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What are the essential attributes or strategies one must adopt to become wealthy in today's financial climate?   This week on the show, we have Jonathan Cattani, a former stockbroker turned real estate investor and founder of Cattani Capital Group. In this episode, he talks about his journey from stock trading to real estate investing, what it takes to become wealthy, and how investors can take advantage of the changing landscape of private markets in 2023. He explores how younger high-income earners can leverage higher equity multiple investments and stresses the importance of having an open mindset when it comes to creating passive income streams.   Tune in for an informative conversation that has the potential to help you make smarter investment decisions in 2023 and beyond!     [00:01 - 08:35] Jonathan Cattani: From Stock Broker to Real Estate Investor and Beyond • Jonathan's background in commercial real estate How his skillset led him to become a capital raiser and start Cattani • How to build out investor relations and automation for sales   [08:36 - 16:19] Exploring Cashflow Investing in 2023 • Investing in 2023 has become challenging due to unpredictability in the market • Interest rates are relatively low at 7% compared to 3.5% a few years ago • How investors are opting for more predictable fixed-income products • TechVestor - a private fund that invests in short-term rentals across the country   [16:20 - 24:15] A Guide to Investing for High-Income Earners • It takes time to build up cash flow streams, but it is possible to plan and craft a strategy for wealth appreciation over 5-15 years • Passive investing works well for high-income earners who are not yet wealthy • Real estate investments can be more predictable than other revenue-heavy businesses   [24:16 - 30:42] Closing Segment • A mindset shift is necessary to take on some risk and grow wealth outside of traditional investments • Writing the first check can be scary, but it is essential to make it a way of life     Connect with Jonathan: Website: Catttani Capital Group Instagram: @jonnycattani Podcast: The Cash Flow Chronicles     Key Quotes:     "Whenever you find a group or someone that's doing what you want, add value however you can." - Jonathan Cattani     "Doing your due diligence and really focusing on who, what, and why you're investing are the most important aspects of real estate." - Jonathan Cattani       WANT TO LEARN MORE?   Connect with me through LinkedIn.   Or send me an email at sujata@luxe-cap.com   Visit my website, www.luxe-cap.com, or my YouTube channel.   Thanks for tuning in!   If you liked my show, LEAVE A 5-STAR REVIEW, like, and subscribe!

We often differentiate between business growth and personal growth and emphasize one at the expense of the other. But what if they're intimately linked?    Join Meny Hoffman and his guest, former president of Cambridge Air Solutions and founder of EncouragingLeaders.com Marc Braun, for a deep dive into the ways that your personal habits affect your business's health. Along the way they discuss how your physical and mental health impact your ability to lead, ways to awaken your employees' latent genius, why courage is crucial, the essentials of effective communication, being humble enough to ask for help, the ways to use social media effectively, and more.   Marc Braun is a coach who teaches business leaders how to build cultures of growth in their companies. He served as president of Cambridge Air Solutions—a renowned engineering and manufacturing company revolutionizing HVAC technologies - and quadrupled revenue and increased profitability tenfold during his 13 years at the company.     [00:01 - 08:32] Opening Segment • Leadership growth is the key to business growth How leaders can foster courage and drive business growth • Leaders have the responsibility of growing their company and themselves   [08:33 - 15:57] Unlocking Creative Genius • Separating business growth from personal growth is important for navigating challenges • To address a problem, it is important to look at the behavior of the leader • How creative genius in humans decreases with age due to fear of failure or criticism • Leaders need the courage to take risks and be creative to achieve business growth   [15:58 - 22:59] Finding the Balance Between Emotion and Logic • Why courage is defined as action in the face of fear • Leaders must breathe courage into their teams to help them learn and grow Self-review of habits and systems is important for leaders • Leaders should be humble enough to ask for help when needed   [23:00 - 30:22] How Leaders Can Navigate Social Media & Improve Communication Skills • Leaders need to understand their blind spots and be aware of their emotional intelligence • Communication is difficult and can go awry if emotions are not taken into consideration Why digital communication should not be used for negative emotions or information   [30:23 - 37:37] How to Become a Positive Force for Good by Encouraging Leaders • Social media can be used as a platform for leaders to have a voice, but it should not be abused • Every leader has a public responsibility and must decide where their voice is heard • Leaders struggle with articulating their vision and getting their team aligned with it   [37:38 - 41:38] Closing Segment • A platform that helps organizations build coaching into every leader at every level • Marc on the rapid four questions     Want to connect with Marc? Follow her on LinkedIn. Visit Encouraging Leaders to grow in profit and purpose!   Key Quotes:   “Our job as leaders is to encourage to breathe courage into other human beings.” - Marc Braun   “You do not have to have a certain level of money to find a coach. You have to actually be humble enough to say that you need help.” - Marc Braun     Connect with Ptex Group: Facebook, Instagram, Twitter, LinkedIn   LEAVE A REVIEW + and SHARE this episode with someone who wants to achieve in business. Listen to previous episodes on Spotify, Apple Podcasts, or wherever you get your podcasts!

Have you ever wondered how to balance the needs and expectations of different generations in a family business? In this episode, Travis Harms discusses ways to promote positivity within shareholder communities of family businesses while highlighting the importance of communication. He delves into the challenges of managing multi-generational family businesses with different shareholder clientele and their expectations regarding cash flow and capital appreciation. Travis highlights the importance of having the right people in leadership positions and working with an attorney and a valuation professional to ensure that buy-sell agreements are understood. Listen and enjoy!Travis Harms leads Mercer Capital's Family Business Advisory Services practice, helping multi-generation family businesses with their valuation, strategic corporate finance, and shareholder education needs.[00:01 - 06:32] Opening Segment• Travis introduces Mercer Capital'sHelping families and business owners with evaluation and advisory services• Family businesses should focus on engaging and relating to shareholders more intentionally• Best practices for positive shareholder engagement[06:33 - 13:54] Navigating Multi-Generational Shareholder Needs in Family Businesses• Multi-generational family businesses face unique challenges with different shareholder clientele• Balancing the needs of different generations and keeping them informed is crucial• Limited liquidity can be a challenge for family businesses, but illiquidity can also be the source of outsized returns[13:55 - 20:59] The Challenges of Diversification and Leadership Transitions in Family Offices• People turn to esoteric asset classes they know nothing about for diversification• Transitioning leadership is a challenge for families without the right professionals and skill sets• Realistic assessment of needed skill sets is crucial for a successful leadership transition[21:00 - 28:51] The Importance of Buy-Sell Agreements in Family Businesses• The importance of having the right person in a leadership position• How to remove the stigma around owning shares in the family business• It's vital to involve an attorney and valuation professional in creating a buy-sell agreement• The need for clear understanding among all parties involved in a buy-sell agreement[28:52 - 37:45] Closing Segment• A consistent view of the value under the buy-sell agreement is important• Families should formalize a process for evaluating a full-on liquidity event or acquisitionWant to connect with Travis? Follow him on LinkedIn. Visit Mercer Capital to explore more about the family businesses! Key Quotes:"If anything, family businesses should be more focused on engaging and relating to shareholders than public companies are." - Travis Harms"Return follows risk in investing." - Travis HarmsDownload our FREE Strategizing for Inflation Guide here: https://www.excelsiorgp.com/download/Connect with me on LinkedIn!LIKE, SUBSCRIBE, AND LEAVE US A REVIEW on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on. Thank you for tuning in, and Stay Tuned for the Next Episode COMING SOON!

In this episode we are joined by Leslie Short in a podcast takeover. Join us as we share on how to hold up your success in your business and how to turn your negative situations into lemonades.   Leslie Short brings four decades of experience when she created The Cavu Group to advise companies and organizations how to expand beyond their current culture through the Diversity & Inclusion lens. She firmly believes that issues don't go away because programs are in place.         [00:01 - 12:28] Opening Segment Leslie shares about herself and her background  Emi discusses her "I AM" statement and how we all have divinity, especially as women in a masculine world Transforming a potentially negative or stressful situation into a good and turning it into a business.   [12:29 - 19:37] Approach Towards Clients Emi shares how clients approach her about their frustrations in business and how to accomplish higher goals Keeping herself accountable for her clients and success Women need to pitch themselves and believe they can succeed    [19:38 - 25:40] Leadership and Being a Leader .Everyone can be a leader and it starts with leading yourself We have the ability to make an impact in the lives of people around us You can be a leader and still not have great leadership Leadership requires us to be open and transparent   [25:41 - 34:33] Approach Towards Business When we show up for our business our team and clients will show up for us  We all have transferable skills we just need to learn how to use them Helping women be the CEO of their business Creating a conversation and building business and not another networking group   [34:34 - 40:32] Closing Segment A perfect client is someone who is open  Being committed and accountable to the person who coaches us  Support will be there when you need it and especially when you don't       Reach Leslie through Facebook, Instagram, Twitter, LinkedIn and www.thecavugroup.com and tap into your limitless social media potential!     If you liked my show, please LEAVE A 5-STAR REVIEW, like, share, and subscribe!     WANT TO LEARN MORE?   Connect with me through Emi Kirschner Business Coach, Facebook, Instagram, and LinkedIn   Check us out on Apple Podcasts.   Thanks for tuning in!       Tweetable Quote   “Everybody is a leader. Like it doesn't matter who you are, there are days when you have to pick yourself up off the floor and lead yourself out the door to go do something that you don't wanna do.” -  Emi Kirschner   “The foundation will continue to grow, but I must be listening to the world and have the flexibility to say, That it didn't work. Now we need to shift. We need to come back. We're doing too much.” - Leslie Short    

How many of us have given up on turning dead leads into hard cash, because we either don't know how to do it or we haven't been successful at systematizing this process? Today, we are going to do a deep dive into how real estate investors can make money from those dead leads. My guest is Chris Craddock, and he is an expert on this topic. You are also going to learn how real estate investors can work hand in hand to make more money in your business.  Chris Craddock is a nationally certified Life Coach in Leadership and one of the top real estate professionals in the world closing 65 deals+ per month. Chris is the host of the Uncommon Real Estate Podcast, a Realtor, and an entrepreneur who runs multiple successful businesses in the Washington DC Metro area as well as Richmond, VA. Chris and his companies consistently bring in close to 10 million in revenue year after year. The Redux Group sold just over 160 Million in Volume in 2020. Key Highlights: [00:01 - 07:02] Opening Segment • An overview of how real estate investors can make money from dead leads • Chris shares his background and work A realtor and entrepreneur who runs multiple successful businesses • The advantages of working with old leads, and how Chris has taken this process to a whole new level [07:03 - 13:55] The Relationship Between Agents & Investors • Why agents and investors traditionally have a "love-hate" relationship • How investors sometimes start to see the value in having agents as part of their team. • Persistence breaks resistance [13:56 - 20:38] Make Money From Dead Leads • The key to success as an investor is to find partners who share your same goals and values, and who are willing to learn and grow with you. • What if an agent doesn't get the value of having somebody send them a bunch of seller leads or appointments • The fours traits an investor should look for Happy, humble, hungry, and smart [20:39- 27:32] Get A Real Estate License, And Make Money • The real estate license is a very powerful investment tool and can lead to increased income • How wholesaling can be a profitable business • What you'll find and learn with Chris's program A virtual brokerage service that allows anyone to become a real estate agent [27:33 - 30:27] Closing Segment • A new system to make money as a real estate investor • Check out the Uncommon Estate Podcast     Want to connect with Chris? Follow him on Facebook. Head to The Redux Group, and find a unique perspective and advantage in today's competitive marketplace all over Virginia & Maryland!  Follow Chris on Instagram here.   Key Quotes: "The people that make the most money tend to be the ones that can solve the most people's problem." - Chris Craddock "Wealth is when you buy once and get paid for the rest of your life." - Chris Craddock   WANT TO LEARN MORE? Connect with me through my website, Instagram, and LinkedIn Or you can send me an email at sharon@sharonvornholt.com  Be sure to check out the Louisville Gals Real Estate Blog and my course Probate Investing Simplified. Learn more about this podcast on iTunes, or Stitcher. If you liked my show, please LEAVE AN HONEST REVIEW, like, and subscribe!

Adrian Moreno began his career inside the health & fitness space, while also gaining unparalleled experience with hypnosis & NLP, establishing himself as a respected transformation coach. As visionary and head transformation specialist for Potentia he specializes in behavior and belief optimization through cutting-edge hypnotherapy and NLP techniques, solving lifelong problems, addictions, compulsions, and depressions in as little as 20 minutes with a 100% success rate. If he isn't busy setting a new standard for how quick transformation can happen, then you can find him spending time with his family, writing, podcasting, or meditating.   He joins us in this episode to dive deep into the power of hypnosis. He busts common myths and reveals the many ways it can benefit the mind and body. Adrian believes that through hypnosis, we can change ourselves and we can change the world.     [00:01 – 01:31] Opening Segment I introduce our guest, Adrian Moreno   [01:32 – 03:51] Who is Adrian Moreno? Growing up in Austin and becoming an entrepreneur   [03:52 – 05:40] Wellness Check-In Take good care of your physical health and shower every day Always stay social Utilize self-hypnosis for visualization practices   [05:41 – 07:01] Connecting to the Community Adrian lists the people he's most grateful for   [07:02 – 20:10] Understanding Why People Behave the Way They Behave His own journey of transformation: from weight loss to starting his own fitness business He discovered that hypnosis has a higher success rate than traditional therapy How hypnosis helped him get to the root of his fear of public speaking Most of the problems in today's world are due to upbringing and can be healed through changing our internal experiences   [20:11 – 20:58] The Guided Meditation for Wealth Move past the negative thoughts and build a better relationship with money and abundance. Watch the guided meditation on YouTube for free!   [20:59 – 31:44] The Truth About Hypnosis Hypnosis is not mind control; it is a state of absorbed attention and can be used for a variety of purposes Children can also undergo hypnotherapy and gain lasting positive effects   [31:45 – 39:37] Hypnosis for Entrepreneurs and Leaders When people struggle with a problem, they often have a core belief that is preventing them from achieving their goals Hypnosis can tackle these problems and eliminate insecurity and self-doubt   [39:38 – 47:26] Closing Segment A quick explanation on the difference between NLP and hypnosis Adrian answers the BOI Talk and Hop questions Reach out to Adrain!   Tweetable Quotes: “Your daily behavior patterns come from decisions you made between the ages of zero and eight. Those decisions you make during that time are very crucial.” - Adrian Moreno   “To be a human being is to literally be in a trance.” - Adrian Moreno   “You will always follow your thought. Thought creates feelings, feelings create action, action creates your results you call your life.” - Adrian Moreno Resource Mentioned: Seth Speaks by Jane Roberts   Connect with Adrian Moreno at rewiremythoughts.com/unshakeable   Learn more about Evolve Benton at https://www.evolvebenton.com/  Listen to more episodes of BOI Meets Wellness at https://www.boimeetswellness.com/ Follow us on Instagram https://www.instagram.com/boimeetswellness/ Follow us on Facebook https://www.facebook.com/BOIMEETSWELLNESS/ Follow us on Twitter https://twitter.com/thebmwpodcast Check out our new merch store https://www.boigearstore.com/ Get the Money Mindset Journal: https://rebrand.ly/MoneyMindsetJournal Click here for Kajabi's 30 days free trial: https://rebrand.ly/Kajabi99 Download StreamYard for your show: https://rebrand.ly/StreamyardBOI    Watch the Guided Meditation For Wealth: https://youtu.be/qSlnH7FDUOw Hit us up and send us an email at boimeetswellness@gmail.com   

Sachin Patel is a father, husband, philanthropist, functional medicine practice success coach, speaker, author, breathwork facilitator, plant medicine advocate, and international best-selling book author. In this episode, Sachin and I discuss the power of mushrooms and fungus. Sachin has been incorporating mushrooms into his diet every day for years and has never missed a day. He believes that the doctor of the future is the patient, and he incorporates medicinal mushrooms into his life to help shift from separateness to oneness.   [00:00 - 06:31] Opening Segment Sachin Patel is a successful father, husband, functional medicine practice success coach, speaker, author, breathwork facilitator, plant medicine advocate, and international best-selling book author Habits are important in order to maintain good health and focus Exercise and nutrition can be difficult to stick to if they are not part of an individual's identity, but with the help of a supportive community, these tasks can become easier to accomplish   [06:32 - 16:53] Going Organic Sachin cut out coffee completely for four and a half months and did not notice any difference in her energy or focus Sachin gives us a crash course on the importance of water filtration, fasting, and eating organic Organic food is healthier than non-organic food, and you can take precautions to protect yourself from harmful toxins by eating organic, growing your own food, or using a biotoxin binder   [16:54 - 29:20] Build Your Dopamine Up There is a lot of effort and love that goes into growing food, and it's a great exercise in building dopamine up All you have to know about microdosing How to Shift Someone into a Parasympathetic State   [29:21 - 36:28] How to Address Sleep Deprivation Sleep deprivation leads to weight gain, hormonal imbalances, and increased cravings Know how to establish a healthy sleeping schedule A good night's sleep will also help us replenish our body's ability to make dopamine   [36:29 - 41:16] Closing Segment A lot of times when we think about lifestyle and nutrition and optimization of our health, we focus a lot on diet and exercise, however, there are other facets that we also need to work on   Get lean, get strong, and get paid!     Let me help you reach your goals for FREE, just go to GetNatesBook.Com.  Break your relationship with sugar and drop fat in 5 days at SugarDetox.com, your first step to health. Learn more by connecting with me through Instagram or visit www.LowCarbHustlePodcast.com.    If you liked the show, please LEAVE A 5-STAR REVIEW, like, and subscribe through your favorite streaming platform!   Tweetable Quotes "It's a very outward experience. But when we go blindfolded, then it's a very inward experience." - Sachin Patel "We want to focus on what you're eating, but we want to understand how your biology can work for you instead of against you and staying compliant to this process." - Sachin Patel

Angela Campbell is the owner and founder of Fitmama Coaching - Helping Busy Women & Moms Lose Belly Fat and Juggle Life. They bring your whole lifestyle together with Faith, Fitness, Nutrition, and Family one habit at a time!   As a MOM and Entrepreneur, the struggle to keep your own health at the top of the priority list is super hard - but it's also very crucial to your own health, to the health of your whole FAMILY relationships, and also your work or business…   In this episode, Angela shares with us her experience as a mom and how she juggles her busy life while remaining on top of her shape.   [00:01 - 10:19] Opening Segment Fitmama, Angela Campbell gives us a brief overview of her life as a mom and entrepreneur Angela's motivation in helping other women put their health at the first inline Angela takes the Mom or Ant Pop-Quiz   [10:20 - 20:39] Keeping Up with the Pressure How Angela speaks with her clients in keeping them motivated to stay fit and healthy We talk about The Career Mom and the pressure moms have within Why Asking for Help is 99.9% Hard for Moms   [20:40 - 38:24] The Mom-Life Balance Angela talks about her relationship with her husband and their acts of service to one another Communicate.  Men and women are not mindreaders A Word for the Dads and Husbands Out There How to Get Enough Sleep as a Supermom Getting Your Body Back Postpartum    [38:25 - 43:35] Closing Segment A sneak peek into the Campbell family's quirks and daily routines   Connect with Angela Website: https://acfitmama.com/  Facebook: fitmamagroupforwomen.com LinkedIn: https://www.linkedin.com/in/angelaicampbell    Get lean, get strong, and get paid!     Let me help you reach your goals for FREE, just go to GetNatesBook.Com.  Break your relationship with sugar and drop fat in 5 days at SugarDetox.com, your first step to health. Learn more by connecting with me through Instagram or visit www.LowCarbHustlePodcast.com.    If you liked the show, please LEAVE A 5-STAR REVIEW, like, and subscribe through your favorite streaming platform! Tweetable Quotes   “When you totally shift yourself and you start working on yourself and you put your priorities on you. You're actually investing in your family too. And it's not the other way around.” - Angela Campbell   “Moms, you also have to put yourselves first!” - Angela Campbell   “Give your body credit and grace for what it just went through postpartum.” - Angela Campbell

Julie Holly is a podcast host, mentor, and founder of Three Keys Investments.  She started her company to help people invest their money into high-performing assets. This is to allow them to spend more time with their families and work fewer hours. In today's episode, she will talk about her transition into the ground-up development space along with other tips to identify the right partners in a deal. Lastly, she will be sharing some of her experiences in her real estate journey, including the good and the bad, that other investors can learn from.    [00:01 - 03:54] Opening Segment Julie Holly tells us why she is in the ground-up development space This is a painful part of her journey, which you might feel too [03:55 - 08:39] Identifying Red Flags in a Deal Here's a tip from Julie to determine if the deal in front of you is right for you Julie talks about the current deals they're working on These are the kind of relationships that Julie maintains in the real estate space [08:40 - 15:14] Investing in Ground-Up Development This is how Julie assured her investors about this ground-up deal How Julie and her team vetted for their ground-up deal Are you looking for a developer? Listen to Julie's story [15:15 - 17:03] Closing Segment A real estate mistake you want the listeners to avoid Don't keep your knowledge to yourself.  Invest in what you know Your way to making the world a better place Building new apartment complexes to help the homeless population Reach out to Julie Links below Final words   Tweetable Quotes “...the more you understand yourself, you can understand how [you are] going to show up and how [yuo are] going to be able to receive what other people are saying.” - Julie Holly “Don't bank your livelihood off of those quarterly distributions. Those are the icing on the cake.” - Julie Holly “Invest in what you know and if you don't know about it, invest with people who do know, who can guide you.” - Julie Holly   -----------------------------------------------------------------------------   Email threekeysinvestments@gmail.com to connect with Julie or follow her on LinkedIn. Visit Three Keys Investments to grow your wealth strategically! Check out her personal website to know more about her other endeavors.  Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Julie Holly  00:00 When we have that initial conversation and I kind of trickle it in is that although we are planning for quarterly distributions, don't blink your livelihood off of those quarterly distributions. Those are like the icing on the cake. You know, just do whatever you want. Some investors are like, can I just put it back in the deal? I'm like, I wish you could. But we can't do that. Not this particular deal. But that is one. Although I wasn't in the ground-up space as we speak about investors. That's one way that my investors were already slightly primed for that concept of,ell really, it's not going to make that much of a difference because I wasn't basing my livelihood off of this distribution to begin with.    Intro  00:40 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:52 Julie Holly is the founder of three keys investment, she helps people like you find their freedom through multifamily real estate investing. Julie, welcome to the show.   Julie Holly  01:00 I am so thrilled to be here, Sam, looking forward to it for days.   Sam Wilson  01:04 Oh, good. Well, I mean, I felt like I scared you or something there with your intro. You gave me that look of like, oh my gosh, what's this guy doing in the microphone?    Julie Holly  01:11 Yeah, really? That's funny that a podcast would have that kind of response.   Sam Wilson  01:16 Well, this is going live, audio and video. So you'll get this on YouTube. But alas, I digress. We've got three questions I asked every guest who comes on the show, right. 90 seconds or less. Can you tell me where did you start? Where are you now? And how did you get there?   Julie Holly  01:27 I started in single family housing, I found multifamily housing. And now I'm currently involved as a LP and a GP and diving into digging into ground-up development. How's that?   Sam Wilson  01:42 How about that? I love that. I love the play on words. They're digging into ground-up development. Tell me that journey? What has been the progression? Maybe not necessarily why? Because we've heard that a lot on this show. I mean, why do people go from single family to multi we get that all the time, I'm sure you get it as well go. But tell me your journey and tell me what things you've learned?   Julie Holly  02:00 You know, the painful part of the journey has been being patient. So I think that transition, as many have made that transition from single to multi. So we're not going to belabor that point. But I'm going to get all teary-eyed because it's demanded not just growth in knowledge and understanding because I spoke residential really well. But I had to change as a person, my thinking had to expand, and it had to expand beyond the vocabulary of the multifamily space. I had to embrace the concept of collaboration and teamwork. I had to learn to flex that word, “no,” in order to say yes, and I think those were the most painful growth avenues that I experienced through the process of that transition.   