are three scenarios here:
A: In the housing market (not the apartment building market), it is all about supply and demand. If we create more supply, and if there is no demand, there will be a correction. But I don’t see this happening to the extent it happened in the US for various reasons.
B: Interest rates could go up substantially, but I don’t see that happening either any time soon.
C: If the economy starts contracting and layoffs increase, then people can’t make payments on their homes.
Q: How about the possibility of the bubble bursting in the apartment building market in Canada?
Apartment buildings are ‘sheltered’.
When you build a brand-new apartment building, it costs anywhere between $250,000 and $350,000 per door to build. But most of the existing buildings trade significantly for a lower price per door or below replacement costs.
For example, Mainstreet’s latest purchases of existing buildings were around $100,000 per door.
On the other hand, the demand for rental apartments is constantly increasing on an annual basis because of immigration, eco-generation, foreign students and foreign workers – all of whom are typically renters.
So, the bubble does not affect apartment buildings like houses or house builders or condo developers. That’s why apartment buildings are more sheltered.
Q: Finally, what one-sentence advice will you give to a youngster who wants to be as successful as you are?
Take action, take big risks. Remember Komagata Maru.