Sam Wilson  02:48 When you say flex your “no” muscle, what would you say flex the word no?   Julie Holly  02:52 Right? No. Well, you know, I was very blessed to be invited to a lot of opportunities. And I was really like every new multifamily investor, really excited like, yes, I want to jump into this deal. Like, don't we all just want to get our deal done, right? Because the Law of The First Deal, like let me just get it done and start my success parade, right? And really, I started reviewing the deals, and it's like, okay, well, he no, this doesn't align with my principles and values, and all the best to you. And that, you know, always all the best to other people. Because I might not see something that they do, or I might not have the courage that they have whatever it is, that doesn't matter. But being able to evaluate things and evaluate teams and say, these are great people. But is this the best alignment for me? And so saying no to those opportunities was really painful, and yet, where I'm at now, I high five, myself, left and right because I know that those would have been some painful situations.    Sam Wilson  03:55 Were there some telltale signs that said, hey, this is an again, not that the people you were looking to work with were bad people or they were doing bad deals, but maybe just not a fit for you. Were there telltale signs that were like, “Hey, this is something somebody else can look out for?”   Julie Holly  04:11 You know, it's easier with, to talk about to discuss that right? When it comes to the underwriting Sam, it's so much easier, right? Because we all have our concept of what quote-unquote, conservative is, right? And so, you know, when it comes to that, it's easy to just say, well, these assumptions don't really align with how I underwrite and so have fun, no big deal. When it comes to the people especially being a people person. I love, love, love people so much. It becomes a different scenario. And I had to learn to do exactly what you said. You said they're not bad people, but this relationship and that means understanding, you know, psychology and human relationships and saying, how are these dynamics going to play off of each other? How when not if when a challenge arises, because it will, every single time when a challenge arises, how are each of us going to show up in a way that is going to lead to a really effective solution, so that we can serve our investors and residents? Well, so that just comes through conversation. And that's one reason why I really believe in knowing who you're partnering with not just a fly-by-night, like, oh, we just met at the conference last week. Good. Yes. We're going to collaborate. You know, we're gonna partner. Yeah.   Sam Wilson  05:33 Yeah, that's, I mean, and you know, that too, can happen, by the way.   Julie Holly  05:37 Yes, it can happen. I'm not saying that it cannot happen. You know, for me, personally, I like I feel like, I need to have a little more track laid it before I do that, but I have seen successful partnerships use, look at Goodegg Investments, boom, BEC. Four years ago, they partnered up, right?   Sam Wilson  05:57 Oh, for sure. Yeah, it can happen. Were there any was there any gut check or anything that was an intangible that you're just like, is not for me?   Julie Holly  06:04 100,000,000% and but you have to learn how to vet your gut, right? Just find that, right. So we have like the deal that you know, the partners, you know, or vet the sponsors, and now we have like, vet your partners by the gut check. You know, it's, but it's really true. And, and a lot of times we dismiss those little red flags, those little microcosms that pop up or like, you have to understand yourself in order to do that. So I've worked with a high performance coach for two years. And that's been very helpful for me. Because the more you understand yourself, you can understand how are you going to show up and how are you going to be able to receive what other people are saying. So it's really a matter of for me conversation. And I love meeting people face to face read their energy.   Sam Wilson  06:52 Right? Yeah, that's for sure. I love that. Yeah, the painful part of that growth, I think going back to what you said, is being patient but I think a lot of that is also like a slingshot. You know, if you're patient, when you pull back, well, the time you let go, it's going somewhere and fast. So you know, don't be in a hurry to get out of the gate too soon. So tell me you guys have a deal closing or by the time this episode goes live, you will have a deal that has closed. Is this your guys first deal? Is this your fifth deal? Where are you in this journey?   Julie Holly  07:21 Yeah, well, by the time that closes, that will be deal number four. So I'm actually closing any day now on deal number three, which is 120 units, Class B and De Moines, and super excited about that. Love the partnership there and fantastic team. And then the part what we'll be closing, when this goes live, is we'll be closed on our construction loan for ground up development in Winston Salem.   Sam Wilson  07:49 Awesome. I want to hear more about that. But talk to me about scaling. You know, it's every deal you've done with the same team, or does this team change?   Julie Holly  07:58 Wow, that's a really great question. And part of me is like, well, people are gonna think crazy things. But it's normal, right? So I actually have partnered, every single opportunity will have been with somebody different. And I love that as a podcaster and as someone who has a very nice network within our community, I know so many extraordinary sponsors, and we all need deal flow, particularly those of us who work to serve investors, specifically by placing their capital. And so that just gives me by having those relationships. I'm always nurturing, you know, and understanding like, who should I be partnering with? I have a place for my investors' capital.   Sam Wilson  08:40 Right, yeah. And that's exactly it. Because again, I say this way too often on this show, forgive me, there's two things that go round and make the business go round. There's deals and money and money deals money. Yeah. And if you're not finding deals, then you're not going to find the money, and if you run out of deals for too long, by the time you have a deal, the money will be gone.   Julie Holly  08:58 Absolutely. You want that money working. So much. So that there was one point where I didn't have anything on the horizon. And I had a couple of investors that really needed to deploy capital. So that's the check also is what do you do? Who are you looking out for yourself or your investor? So I referred them to, like a couple of sponsors that I knew had quality deals to offer. Painful moment, I'll imagine everyone's like, please feel my pain with me. Okay. Yeah, it's listening. It was painful. But I also knew it was what I believe is the right thing to do for my investors.   Sam Wilson  09:32 Right, yeah, that's absolutely cool. Tell us about the ground-up deal. I mean, that's very different underwriting, that's a very different potential investor to bring onto the deals to kind of walk us through that because there's just some nuance to that. That's not for every either sponsor or investor.   Julie Holly  09:50 That's true. And when I joined that partnership, I was actually you know, very transparent and said, I have not solicited ground-up development to my investor list at this point. So this is going to be something new for them. And we all know that some investors want all of that they want that distribution, that quarterly or monthly distribution that they're receiving. And to have that, you know, potential of two years of, we're not seeing anything is a big deal. But here's how I navigated that, Sam, I actually always tell my investors when we have that initial conversation and I kind of trickle it in is that, you know, although we are planning for quarterly distributions, don't bank your livelihood off of those quarterly distributions. Those are like the icing on the cake, you know, just do whatever you want. Some investors are like, can I just put it back in the deal? I'm like, I wish you could. But we can't do that, you know, not this particular deal. But, you know, that is one, although I wasn't in the ground-up space, as we speak about investors. That's one way that my investors were already slightly primed for that concept of, well, really, it's not going to make that much of a difference, because I wasn't basing my livelihood off of this distribution to begin with. And that tailwind that everyone gains at the end of ground-up development is so significant equity multiple, is so significant, that it can be very enticing to investors to say, wow, you know, I'm more far more than doubling my money, this is going to be very worthwhile for me.   Sam Wilson  11:24 Right, yeah, absolutely. How did you vet that deal, an opportunity? I mean, somebody brings you a piece of land and says, Hey, you guys should build an apartment complex here. I mean, how did that process work?   Julie Holly  11:34 Right? Well, in addition to, you know, looking at the underwriting, the underwriting is confident in however, what I was really concerned about, as I'm sure the listeners will have the same concern is, what about the red tape and all the different government levels? What about the supply chain issue? What are we going to do, as supplies increase in price over the duration of this build process? So the underwriting was solid in and of itself, and the process of entitling the land and getting going on the ground-up development, the track was very well laid. So for me, it was more like who is our developer? What is our track record? Again, it's going down to that partnership, if the numbers already make sense, and the numbers check out, now we got to know who are we working with? And what are they bringing to the table that is going to ensure to the investors and the team that this can be fully executed? Right?   Sam Wilson  12:33 How did you guys select a developer?    Julie Holly  12:35 Yeah, well, this is actually a really cool story. So our partner was driving home, and everyone does. So as you're listening to this, like, make sure that every time you're driving everywhere, that your eyes are like looking around, train your kids in the car to look for sale signs also. He's driving home, you know, he's taking the off-ramp, and they're buried in the trees is this teeny, tiny “For Sale” sign me he's driven past us a million times already probably calls the number on that. And he has actually done development with our developer already in that community. So it's not like, “Oh, this is the first time working with this developer.” So they walk the land, I'm giving you the long story. So feel free to interrupt at any point. They actually, you know, he calls the developer they go, they look at the land, they walk it the developer hops on the phone with, you know, planning and zoning people he already has relationships with and it's a matter of, hey, can you check what the zoning is out here? And, okay, can we change that? And they just said, Hey, we'll get back to you in a couple of weeks and let you know, a couple of weeks is a long time. But guess what they got back to me like 5, 10 minutes later phone rings, which is, also speaks to the caliber of that relationship at PNC. And they're like, We can work with you on this. And so we just simply went down that process when we were at the city council meeting, and fortunately, it's a zoom call, because I am on the opposite coasts, on the Canadian border, you've been like opposite coasts and opposite, you know, north-south. So I was able to be on that Zoom call when P and Z, you know, unanimously voted in favor of our zoning change. And so lots of and that's current, we still have some, you know, things to move forward. But you know, it's a very favorable and so selecting that developer was just a matter of looking at, okay, well, my partner has already done business with him. They've already had this experience, they already have a relationship, and it's been extremely successful for them. That really made it easy.    Sam Wilson  14:35 That sounds like I mean, a lot of what you have done to grow is simply scale other people's expertise and knowledge in the space. Is that a fair summary?   Julie Holly  14:45 Isn't it? It totally is. And isn't that so it seems like a cheat or a hack, doesn't it? On one hand.   Sam Wilson  14:54 It's not hacking. It's doing what it takes.   Julie Holly  14:57 Exactly. And it's a good partnership. Right, if every single person is constantly bringing their very best to the table, then we have rockstar teams, every single time. Everybody wins. And I love everyone who hears me anywhere knows I am all about everybody with me.   Sam Wilson  15:15 I love that. That's great. Julie, I've enjoyed hearing your story. I've loved watching your progress. I know I met you maybe a year, year and a half ago. And it's fun just to see where you've come in that time frame. So thanks for coming on today. And really just sharing the kind of the secrets to what it is that you've done and how you have grown your business and where you guys are going or you're getting into some really fun stuff. And I just look forward to seeing what the next year, year and a half holds for you. Let's wrap this up with a final few questions. The first one is this: What is one mistake you can help our listeners avoid and how would you avoid it?   Julie Holly  15:45 Invest in what you know and if you don't know about it, invest with people who do know who can guide you. Right. I learned that the hard way.   Sam Wilson  15:52 That's great advice. Next question when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Julie Holly  15:58 Oh, I'm building new apartment complexes. That is making the world a better place there is a housing shortage and while our homeless population needs to be served and cared for all of the other residents, it's C, B, A everybody needs a place to live.   Sam Wilson  16:14 Yep, absolutely. Julie, if our listeners want to get in touch with you or learn more about you what is the best way to do that?   Julie Holly  16:20 I have the over to the back door of my website Julie Holly, with a Y dot com. So head over to JulieHolly.com and you can see the investment side of me. You can see the podcast and you can join the book club.   Sam Wilson  16:34 Awesome. Julie, thank you so much for your time. I do appreciate it.   Julie Holly  16:37 Thank you, Sam. It's been awesome.   Sam Wilson  16:38 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.

Can you mix faith and business together? Stuart Grazier and David Gutierrez could and so can you. They are the co-founders of Storehouse 3:10 Ventures, LLC, which acquires and adds value to cash-flowing rental properties that will help their investors gain financial freedom through rental real estate. They donate 10% of all their net profits to their partner non-profit organizations.  In this episode, they will talk about how they built their business based on their faith, the journey they had to take and the challenges they had to overcome, and strategies that other investors can apply to their real estate investing.  [00:01 - 02:23] Opening Segment How Stuart Grazier and David Gutierrez become business partners This was their motivation to invest in real estate after retiring from the Navy [02:24 - 07:02] Building Systems and Processes The importance of building a team and the right systems and processes. Stuart shares a few secrets on how they do turnkey business from a distance David tells a few tips to scale a real estate business [07:03 - 12:40] Managing Worst-Case Scenarios Stuart and David capitalized on their military network to diversify This was how they did it This is David's favorite exercise before doing a deal, and he explains why You will learn something from how Stuart and David handle crises Listen to this segment [12:41 - 17:02] Investing in Real Estate Founded on Faith and Passion Stuart and David offer their outlooks on the future of real estate This is how they educate their investors about potential deals Learn the story behind the name of their company [17:03 - 18:47] Closing Segment A real estate mistake you want the listeners to avoid Not taking action Don't overanalyze Your way to making the world a better place Donating a portion of their business earnings to charity Reach out to Stuart and Ben Links below Final words Tweetable Quotes   “The biggest piece to having a successful real estate business is just fostering and creating relationships.” - Stuart Grazier “Real estate is a team sport…you got to create that know, like, and trust triangle. ” - Stuart Grazier “Focus is key, but also think that being diversified is also a great way to figure out where you're talented, where your highest and best is.” - David Gutierrez “Choose partners and choose teammates that compliment your weaknesses, and in order to do that, you have to know yourself.” - David Gutierrez -----------------------------------------------------------------------------   Email grazierinvest@gmail.com to connect with Stuart and David. They are also on LinkedIn: Stuart's LinkedIn David's LinkedIn Turn the key to your future by investing in real estate. Visit Storehouse 3:10 Turnkey now! Listen to their podcast, Filling the Storehouse Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Stuart Grazier  00:00 Networking and building relationships, honestly, I mean, I think that's the biggest piece to having a successful real estate business is just fostering and creating relationships. You know, real estate is a team sport. I've learned that the hard way. You know, I tried to do a lot of real estate, investing on my own, trying to do everything by myself for a long time. And it's just not the way to do business in real estate. You got to build relationships, you got to create that, you know, that know, like, and trust triangle. So I think that's it, man.    Intro  00:27 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:39 David and Stu, welcome to the show.   Stuart Grazier  00:41 Sam, what's going on, man? How are you?   Sam Wilson  00:42 Hey, man, I'm great. Same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell me where did you guys start? Where are you now? And how did you get there?   Stuart Grazier  00:50 Yeah, so David and I, we actually were college roommates way back in the day from the Naval Academy. And we've finished up a 20-year career in the Navy, we've both been investing in real estate on the side and about every different niche and strategy we could possibly think of, started a company together about three and a half years ago, and we have a podcast, we have a turnkey business in Wisconsin, flipping 30 to 40 to 50 houses a year, turn them into rental properties. We've also syndicated some mobile home parks, and we are lenders and we do all the fun stuff in between.   Sam Wilson  01:23 That is amazing. Question for you, David, when you hear all that, is there ever any consideration of saying, hey, let's streamline operations and really dial down into one niche?   David Gutierrez  01:33 Yeah, absolutely. You know, I think focus is really important. We are about to retire from the Navy. So in about five months, that'll really, hopefully free up some time, we've done a really good job of filling up the time that potential we are going to free up. So we need to, we definitely need to focus but and I would encourage absolutely encourage your guests and your listeners that focus is key. But also think that being diversified is also a great way to figure out where you're talented, where your highest and best is. And it gives you a chance to see if you really enjoy certain things and don't enjoy certain things. We love single family homes, a lot people think you graduate from single family homes go to multifamily and commercial deals. But we found that we really enjoy single family homes, so probably maintain a portfolio doing some of those. But at the same time, we also enjoy multi use buildings and multifamily. So I do think you do have to somewhat of a focus area. But I also think the diversification is good for us.   Sam Wilson  02:24 Right? What have been some things that you guys have done? I mean, these are a lot of different moving pieces, you know, doing a turnkey business in Milwaukee from Denver, while you're full time in the Navy. I mean, how have you effectively managed all of those? I mean, again, being full time in the Navy, like that's a lot of moving pieces. How have you done it?    Stuart Grazier  02:42 Yeah, so I think the biggest thing is building a team to help you and surround you with all the things that that we're not good at. David's like not good at really much anything. So we have to find a lot of things that can help us out on that end. But honestly, you just build out a team, building systems and processes and putting things in place where you know, we don't have to be in the business full time all the time,   David Gutierrez  03:03 You should also have a face to the business. And that would be me, anybody of your watchers on YouTube, you'll see students face and recognize why that's not the case for our business, that he's not the face. But I think there's also a component of outsourcing some of the things you're not good at, there's a couple things, one, choose partners and choose teammates that compliment you know your weaknesses. And in order to do that, you have to know yourself, right? You have to spend some serious time analyzing what you're good at admitting being honest with yourself being self aware and admitting the things that you're good at, and you're not good at. And then when you I'm a believer in taking your strengths and really maximizing those, the best that I can be for our team are the areas that that I bring my strengths, I don't need to spend a ton of time on my weaknesses, because my weaknesses, that effort will never do my weaknesses up to where my strengths are. Right. So I think you really focus on building that and outsource your weaknesses. And luckily for Stuart nine, we are so different. We have a great relationship, we get along great. And that's a key component. We trust each other, we love each other. But then there's the element of he brings things to the team that I just do not bring the analytical side things that I don't really care to do. And he's really good at that stuff. So it's a great partnership.   Sam Wilson  04:06 I love that. Ttalk to us about doing turnkey from a distance. That's a really unique anglem, and Milwaukee, how did you pick the market? And then how did you scale the teams effectively? I mean, that's, I know, a lot of turnkey providers. I don't know any who do it from a distance.   Stuart Grazier  04:23 Yeah. So a lot of things that we've built are out of past failures. And a lot of lessons learned along the way. You know, David and I were actually both living overseas in Italy. And we decided to purchase turnkey from a distance as a way to scale our own personal portfolios. And we both had really, really bad experiences with it. And David had way worse experience than I did to where it was like fraudulent he was possibly like going to court over some stuff. But along that journey, we really kind of figured out like there's some good ways to do things and some not-so-good ways to do things. And out of necessity, David really had to kind of build out a whole new team. His investments were in Milwaukee, he has family there. So he had to build out a team, I was going through some struggles, we were comparing notes, we'd also, you know, already had been doing stuff in the past. And we decided to take this and build on those lessons learned and build out a company to try to do it the right way. And so, you know, through those struggles, and through those failures, we were able to build out a team build out a model that we could be proud of, you know, using kind of those core values that we stand for. And, you know, build our team that way.   Sam Wilson  05:29 Yeah, that's really intriguing. I mean, it's one thing to do it once or twice on your own, maybe from a distance, it's another thing entirely, to develop an entire replicable system. What was that process like?   David Gutierrez  05:41 Yeah, you know, it's interesting, because there's, and I think you have to recognize what you bring to a situation, right. So when we're looking to build a team in Milwaukee, we're analyzing, you know, what we bring. So if we bring a network, we bring funding, we bring these different elements to make it easy for the team to acquire a property, then, you know, they kind of put some people together, they do some hiring and bring some contractors in that, you know, can hopefully embrace what we're looking to do. And then on the back end, we have a network that wants to buy these beautiful products, and we can continue to replicate that. So I think as you look at those things, and you try to build a system, I'll tell you, one of the things that I wouldn't recommend, I would not recommend doing it from a distance. Now that we've done it from a distance, I think the best way to build systems is to build a culture and to build the way that you do business and to be present for that every single day. So that you can your face is seen and you can really communicate the desired outcome of the business is the most effective way to do that, barring being able to be permanently there, if you do it from a distance, I would encourage you to get some really good frequent flyer credit card miles and spend a lot of time there and be present so that your team can see you and you can build that the system's weather, you know, we like EOS from traction, right? And, you know, willing, and we love that those processes. But whatever it is that you choose, the system you choose, is something you got to be dedicated to your team's got to be dedicated to. And a lot of times you have to be really present to build that culture.   Sam Wilson  07:02 Right. That's absolutely fantastic. So tell me, you know about building out then you guys have also syndicated mobile home parks, that's another kind of left turn outside of, you know, doing single family turnkey, doing a debt fund, syndicating mobile home parks, what does that look like? How are you finding opportunity? And then how are you growing that side of your business?   Stuart Grazier  07:21 Yeah, I mean, again, it's still not that team, you know, finding the right partners, the right people that compliment you, you know, one thing that we kind of saw early on in our investing careers was, you know, we had a great network, you know, being be military guys, we had a lot of people in our network within the military that were really interested in investing in real estate, but didn't really know how to, we were able to kind of capitalize on that and educate and help and teach. And we started a podcast, and we started seeing that we were able to do really well with our network. And so we use that as a source to then partner with someone that was knowledgeable about a market about an asset, and about, you know, kind of the nuts and bolts of the buying and managing and operating the asset. And we were able to kind of partner with them and bring the network and raise some capital and provide some, you know, investor relations to the team. So again, just building out a team, and then working with our strengths to do what we do best.    David Gutierrez  08:21 I think one thing that's really important to emphasize here is the partnership piece. And I think real estate is an area that a lot of people very quickly formed partnerships, and like, let's go do a deal. Hey, you're my neighbor, we've talked about five times I know you got somebody, I've got some money, we draw the same color car, so let's go do a deal. You know, I would highly recommend against that, you know, for Stuart and I, our partnership started developing 25 years ago, in the context of a hard situation, the Naval Academy, going through some tough times, and building a relationship, founding that 20 years of service and friendship and seeing each other's kids be physically seeing each other's kids be more, but shortly after, when the baby came out, you know, going to each other's weddings, you know, doing all these things, we have this very, very strong partnership, we build partnerships. Now, before we do deals, there's a lot of time spent relationship building, getting to know and doing worst-case scenario, that's my favorite game before doing a partnership, we say, Okay, this is the deal. And this went completely wrong. We lost money here, we have these investors, what do we do? What are you going to do in that situation? I think when you go through that exercise, and you put rigor towards relationship and partnerships, then when the tough times come, it's easy, it's automatic, right? You know exactly what you're going to do and you face contact and you make a decision and you move forward. And I think that the partnership piece, I see it so many times in real estate, especially when you start getting into bigger deals, commercial syndication multifamily investors. And if you don't want to have a beer with the guy or gal, do not bring them on as a partner. Do not bring them on as an investor because you should know that you're going to be together and somewhat of a marriage for a while.   Sam Wilson  09:48 For sure. What are some things you guys are writing into your agreements for when planning for worst-case scenarios? It's one thing to talk about it but it's another thing to have, hey, if you don't perform this perfectly, whatever it is, how are you protecting yourself in that way?   Stuart Grazier  10:03 Yeah, so we early on, David mentioned the book, Traction, you know, we read through that they had a thing called the The Vision/Traction Organizer, and it has you specifically write out like your vision, your core values, your 10-year vision, your five-year goals, your three-year goals, your plan, we do quarterly, you know, rock statements where like, you got things going on what you want to work towards. So we do that on a regular basis on a quarterly basis. We write those in and we update it every single year. So we always have that to go by, you know, obviously, like, we have the operating agreements for our businesses. And you know, we're best friends, like, you know, our families are incredibly close. And, you know, like David said, like, we're not gonna put anything in writing that says, if you fail on this, I'm not going to be your friend anymore. But we had those, like, serious talks ahead of time, from the business aspect. And, you know, our friendship and our family come over anything, you know, related to money in business. And, you know, we had this hard conversation before we decided to go into business together.    Sam Wilson  11:03 Well, that's between you two, but let's assume you're working with your mobile home park operator, that's a very different relationship, how have you guys kind of WarGames that relationship and made sure that you know, when things go awry, how they're handled?   David Gutierrez  11:17 I'll tell you one of the really good beneficial things that we have currently, as our business partners on some of these deals are lawyers. And so they write very effective lawyer ease into these contracts into the operating agreements. And so the paperwork is legit. Obviously, the paperwork is vetted very finely, and I think really were to get after what you're talking about, most of the times that we're doing these investments, we're raising money, these are with people that either we have a connection for the most part through the military, if we don't personally know them at that point. But I'll tell you the Speed of Trust, right, and we hear it all the time, it's a Speed of Trust, if you have that the speed of the deal is very quick. And so we spent a lot of time whether it's through again, for your listeners, podcasts are amazing opportunities, not only for us to get great guests on or to be, you know, guests on on amazing shows. But it's an opportunity for someone to click on a button and hear who we are. And if that can, that message is consistent over and over and over. By the time we get on the phone with them, and they want to invest, they feel like they have a good foundation for who we are. And then we have to obviously, if we're not being genuine, it comes out pretty quickly, right. But I think we are very genuine and honest with our audience. And so it's really enhanced. The legalese, all the stuff that nobody understands or necessarily reads anyways, and really builds it into foundation of a relationship, where then transactions are taking place, and they'll tell you pay your investors back, then back on time pan back and forth, and you do it over and over and over again. And that's really gonna the words gonna get out, right?    Sam Wilson  12:41 Yeah, absolutely. What are some things you guys are doing right now to find opportunity?   Stuart Grazier  12:44 Networking, and building relationships. Honestly, I mean, I think that's the biggest piece to having a successful real estate business is just fostering and creating relationships. You know, real estate is a team sport. I've learned that the hard way. You know, I tried to do a lot of real estate investing, on my own, tried to do everything by myself for a long time. And it's just not the way to do business in real estate, you got to build relationships, you got to create that, you know, that know, like, and trust triangle. So I think that's it.    Sam Wilson  13:11 And yeah, I love it. Tell me when you guys look forward, talking about the, you know, three, five, and 10-year plans? What does the future look like for you guys?   David Gutierrez  13:20 Yeah, you know, it's an interesting question. I think the, there's always times in life where you have these significant transitions, you really try to have to redefine and refocus. And I'd say that we're in that stage right now. But I think what the most important thing is that, whether you're doing your first deal, your 100 deal, or you know, you're kind of redefining I was listening to a podcast the other day with 10X Guy, Grant Cardone, thank you very much. But he in his state currently is redefining every year, and he's getting on these podcasts, and you can see a transition. And so I would say in the midst of those things, what we're doing now is still taking action. So for example, we came back to Colorado both moved back here recently, as we're transitioning out, we went down to the area where we have the mobile home parks and put a multi-use building on a contract. We're like, Okay, let's get this. We like this area, like this town, we can analyze this deal till the cows come home. Let's do it looks good. Numbers, pencil, we have some great partners. And let's take this thing down and, you know, get our feet wet here and figure out what the Colorado market because vastly different Milwaukee, right. I mean, Colorado is an extremely different market. But I think taking that action and always having the passion, we have a passion towards real estate, and team building. So you put those things together, we're going to go find a market, we're going to see where the numbers make sense. And could you do deals I would see for us in the future, to continue to do these mixed-use in these areas that we're looking at kind of tertiary markets. I see us growing that business that portfolio, those opportunities for our investors. And then I also see for us we love investing in the veteran community. And so there's a lot of guys out there starting to do operations, you know, whether it's multifamily or they're doing turnkey stuff and building funds to be able to enable them to not have a cash issue and help them to get their businesses up and running is something We're super passionate about so we see growth on that side of it as well.   Sam Wilson  15:02 It sounds like you guys are really opportunistic, like you're not tied necessarily. I mean, clearly from your initial intro they're doing turnkey debt funds syndicating mobile home parks both, I mean, you guys got your hands in a lot of things. I would classify that as opportunistic. How do you educate your investor base with so many different opportunities that you're looking at?   Stuart Grazier  15:21 So we have a podcast ourselves, and we have amazing guests come on, we don't really, truly focus just on real estate. It's a business podcast, but we focus on everything that we're passionate about faith, family, financial freedom, entrepreneurship, giving, you know, so we have continuous guests on they're talking about different topics. We're also a part of mastermind groups, we're a part of a military veteran mastermind group that focuses on real estate. We're part of some other mastermind groups. And so it's just pouring in getting on phone calls, teach and talking, you know, through our experience of trying these different things. And I mean, you know, a lot of people say, hey, focus on one thing, but I feel that, because we've tried so many things, we're pretty well versed, and we kind of know what to look for what not to look for. And, you know, there's a lot there's some good to that too.    Sam Wilson  16:06 Right, yeah. Absolutely. Last question before we jump into the final three, Storehouse 3:10. That's the name of your business. Tell us about that.   David Gutierrez  16:14 Yeah. So you know, one of the big tenants that when we found our business and all our business are found down is giving. We're big into tithing. So Molokai 310, is the traditional tithing verse from the Bible. And so it's something that we really are passionate about giving to organizations that we love and care for. So for example, we've given to a warrior's heart, huge supporters of them and the Exodus road currently have a really good partnership with them to try to enable and empower them as best we can. So we have a huge passion for giving, we feel it's part of our mandate, it's part of our faith. It's part of who we are as men. And so that's really the foundation of you know, the first business we started and, and really carried through to, you know, now we've got about four or five different businesses we started and with the general theme of giving first.   Stuart Grazier  16:58 So the 10% of our profits from all of our businesses go to charity organizations.   Sam Wilson  17:03 Cool. Very, very cool. Well, you took one of my last three questions. So now it's down to two, what is one mistake you can help our listeners avoid and how do you avoid it?   David Gutierrez  17:10 Yeah, you know, I think that for me, one is I'm a relationship guy. I'm very passionate, I'm very quick to make decisions. I think that's a huge benefit in the military. But it also has a dark side to it, right? It has the, you're too quick to jump in, you're too quick to do things you maybe don't analyze enough. And so I would say that, you know, allowing my emotions and excitement to get me into a deal or even do a partnership is a mistake. But I think a bigger mistake, oftentimes is not taking action is seeing opportunities. And you know, it's good. You've analyzed, you've analyzed 100 deals at this point. And you know, this one is good. Or maybe it's maybe something home run, but it's an opportunity to get into the space to do something about something and you sit on the sidelines, and you continue to do that and justify it with well, I'm analyzing, we can analyze forever. So I think not taking action is a big one for me as well.   Sam Wilson  17:58 Fantastic. I love that. Last question for you, if our listeners were to get in touch with you, what's the best way to do that?   Stuart Grazier  18:03 Yeah, so Dave and I are both pretty active on LinkedIn. You can check it out. Check us out there and connect with us. And then our website is storehouse310turnkey.com, and we have links there for our podcast as well the tab there, so check out our podcast filling the storehouse.    Sam Wilson  18:19 Awesome. Gentlemen, thank you for your time today. Do appreciate it.   David Gutierrez  18:21 And they say appreciate you.   Sam Wilson  18:23 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Can an events planner succeed in real estate? If we are to ask Ben Nelson, he will definitely agree as he is a prime example of someone who had organized record-breaking events worldwide before diving into real estate projects. In this episode, he will share some lessons he learned from organizing events and how he applies them in making real estate deals. He will also share a bit about his humble beginnings back when he was still not into real estate and the reason he made the jump even if he already had a lucrative career.    [00:01 - 02:19] Opening Segment Ben Nelson was not really into real estate, but his brother was How his brother convinced him to take the jump He shares how the COVID-19 pandemic affected his real estate education [02:20 - 12:02] From Planning Events to Preparing for Real Estate Deals These are the skills under events management that Ben has brought to real estate Here are some tips from Ben to manage tasks happening simultaneously This is the most influential part of being a leader according to Ben [12:03 - 13:50] Raising Capital for Real Estate Deals Ben talks about the roles and responsibilities within their team Why they adopted a “people first” philosophy for their real estate business He shares some strategies that they apply to raise capital for a deal [13:51 - 18:59] Closing Segment A real estate mistake you want the listeners to avoid Not asking questions It's better to be honest and proactive in looking for the answers Your way to making the world a better place Building self-sustaining communities  Reach out to Ben Links below Final words Tweetable Quotes “I built in this habit of writing down exactly what the next day is going to be like, not just for my time…but all the tasks and what we want to do. So when you get to the day of every single day…you don't have to think very much.” - Ben Nelson “...knowing that you can continuously walk through your day without having to remember or think about what's going on makes you super effective.” - Ben Nelson “People will react to you how you allow them to and people will come to you and act as you act.” - Ben Nelson -----------------------------------------------------------------------------   Email ben@wildoakcapital.com to connect with Ben or follow him on LinkedIn. If you want to work with a company that understands the ins and outs of the real estate industry, check out Wild Oak Capital now! Listen to the Real Estate Mindset Podcast to learn more about their work.  Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Ben Nelson  00:00 It really depends on the property. Obviously, I'm painting with a broad brush here. But that's kind of how we think about is we want to be well-capitalized on the front end. And if that leads to great returns, if we end up putting some of that money back, fantastic, and we're very happy to return that. But we'd be far, rather be able to look folks in the eyes and say, hey, we're asking for a little extra money on purpose. We've underwritten this, and it's a deal in this way on purpose, because we want to be able to weather the storm. We'd rather don't ever want to go back to the bucket if we well, no, we don't go back to the well.    Intro  00:29 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:41 Ben Nelson has produced multiple world records setting and breaking events and productions, and he's used that detailed planning style in his asset management and planning. He's now a multifamily syndicator as part of Wild Oak Capital. Ben, welcome to the show.   Ben Nelson  00:53 Thanks for having me. Sam. said here,   Sam Wilson  00:55 Hey, man, the pleasure is mine. I know I met you just a little over gosh, what me a month and a half ago at a conference, which was a blast, getting to know you at that conference. But for our listeners that don't know, in 90 seconds or less, can you tell me, where did you start? Where are you now? And how did you get there?   Ben Nelson  01:09 Sure, I actually give most of the credit to my younger brother, Eric. He's been playing the real estate game for a long time. My dad had dabbled a little bit in small multifamily and some rentals back in the day, but Eric really kind of lifted it up. He's been bugging me for a long time. I come from, like you mentioned from large action sports and producing large difficult projects, he kind of been putting the bug in my ear for years and said, hey, a lot of what you're doing makes much sense. And then our friend COVID came along, Eric and I had, you know, gone together and a couple small multi families and, you know, kind of got my feet wet into the real estate market, but COVID came along and shut everything down. And quite frankly, the majority of that in my world, you know, we made a living gathering people together. And as soon as we could do any of that, it really made me focus on what that means. In the long term, you know what trading time for money means, especially when you can't trade time for money, and there's no other source of income. And really kind of looking at what that means. You know, I'm always building things for other people, other places, and really changing my focus where I can start building something for my family and for myself, but also help the communities as well and build something that lasts more than just a couple of moments and fleeting moment in time, if you will. We're really proud of stuff we produce. But I'm excited to use those skills and translate to multifamily.   Sam Wilson  02:20 For sure. Yeah, certainly. And just to give kind of our listeners a scope, or scale of some of the things that you were doing, I mean, just for fun kicks and giggles here on the show, tell us maybe one of the more fun world record, some things you mean, you weren't just putting on like, “Hey, we're gonna go out and you know, do an event over a weekend.” You're doing some pretty nutty stuff.   Ben Nelson  02:39 Yeah, we have the opportunity to work with some fun people, for sure. So we've broken world records in snowboarding, skiing motocross, for height, distance, we've jumped trucks for distance, you know, most people are familiar with Red Bull Stratos. We were really fortunate to be able to participate in that program and work some event ops on the ground there and help put them in into near space, I'm happy to say that I have a very small piece of something that lives in the Smithsonian, which is something I'm pretty proud of for the rest of my life so well.    Sam Wilson  03:05 Yeah, man, that's absolutely fantastic. Are you doing anything in the event space now or is that completely behind you?   Ben Nelson  03:11 No, I think I'll always have my foot in there. It's a passion of mine. And something, you know, you build skill set in a certain place, you build relationships in a certain place. So I've transitioned from, you know, producing those things full time and really spending, you know, project like worked on a race in Brooklyn this last year. And it really requires a lot of energy and time, and I was gone for, you know, 30, 40, 50 days a year with my family. So I've transitioned into building some stuff, we've you know, we're producing some smaller real estate conferences, but also some things for fun in town, I planted some seeds during COVID. And, again, started reestablishing relationships locally. So we're doing some things. You should come out. There's a, there's an event called chicken fight May, or basically, it's a fried chicken and whiskey festival, and we shut down an amusement park and we invite all our friends to come have a good time and taste the best chicken in town is about 40 or 50 restaurants that I'll compete for a couple of different titles. So it's more about transitioning the time that I how I choose to use my time and really taking control and ownership of where and how I use my time. So I'll do some smaller events for fun. And we'll you know, we'll gather some folks, but I'll spend most of my time focusing on building a legacy for my family. And for those folks in the community we work with   Sam Wilson  04:17 What has it been what have been some of the skill sets, because a lot of this industry for real estate is built on two things. I say it all the time on the show deals and money, like you need both of those. But marketing is a component of both of those in a very heavy way. And the industry you've come from is a heavy marketing industry. What are some of the skills that you've used that have kind of crossed over?   Ben Nelson  04:38 Well, I think you need to be scrappy, and it's just like a lot of industries as well. So it is deals is deal flow, but a lot of this is relationship right? So a lot of the ability to have conversations with people, the ability to ask questions, perhaps that normally people don't ask, you know, everybody knows how to call a broker. Everybody knows how to follow up with a broker but building relationships in such a way and I know I'm not the only one says this what value are you adding to folks on the broker side, you know, we also do try to source quite a bit off-market, we've got our own sources and some things that we're doing there that we build in. But I think the biggest thing that I've found, and the thing that translates the most from events to how we operate is game planning. And what you know, it's can be called production schedule, it can be called run a show, it can be called, you know, battle plan, if you come from military, what we found is running with a script that you pre-plan. So I built in this habit of writing down exactly what the next day is going to be like, not just for my time, blocking out the time, but all the tasks and what we want to do. So when you get to the day of every single day, it's you don't have to think very much, you're just going in with the planning setup. And I've found that it saves me a tremendous volume of time, and efficiency to do that. So whether you know, and if we have to shuffle things around and adjust, but that's been huge for me. So marketing is one thing, but I think to me, it's a really low hanging fruit idea, but very few people actually take the time to truly plan out and the day for me, it's the day before I wake up in the morning, like, I don't have to think about anything, I just execute my day. It has truly saved so much time.   Sam Wilson  06:04 When do you do that game planning? Do you do that the night before the morning before? Like, do you think in 48 hours in advance? What's that look like?    Ben Nelson  06:12 No, I usually do about 24 hours. I mean, it's the excuse me, it's about the night before. So that's a part of the rhythm My day kind of closing down. There's a couple of different journaling tactics that I've kind of put into my life. I use the Daily Stoic. So Ryan Holiday has thing if you're familiar with any type of that stoicism, but it's just really is kind of more thought starters. And thought enders, at the end of the day, it's kind of following his lead, there's an end of the day journaling. And then I'll just sit down and for 15 minutes, go through my calendar and what's on the horizon for the next day and figure out you know, what, what's the plan? What do I have time? What am I going to fit in? What are my top three priorities, what other things I need to do? And then I have, like I said, I've got a game plan for the day. And I write in pencil, I become a pencil guy, for sure. And it's the ability to adjust but knowing that you can continuously walk through your day without having to remember or think about what's going on makes you super effective.   Sam Wilson  06:59 Yeah, absolutely. I mean, that cuts down on the mental fatigue. And that is where you know, so much of the time we lose countless hours in the day, just from transitioning from one task to the next to the next. Do you time block particular items together? Do you time block? What's that process?   Ben Nelson  07:15 Yeah, I mean, I think I'm like a lot of people in this space, right. Like, I've got multiple projects and multiple rounds going on, you mentioned events, you know, and there's other projects I'm working on that we're trying to kind of cross over. So I do try to block those out. But it allows me to not have to shift back and forth. Like I'm going to work on this thing for three hours. And most of the people that work with me understand that, hey, I'll get back to you at 11 am. And then from 11 to 3, I'm all yours. But in the morning, I'm working on something else. And as long as you set those understanding barriers up with folks you're working with to you can be difficult, you know, like everybody wants everything from me all the time, like we're gonna give it to me as soon as you possibly can kind of space and with the internet, everybody wants everything out. But it's up to you. I mean, that's something I've learned, I mean, people will react to you how you allow them to, and people will come to you and acts as you act. And I think the most important thing there is it allows me to be respectful of other people's time. That cuts down on you running late from meeting to meeting and it cuts down from you having to constantly shuffle and like oh, hey, can we reschedule this, if you're thinking about it, you know, the night before, and you know exactly what your day is. And you can send it up the night before if all of a sudden you come across something, then you can be respectful of people's time and you're not reacting constantly, you can be proactive about what that is. You know, there's a story that I tell sometimes is a guy that I met, he actually works, he was my wife's boss. And we were sitting with him for some reason. And he excused themselves that I'm very sorry, I have to lose me, there's somebody who's very important that I need to speak to. And it says in such a way that we thought it was like a president of a company or something like that. He said, I came to find out later that day, it was a new hire, like one of the most junior people he was putting on his team. But the way that he thought about that, and the way he prioritize that in his day, and he excused himself from a meeting saying I'm very sorry, but I have a very important phone call that I have to take with a very important person sets the tone. And it's like he didn't tell us that, we found that out from somebody else. But the respect volume that I got from that one interaction, and the way that I try to put that into my days is enormous.   Sam Wilson  09:10 It's interesting that commanding your own calendar the way you want it and saying, “Hey, look, I'm time blocking, I'm taking care of the things that I have to take care of now in its own right,” really helps you value other people more. That's a, that's a really unique twist on that. And I like that because then when you're on, you're on, and when you're off, you're off, like, “Hey, I'm not here, I'm doing the things I've set out for me to do.” And you probably are way more efficient that way as well.    Ben Nelson  09:35 Well, you also set an understanding and respect level for the people to show up prepared, right? Like we don't take meetings unless there's an agenda, like it just the way that it goes. Like we will respect your time if you respect ours. I promise that I'm gonna show up. I'm gonna show up on time and I'm sure prepared and I expect the same of you. So it's just again, it's a way that you treat people. It's the way that you put that out there. You know, you go back to events. The reason that this is really important on a large-scale event is, I go back to the racing example, you know, we're building this race in Brooklyn, we may have 50 different vendors on site all trying to accomplish things at once. And if you haven't in advance, orchestrated, who goes where with what materials and machines, and which people and you're not taking care of making sure that people are doing it safely. And all of a sudden, something breaks down his machine, you have to have the ability to pivot, if you don't have a plan, understand what happens down the line from that, you can get in some serious trouble because most of these, you know, we're working 18, 20 hours a day, if you lose five hours, then you can legitimately lose a day by the time you're done. So you know, and you've got lots of money on the line is just like real estate, right? You have other people's money that you're trying to take care of, and do a good job. So by planning efficiently by thinking through the what-ifs by thinking, actually writing it down, and sharing that with somebody else, you're not only holding yourself liable, but you're also putting it out there like hey, this adds together, this is what we're going to go about. So it works in asset management, it works in birthday parties, it works like all the way down the line, man, just depends on what you're looking for, and how you want to how deep you want to get in the planet. But it's been super important. For me, it's been really helpful for me and how I operate business.   Sam Wilson  11:07 What role have you taken inside of the multifamily real estate business?   Ben Nelson  11:12 Mostly asset management. I mean, we're a small group, it's a team of four. And I will say, you know, team building has been the most influential part of my development as a leader, also, the ability to give and take. So we're fortunate in the sense that we've found all of us found for people and again, the credit goes to my brother, he's really done the most work putting these folks together. But we have overlapping skill sets, we have the ability, so any one of us can underwrite, any one of us could do asset management. But we kind of have our lanes in that sense. So Eric, and I focus primarily on you know, asset management and fundraising. Eric's kind of out front, he's got the podcast, we'd love to have you on the podcast, and really kind of that public-facing side. John does a lot of the sourcing and deal sourcing and Shane is smarter than any human I've ever met at math the guy can underwrite in his brain, and it's insane to me. I'm more words than the math on my side.   Sam Wilson  12:03 That's absolutely intriguing. Tell me about the formation of your team and then I want to hear what assets you guys are buying right now.   Ben Nelson  12:09 Sure. Eric really was sort of the central wheel here. He knew some folks like we're all participating some masterminds, Eric's involved in some we both actually Eric and I both utilize the same business coach, also, which I would plug that also if anybody's thinking about it, you know, there's tons of programs everything else I think two weeks is own, but I focus on a kind of a bi-weekly business coach. Through that Eric and I met John introduced that and Eric and met Shane, actually, just through a meetup in Durango. Eric was in Durango, Colorado. And Shane has a couple properties there. And as by chance, they struck up a conversation, start talking. And we kind of made this Voltron and they those three together and met each other. And then I kind of came into the mix, especially at the end there because it was right when we were finishing that big race. And like I said, I disappeared for about 30 days, they asked me to just sit and have a conversation with them. And it just seemed to work. Like we have, like I said, we have overlapping skill sets, we have overlapping personalities. So what's really, really nice though, is it allows people to have a life that allows people working on the projects and allows people to pay attention to multiple things. And we consistently can keep pushing, right, like we picked up, we went through a really dry spell and to bleed into your second question. It's really tough out there right now. There's a lot of money in the game. And there's a lot of people throwing good money after bad and underwriting deals in such a way that I honestly don't understand. And I think it could be a little bit dangerous, especially if you know, it's assuming that everything was gonna keep on rolling the way it's gonna roll. If there's a shift, I think there's some people gonna get water. So we were playing really firmly in the multifamily space, we kind of a B2C category, a lot of value add is what we're looking to produce. We've been heavily into Texas and Oklahoma, we've just been reaching out some deals here in Colorado, looked at some in Louisiana, but Texas in Oklahoma has been kind of our bread and butter. And there's a lot down there that we understand. We've had to develop some great relationships, we're not opposed to moving to other places, again, Colorado, mostly because I'm here and I have the ability to develop relationships in person. Shane and John, both live in Texas and they've been able to do the same. But I think we have to be really smart about how the shift in the market is coming and what that actually means. And again, we're really conservative. I know, everybody says they're conservative, but I've seen some people's numbers. And I think that we're actually conservative, but we really want to make sure that we're building this for the long term. And we're really focused on community. We sat down together as a team in Mexico, we just took a couple of days and disappeared and said, “Hey, we just need to spend some time together.” And the one thing that I remember coming out of that meeting and the formation of what we're going to do this year is that we've decided “people first” and we say it all the time internally. So it may be a great deal. We may be able to make some money on it. But if it doesn't help the community if it doesn't raise that community up if we're not providing a quality product, then we don't we've said no to a bunch of things that probably could have made us money already this year. It just didn't make sense for us to to help in that community though.   Sam Wilson  14:52 That's really, really intriguing. Absolutely fantastic. I love that and I guess what are some strategic steps you guys are taking right now to prepare for a potential recession or change in the market wins? What does that look like?   Ben Nelson  15:05 Yeah, I mean, it really depends on who you talk to you, right? Like half of the multifamily group thinks it's going to be a rock chip and never gonna land and the other half is doom and gloom, and everything's gonna go wrong. I tend to swing somewhere in the middle there. So a lot of it is really just being smart about capitalization, our ability to fix things, and again, it goes back to that planning for the what-ifs, right? When I look at some people's underwriting, there's sometimes very few what-ifs, it goes back to production planning to battle planning, our ability to pivot, we say, hey, we want to turn all of these units out to be X. And also we're going to add a dog park. And also we're going to add a playground, for example. But we also know that we have a margin in there that if we have to say, hey, we're gonna hold on that dog park, everybody's gonna get units turned, or we know that if we project rents and if we get to a downturn where we have the ability to cover our ratios, we have the ability to still do some things we ride into, like, yeah, we'll do gifts at Christmas, we want to do some community engagement thing. So we add in a couple of these additional pieces, and we're really open about it with our investors, like, “Hey, this is what we want to do, you can take a look, we'll go through the PPM like where our money goes.” And it really depends on the property. Obviously, I'm painting with a broad brush here. But that's kind of how we think about is we want to be well-capitalized on the front end. And if that leads to great returns, if we end up putting some of that money back, fantastic. And we're very happy to return that. But we'd prefer rather be able to look folks in the eyes and say, Hey, we're asking for a little extra money on purpose. We've underwritten this, and it's a deal in this way on purpose, because we want to be able to weather the storm, We'd rather don't ever want to go back to the bucket. It's we well, no, we don't go back to the well,    Sam Wilson  16:39 Right. What is the percentage, do you have a certain percentage over that you are typically raising for a deal?   Ben Nelson  16:46 That's a tough thing because it really depends per deal on what that deal needs. Were mostly in the value-add space. And I think it depends, because it's a really volatile time right now, too, right? Like the volume of dollars that it takes to build attention two years ago versus the dollars it takes to build that today are dramatically different. So we take a look at the prevailing winds, we take a look at what we're looking at for, you know, for example, we're looking at a group of units up in the mountains. And for us to get labor up there for us to do some of the turns up there is exponentially more expensive than it would be in say Lubbock, Texas. So it's hard to put a percentage. I know that's kind of dodging the question, but it really depends on the market. And it really depends on the project. You know, we look really heavily a debt to income or student debt coverage ratio. And we want to make sure that we're in the green pretty strongly. They're both from anticipated rents, but what we think we can do in the short term as well.   Sam Wilson  17:35 Right. I love that. Ben, thanks for coming on today. This has been a blast. Last three questions here for you. What is one mistake you can help our listeners avoid and how would you avoid it?   Ben Nelson  17:43 Ask questions. Never be afraid to say, “I don't know the answer to that but I'll find out.” The ability to be honest with people and the ability to go and find the answer and ask questions. Building those relationships is the number one lesson that I've learned across all of the industries I've ever worked at.   Sam Wilson  17:57 Right. I love that next question for you. What is one way you're making the world a better place   Ben Nelson  18:02 Just talking to you man, I every day I get to see you and makes me, my heart glow. Oh no, we try to do whatever we can to lift people up. And again, that's a variety of things. But we really want to build communities that can help themselves and support themselves with building better places for people to live and raise their families is important to us.   Sam Wilson  18:17 Right, Absolutely. I love that last question. If our listeners want to get in touch with you or learn more about you what is the best way to do that?   Ben Nelson  18:23 Look us up, wildoakcapital.com. Take a look. We've got a couple of deals coming through. Please sign up. We'll send you out information every time we get a new deal.    Sam Wilson  18:31 Awesome, man. Thank you, Ben for your time. Appreciate it.   Ben Nelson  18:32 Thanks, Sam. Appreciate it.   Sam Wilson  18:34 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Is it possible for Canadians to invest in US real estate? It is, and Ava Benesocky is here to tell us how. Ava was once a small city girl who moved to the big city to follow her dreams and built a real estate private equity firm from the ground up. Currently, her firm, CPI Capital, is helping aspiring investors to be empowered in making financial decisions by educating them about real estate.  She gives a ton of helpful information for anyone interested in investing in real estate in the United States, particularly Canadian citizens. She also talks about her journey from investing in single family for 10 years to transitioning to multifamily.    [00:01 - 03:06] Opening Segment Ava Benesocky was investing in residential real estate for a decade She jumped to multifamily for this reason How to transition from single family to multifamily? [03:07 - 08:45] How Canadians Can Invest in US Real Estate  Ava's team helps investors from Canada and the US These are the unique challenges between the two kinds of investors This is the equivalent of a US LLC in Canada She talks about her experience closing her very first deal [08:46 - 13:50] How to Overcome Limiting Beliefs They had no portfolio in the US to show to their investors This is what they did instead How to keep in touch with your investors? Ava reveals her secret Aspiring investors have limiting beliefs that they can overcome Ava gives some tips [13:51 - 15:02] Closing Segment A real estate mistake you want the listeners to avoid Trying to reinvent the wheel Find someone who's been there already and learn from them Your way to making the world a better place Educating people Reach out to Ava Links below Final words Tweetable Quotes “We have our track record here [in Canada], but we didn't have the track record that we needed in the US. So the next best thing was to find and partner with…the boots on the ground who've actually been through a full cycle in order to piggyback off their track record.” - Ava Benesocky “A lot of people that want to get started in real estate… limit themselves because of [the] really large numbers [in deals]. Don't allow that to scare you because this is a team sport...” - Ava Benesocky “That's what makes our business go round…really taking those relationships and growing them and strengthening them as they invest in more and more deals with you.” - Ava Benesocky -----------------------------------------------------------------------------   Email ava@cpicapital.ca to connect with Ava or follow her on LinkedIn. Do you want to be an empowered investor who earns passive income from real estate? Visit CPI Capital now! Download CPI Capital's media kit here. Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Ava Benesocky  00:00 We did not raise all that money on our own, but we did was we partnered with our US operating partners. They raised a significant amount of the capital, and then we brought in our Canadian fund. And again, some of our US investors invested as well. So that's how we did our first deal. So a lot of people that want to get started in real estate, they're really like they limit themselves because of these really large numbers. Don't allow that to scare you, right? Because this is a team sport and you can really take action and be part of these great assets if you structure it the right way.   Intro  00:29 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:41 Ava Benesocky is a small city girl who moved to the big city to follow her dreams and built a real estate private equity firm from the ground up. Live in Canada. Ava, welcome to the show.   Ava Benesocky  00:52 Thank you for having me, Sam.   Sam Wilson  00:54 Pleasure's mine. Same three questions I asked every guest to come on the show. In 90 seconds or less, you told me where'd you start, where are you now, and how'd you get there?   Ava Benesocky  01:01 Started in a small town. I'm now in Vancouver, Canada, and a big city and I got there by starting a residential real estate and scaling up to multifamily.    Sam Wilson  01:11 You were in residential for how long?    Ava Benesocky  01:13 For a decade.    Sam Wilson  01:14 A decade. That's a long time. What did you do in residential?   Ava Benesocky  01:17 I was helping people buy and sell residential real estate.   Sam Wilson  01:20 Got it. Was there ever a lightbulb moment? Or what was the lightbulb moment? Cuz clearly you're out of it, where you said, “Hey, there's got to be a better way.”   Ava Benesocky  01:27 You know, a couple light bulb moments for me was I was helping person by person, kind of invest in real estate. I dealt with lots and lots of investors. Everybody wants to invest in real estate, a lot of people don't really know where to begin, and so forth. So I was I was kind of guiding people along the way. And my kind of vision for my life was to help people by the masses. So essentially, now what I do now, I co-founded my company, CPI Capital, and that's where I kind of shifted pivoted my focus to real estate private equity, where I could help hundreds of investors at a time invest in real estate, but on a passive side.   Sam Wilson  01:58 What was that transition like for you? I mean, there's a lot of steps between, hey, I'm a residential realtor, and I teach people how to invest in real estate, too. Now we're doing large commercial projects. What was that process like?   Ava Benesocky  02:10 The process was really exciting and educational and didn't come overnight. It took a lot of grinding and again, education, I went through this massive educational journey, you know what, I co-founded my company from a fundamental problem that I, I've seen existed for real estate investors. And again, that goes back to you, everybody wants to put their money in real estate. But a lot of busy professionals don't really have the time knowledge or experience on where to begin, right. A lot of people don't want to be landlords, a lot of people don't want to have to deal with the calls at night. And hey, my toilet, you know, toilets and tenants, if you will. So when I kind of shifted, again, I went from me kind of realizing this problem that existed and I really wanted to find a solution to that problem. And that was me building my real estate private equity firm, really figuring out the legalities of it cross border because I'm dealing with helping, partnering with Canadians to acquire US multifamily assets. And again, partnering with US investors as well. So I can go on and on about kind of the trials and tribulations I went through and how I did it. But oh…   Sam Wilson  03:07 No, no, that's good. You're answering really the questions on that, since you brought it up, the legalities of you know, developing or having investors on both sides, you know, in the US in Canada, what was your solution to that?   Ava Benesocky  03:20 Yeah, well, you're dealing with cross-border, right. So two different taxations, two different governing bodies, two different securities compliance. So trust me when I say I spoke to 40, 50 cross border tax accountants, and cross border lawyers and really got my corporate structure aligned, to be able to serve both US and Canadian investors. Canadians, really exciting, kind of pain point that I relief from them as they have access to US multifamily assets, to US real estate because there's incredible opportunity for all those US people who live in, you haven't written your own backyard. And what I did essentially was relieve them from pain points, like double taxation and worrying about, you know, where do I invest in the US and how do I access these great investment opportunities?   Sam Wilson  04:04 Right. So what was the solution? Is there a legal, I'm asking more specific here? Is there was there a legal solution such as you know, the way you created the LLC, is was there a certain fund model? What does that look like for a finished product?   Ava Benesocky  04:17 Yeah, so we use a fundable fund structure where we pull together Canadian capital and we deploy it as one investor and to the entity that owns the asset on the US side. Now, there's a treaty that exists between Canada and the US, okay. So if you put your fund, if you incorporate your fund of funds structure properly, what happens is the CRA on this side of the border sees it as a flow-through entity and Canadians are relieved dollar for dollar on double taxation. Now, if a Canadian was to go and invest into a, you know, project in the US that was formed under an LLC, will then trigger double taxation. So there's not a lot of education that exists here on this side of the border when it comes to investing in the US. So my company when we first started building our Real Estate private equity firm it was all about the education, educating investors how everything works and really making it streamline in their minds on how the legalities and the taxation works to really simplify the process.   Sam Wilson  05:12 Right. So let me get this right. So your Canadian investors invest in what did you call it a CRA?   Ava Benesocky  05:17 No, no, the Canadian investors in a single-purpose vehicle.   Sam Wilson  05:20 Got it. SPV. Okay, so they invest in an SPV, whatever that your equivalent of an LLC is they invest in that SPV. And that SPV, then, of course, you know, invest across the border in the US. What do your investors on this side of the line? What do they invest in? In that same entity?   Ava Benesocky  05:34 Either? Actually, no, they're actually investing into the single-purpose vehicle that actually owns the asset.   Sam Wilson  05:39 Right. So that's that SPV was formed in Canada was formed the United States?   Ava Benesocky  05:42 Formed in Canada.    Sam Wilson  05:43 Okay, so what happens to the American investor, that you're both American, but the United States investor that invests in the Canadian SPV? What's their taxation like?   Ava Benesocky  05:51 So they don't even touch Canada. It's super, super streamlined process for them, they just did US investor invest exactly into the entity that owns the asset, nothing to do with the Canadian side, two separate entities.   Sam Wilson  06:03 Got it. Okay. With a US investor, you're going to steer them directly into the LLC that owns the asset. And then so you can bring two sets of investors and then your other set of investors from the Canadian side is going to be in their own separate SPV that also invest as a single investor in that same LLC that owns the asset.     Ava Benesocky  06:21 Yes, correct.    Sam Wilson  06:23 You have two separate pools of limited partners. Okay. Thank you. All right, that clarifies how that works. I appreciate you taking the time to educate me on that because I wouldn't have known obviously.   Ava Benesocky  06:32 Yeah, Sam, one thing I want to highlight is you kept using the word LLC, the LLC doesn't really work with our, we cannot use LLCs for Canadians to be relieved of that double taxation. So we do have to be very careful how we set up the entity, the single-vehicle here in the US.   Sam Wilson  06:48 So what is the SPV? What is your equivalent of an SPV then?    Ava Benesocky  06:52 We don't even have LLC is actually in Canada. We call it a limited partnership.   Sam Wilson  06:56 Okay. Very interesting. Cool. All right. I love that I love you taking the time to figure that nuance out because that's confusing. I mean, I'm a guy that knows enough to be dangerous in this space. And even that's still just a little bit nuanced. Like, wait, why are you doing this again? Just because I haven't had to learn that yet. So that's absolutely intriguing. Tell me about your first deal you got done. It's one thing to have an idea. It's one thing to educate investors, how did you convince your investors especially in like, not convinced, but how did you approach your investors on the Canadian side to say, hey, look, I'm onto something, and you should be part of this.   Ava Benesocky  07:30 Yeah, that's a great question. And that was quite an experience. Because when I went back to all my investors, and I started talking about, hey, give me your money, I'm going to take your money, I'm going to go to the US, and I'm going to purchase multifamily in the US across, you know, literally across the border, you're thinking like, What are you talking about? This is, what the heck are you talking about? So trust me when I say it was difficult to convert. And that's where we started building our educational platform. So people could really grasp okay, what are they talking about here? And why are they going to the US? So essentially, the same business model, I'm just gonna highly, I just would like to touchpoint on the same business model here in Canada doesn't work, you cannot achieve cash flow and depreciation at the same time. There's very strict landlord laws here, and so forth. So education to try to convert people. And then essentially, our first deal that we did was in Orlando, Florida was a really exciting class, a asset, actually. And we ended up bringing our investors on to that. But what we did was, we went large, our first deal, we went really big. Okay, so we actually started our company, not by doing their original way of doing things where people usually start off with like, you know, a duplex and then a four-plex. And then they go to, you know, a 10-unit. We're not even talking about institutional multifamily assets that are 100+ units. We wanted to bring an institutional asset to our investor community from day one. Yeah. So essentially, that's what we did. We brought them a class A, it was a 350 unit asset in Orlando, Florida, and presented it on a platter to our investor community.   Sam Wilson  09:00 Talk to me through that size of acquisition, amount of capital you had to raise, give me all the nitty-gritty, if you don't mind.   Ava Benesocky  09:06 Yeah, for sure. So when you go to investors, and you say, hey, I want you to invest with me, what's the first question that they usually ask? Okay, show me your track record, right? Like, show me some numbers that have actually been achieved before. You know, people are forecasting all these great returns, keeping in mind Canadian investors, their use, they're really excited about a five to 6% annualized return, that's a great investment for them. That's an amazing investment for them. So when you start talking 20 or 15, 20%, annualized returns, most cases, they're like, this is too good to be true. What are you talking about? So essentially, on our first deal, what we did strategically was we figured out what regions do we want to be in, right? We've been doing real estate in Canada, we had about $100 million worth of transactions done here on this side of the border. We have our track record here, but we didn't have the track record that we needed in the US. So the next best thing was to find and partner with our operating partners, people who are the asset managers, the boots on the ground who've actually been through a full cycle in order to piggyback off their track record and show our investor community, hey, guys, look at the returns that of actual returns that have been achieved. And check out the actual numbers. So it was a $92 million asset in Orlando, Florida, as I mentioned, it was large institutional 350-unit, the capital raise was 32 million, we did not raise all of that money on our own. But what we did was we partnered with our US operating partners, they raised a significant amount of the capital. And then we brought in our Canadian fund. And again, some of our US investors invested as well. So that's how we did our first deal. So a lot of people that want to get started in real estate, they're really like they limit themselves because of these really large numbers. Don't allow that to scare you, right? Because this is a team sport, and you can really take action and be part of these great assets if you structure it the right way.   Sam Wilson  10:49 Right. That's absolutely, one more question. And I should have asked this earlier, but you hit on again. It reminded me that I didn't ask it. For the US-based investors that invest directly in to the which here, it will probably be an LLC that owns the asset, how does that work for you staying in control, and in front of your investor base, I know a lot of us do fund to funds, I participated both myself in a fund to funds model and being the fund sponsor. We want to stay in front of our investors. How do you do that?   Ava Benesocky  11:15 When you say, stay in front of our investors? As far as?   Sam Wilson  11:19 Yeah, I mean, a lot of times, you know, if we come in as a fund of funds, the operator won't even know who the members of that fund are necessarily, right? Because we're all investing in our own fund. And this fund comes with a single investor in that entity. Whereas if you have a pool of other investors in the outside, also investing in that entity, now you've got your sponsor indirect contact, or knows who your other investors are. Is that correct? Or am I missing something?    Ava Benesocky  11:43 Yeah, you know what? Yeah, exactly. They wouldn't know who your investors are, in most cases. But I do all the communications with my investors. Okay. So to stay in front. Yeah. So I'm the one sending them their monthly distributions. I'm the one sending them their monthly updates, you know what I mean? So I still take over the full communication. And that's how I stay in front of my investors. Good question. Okay. Very, very, do not hand them off. Because we have a very tight-knit investor community, right. So we are this educational, like every week sending emails out, we're very hands on all my investors have my personal cell phone number, to be honest with you is so when it comes to that, yeah, I totally dig over the communication and hands on every step of the way.   Sam Wilson  12:21 Which is what we want that you want. When you because a pool of investors, that's a hard earned network, and you don't want to turn loose of that.   Ava Benesocky  12:29 That's what makes our business go round, right is really taking those relationships and growing them and strengthening them as they invest in more and more deals with you.   Sam Wilson  12:38 For sure. Talk to me about resilience and the belief that you could actually do this because I see enough people in the residential real estate space, especially in the realtor world that are just like, you know, completely, you know, narrow, like they got the blinders on like, well, it's just residential, I could never do that they have no idea that this great big world of commercial real estate even exists or that they can even participate in it. How did you overcome that?   Ava Benesocky  13:02 How did I overcome that? You know, what, I've always been a big dreamer, I guess I've always had kind of an entrepreneurial like spirit that was, I think, born within me, but essentially what, it comes down to surrounding yourself with the right people, you know, figure out what you want to do, who do you want to help? What problem do you want to solve, and then take it step by step and learn the process. But for people have limiting beliefs, right, as I was kind of mentioning, when they limit that belief on themselves, and they're kind of stuck in this, the same lane their whole life, it's really about having big dreams. And every time you're fearful, letting that fear kind of empower you to take the next step and take the next step for not just something bigger and better, where you can help more people or you can kind of scale yourself on an active level because it's really exciting when it begins. And it's only your fear that's really stopping you and being that's the only thing that's in your way.   Sam Wilson  13:51 I love it. I absolutely love it. Ava, thank you for taking the time to come on today. This has been a blast. I certainly appreciate it. Let's jump into a final few questions. When it comes to real investing in real estate. What's one mistake you can help our listeners avoid and how would you avoid it?   Ava Benesocky  14:04  Okay, do not try to reinvent the wheel by yourself. Reach out to somebody who's already been there, done that, and follow their guidance.   Sam Wilson  14:10 Right. That's great. Next question. When it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Ava Benesocky  14:15 Educating.    Sam Wilson  14:17 Love it. Last question for you. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Ava Benesocky  14:21 So I am super active on LinkedIn, Ava Benesocky, or you can check out my website, it's www.CPACapital.ca or my email is Ava@CPIcapital.ca   Sam Wilson  14:33 Awesome. Thank you Ava for your time today. I do appreciate it.   Ava Benesocky  14:36 Thank you so much for having me.   Sam Wilson  14:37 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.

What were you doing when you were 19 years old? Caleb Guilliams was leading a bank's investment department when he was 19. No, he did not take any shortcuts. He did not have any connections. Back then, he only had this unwavering passion to learn and give value.  He used this experience to build his own company called Betterwealth, which now serves individuals as a one-stop-shop for better financial decisions. He joins us in this episode to talk about his journey, the services his company provides, and his bestselling book, “The AND Asset.”   [00:01 - 05:14] Opening Segment   Caleb Guilliams worked in a bank's investment department at 19 years old   Here's how he landed this job This is the book that changed Caleb's approach in dealing with clients [05:15 - 15:54] Better Financial Decisions Why Caleb started Betterwealth in the first place Caleb explains “value leveraging” and why investors should consider it 3 things Caleb did to build credibility What business owners really care about according to Caleb He gives us a sneak peek into his book, “The AND Asset” What's the “and” asset really? [15:55 - 17:40] Closing Segment A financing mistake you want our listeners to avoid Devaluing yourself while investing your money Reach out to Caleb Links below Final words   Tweetable Quotes “If you have a no-brainer offer and you amplify that, you'll become extremely wealthy, have influence, and serve a ton of people.” - Caleb Guilliams “I do see the value of connecting the marketplace with capital with operators that are creating value using real estate and making that connection.” - Caleb Guilliams “Make sure that you don't devalue yourself in the process of building wealth.” - Caleb Guilliams -----------------------------------------------------------------------------   Email caleb@betterwealth.com to connect with Caleb or follow him on LinkedIn. Your one-stop shop for every financial decision is just a click away! Visit Betterwealth now!    Check out his personal website to learn more about his work. GRAB a copy of his book, “The AND Asset” here.    Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below:   Caleb Guilliams  00:00 You ever realized, like, I knew about money, but I didn't really know how the game worked. And so I would like do a fact finder review with them. And then I always I did like the Simon Sinek, Start With Why. And I just did that mainly out of like to defer to the next meeting because I'm like, I don't know what I'm talking about. So like, let's get really clear on why you do what you do. And then what I did when they left is then I started calling the account managers at our broker and the IMOs and just saying, Okay, what is the best way to do this and they had to do official things because I didn't have all the licenses at the time. What I learned from that is the genius of starting with why and the genius of asking people what they actually want.   Intro  00:37 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:48 Caleb Guilliams is the founder of Betterwealth, a company committed to show people how to be more efficient and control their money. He also authored “The AND Asset,” and he hosts the Betterwealth Podcast. Caleb, welcome to the show.    Caleb Guilliams  00:58 Man, it is pleasure to be here, man. It's good to be on the show.   Sam Wilson  01:02 Pleasure's mine. 90 seconds or less, tell me where did you start? Where are you now? How did you get there?   Caleb Guilliams  01:07 I grew up in central Wisconsin, oldest of six kids, my dad was a doctor, realized real fast that I didn't, I wasn't gonna walk in his footsteps. First job was gutted chickens then worked at a bank took over banks investment department when I was 19 years old, realized that the financial planning industry is all about selling products. And not really about helping people get results. I was super young, even looked younger. And so I had some people I think, pity me and felt sorry for me. So they mentored me, realize that there is more to life than just making money left the bank when I was 21, to start Betterwealth. And now we work with people in all 50 states helping them achieve financial freedom, which we call intentional living and help them take back control their wealth. So that's the 90-second version.   Sam Wilson  01:47 Man, I love it. That's great. How did you score a job at 19? Running a bank's investment department?   Caleb Guilliams  01:53 It, yeah, great question. When I was 15 years old, I started getting chickens read books on money and became obsessed when it came to money, and just wanted to learn more about it. And so I had a friend of mine who was like, you know, the best way to learn because I was homeschooled. So I always thought a little outside the box, said the best way to learn is to work at an environment that stretches you. And so they had a connection, who got me a job at the bank at 17 as a teller, so I was there working as a teller, it was one of the best jobs I ever had because it boosts my confidence. And then I just had the mentality that I was going to do every job I could. And I was an HR nightmare because they only paid me so many hours. So I just worked for free, I would show up to meetings, even though just to get my input, I would talk to the CEO, I was like the teller that was talking about with the CEO and how we could grow the bank and grow revenue. And so I was always into investments. When I was 18, they allowed me to work part-time as the investment assistant. And I just ran with it, the investment director at the bank left to take another job. At 19 years old, I was the only somewhat qualified person. And so that's, that's how I got lucky. And I also worked my butt off to get myself in that position. And then from there, I was supposed to just be the interim, but I was there until I left. So it was just one of those things were grateful for the experience. I look back and think what were the banks thinking? What was my boss thinking? But I'm just grateful.   Sam Wilson  03:13 Well, I kind of, I mean, tell me, what were the type of investments that you were directing people towards?   Caleb Guilliams  03:19 Mainly there was, I mean, mutual funds, their 401(k)s, there were annuities, fixed annuities, and then some basic life insurance stuff. So it was pretty basic. And it was really like people would come in, and it would be like, Oh, instead of a CD, because why would you want to put your money in a CD, we have an investment person and and so we had, like 350 clients. Nothing crazy. It was like a typical financial planning office, local office.   Sam Wilson  03:46 Right. That's cool. So I'm assuming had to go out and get your licenses, certifications? I don't know what you would need, six, seven, six.   Caleb Guilliams  03:54 Yeah. So what's interesting is when I first took over, I didn't have all my licenses. And so I was working with the broker. So like clients would come in, I had no clue, you have to realize, like, I knew about money, but I didn't really know how the game worked. And so I would like do a fact finder review with them. And then I always I did like the Simon Sinek start with why. And I just did that mainly out of like to defer to the next meeting. Because I'm like, I don't know what I'm talking about. So like, let's get really clear on why you do what you do. And then what I did when they left is then I started calling the account managers at at our broker and the IMOs. And just from saying, Okay, what is the best way to do this? And I had to like, they had to do official things, because I was I didn't have all the licenses at the time. What I learned from that is the genius of starting with why and the genius of asking people what they actually want. Because in the financial industry, we're all about jargon like oh, let's like the talk about the 4% rule and the diversification and all that stuff. And that doesn't translate into value, that doesn't translate into results. And so although I started out of just not knowing what I was doing, I realized that it was effective to get really, really crystal clear on what they wanted. And then I would communicate with the other people, This is what they want, will this tool or widget help them get closer to that? So again, someone didn't know a ton about money, but I connected those dots were unfortunately in our space, I don't think those dots connect with everybody in the financial industry.   Sam Wilson  05:15 No, gosh, no, absolutely not. So tell me about what you're doing Now. Would you say it's built better wealth? I know I read it here in the beginning, but yeah, since close, so yeah. Why did you form build Betterwealth? What does that look like now?   Caleb Guilliams  05:27 Yeah, so better. off.com is the company and essentially was working at the bank had a mission statement that said, help people see and reach their highest potential. I wake up every day like with that passion of people realizing and living to their God-given potential. And so with that, I'm looking at the bank that I'm in, and I'm grateful for the experiences, but with compliance with the lack of ability market bill, the team, like it just became really clear that this would be an amazing job. No one would say, Caleb, you're 21 you're slacking at the corner office of the bank. But I just knew like there was so much more as it relates to education. But then I wanted to do this whole internet thing, which five and a half years ago, it's the internet was a thing, but like, even like, it wasn't as popular and the thought of like coaching people and educating people on the internet just was a little bit like people weren't all about that. So I just was like, you know, what, what do I have to lose, I was still living at home, I had money saved up. And I just don't want to live life with regret. And I knew that if I stayed, that would be a potential decision, I would regret. And so I left. And with this just vision of like, I didn't know really what to do. I was just like, we're going to help people, to people that really believed in the cause. Our first office was in the basement of a Papa John's building, nothing sexy there. But we just, you know, started and we had a few people become our client and then slowly but surely, people like started saying, like, hey, I want to learn more how we made our money was we did insurance. And then we also referred out to investments. And now currently, we have an RA which does assets, we have an insurance arm, we have a tax company, we have a coaching company, and we actually have a little bit of a software company as relates to helping people and it all goes back into helping people live more intentionally with their money. And some people use it all some people use a product or two. And so that's Betterwealth is a makeup but it's been a journey of five and a half years of building and bringing on other experts.   Sam Wilson  07:15 Yeah, that's really intriguing. I love that and talk to us about scaling. You're obviously in the financial services industry, you touch real estate, like you said, you have your assets division, but talk to us more, maybe we'll spend a little bit more time here nuanced talking about scaling the business itself, be more than we'll talk real estate, can you kind of walk us through that process?   Caleb Guilliams  07:34 Yeah, so I love the concept of scale. And when I started Betterwealth, I couldn't articulate what I now call value leveraging. But I wanted to create a magnet effect I wanted people to come to us. And and that was why I liked the Internet and other things. And so in the financial industry, probably a lot like the real estate industry, there's a lot of people that are smart, that create value, but they have no leverage behind that value. And one of the reasons I love real estate and what I believe it's the greatest asset, one of the greatest assets out there is you can use leverage to acquire it, it can appreciate it can create cash flow, there's certain tax benefits. And so but one of the amazing things is you can get leverage for that, whereas a lot of other businesses it's hard to. And so levers are an incredible amplification from the business. And so I have pretty much a whole talk that I help people with leverage. And so it's like, number one, you have to create value. That's the thing that a lot of people forget about is like you can leverage but if you leverage a crappy real estate deal, it's not gonna, it's you're just gonna accelerate a problem. And so number one, you have to ask yourself, Is your business, is your service, is your product, actually valuable supply and demand? Do people actually want it and the market will decide if it's valuable. If it's valuable, then we have to look at what are the different ways that we can amplify that go one to many, and there's media, that's amazing. There's code, that's amazing. There's labor, that's amazing. There's OPM, other people's money. And so it's finding out like there's influence and charisma, there's finding out what are little levers that I can put into my business that can create that amplification effect. And so what I did is I was self-aware enough to know I'm 21 and look like I'm 15. So I need credibility and influence. So I self publish a book, I started a podcast and interviewed other experts. And I just said that, that I'm now a speaker. So those are three things that I did that like were a little levers that increase my status. And then the internet allowed us to create that platform to go one to many. And we started using podcasts and videos. And all of those, like this video that's created isn't a leverage effect. Because we're meeting we're having a conversation and if one more person listens to this, that's not like, our input is the same, and the output is unlimited. So those are the kinds of things that I'm obsessed with. And I just I think again, I couldn't articulate all at 21. But I knew I wanted to build a business around leverage. But the biggest mistake people make is they're not valuable, and so it's still to this day, are we fully leveraged? No, my mindset's all about making our products and services the best that can be because I know leverage will just amplify the value that we bring to the marketplace.   Sam Wilson  10:00 When you made a comment here a second ago, I'd love some clarification on you said the biggest mistake people make because they're not valuable. What does that mean?   Caleb Guilliams  10:06 They think their investments and businesses and services are valid, valuable. So when when I say value, there's only two things that can create business, like business can only create two things. It's a service or a product. And a lot of people think I just need to get my message out there, I just need to leverage what I'm doing. But the problem is their service or product is not valuable, meaning like people like, it's not as valuable as they think it is. And so when they leverage or they amplify that message, people just realize, oh, this product sucks. And now more people know that it sucks, and not just the micro, you know, your micro group. And so I the big thing, when I'm coaching or encouraging people is really make sure the Lean Startup like make sure before you go, you know, met to the masses, make sure that your thing your product or service is super valuable and irresistible, and a no-brainer offer. If you have a no-brainer offer and you amplify that, you'll become extremely wealthy, have influence, and serve a ton of people. If your offer's not like not good, you're just gonna accelerate to going out of business.   Sam Wilson  11:03 What are some no-brainer offers that you guys have implemented in your business? Just to give some examples that people to get the wheels turning?   Caleb Guilliams  11:11 Yep. This is honestly, in the financial service space is tricky. One of the reasons why we're bringing on a tax company is to create that no-brainer offer, because when you ask, you know business owners, because that's primarily who we serve, like, how can we help you? What are you worried about at night, they're not worried about compound interest, they don't really care about their 401(k) or SEP IRA. Like all these things that we do for business, like, Oh, I could, you know, better investments, I can overfund life insurance for you, I can help you be more efficient like all those things are great. But like, that's not really what they care about. What they care about is taxes. They hate overpaying taxes, they feel like their CPAs aren't doing their job. And they just hate it. Hate it hate it. And so I've heard this for years and years and years. And so I'm like, Okay, what if instead of trying to convince you or sell you something that you don't really want? What if I just created a company with the least amount of friction helped you save money on taxes? And then oh, by the way, once you're in the door, what are you going to do that with all those savings? Are you going to spend it? Or can we invest it and be more strategic with it? So the reason we have a tax company is to create a no brainer offer. And that's just the best example I can make in a service business where we have to be careful, it's like, you can't make any guarantees. You have to be very, very careful. But it's like how can you create that experience that people say, you know, what I want to work with Betterwealth, not just on the tax side, but across the board.   Sam Wilson  12:28 What about your back end service providers? If you guys have let's talk real estate for a second, if you guys have an asset division, yeah, that you probably have operators, deal sponsors there that are kind of you know, that you guys have known like and trusted. What does that process look like for you? And how do you interact and work with them?   Caleb Guilliams  12:45 So real estate, we have a lot of clients that do real estate syndications and real estate because it's an amazing asset class. And to date, we don't touch the real estate from a standpoint of like, hey, we'll raise funds or if you're a real estate investor, we are usually your “and” so we do a lot of overfunded life insurance. And if you want to do market-based activity, which quite frankly, if you're in real estate, know the power of it, I wouldn't necessarily recommend putting your money in indexes or ETFs. Again, it's just all about based on where you want to put your money. To date, we don't have any real estate connections. Now, in 2023, one of the areas becoming more valuable is we're creating a platform and all we're going to do is connect people, we have to be very careful not to make recommendations. We can't make a commission on this. But I do see the value of connecting the marketplace with capital with operators that are creating value using real estate and making that connection. So I don't know if that answered your question. But we're more of a someone that hopefully can enhance and improve your deal. But we're not the one that's connecting you to the direct deal at this point.   Sam Wilson  13:47 Right, understood that. Talk to me about the asset. What does that mean? That's the title of the book. It's unique. What is that? What does it even mean?   Caleb Guilliams  13:53 Make a long story short, the “AND” asset is just another name for overfunded whole life insurance. And, you know, I'll be very frank, when I started working at the bank, I grew up under Dave Ramsey. Thought debt was bad thought life insurance was the worst place to put your money. And so when I started hearing this concept of like, oh, life insurance could be a tax-free investment. I was like, Okay, let me like, look into that. And I realized that majority of people that sell life insurance, sell it wrong, talk about it wrong, but like the epiphany that I had was everyone's that's talking about life insurance is bad-mouthing investments, and they're like saying all these things, but really life insurance is not even an investment. It's not legally an investment. And really what it could be is an alternative place to store capital that gives you pretty better growth in your savings account gives you creditor protection, gives you special tax advantages, gives you a state value benefits and gives you the ability to collateralize that money utilize that capital while you still get all the benefits of life insurance long term. So I'm like why is the life insurance industry hating investments? Why did the investment industry hate life insurance like actually these two things can be an “and” like life insurance could be part of your stock portfolio. Life insurance could be used to purchase real estate. A life insurance could be at the foundation, or at least a bond alternative. And so it's just been on this journey of like saying, hey, like, I do not like the whole sales concept of like, you need this, you don't need anything. It's like if life insurance can help you live more intentionally and unlock certain things, that would be interesting. And so I personally save over six figures a year in the life insurance, why it's not an investment, I just would rather save in a place that would get a better yield and have more benefits than a savings account. But I use it as my opportunity fund to invest in businesses. That's where I invest currently, but it could be in anything. And so I don't know if that answers your question, but that was like the epiphany that I had. And then in the more research, and we're making a movie, and my book is all about not that life insurance is the end. It's not the end solution. But it's like, I think it's a pretty amazing enhancer, whether you're looking into retirement, whether you're an entrepreneur, whether you're a real estate investor, I wouldn't ask the question, should you do this? Or that you should ask the question. Would this be an answer to what I'm currently doing?   Sam Wilson  15:55 Right. That's absolutely awesome. Caleb, I've enjoyed this today. Unfortunately, we are out of time, man, I got a dozen more questions I can hit you up with. But let's jump here into the final three questions. What is one mistake you could help our listeners avoid and how would you avoid it?   Caleb Guilliams  16:08 That's an amazing question. And I would say the one mistake that I've made is trying to convince by saving my identity, and realizing that my identity doesn't come from you doesn't come from your listeners doesn't come from the money or success. But it's so much deeper than that. And if you actually understand that, you're going to be a lot happier, and you're not going to make dumb mistakes in the future trying to save your identity.    Sam Wilson  16:32 Got it. That's awesome. Man. I love that question. Number two for you is, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Caleb Guilliams  16:39 I believe the greatest investment you can make is in yourself, and I think a lot of people are devaluing themselves as they think about money in their investments. And so if I can have one message that rains on. It's: make sure that you don't devalue yourself in the process of building wealth.   Sam Wilson  16:53 Got it. I love it. Last question. If our listeners want to get in touch with you or learn more about you, what's the best way to do that?   Caleb Guilliams  16:58 Betterwealth.com. And you can email me at Caleb@betterwealth.com. And if you email me and reference this show, I will give you a bunch of free checklists that we use and that we give away to to people that want to learn more about how to be more efficient with their money.    Sam Wilson  17:14 Awesome. Caleb, thank you for your time.    Caleb Guilliams  17:15 Thank you.    Sam Wilson  17:16 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.

Are you looking for a dedicated financial expert and wealth strategist who will help you grow, protect, and keep more of your wealth? Eunicia Peret is exactly who you are looking for. Eunicia is the Chief Executive Officer of Empowered Financial Planner, which helps individuals make the most of their hard-earned money, optimize their wealth building, and eliminate any financial leakage.  She visits our podcast to talk about some of the mechanisms to manage personal finances and tips to grow wealth. One of our main discussion points is about reducing or, if possible, eliminating taxes altogether.  How this is possible and how real estate investors can capitalize on this is something that everyone should not miss.    [00:01 - 03:59] Opening Segment How Eunicia Peret realized that real estate was at the core of her soul Eunicia shares her philosophy in terms of investing your money [04:00 - 14:38] Managing Your Finances, Growing Your Wealth What sets Eunicia's team apart from other financial consultancy companies? Eunicia tells us what it means to be in a “strategic partnership” She gives a sneak peek into the biggest financial pitfalls you should learn now [14:39 - 17:53] Reducing Taxes the Legal Way Taxes now vs. taxes later Eunicia explains Eunicia gives an example of a wrong mindset in wealth management Can you eliminate taxes altogether? [17:54 - 20:52] Closing Segment A financing mistake you want our listeners to avoid Not asking a lot of questions Your way to making the world a better place Helping individuals with their finances and wealth management Reach out to Eunicia Links below Final words Tweetable Quotes “People's money shouldn't be in a place where that gives them insomnia or hard tech presentations or palpitations.” - Eunicia Peret “Of course, all investments bear risk, but at least being able to eliminate the risk of not knowing who you're dealing with is so so critical.” - Eunicia Peret “If you want to make money, you're also going to have to be willing to invest in yourself to make sure that you realize those gains.” - Eunicia Peret -----------------------------------------------------------------------------   Email eunicia@euniciaperet.com to connect with Eunicia or follow her on LinkedIn. Check out her personal website to know the “5 Insights Financial Advisors Don't Share!”   Visit Empowered Financial Planner to know more about her work.  Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Eunicia Peret  00:00 One of the things that we do is we give our clients options. We don't ever wait. So for example, let's talk CPAs, right? Oftentimes clients will come to us and say, Hey, I'm working with the CPA, I really love him or her. But there's just this thing where I know that my taxes aren't truly optimized. How do I go about that? Do you have somebody that you refer me to, when we introduce our clients to any of our strategic partners, we tell them, “Listen, we are going to be here for you through the implementation phase, not because we're executing it, but to be the quarterback, but you have to feel comfortable, vet them out, interview that if it doesn't feel right to you, not everybody is for everybody else. Make sure that at the end of the day, the decision has to be free to work with somebody that you like, and trust.    Intro  00:40 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:51 Eunicia Peret is an accomplished financial expert in business owner with over 15 years of experience in the financial services industry, her passion is to work with individuals that want to optimize their wealth and are looking to take control of their money. Eunicia, welcome to the show.   Eunicia Peret  01:05 Thanks a bunch, Sam. Really happy to be here.   Sam Wilson  01:07 Hey, the pleasure is mine. Same three questions I asked every guys who come to the show. In 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?   Eunicia Peret  01:14 I love it. When I transitioned from corporate America, I started out actually funny enough as a real estate investor. And after going through the trials and tribulations of that for a little while, I realized that real estate is still hardcore at my soul, of the soul of what I do. But I also realized that there was so much more that was happening from a broader understanding of truly how money works, how it moves, how do we optimize it. And so because of that, I started really hardcore transition back into financial strategy, consulting, and helping individuals understand how they can marry the savings, the wealth accumulation, that perhaps they have uptaken up to that point in time and apply it in some cases to real estate.   Sam Wilson  01:53 That's really interesting, you know, in the real estate sphere, and I'm guilty of this, like, I am all real estate. Now I've got a diversified across every imaginable asset class, right. But a while ago, I stepped out of the stocks and bonds world entirely. I don't have $1 in the stock market, right. And I don't necessarily know that that's the right way, perhaps to go entirely either any more than the right way to go is for the person that's like, Hey, we're all stocks and bonds. And that's it right? And so kind of walk us through that. How do you balance that line? What do you advise people to do? Obviously, everyone's position situations different, but just kind of break down your thinking there.   Eunicia Peret  02:27 So my thinking there is I don't think that there is a right or wrong answer to that. Honestly, some I think when we're sitting down and thinking about what should money be. My philosophy is that it should be in a place where people feel comfortable with it. You mentioned that you got out of the stock market entirely. There are individuals that cannot stomach the ups and downs when they're small or big, right. And that's myself included. I just when I hear the stock market, I just, my heart starts trepidation. So but at the same time, I realized that there are individuals that want to be there. And so the question is, regardless of where they are, whether they are in the stock market, or maybe they are in the stock market and want to do something else, but don't know what that something else is, the question is, how do we find that something else? How do we find where the money can and should go so that it addresses the way that it needs to service us and it also needs to address the need for us to be able to rest at night, right? We should, people's money shouldn't be in a place where that gives them insomnia or hard tech presentations or palpitations or anything like that. It needs to be aligned to our mission and needs to be aligned to what we're wanting out of this life, not just for ourselves, but even for future generations.   Sam Wilson  03:37 How do you do that effectively with your clients? I've got some good friends here in Memphis that are advisors and they're really, their hands are really tied. They manage large amounts of money, but their hands are tied in the sense that they can't by the the rules and regulations of their own firm, do anything outside of traditional stocks and bonds, it should everything else is off-limits. How do you overcome that in your business?   Eunicia Peret  04:00 That's a great question. So that's the reason why we structured a business the way that we did. So all of the new clients that we've been working with, really, for the last several years, come through our consulting arm. And as part of that consulting, financial strategic consulting engagement, they are not in a position where we even talk about any sort of financial products and the reason we don't is because people oftentimes feel sold literally into these financial products. So take your your friends, for example, right? I'm sure that they're amazing human beings, but their hands are tied because of you said it right because of the company that they work with. So when I'm looking at myself years and years back when I'm looking at my clients now, why should their hands, my hands, be tied over the fact that it's somebody dictating that's part of the reason why I left corporate America, I didn't want my hands to be tied anymore. I didn't want to be dictated as to how I felt what I did what I said, constantly being walking on eggshells, and so when we work with our clients, everything comes out in the open, everything from really that we kind of cover three core pillars taxes now taxes later. How do we minimize both sides? Most financial advisors that most that they can help if they help is with taxes later, right? How do we minimize taxes later? What about the taxes? Now? How can we keep more of our money? The other perspective is how do we take control of our money? That's another area that a typical financial advisory firm is going to go straight into what they sell, sadly, right, they have access to X, Y, Z financial products, most of them are going to be market-facing. And that's what the client gets to experience. Well, what if the client wants to be more real estate? What if the client wants to do more of what you do Sam? And they're looking for perhaps a partnership? Maybe they're looking for fractional investments? Where do they even start? Where does the conversation even start? That's what we do a lot for our clients, we are kind of the pivotal force that sits behind really the questions that they're asking. And then last but not least, is how do we figure out what revenue streams and income streams will look like in the future? Should they come from people's portfolios? Or maybe should they come from a mix of different asset classes that, again, gives them the permission to live life on their own terms, and define that freedom when it matters most.   Sam Wilson  06:05 I love that. I love that kind of idea. That whole ethos of how you're approaching, you know, finances, practically speaking, I'm sure that there's some challenges in the actual implementation of that because every person is going to come with their own unique situation, they may want to be involved in business, they may want to be involved in real estate, they may want to have other income-producing assets, they may want to be in stocks and bonds, how do you effectively build that plan, and then implement that with, you know, with your clients? BecauseI imagine, I mean, this is a highly nuanced segment of financial advisors.   Eunicia Peret  06:37 It is a very highly nuanced segment to segment that, to be honest with you at the very beginning, when I first left corporate America and really left strategy consulting, LLC, thought I was going away from it. And the more I asked the question of multiple questions, what are we missing? What's happening with taxes? What is there that people don't know? What is there that? I don't know? Because I had the power to ask those questions. Truly, as a strategy consultant, I started uncovering these blind spots, just like you said, it's multifaceted. And so then the question becomes, how do you implement it? How do you deploy it, and one of the things that I tell my clients is, when we work together, we are not Jack's of all trades, because we don't want to become masters of none. But we don't just hand those relationships over. And we say, congratulations, good luck, you're on your own, we truly become the quarterback. So a lot of our clients will tell you that what we do is the equivalent of funny enough herding cats, you'll hear me talk about that often. And our clients ourselves are asking, how are you able to do all of this, we're able to do it, because of the expertise that our team has, because of the expertise that I bring to the table, which is so unique. It's not something that a typical financial advisor has in their toolbox, but also does strategic partnerships that we have with our partners in order to be able to really deliver value across whatever facets that our clients need.   Sam Wilson  07:53 Talk to me, when you say strategic partnerships, what does that mean?    Eunicia Peret  07:56 So think about not long ago, somebody came to me as an example and said, “Hey, Eunicia, we've got this particular project we're doing in Augusta, Georgia, it was a real estate investment. We're looking for investors at that particular time, I didn't know that specific investor group.” So a client comes, you know, similarly, right clients with a lot of money, we'll get targeted. And we'll get you know, they're knocked on their doors by specific individuals and investors on Hey, do this and, you know, showing you know glitz and glamour, and oftentimes they don't know how to decipher derived from wrong, because they don't know who those people are. So our strategic partners, for example, will be in situations where they do as an example, fractional investments. So now when the client says, “Hey, I want to my want my money to work harder for me in real estate, how do you go about that?” We are able to introduce them to those strategic partners that have been vetted, right, we know, we look over neural their trajectory over the last 5, 10, 15, 20 years. And we know that, hey, these guys or gals are here for the long haul, we see the results that they've delivered for other clients and because of that, now, the client doesn't go in blind, trusting, you know, somebody just because they found them on the internet, but rather, they know that, “Hey, Eunicia has seen them, our partners have seen them, they know and these people know each other.” So nobody is running away with anybody else's money kind of thing. Of course, all investments bear risk, but at least being able to eliminate the risk of not knowing who you're dealing with is so so critical.   Sam Wilson  09:21 Absolutely. And that's one of the questions I would you know, probably have, if I were in your shoes is going, how do we properly vet the people? Because I mean, there are endless as you know, endless supplies of like, I think you said glitz and glamour or shiny brochures that promise you the world. And it's like, I mean, I get them all the time, even in real estate, I get them because I'm a passive investor in a lot of different asset classes. And I'm just like, absolutely not. I can just tell you both from the composition of the team, the deal, I mean, in 20 seconds, I can really know if I'm gonna throw it around better talk about it further. And you know, for you, I would imagine that's even more complicated because maybe you're not in real estate full time. But then you also so you have the real estate component, you probably have a business card You got a lot of different things coming at you at once. What are some ways or some tools that you guys use to vet potential partners? Because once you recommend or say, “Hey, this looks okay,” I'm sure your clients are also going to be kind of going, “Hey, Eunicia, you said this was okay.” How do you work through all that?   Eunicia Peret  10:14 Well, one of the things that we do is we give our clients options, we don't ever wait. So for example, let's talk CPAs. Right? Oftentimes, clients will come to us and say, Hey, I'm working with the CPA, I really love him or her. But there's just this thing where I know that my taxes aren't truly optimized. How do I go about that? Do you have somebody that you refer me to? So when I, when we introduce our clients to any of our strategic partners, we tell them, "Listen, we are going to be here for you through the implementation phase, not because we're executing it, but to be the quarterback, but you have to feel comfortable.” Vet them out, interview, that if it doesn't feel right to you, not everybody is for everybody else, make sure that you know, at the end of the day, the decision has to be free to work with somebody that you like, and trust. So it's not just about us, pairing people up with the specific investors, the client also needs to feel comfortable, because the last thing, that's one of the things that happens in financial advisory, right, with typical financial advisors, well, you said that this is going to work. Well, I mean, again, all risk bear all investment bears risk, I don't ever want to client and part of the reason why what's has spun the way that we work on a consulting basis is clients coming back with questions one, two years later, whether it was a good or a bad decision on their part to say, “Well, can you help me understand why we made this decision?” Well, I'll be darned. When you're making a decision. And we're sitting there for hours and hours and hours and hours of talking through the strategy. I want the client to assume some responsibility on “hey, we made the decision together, you ultimately said yes, this is what I want to do.” I don't ever want that that should have should never be turned on the other party. Because if the client is empowered, and they understand their options, now it doesn't, it's not one of those things where I'm just going to be able to place blame, but rather, somebody on your podcast said it's learning money, right? We learn from our mistakes, we learn from going through the motions and figuring out some investments will work better than ours, that others those that don't work as well, guess what, they're going to be a learning platform for the next opportunity, right? And so those are, we're also in the process of working with our clients. In addition from us, just giving that value, we're also looking for the clients that are willing and able to think outside of the box. Because if mentality, if mindset isn't there, you probably know better than most, nothing's gonna happen right.   Sam Wilson  12:30 Absolutely. You know, on your website, there, you've got the Five Biggest Financial Pitfalls Checklist, which I think is something if you don't, if you're listening to this, it's Euniciaperet.com. One of the things you have on there is preventing unnecessary leakage. What do you guys do when you're auditing someone spending, when you're auditing their investments? What does that mean to you?   Eunicia Peret  12:48 Oftentimes, clients don't understand, don't don't even realize that they have money that's hiding away. They don't know that they're burning money unknowingly, right on different things. So think of, for example, tax, I'm going to go back to taxes, oftentimes people don't know, especially high income earners, that are in corporate America, making multi, multi six figure incomes, they don't understand that they have options to minimize their tax exposure. And in many cases, they're just thinking that, hey, I get to pay taxes, because I make a lot of money. That's wonderful. But the reality is, the tax code wasn't written for a W2 employee. So how do we shift that paradigm? How do we get those people in a situation where they can actually minimize right and stop the leakage on the tax front. So that's one. The other thing is oftentimes, individuals don't understand that they have a lot of leakage in the form of fees, and excessive fees that are hidden within their portfolio, especially if it's a financial portfolio. One of the things that we do for our clients is we're upfront and honest, whenever they're looking at specific ways of structuring their portfolio, we will show them this is what good, bad and ugly looks like. And when they realize it's oftentimes we're actually able to do that with financial vehicles that might already be in their portfolio. We're able to show them that oftentimes, we see multipliers to the tune of 10s, if not hundreds of 1000s of dollars that would otherwise be left on the table. Why? Because of those excessive fees that the client never realizes are hidden inside of their financial portfolio, or how some of the things are structured. And so as you can imagine, when they realize that, hey, if I just tweak this, and I restructure this way, I can get an additional 900, some $1,000 to my bottom line between now and the next 25 years. That's pretty big. And so those are kind of the results that we're always looking for, for our clients to minimize a lot of the risk to get them the confidence that “hey, I know that I'm independent.”   Sam Wilson  14:39 Right. That's absolutely interesting. Yeah. And I love what you said there about taxes now versus later because I feel like that's something we commonly get to hit in real estate is the tax advantages, right? I mean, it's if you're not, but so often, you know, we're taught especially with traditional finances is like, okay, which retirement account would you like, you know, is it a Roth IRA or do you want traditional Want to pay tax now? Or do you want to pay it later like, and there's just so many more options out there, especially when it comes to taxes and fees and things like that, that I love the leakage idea there. One other point that you had on here that I wanted to take advantage of when you say you're talking about this, take advantage of simple concepts the financial industry doesn't want you to easily understand, what are a couple of those things maybe that come to mind when I read that?   Eunicia Peret  15:22 Well, take A real estate, we're going to go back to real estate here for a second, we have a lot of clients that are in real estate portfolios, whether it be because they wanted to do it on a personal note or truly diversify. Oftentimes, when some of those individuals are looking to divest their portfolios, in many cases, they don't know that they, there are ways to circumvent those capital gains, right. And so because they don't know, financial advisors won't tell you, oftentimes CPAs won't tell you because unless you're dealing with a CPA that is specialized in real estate divestiture or business divestitures, right, when people sell their businesses, how can we squeeze as much value out of that business, because you've built it over time, and make sure that at the same time, we minimize your tax exposure on the back end, that is not something that if you just out there selling your business, it's going to happen, it's just won't, it has to be designed in advance, it has to be coordinated, best. I'll give you an example of what the wrong mindset looks like. One of our real estate partners, transactional real estate was helping a client coming, moving down from New York, there, they had a small real estate portfolio to the tune of several million dollars. And when they moved to Georgia, the whole idea was they wanted to make sure that they stay in real estate, well, that's wonderful. But they could have easily, instead of just doing the 1031 exchange and being stuck within those short timeframes of finding the right opportunity, especially in a hot market, they could have easily reposition those assets to where they pretty much circumvent the capital gains, and reposition the money to the point where they could have really invested it however they want to it could have still been in real estate, but they would have been able to keep so much more out of the hard-earned portfolio that they had built over time. And so that's kind of its how do we find those unrealized gains without that mindset, which is one of the five pitfalls as well, it's not going to happen, because guess what, those particular individuals, they said, No, we just really want to stay in real estate, we really want to have the brick and mortar, we really want to have the multifamily. And so even if we pay more, we just want it. Well, you're going to get what you get at that point in time, right, versus being strategic, and making more out of that transaction overall.    Sam Wilson  17:29 It's amazing what a little planning can do in situations like that. And it hurts so often, I'm sure you see it more often even than I do, and you see a business exit or something to that effect. And you go oh my gosh, we could have cut your tax bill by more than 50% if we had just planned in advance so…   Eunicia Peret  17:43 What about eliminating the tax bill altogether? And maybe it'll cost you 10 to 15%. And you get to really play with your monies to the point where you become your own bank? That is real. But people don't know about it, right?   Sam Wilson  17:54 Right. Absolutely. I love it. Eunicia. I've enjoyed our time today. Thank you for coming on love the work you're doing. And I know, it probably puts some more administrative burden on you as a financial adviser. But I think it's so needed in our industry. You know, we're just where we are today in the financial advising world. So thanks for doing what you do, certainly appreciate it. final few questions here. What is one mistake you can help our listeners avoid? And maybe we'll keep this you know, pertaining to financial advising. What was one mistake you help our listeners avoid and how would you avoid it?   Eunicia Peret  18:22 Ask questions, make sure you ask lots of questions. And when in doubt, make sure that you're asking the question, what is your financial team doing for you, that's something that we didn't really talk about. If your financial team isn't either meeting or talking or somehow communicating about what's happening with your financials, you are probably here yet again, leaving money on the table. So if your financial team isn't talking, reach out to us, we'll give you some of the tips to identify how you could be making them talk. But the reality is, there's a chance you may not because they're not. They just don't think that way. And so in that case, you will again need the open mind to say “Okay, how do we experience that level of uncertainty but go to higher ground with our finances,” and we can certainly help you with that.   Sam Wilson  19:04 Love it. Next question for you, what is one way you're making the world a better place?   Eunicia Peret  19:08 We focus on really, truly doing what's best for a client beyond what a lot of we got the question earlier this morning. Are you a fiduciary? And too many people hide behind this title of fiduciary. And what I tell them is, would you go to any medical doctor that just has the MD behind their name or would you do your due diligence before you let somebody operate on you? I would tell clients, stop just looking at titles titles don't really help you look for the people that are willing to open up the Pandora's box to show you where monies and fees are hidden and when you found those people because that's what we do for a client so we know that they exist are a rare breed, when you found those people hold on to them because they will truly be leaving money on the table themselves in order to make sure that they help you but nothing comes for free. So if you want to make money, you're also going to have to be willing to invest in yourself to make sure that you realize those gains, nobody does it for free,   Sam Wilson  20:02 Right? I love it. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Eunicia Peret  20:06 Best way they can go to, you mentioned Euniciaperet.com or best way is www.empoweredfinancialplanner.com. You can find us there, you can find resources there. And you can easily message us from there. We'd love to schedule a quick connect with you to see if you may be a good fit for us to work together and provide value to.   Sam Wilson  20:23 Awesome. Eunicia thank you for your time. I do appreciate it.   Eunicia Peret  20:26 Thank you so much, Sam.   Sam Wilson  20:27 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Is self-storage worth it? We have invited guests before who had talked about self-storage, but still, there's more to this space that many investors have yet to learn about. Jay Bowman drops by our podcast to talk about his experience jumping from single family to self-storage. He started his real estate journey by buying his first rental property for $11,000. Little did he know that it was a big mistake and his tenant moved out only after two months. This misstep has prompted Jay to find other ways to invest in real estate, which led him to the self-storage space. He now helps his fellow investors buy self-storage properties through his company, Beyond Storage.   [00:01 - 02:48] Opening Segment How Jay Bowman learned how to be a landlord really fast Here's his journey of how he jumped from residential to self-storage [02:49 - 10:56] Why Invest In Self-Storage The difference in evaluating between a single family and a self-storage property Here's the right way to evaluate a self-storage property before buying How should you set the prices for your properties? Jay gives a sneak peek into their approach [10:57 - 15:21] Properties That Are Worth Investing Jay shares his thoughts about tenants leaving the properties Why do they leave in the first place? If a property is 40-50% occupied, is it still worth it? Jay gives his thoughts The biggest surprise that Jay discovered after jumping to self-storage [15:22 - 17:38] Closing Segment A real estate mistake you want our listeners to avoid Not educating yourself before buying properties Your way to making the world a better place Giving back to the surrounding community Reach out to Jay See links below  Final words   Tweetable Quotes “...when you got 300 or 300 units in a facility and everybody's leaving, a lot of times, it's just because their usage is done.” - Jay Bowman “...you got to be educated, you have to understand what it is that you are actually purchasing…people are gonna tell you how passive self-storage investing is, and whoever tells you that does not know what they're talking about.” - Jay Bowman -----------------------------------------------------------------------------   Email jay@gobeyondstorage.com to connect with Jay or follow him on LinkedIn. Are you planning to buy storage facilities in the United States? Beyond Storage can help you with that!     Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Jay Bowman  00:00 When you're evaluating a business, such as self-storage, you're going in about how much net operating income it's going to throw off at the end of the day. And so you're having to look at maybe an asset that is not being operated correctly or the rents aren't high enough or there's some other things that you can make changes to drive higher rents monthly, to drive in the end your net operating income higher, which therefore then increases the value of the property.    Intro  00:29 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:37 Jay Bowman is a former buyer of single family rentals rehabs and flips, and he has successfully transitioned to self-storage purchases. Jay lives in Kentucky with his wife and two children. Jay, welcome to the show.   Jay Bowman  00:49 Thanks for having me, Sam. Appreciate it.   Sam Wilson  00:50 Hey, man, pleasure's mine. There's three questions I asked every guest who comes on the show. In 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?   Jay Bowman  00:57 I started here in Louisville, Kentucky, moved here in 2004. And started by buying my first rental property for $11,000 in a really bad area with one tenant. And I thought, “Man, this would be great. I'll buy a house and there'll be a tenant in there and he'll pay the rent.” And two months later, he moved out and I learned how to, how to be a landlord really, really fast.   Sam Wilson  01:19 Yeah. And would you recommend buying $11,000 rentals?   Jay Bowman  01:23 I would not recommend that. It was also the first rental property I ever got rid of. It took me a while but I took a beating good enough, and I sold it for cash as well at the same time.    Sam Wilson  01:33 Right? Yeah, you have to I have a story similar to yours in starting out and you go, “What was I thinking? What exactly was I thinking?” That's really, really fascinating. Tell me where are you now?   Jay Bowman  01:44 We're based out of Louisville, Kentucky. Oh, this where we've always been all my portfolio is my single family portfolio is here. But our storage portfolio is spread out. We have units or we have facilities in Indiana, Missouri, and currently one under contract in Louisiana.   Sam Wilson  02:01 Interesting. Okay, so right. So just to follow this transition, you were in single family, you started off, obviously, you know, some really small stuff. I'm sure you ran the gamut in single family from me, did you do everything you could possibly do in single family before you gave up on it and said, “Hey, I'm going into commercial.”   Jay Bowman  02:17 Sure, I started buying a small rental and then started wanting to do rehabs. As everybody else in the brother did back in, you know, five, six, and seven, got into that and then bought one in ‘08, couldn't sell it. So we just turned it into a rental and from there just continued the fix and flip rentals and then just started acquiring and going from there. And then after a while around 2020, the transition to self-storage came available. And after years of construction and heartache and pain banging your head against a brick wall, we decided to make the transition to self-storage.   Sam Wilson  02:49 Tell me what was that process like? Because a lot of people want to make that jump, they want to say hey, you know, they're just like you just like where I used to be. They want to say, hey, I want to get out of single family. But I don't know how or I don't have the team or I don't have the finances or I don't X, Y, Z fill in the blank. How did what were some of the things that you mentally said I don't maybe yet have the skill set to take that down, but that you, kind of had to fill in the gaps on what did that look like for you.    Jay Bowman  03:13 Really the biggest thing is, you know, the acquisition is very similar. The only difference is being able to evaluate the property while you go into a single family, you may say, Oh, hey, this is $100,000 house, when it's all well and done buying it for 50. It needs 20 Oh, there's a $30,000 spread, right? Easy peasy. That's pretty easy. When you're evaluating a business such as self-storage, you're going in about how much net operating income is going to throw off at the end of the day. And so you're having to look at maybe an asset that is not being operated correctly, or the rents aren't high enough, or there's some other things that you can make changes, to drive higher rents monthly to drive in the end your net operating income higher, which therefore then increases the value of the property. So its evaluation is completely different. And I would recommend that anybody who gets into storage, learns how to evaluate those properties. Outside of that we do basic rehab stuff. Same thing as houses, you have paint, you have some fencing, you have things like that, and then making cold calls and talking to business owners instead of homeowners. It's still the, very similar conversation. It's just the operations of the business is different.   Sam Wilson  04:17 Right? Talk to me, if you don't mind, take a few minutes and go in-depth on property evaluation. You know, when you look at a deal, what are some high-level things maybe that you guys look at out of the gate and say, Hey, further interest or pass and then when you take the next the kind of the second round of underwriting, what does that look like? And you break down those kind of two phases for me?    Jay Bowman  04:35 Yeah, sure. So when we begin, we want to discover what that seller is, what his motivation is why he's looking to potentially sell. And so we're talking to him about his or her personal situation. You know, a lot of these people are older people, they bought these facilities in the 80s or 90s. When they were 30 years old. Well, today, they're 60 and 70. And they're still sweeping out units with a broom, and they're still sitting in an office right? Physical leases and they're getting really tired of that. So we start talking to them about what their process looks like, what their facilities look like, you know, what's your unit mix? How much are you charging? What's your occupancy? Are you fence, “Do you have automated gates?” Do you have a website and we start to gather that information. And we put that into our analysis, and they would begin to compare it to what's going on in their competitors. And what we do is we start with a basic target, and we go, Hey, who are the competitors, then zero to one miles, then 1,2,3. And then three to five, rarely, we're going to go out and five miles, because storage is very, it's just very a local business. Nobody says, you know, unless you're in the middle of nowhere, when I'm going to drive 25 miles to go to this storage facility, you don't have a lot of that. So that's our initial underwriting. If we can see that there's value to be had there, we're, we're more than happy to talk to that seller about making an offer on that. Once we do that, that second round, we're going to go to a site visit, because you can't attend, you can't go visit these things. You know, I'm in Kentucky, I'm not going to drive to Memphis where you are to go see a facility just because I have a conversation with somebody. So we need to get the details first. And then once we have that property, under a purchase and sale agreement, we will actually go visit the physical property, do a walkthrough, identify any other issues that we may have, and move forward from there because we need to be able to put our eyes on that property and evaluate physically.   Sam Wilson  06:28 Right? Sure. Yeah. You want to make sure that there's no unknowns, maybe that when after you're under the purchase sale agreement, when you get there, you might find some things that were lurking that weren't disclosed. But then I guess on top of that, let's ask because obviously, this is all net operating, income-driven. That's how you decide this is how much we can pay for the property. How do you determine in an efficient manner, what going rent rates are without surveying the 135 mile every, you know, potential competitor in the 135-mile radius? Is there a quicker way to do that than just actually getting on and writing them all down on a spreadsheet and figuring out what that looks like?   Jay Bowman  07:02 No. I keep that, you know, we want to talk to those people, we need to know what these other people are charging and how full they are. So if all of your competitors are 100% full, and they're bragging about how they're they haven't raised their rates in the last 10 years, and we're just charging ahead, we know that there's room to grow, how much room to grow, and how high you can raise those rates is another is a different question. So if somebody has a 10 by 10, for $70, and everybody's charging $70, and everybody's 100%, full, well, then we know $70 is too low, you know, we want to see roughly anywhere between 87 and 93% occupancy on a unit mix. And so that way, as these people move out, if they have cheaper rates, we want to be able to charge a higher rate per month for that unit size, what that unit, what that is 75, 80, 85 what that market is willing to bear is the risk that you take. So we never like to see that. You know, you have a lot of people who are 90% full, and everybody's charging the same rates, there's really no room to run there. You know, unless operationally you are looking to contain to drive, you may drive your clients out if everybody's charging 80. And then I step in and I go, Well, we're gonna charge 95, we could easily lose those clients and drop below a threshold that we were really comfortable with.   Sam Wilson  08:22 So say that again, if you see that it is 90% full, and everyone is charging the same rates, you say that there's no rent growth possible, that what you just said, Did I hear…    Jay Bowman  08:33 That's what, that's us, yeah. So we're gonna look at that and go, Well, should we go in? And should we charge an extra $5? Well, if somebody else has 10%, left to fill, we may be pushing some of those people out. It's usually not everybody's running for the door. But you're always gonna have those people, a lot of people just call and shop. And if you have three competitors that are really close by and those are, what your comparables are, you need to proceed with caution in that scenario.   Sam Wilson  09:01 Right? Yeah. Because I mean, if you're shopping, and you're 10 or 15 bucks more a month, and they're only 90% full, that means they can just as easily absorb that person who's looking for a place to go. Whereas conversely, if you said, if you shopped, and you said that, hey, they're 100% full, and they're all charging the same rates, then you say, Hey, wait, there's room to grow?   Jay Bowman  09:18 Yes, exactly. Because everybody, it's full. And they're all just taking waiting lists waiting for somebody to move out? Well, if we raised $10, and we have 90% of our people stay, we're happy with that we've increased our revenue pretty dramatically. And then if there's everybody else is still full, there's charging the same, right? We just go up a little bit more, but we're the only ones with units available. And so we're driving the market at that point.   Sam Wilson  09:42 Do you just kind of test this as in you know, take a few units and say, Okay, we're gonna put this out there at 10 bucks more per month and just see what happens. How do you adjust that dynamic pricing or testing model?   Jay Bowman  09:55 Sure, the websites that we use software that we use, we are able to set that up So we will take, depending on how many units there are, we will take that and say, Okay, once we hit a 87% occupancy, we are going to raise the rate of this unit, let's say a $70, unit 10% to $77, we're gonna raise a seven bucks, oh, but if it fills up a few more units, and we hit 93%, occupancy, we're gonna raise it another 15%, because now we're pushing that rate higher. And then once if that starts to fill, we're going to look at all those people who may be paying 70. But now the market rate is shown to be 85. And we're going to start to move them up to the market rate. And maybe we don't raise them up, immediately we do it in stage over a few months, we will go from 70 to 77, or 70, to 80. Keeping them there. And then we noticed storage is a high sticky factor, we may not see a whole lot of people leave, and then we'll just push them straight to market and then begin that process all over again.   Sam Wilson  10:57 Right, that's really, really intriguing. What is that conversion ratio? Or percentage of someone? Maybe they came in at 70? How many people that you then raised 85 actually stick around or and then how many of them? Do you find that lease renewal end up going somewhere else?   Jay Bowman  11:11 You know, that would require a lot of asking why those people are leaving, we don't do that when you got 300 or 300 units in a facility and everybody's leaving, you know, a lot of times, it's just because their usage is done, really, you're gonna find a lot of people leave, if you buy a value add facility at the very beginning. And people are there for the value there for the cheap rates, they're just looking to put grandma's dresser somewhere, and you were the cheapest in town. And when you step in, and you clean up that facility and you go $40 rates going to $70, you're no longer that value, that's not our client anyway, we're not looking for that client, there's another facility a couple miles away, that doesn't do as great of a job, it's a little rougher facility, you're like, hey, they're right down the road, you can head over there, but we're gonna replace that $40 person with a $70 person, that's what we're looking for. When you've already have when you have people who are operating poorly, you know, we're gonna go in and make value there. Or if you have rates that are really good, maybe the market rate is 60. But they've got a lot of people at 50, it's not really value, they just haven't done their job, the operational side, in raising the rents to the market, because they're always afraid somebody is going to leave, we're happy to invite them to leave, because we know somebody else is going to fill them at 1015 20 25% higher, right?   Sam Wilson  12:33 What do you or how much time do you build in for, we're gonna call it the lease-up phase or the release phase when you take over a facility?   Jay Bowman  12:42 Yeah, so we usually look our market and have facilities where we've had to experience that it's been about 2.5% a month. That's a pretty good rule of thumb for us so far. So and I'm going to be really bad at doing the math here. If we're at 65% occupancy, when we take over facility, we would expect in 10 months to achieve 90% And 2.5% a month, that's really our that's what we shoot for when we do our pro formas. And so say that, like we know this one, it's sitting roughly at about 40 to 45% occupancy, and we're going to go in, it's gonna take us a while to get that thing full. But you have to go in and you have to begin advertising, you have to set up the website, you have to get the Facebook ads out there for these people who are searching for places to put their stuff. And a lot of these older buildings that are run by people who've had them for 30 or 40 years. They're just not doing that. And so we're going to go in and take advantage of that opportunity.   Sam Wilson  13:40 Does it concern you when you find a facility that's 40 to 50% occupied? Like how do you know when you buy that, that, hey, I can actually turn this around? I mean, other than just going hey, I think I can or you know, I mean, what are some things when you look at those facilities that hey, wait, there is unmet demand here? And I mean, walk me through that that would be intimidating.   Jay Bowman  14:01 Sure. So when we have other competitors surrounding us, and we see those competitors are 90 to 100% occupied and then we're like, Well wait a second, you know, the old Sesame Street thing. One of these things is not like the other and we're going it looks good. It's in the right location. Everybody else is full. So what's wrong here? And you have to look at that and wonder why? Well, I mean, it's pretty obvious when they're not answering the phone, there's no website, they're not running ads, you have some management that's just not are owners who are not doing their job, and are very hands off or don't care. And so at that point, we are very, very confident that we can go in and increase that occupancy.   Sam Wilson  14:41 Got it Jay this is absolutely awesome. What's been one of the biggest surprises you found personally going from single family into storage.   Jay Bowman  14:49 The biggest surprise that's a really good question. Had I known the power of owning a business over owning real estate, probably would have made this transition sooner. The operational side is it well, single family, you're still a landlord, you're managing people, your oven is breaking, your lawn needs mowing, all of that. I didn't realize how much I would enjoy the operational side or the investment side of actually buying a business that comes with real estate as opposed to just buying real estate itself.   Sam Wilson  15:22 Man, that's fantastic. Jay, I've certainly enjoyed this today. Thanks for taking the time here to come on. Next question for you. What is one mistake you can help our listeners avoid and how would you avoid it?   Jay Bowman  15:31 Education. You absolutely want to before you go out buying little bitty facilities, we rarely work in the tertiary markets. We're not buying in the middle of Louisville, we're not buying in the middle of Memphis, you know, Class A facilities are not our thing. We look for tertiary markets, class beat facilities, not trash, but it's not super high end, we're looking for value in those markets. And to just go out and start buying that. It's like handling a gun, you got to be educated, you have to understand what it is that you are actually purchasing. It's not just a people are gonna tell you how passive self-storage investing is. And whoever tells you that does not know what they're talking about. There is operations to this and you have to understand what that is, and how to do that effectively to be able to manage that business,   Sam Wilson  16:18 Right? A lot of that. What is one way you're making the world a better place?    Jay Bowman  16:23 You know, when we go in and we buy a facility, we immediately contact some charities and we donate a couple of units to them. Sometimes if we don't have a fenced facility, we're also contacting local police departments, we're donating units to them as well. And it's, I'm not gonna lie, it serves a double purpose when, you know, you're saying hey, we'll give you a couple units if you're happy to drive by once a week and do that but we always want to make sure that we contact those Sherry's and we want to make sure that they're they have a unit or two and begin to work with him.   Sam Wilson  16:54 Man. That's awesome. I love that. Jay, if our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Jay Bowman  17:00 Yeah, you can find us at gobeyondstorage.com. That's go beyond storage dot com. I'm on Facebook. I'm on Twitter at Jay Bowman and on LinkedIn.   Sam Wilson  17:10 Awesome, Jay, thank you for your time. Appreciate it.    Jay Bowman  17:12 Thanks, Sam.    Sam Wilson  17:13  Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Can full-time physicians invest in real estate? You may think high-income earners don't have the luxury of time to invest in real estate deals, but Sam Giordano discovered a process that makes it possible. By discovering how real estate syndications work, Sam was able to invest in real estate and share his experience with his colleagues.  He is now educating both medical cohorts and residents to start investing passively in various properties, allowing them to make the choice of going on with their day jobs or retiring comfortably at a relatively young age.  [00:01 - 03:10] Opening Segment Samuel Giordano is a full-time physician Here's how he learned real estate The importance of real estate syndications for high-income earners like him [03:11 - 13:29] The True Meaning of Financial Independence Sam shared the story when he realized he needed another income stream How PassiveAdvantage.com was born according to Sam Sam breaks down what financial independence means for him [13:30 - 21:53] How to Handle Debts The Right Way Sam prioritizes teaching resident physicians about debt He shares the reason here Physicians are often misinformed about debt and Sam wants to correct it Listen to his explanation Sam offers an interesting thought about mortgage payments you don't want to miss [21:54 - 24:56] Closing Segment A tool or resource you can't live without passiveadvantage.com A real estate mistake you want our listeners to avoid Consolidating student loans abruptly and without any plans Your way to make the world a better place Educating both physicians and passive investors Reach out to Samuel See links below  Final words Tweetable Quotes   “When you combine the syndication investing with the traditional investing, it's just so powerful at how quickly you can [achieve financial independence].” - Samuel Giordano “I think it's important to take your education very seriously. Focus on it, spend the appropriate time, and then be detailed at what you do with that.” - Samuel Giordano “The ability to be a detailed person in terms of what I need to do to educate myself has allowed me to get where I am...” - Samuel Giordano -----------------------------------------------------------------------------   Email samuel_giordano@hotmail.com or sam@passiveadvantage.com to connect with Samuel or follow him on LinkedIn. Is real estate syndication too complex for you? Learn how to simplify it by visiting Passive Advantage.  Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Samuel Giordano  00:00 The ability to be a detailed person in terms of what I need to do to educate myself has allowed me to get where I am everywhere in terms of everything. Whether it's in my medical profession and my real estate investing world, I think it's important to take your education very seriously focus on it, spend the appropriate time, and then be detailed that what you do with that. And that's probably something that personally I don't I'm not sure if that's sort of allowed in terms of the way the answer, but personally, it's most important to me from that standpoint.   Intro  00:29 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:41 Samuel Giordano was a physician based out of New Jersey. Sam, welcome to the show.   Samuel Giordano  00:46 Thanks for having me, Sam. I appreciate it. This is the first time I've ever had an interview with another Sam. So right away, we have something in common. So that's great. Thank you for having me.   Sam Wilson  00:55 Absolutely. Man, this is fun. Thanks for coming on. I know it's early for you. It's certainly earlier even for me. And you know, that's maybe that's one of things we can talk about today is just kind of what it takes to get things done in the real estate space, especially when you're a full-time practicing physician. I know I've had a few others come on and it's, you know, 5 am for them, and they're just finishing up the shift. But you know, before we get into all that. The same three questions I ask every guest who comes on the show, in 90 seconds or less, can you tell us where did you start? Where are you now? And how did you get there?   Samuel Giordano  01:21 Yeah, no, thanks for the opportunity. And thanks for having me on Sam. I'd really gotten a lot of valuable information from previous guests and I, hopefully, I can provide some of that myself and thanks for having me. Yeah, so my name is Sam Giordano as you said, I'm a practicing gastroenterologist in New Jersey, I've been practicing about 10 years now. And, you know, had gone through the traditional personal finance sort of continuums that one does, as a new newly graduating physician about 10 years ago, trying to pay off student loans, you know, contribute to my children's 529. And then once you get enough capital, then you maybe have the opportunity to max out your retirement accounts, and then invest in sort of taxable brokerage accounts. But up until that point, most of my investing had been through the equities or the stock market, sort of the traditional path. And then I would say about three or four years ago, I was sort of enlightened to some opportunities in real estate and how it can benefit high-income professionals from a tax standpoint. So I started to do some due diligence on the different methods, you know, whether it be investing through real estate, turnkey opportunities, active involvement in real estate, and I very quickly realized, you know, I didn't want to be getting the nighttime calls about you know, leaky faucets and broken toilets and things like that, just because I'm a full-time physician, my wife's a full-time physician. And so we were made aware of investing in real estate syndications, like I said, about four years ago, and it just opened up this sort of rabbit hole for me to where I'm trying to dove right in, spent the full year kind of investigating things. And now since then, I've now gone, I've now been in over 12 deals over the last four years. So it's been a part of my investment thesis now. And I tried to allocate a certain amount of my investable assets to it, and it's definitely made a difference in my life, and I think it could make a difference in others as well.   Sam Wilson  03:11 Yeah, absolutely. And it's amazing. And this goes for, and I've said this on the show many times, but this goes for military professionals. This goes for high-income earners, and really across the board, but especially I see in those two groups a lack of financial education. In the physician space, you know, you get out and it's like, wow, these are really smart people. You guys are way smarter than I sucked at school. Oh, and it's like, oh, wait, there was never this, like just the basic knowledge on how to invest across, you know, non-traditional assets. It's like, wow, why is this so not taught in school?   Samuel Giordano  03:45 You're absolutely right. It's a big issue. And I work at a hospital that has about 700 physicians, we train residents, we train fellows. So I, even prior to investing in syndications, I do some education with the fellows that I train, instead of doing my traditional gastroenterology lectures, they buy on-demand, they basically want me to do some of the personal finance stuff. So I try to make a difference in that. But you're right, there's definitely a lack of opportunities for them to learn personal finance. So we try to bring it in because it's not like it takes that much knowledge or information to make a huge difference from that standpoint. So we try to make a difference in that as well. But you're right. There's a lack of that, no doubt.   Sam Wilson  04:25 Yeah. What was the scenario when you use the words enlightened and made aware? What was that scenario about four years ago when someone kind of brought this idea across your desk?    Samuel Giordano  04:35 Yes, so you know, I really around 2017, when with the tax cuts and JOBS Act was enacted as somebody who lives in New Jersey, you know, I really got hit pretty hard as a two-position family with the tax implications when I couldn't deduct my state and local income taxes anymore. And so we had been sort of a traditional expectation of what our taxes would be on an annual basis and then that following year, I probably should have thought about some tax planning. But that following year, I was like holy cow, I can't believe we have this huge tax bill that we got to kind of write a check for. And even my wife and I are both W2 employees, and even though we're happy in our jobs, and we didn't want to really diversify out of that sort of W2 situation, I wanted to look for ways that I can sort of at least come up with a second sort of income stream that's more tax-advantaged. And that's when I started to come up on the real estate investing. And so a friend of mine had invested in real estate syndications and was trying to, you know, give me some information on the tax advantages. And even though you know, if you're not a real estate professional, you may not be able to offset your actual income, but you can definitely offset some of the cash flow from the syndications. And then there's sort of methods that you can do to sort of pass a pairing sort of effect that you can then invest in subsequent syndications when the syndication is concluding that year and try to offset some of the any of the capital gains and some of the depreciation recapture. So it just opened my eyes, I did it, I read as many books as I could, as many podcasts as I could, and then I got comfortable with finally investing. And then since then, you know, it's been great. So I think hearing about the opportunity to invest in the TAT in the real estate syndications. And then learning about the tax advantages was just like, I guess it opened a whole new world for me.   Sam Wilson  06:23 That's absolutely fantastic. I love the, you know, the kind of on-ramp, if you will for you. I mean, it took an entire year, educating yourself and saying, and for those of you who are raising money, myself included, that's something we just need to keep in mind is that it takes time to educate our investors. I'm comfortable with this idea. I mean, I know it took my own family allowed, like, Okay, watch me watch me, watch me. Okay, cool. Yeah, what you're doing there, tell me about what you guys are doing on that front on PassiveAdvantage.com.   Samuel Giordano  06:50 Yes. So basically, as I said, I work at a hospital that has over 700 physicians and I had, you know, being someone who's involved in the teaching of the personal finance and start, when I started to get into the real estate, it started to come up in more casual conversations in particular, over the last couple of years, like for the first couple years of my investing, I was kind of doing it just for myself. And then for the last couple years with the impact of COVID, on physician burnout, and more physicians kind of thinking about cutting down, either cutting out altogether and retiring or just cutting back to maybe a four day work week or a three day work week, real estate started to come up and more and more of the casual conversations I had with these physicians. And I would have, I would point them to certain podcasts or books that I liked, maybe some real estate forums, but it kept having the same conversation over and over with them. And then eventually, you know, I brought up sort of a tool that I've put together at the time for myself when a real estate syndication comes through my email, what I use to kind of look and see if there's any obvious red flag or risk points in the deal that if none of it, if it checks all the boxes the appropriate way, then I move on to a further deep dive into that deal. And so a number of people wanted to have access with that which I have no problem sharing. But the difficulty is, you know if I'm going to share it with other people, I wanted to make sure it was tidied up and you know, dot dot and I's and cross the T's. So then I partnered with my current partner who is sort of an Excel spreadsheet whiz and someone who vets deals for syndicators or pre-vets deals. And we sort of combined to form a deal syndication vetting sheet that allows you to kind of see some of the risk points and then that product then parlayed into a business that we have, which we call it with our website's name, passiveadvantage.com, where our focus is in is educating investors and helping people be aware of some of the things to look for and some of the risk points when looking at real estate syndications.   Sam Wilson  08:47 That's really cool. So just so I understand a little bit more clearly, like you kind of have a secondary spreadsheet. I know for me when I invest as a passive investor, because I do that as well, obviously, yeah, there's just too many good opportunities. And I want to participate with my friends as well in those deals, but where you know, you have a secondary Excel sheet that you guys have created that then because I always get their Excel sheet because I want to see their underwriting. But then you'll go and plug it into your own proprietary Excel sheet and then kind of spit out a whole different set of numbers. Is that what I mean?    Samuel Giordano  09:15 That's right, and the way that sheet is organized in that, it's basically it's organized for ease of use. So you input some of the data on one particular page, we call it the key metrics page, and then it sort of pre-populates into the rest of the sheet. So and then when we do look at specific deal metrics, a lot of it is drop-down based, so you don't have to go in and worry that a formula is not working or this isn't working. And then when a metric is outside of the range of normal, then it either highlights the cell red or green or yellow depending on what the desirability of that particular metric is, for example, like an exit cap or rank growth rate or something like that. It may then highlight that this should be something you may want to ask the sponsor about. So yeah, so we use the metrics that we get from the investment summary or any materials we get from the sponsor, and then input that into our sheet and kind of go from there.   Sam Wilson  10:10 That's fantastic. What a heck of a resource for passive investors. That's really cool that you guys are sharing that with your group there. Talk to me about financial independence. I mean, I'm gonna make an argument here and see if you can support or, you know, what's the other word I'm looking for there? Anyway, find the holes, deny, yeah. I say, “Hey, man, this isn't right.” Because I also have a passive investor and a lot of deals. But it's not enough, especially on a cash flow basis to really offset my, you know, working my call this my working income, right? Sure, for me going out and actively doing deals. And I would say the same for you. Even with 12 investments, it's not going to really change or offset your income. So what does that look like for you, when you use that word, financial independence? Obviously, you know, a lot of these deals, you get a big payday upon disposition? You know, in the interim, it's not an independence game, per se, as a passive investor, am I wrong?   Samuel Giordano  11:04 No, that's 100%, right. So when you look at financial independence, in the traditional sense, a lot of the personal finance blogs, look at what's called The Trinity Study, where they look at, you have to save X amount. And if you use sort of the 4% rule, meaning that you know, if your goal is to have, say, $100,000 in passive income, when you retire, you then have to save 25 times that to get to a 4% withdrawal rate. So then you would need to save 2.5 million to get to that point before you can retire on 100,000 annually, roughly, if you want to assume that that retirement will last a period of like 30 years based on that Trinity Study. So that's sort of the holy grail of how financial independence or retirement appropriateness is looked at in the personal finance world. So the advantage of incorporating the real estate syndication is that, instead of using that 4% rule, if you have, I mean, just assuming what sort of syndications on average is good from a cash flow standpoint, these days, when you take into consideration, both the cash flow and the disposition amount, say you conservatively do that as 8% so now you have maybe half of your investable assets in syndications that are garnering an average of 8% whereas you still do the traditional stuff where you can maybe assume that it's a 4% withdrawal rate if you want to take money out of the stock market. So then all of a sudden, that timeline to get to that 2.5 million, now, you could maybe when you do the combination approach get to that same place with 1.5 million, roughly. So it sort of truncates the timeframe to financial independence. And so if someone's goal is 10,000 a month passive income, then if we have a calculator within our sheet that sort of opens people's eyes to this ability to attain financial independence to where one example that we default to in that particular seed is that if somebody invested 100,000 annually, so you know, two depending on the, 50,000, minimum or 25, or you know whether it's two to four deals on an annual basis, and assuming reinvestment of any of the proceeds assuming an 8% return, assuming a 2% inflation rate, if you needed to reach that 120,000 a year or 10,000 a month of passive income through syndications only with that 100,000 A year investment, you could get there in seven to eight years. So instead of spending it and that's not even taking into consideration the stock market, so instead of spending your 25-year career on saving 2.5 million or you know something in that, or even 15 years, you can get there in seven, eight years on syndications alone, but you have to invest 100 grand a year, right. So to me, when you combine the syndication investing with the traditional investing, it's just so powerful at how quickly you can do that even if somebody doesn't want to retire, even if they want to cut down the four days a week, you may not need that full 10,000, you may only need 4,000 a month to sort of offset that one day or 5,000 a month or something like that. So yeah, I think that the cool thing about syndications is it really gets to sort of truncate down that process that it would take you to get there.   Sam Wilson  14:14 Yeah, and that's a really valid point. And I love that two-prong approach. Yeah, because there I mean, the returns that we typically project and see in real estate syndications. I mean, I couldn't sell an 8% return to investors over the life of the deal if I tried I mean, cuz that's just, I want to invest in that. Like I don't want 8% I want 12 to 15 like that's, right need to be in order for me to put money in. So you know, and not just obviously accelerated even further, not that you're always gonna get that but that at least, you know, the types of opportunities we look at. So to even further your point, it's like eight percent's really low in a real estate deal.    Samuel Giordano  14:47 And that's just being conservative, but you're right, you say a deal does perform like what we're looking at in the traditional IRR is lately like in that 12 to 14 or 14 to 16 then all of a sudden that seven years goes down to six years or five years. So you can be amazing. And you never you want to take conservative assumptions when you do these kinds of planning. But yeah, if things sort of continue as they were, then you can even truncate that even more.   Sam Wilson  15:11 That's fantastic. I love that. When you talk to the people that are coming on when you, I think you said residents or people coming in, and they kind of give them because I know that you are asked to speak about financial topics, what are some of the things initially because you can't just fire host, people with hey, real estate IRR? Is all this stuff? Like? What are some of the more basic things you start with?   Samuel Giordano  15:30 Yeah, so basically, the way that I sort of outline is it the physician world, like the big thing for physicians, in particular in training is like the student loan burden. So it used to be when I came out, it used to be $100,000, in student loans with a lot. But now unfortunately, in talking to a lot of residents and fellows, it's not uncommon for them to have 250 to 400,000 in student loans coming out, especially if it's like a two-physician couple. So this kind of burden is almost like a second mortgage payment. So when I teach personal finance to these residents and fellows, I always start with the debt piece. So I go over debt in more detail and what the plan is to attack the debt, you know, in terms of whether it's credit card debt, whether it's just student loan debt, whether it's other debt that they have, personal debt, and how to attack the debt piece first. And then I sort of go into the insurance metrics and you know, things you want to cover yourself from, insurance cover for catastrophe, whether it's life insurance, disability insurance, umbrella insurance at some point in time. So those are sort of the foundations of getting you got to get through that first. And then we sort of transition into what do I want to invest and I, even though I believe in real estate, I usually do start with, you know, equities investing and stock investing. And I would say the point of physicians about, I would say at least five to seven years out is when they would start to think about these alternatives that we're talking about. So it's not someone that is probably going to invest in this kind of thing right off the bat, they kind of have to get that foundation, build it up, have some disposable assets, then they can transition once that's all set in place to these more sort of alternative investments.    Sam Wilson  17:12 How do you feel when talking about the debt piece? I don't know what student loans are, interest, you know, what they're charged on interest now, but it's got to be sub 3%? No?   Samuel Giordano  17:23 For some of them, believe it or not, there's some that are still in that five to 6% range. So the tricky part is in the physician world, there's something called like Public Service, Loan Forgiveness, or PSLF is a federal program that allows you if you work in an underserved community, or you work for a 501(c), charitable organization, which a lot of hospitals are, for a period of 10 years in total, those full amount of loans can be forgiven if you're paying what's called an income-based repayment plan. So if you're paying a certain percentage based on what your income is, then that can be forgiven. So in someone like me, for example, if I'm a gastroenterologist that requires four years of med school, three years of residency in Internal Medicine, assuming the four years of college, then four years of med school, three years of residency, three years of fellowship, so we're, just the medical training is 10 years, if you start that public service, loan forgiveness, or the Income-Based Repayment in the three of residency and the three of fellowship, you only need to work as an attending or a full-fledged physician for four more years to get those loans forgiven. So what people often don't know is if they consolidate those federal loans to a private loan, they disqualify themselves for being eligible for that. For some of these people, or they may have a 6% loan, but they consolidate into something lower, but they could and they're like, oh, great, I got a 3% loan now, but then they could have gotten forgiven if they worked three or four years. And they didn't even realize that. So there's a lot of misinformation out there. And we're, physicians don't aren't aware of all the implications, depending on the type of loans you have.   Sam Wilson  18:58 Right. That's intriguing. And guess the follow-up question to that would be if inflation is you know what it is now at six 7%-ish? Yeah. Do you change any of that if someone has a 3% loan and say, hey, you know what, maybe we won't pay that debt down as fast? Or is it one of those things where you just find getting that out of the way is just helpful to do?   Samuel Giordano  19:18 Yeah, so if they qualify for that Public Service, Loan Forgiveness, then I would still stick with the income based repayment plan and then you where you can maybe get it forgiven completely. Because say, you start with 300 grand and you're paying the income base, because the residents and fellows only make about 50 or 60 grand a year. So you know, maybe paying like 500 a month, then you may as well do that for the six years but you, net of what you're bringing down on that 300 grand, you may still owe 270 grand but when taken into consideration the interest rate. So if you can then forgive that over four years, it's still I think, a smart move to do that. But in someone who doesn't qualify for that PSLF and just has a fairly low-interest rate and they're just going to be paying it, then if you think you can manage that delta between the 3%, and what you can make on your investments, whether it's through equities or real estate, or whatever else it is, then yeah, I wouldn't rush into paying those off unless from a mentality standpoint, or there's some mental benefit to paying it off. But financially, if you can make that delta and the difference between the 3% of whatever you can make in investments, then there's no reason to pay that off any quicker. I agree with you.    Sam Wilson  20:27 Right, yeah, that's interesting. It is. I mean, for me, personally, I don't have any debt on my primary residence. And it doesn't make financial sense, right? Like, rates are so low, but it's a nice little warm blanket that I put on him like, oh, I don't owe anybody anything for my house. So yeah, I don't like Yeah. And that's a personal decision more than it is a business one. But I just wondered how you coach people on that, you know, when they come in, like, Okay, here's my debt piece, because that's what you start with, you know, what that looks like. So thanks for breaking that down. Say, um, this has been a ton of fun. Thanks for taking the time to come on the show today. It's only got one more thing here you'd love to share with us before we jump to the Final Four.   Samuel Giordano  21:01 Yes. So what I was saying is, you see a big a wide variety of people's views on that mortgage component, like what you said, it feels good just to be able to know like, I have a place to live, I'm not, I don't have to worry about mortgage payments. And the other thing, depending on the size of your mortgage, it can free up a good amount of cash flow, which then you can earmark for other things. And you don't have to worry about that. But then you get the opposite end of the spectrum where you hear and you know, a lot of people in the real estate community, not to say it's the wrong thing. But it's just interesting. The difference is where some people say, take out a home equity line and you know, on your house, if the where the interest rates are and then use the Home Equity Line to invest in syndications, which, you know, it's I'm not quite to the point where my home is paid off, but I definitely have some equity. And I've thought about it, but I'm not at the mental space where I can just take some of that money and you know, take it out of my house to put it in some syndication. So it's an interesting spectrum.   Sam Wilson  21:54 It is. And there's again, it's more of a personal just comfort decision more than it is just a strictly numbers, dollars and cents decision. So yeah, resting was just curious what you had on that, say on the final question to this, what is one tool or resource you find you can't live without.   Samuel Giordano  22:10 So I would say my tool in the passiveadvantage.com site is one that I couldn't live without, but I think separate from that, you know, I would say that the ability to be a detailed person in terms of what I need to do to educate myself has allowed me to get where I am everywhere in terms of everything, whether it's in my medical profession and my real estate investing world, I think it's important to take your education very seriously, focus on it, spend the appropriate time, and then be detailed at what you do with that. And that's probably something that personally I don't, I'm not sure if that's sort of allowed in terms of the way the answer but personally, it's most important to me from that standpoint.   Sam Wilson  22:49 I love it. Question number two, what is one mistake you can help us avoid and how would you avoid it?   Samuel Giordano  22:54 Yeah, so I think, you know, getting back to the student loans, I would say, if you are a physician, listen to this podcast there you have student loans, even if you're not a physician, look into the PSLF program and make sure that you're not consolidating your loans before two that would disqualify you from starting with that. Because if you can wipe off three 400,000 in loans, it's a big mistake I've seen a couple of fellows make before I've had the ability to educate them. It's something worth looking into if you have a lot of student loans, and you may be working for a nonprofit down the road.   Sam Wilson  23:26 Right, man, that's fantastic. Question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?    Samuel Giordano  23:33 You know, I think the biggest thing and it comes back to the point one is educating, I think I'm a big believer in like, we get what we give, and whether it's through charitable donations, which my wife and I do through our donor-advised fund, or whether it's through educating others. I think it's my passion to help people whether it's, you know, some of our fellows and residents that we do on a personal level in the personal finance space are just helping guide them and their life decisions, or whether it's helping other passive investors invest in real estate syndications, maybe alert them to some common risk points or deal points. I think giving back to education is one of the biggest things that I try to impart as a way to help.   Sam Wilson  24:09 That's fantastic, Sam, if listeners want to get in touch with you or learn more about you, what is the best way to do that?   Samuel Giordano  24:14 So you can reach me through our website at www.passiveadvantage.com or you can email me personally at Sam@passiveadvantage.com and I'm happy to help any way I can.   Sam Wilson  24:25 Man, thanks for your time today. Appreciate you coming on the show.    Samuel Giordano  24:29 Oh, it's my pleasure, Sam. Thanks so much for having me. It's been a great time.    Sam Wilson  24:32 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Is multifamily an undervalued asset class? This may sound like a controversial take, but Hunter Thompson is here to tell us why we should believe it.  Hunter is Managing Principal at Asym Capital, which helps real estate investors acquire properties that are recession-resistant. His team's background in economics and technology provides clients with a unique perspective in investing in real estate deals. Hunter is also an expert in capital raising.  He has raised more than $50 million in private capital and has taken down over $100 million in real estate. His tips and tricks are written down in his book, Raising Capital for Real Estate.    [00:01 - 04:44] Opening Segment Why Hunter Thompson fell in love with passive investing Here's the reason you should work with Hunter [04:45 - 14:52] The Economics of Real Estate Hunter's different approach as a limited partner What are recession-resistant asset classes? Hunter explains He gives his thoughts about the profitability of ATM businesses  [14:53 - 24:30] Multifamily is Undervalued, and Here's Why Listen to Hunter's thoughts about inflation and its influence on real estate investing Hunter believes that multifamily is being undervalued He tells us why He shares his thoughts on the tokenization of real estate [24:31 - 27:40] Closing Segment A tool or resource you can't live without Calendly A real estate mistake you want the listeners to avoid Focusing too much on capital raising Pay attention to debt too Your way to make the world a better place  Helping people become successful entrepreneurs Reach out to Hunter See links below  Final words   Tweetable Quotes “The debt piece is usually the single most important determiner on whether or not investors get their money back.” - Hunter Thompson “You can be way late and very successful in real estate because of the speed at which the asset class moves…you don't have to have the best deal in the world, as long as you're participating.” - Hunter Thompson “If you think that [the tokenization of real estate] is a potential thing that's going to have a lot of legs, I don't want you to have to be the person that actually makes it happen. You can let someone else go and incur that risk, figure it all out for you you can be three years later, you're still going to get tremendous, tremendous upside.” - Hunter Thompson   -----------------------------------------------------------------------------   Email hunter@asymcapital.com to connect with Hunter or follow him on LinkedIn. Do you want to work with a technology-enabled real estate investment firm? Check out Asym Capital now.   Listen to Cash Flow Connections to learn the intricacies of commercial real estate from the comfort of your car, home, or office. DOWNLOAD THIS FREE BOOK, Raising Capital for Real Estate.  Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Hunter Thompson  00:00 Go all in on education. The time is now to do that. It doesn't mean go and get into an illiquid investment. Similarly to the world of the tokenization of real estate, if you think that this is a potential thing that's going to have a lot of legs, I don't want you to have to be the person that actually makes it happen. You can let someone else go and incur that risk, figure it all out for you, you can be three years later, you're still gonna get tremendous, tremendous upside because this is not the world of innovation. This is the world of copying others that have had success.   Intro  00:31 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:42 Hunter Thompson has raised more than $50 million in private capital and has taken down over $100 million in real estate. He's also written a book, Raising Capital for Real Estate, which you can find at raisingcapitalforrealestate.com. Hunter, welcome to the show.    Hunter Thompson  00:57 Honored to be on thanks again.    Sam Wilson  00:58 Hey, man, the pleasure is mine. same three questions asked every guest who comes on the show. In 90 seconds or less, can you tell us where did you start? Where are you now? And how did you get there?   Hunter Thompson  01:05 So I started by being really interested in what took place in 2008. Just the devastation that took place in the marketplace, I did not lose any money in 2008, I was just a college student. So I thought, You know what, this is a great time to invest within bloods in the streets. I moved to California, not because of the market, but just because I felt like that's where the excitement was, especially at the time. And there was a lot of money and the cap rates, though they had been depressed, they were far too low for what I felt comfortable with. So I started looking at other opportunities outside the state of California and was very quickly introduced to the world of syndications, which is, you know, common vernacular now. But at the time, it was only me and like three other guys that I knew that you know, what we later would call crowdfunding real estate. And I fell in love with the world of passive investing, and built a business to help people find great investment opportunities that were vetted so that they could be great LP investors, and decided to raise capital for other people's deals. So to a large degree today, I still am a passive investor. I just raised significant capital from our role of extra sponsors that we created over the years. I hope that was 90 seconds.   Sam Wilson  02:14 Close enough. I mean, that's an intriguing idea. You know, I think, you know, we've seen that the rise of the capital allocator, we've, you know, that has become its own thing. And there's inherent risk, I think involved in that whether or not you become a registered investment with a resident IRA, which I think you are,   Hunter Thompson  02:31 I'm a registered representative, which is a different track from the RA route, but it's similar in practice.   Sam Wilson  02:36 Okay, so you're a registered representative, a broker-dealer. I think that's terminology, right. And then we have people kind of play in the wild west gray space of just raising capital, but not really being on the GP team, but they're on the GP team doing nothing you got you kind of got that weird, but I really don't want to tackle all of that today. I mean, if you want to dig in further on that we've got lots of episodes, we've brought on some other people who've done the same thing as a registered representative Hunter has, but really just a unique idea that you can go out and raise money for a project that someone else is doing, like break that down for us, like why does somebody come through Hunter versus just going direct a sponsor?   Hunter Thompson  03:11 Well, it's a good question. And so we work really hard to answer it, you know, economically, relationship-based, etc. So, generally speaking, all of our economics is paid by the sponsor, because we're providing them a tremendous service. When they do deals with us, we have very buttoned-up investment wires, just hitting their account without them doing much of anything, in terms of raising capital. We put them in a very good position because once we go through our very rigorous due diligence process, which sometimes can take years, and that's not an exaggeration, when we put that group in front of our investor base, they're positioned in a very good light. So we don't do deals with a lot of sponsors, you know, we've done deals about six or seven sponsors only like four of which we're currently doing a ton of deals with because of the deal flow changes and the dynamics of the market shifted. And so why a sponsor would be interested in dealing with us, our position in the space is we have a very good reputation we deliver on our promises. And if they're willing to part with some of the economics of their deal, it'd be worth a conversation on the investor side of things. They're getting a very white glove vetted process, which results in them to a large degree, being able to rely on our due diligence process, rely on our relationships rely on the fact that I'm usually one of the largest personal investors in each of our offerings. And they also know that somewhere between 70 and 80% of our economics are based on performance. So we're just not incentivized to do a lot of deals. We do deals with groups we think are going to work and you know, I invest significantly in each one of them.   Sam Wilson  04:45 Man, that's fantastic. I love that. That's very, very cool. And that is certainly a compelling thesis. I love what you said there about a white-glove service because I mean, let's be honest, it's a pain in the neck to be a limited partner and actually find a deal that you like. I'm in this industry, and I'm sitting on capital right now I know I'm like you, I mean, you know, hundreds of operators and I'm going, I don't want to put this, it'd be 10 times harder if I really didn't know the industry that well, I mean, then you're really just throwing a dart at the wall going, Gosh, I sure hope I hit the bull's eye.   Hunter Thompson  05:12 There was a time where access was the challenge. If I could only access these deals, I'd be able to invest, right? But now anyone can Google real estate crowdfunding and you can access hundreds of opportunities. The problem is, everyone's marketing documents were made by someone overseas that costs $35 An hour and they look amazing. But the difference between Blackstone's marketing documents, anyone else's marketing documents is really negligible, right? There's no real difference. So what's going on under the marketing documents is what really matters? Who are the actual principals? Have you run a background check or criminal check? Have anyone that's, you know, to some degree, acting on your behalf? I tour properties across multiple states show up to properties randomly pull deeds on property. So if you take a picture in front of a property and say, Hey, I own this billion-dollar piece of real estate, I don't just take your word for it, we'll pull the deed on the asset and follow the chain of LLC to until we get to you personally. And at that point, we know you might own the asset. But how many passive investors are doing that? Almost none. But it's not because they don't have the time. It's not because they don't know how. It's just that the economics is such that you can't spend all your time doing what I do, or it will eat into your return profile, right? You spend five or $10,000 on due diligence, and you're only investing 50 grand, it doesn't really work. Even if you know exactly what you're doing. So a big thing of what we do is we use the economies of scale where, you know, in 2021, I think we invested 20 or $30 million, that allows us to do all those things on the behalf of our investors.   Sam Wilson  06:45 Right. That makes a heck of a lot of sense. That's awesome. I love what you guys are doing. And now that we're talking economics, let's shift gears a little bit. I mean, your show is it's a great show. I'm a longtime listener, first-time caller. But no serious. I've listened to your show for now several years and really have enjoyed it. And I love kind of the the controversial people you tend to bring on. It's always a different kind of perspective. Can you give us what your outlook is? You know, you guys are investing a lot of money in a lot of different asset classes? Or is it all the same asset mesh? Like five questions, you're all at once a lot of different asset classes? Or is it all in one asset class? Give us your kind of economic view? How are you guys protecting investors? Just give us your overarching, what does Hunter see in 2022? And what are you doing about it?   Hunter Thompson  07:29 So in some ways, this is kind of a boring response because if you listen to any interview I've done over the last 10 years, you're gonna get the same answer. But I'll kind of justify that. So we have a low-risk cash flow-focused, recession-resistant thesis, meaning that we invest in stabilized to value-add risk profiles that are going to be cashflow positive, at least within the first quarter of the investment. And then they must have some sort of recession-resistant thesis. And so what that means is, the first two are pretty self-explanatory, but the recession-resistant thesis has now become more and more popular. But basically, the demand for the product has to be either inversely correlated with the economy or non-correlated with the economy. So as an example, the self-storage industry is notoriously recession resistant, the worse the economy does, the more people that are downsizing, sometimes the more divorces they are sometimes the more kids move home from college unexpectedly, all of that creates demand for self-storage, a very good recession resistant thesis, I recently did a deal in the ATM business. And that is a really interesting one. So the ATM business in today's and then this particular niche. It's basically for people that are unbanked or on bankable, you can't get a bank account. And so the worst the economy does, the lower people's net worth tends to be, the less likely they have income, it's more difficult for them to get a bank account, it pushes them into the unbanked. And then they use ATMs to kind of transact, like most people, or other people would use banks. And there's 10s of millions of people so that are unbanked in the United States. So that creates a really interesting, compelling, recession-resistant thesis. And another piece of that one is that we don't sell the ATMs later down the road. So the valuation of the ATMs to be determined at a later date is not consequential to the investment thesis. So I really love the combination of let's say, investing in self-storage, where you're going to sell and your 10 out evaluation, you hope to be larger. In the ATM business, you don't care about the valuation, the cash flow is so significant that the IRR is totality. And its totality is from operational cash flow. Right. So just constantly participating in the market intelligently, always with that thesis, but as things change the marketplace, changing the percentages that we're investing. So in the wake of COVID, for example, grocer-anchored retail, which is a very compelling recession-resistant thesis, that is not a significant piece of our future investments because of the changes that have taken place in the marketplace.   Sam Wilson  10:02 That's intriguing. And those are two very different asset classes. They're, you know, the self-storage one. Yes. You're looking for an equity multiple upon exit. Yep. Or as an ATM, you're just collecting the cash flow. And I think like you said, it's not contingent upon a future sale, which means at year, I think, if I recall correctly, as I looked at this deal like it was a seven-year, that's right, when your deal and you know, at seven years, the disposition price of your ATMs was zero, basically, yeah, you're just giving it away. Right? And that's really, really interesting. What do you think, you know, and we're gonna, I'm gonna turn left here, but CBDC. So Central Bank, Digital Currencies, need fear for that, and the effect it could have upon the ATM business?   Hunter Thompson  10:41 So yes, and no. So I think we saw what happened in China. And of course, you know, I have invested like, our investors invested 10s of millions of dollars in this space. So we're definitely like focusing on this particular risk. So we've done a whole hour and 15-minute podcast about this particular topic with someone who is part of like the ATM lobby and understands the regulations and how they work, we definitely take the risk seriously, but we're just not concerned about it in that seven-year timeline. In China, they were able to successfully basically convert everyone over to a kind of centralized digital currency very quickly. But China, as many of you may know, it's like a top-down process where they can make it so instantly, they can say this is the case, I believe it was the movie, Thank You for Smoking, wherein the film, the son of the main character, ask them, “Daddy, what makes America so great? And he says, our endless appeals process? Well, that's the reality with the banking sector. So you can't just say, Hey, new digital currency, sorry, banking sector, it's new, this is what we're gonna, no, there is a litigation that's going to take place, there's endless rules and regulations, there's people going to push back on this stuff. And that's, we just don't see it hasn't started, it truly hasn't started in the sense that we actually see ATMs increase in transaction volume within our niche on an annualized basis. Most people would think that's not the case. Oh, but cash is going away. If you're interested in learning more about this and why our particular niche is not really impacted by that you can go to asymcapital.com, I have a webinar on the process, but we have not seen like cashless societies, Venmo, PayPal, these things aren't really applicable to our particular niche because of the requirement for a bank account to be used for all of them, which would most likely be the case for digital currency as well.   Sam Wilson  12:30 Right. Yeah, that's really, really intriguing. And you're right, the demographic that is serving that you're serving by providing ATMs. I mean, I can tell you, I'm involved in a business that, you know, it requires cash for a lot of people to come to the business and they prefer to pay in cash, we've given them all digital options. I mean, you can come you can get digital prepaid card, you can do everything you want to even bring in the cash in then they still prefer to go strictly to the cash sale route. And it's like, this is really bizarre. So yeah, there's a certain demographic you guys are serving there. That's really intriguing. How do you pick your investment thesis based upon? Or is it me, ask this question? Is there any correlation in what you invest in, and what your free market views are? I know, on your show, you talk a lot of free market people, you talk to a lot of really, you know, high level thinkers, and I know where you kind of stand on a lot of this stuff. Those two intersect in any way.   Hunter Thompson  13:17 So definitely, especially when it comes to my views on inflation. So I think that we are going to go towards, you know, continued inflation of asset prices. And it makes you seem like a Perma bowl. But I just feel like someone asked me recently, what's the number one most undervalued asset class in the United States, and I was trying to be kind of cute, and I said, multifamily, and like the whole room just like paused and was just like, what, and kind of not joking like, I think there's a flush of 10s of trillions of dollars of money printed over the last couple of years. I think 40% of all the dollars in the history of United States for printing the last 18 months. And United States real estate, particularly multifamily is one of the most compelling investment products in the world. And you have the combination of the size of the United States, the predictability of outcome and legal system, the way that title works in the United States. There's a slush fund of capital looking for great deals, and growing robust markets like Phoenix and Texas and Florida, etc. Where the supply-demand imbalance, sound fundamentals are producing incredible returns. And it's just getting started. I haven't looked up the number recently, but the number of accredited investors that have any investments in private placements is basically zero. It's almost nothing. Meaning that there are a lot of accredited investors, there's 12 million in the United States, they have assets that are invested in real estate, but they're all REITs. And like, we all know that those are not compelling compared to the deals that you and I have access to correct? Once this becomes democratized, for lack of a better term, meaning people have access to it. I think that there's going to be a flush of interest to the space. I think that all of us kind of get in this echo chamber where it's me and you in bigger pockets and everyone's talking the same language, we think, Oh, it's really competitive. Just wait, just wait. I think interest rates potentially could go negative, as we've talked about before, they currently are negative on a real basis, you know, real interest rates are negative currently. United States is one of the few industrialized countries that has even positive rates. I think United States bonds are far more attractive than something like a Japanese bond, which for the last time I checked was negative, there's no reason this isn't going to continue. Interest rates are going to continue down, asset prices are going to continue up and cap rates. Let's say they're fives. Now, there's no reason they can't be two and a half. Yeah, now, maybe I'm wrong. But what if I'm right, and if I follow that investment thesis, and use appropriate debt to protect my investors, in case I'm not correct, I'm gonna be very happy if I have a lot of money invested in those inflating assets. And if I sit on the sidelines for two years, and I, that correction doesn't happen for two years, I'm going to wish I had been invested that whole time. And by the way, people have been asking about when interest rates are going to rise. Since 2008, since 2000, you know, and look at the last 100 years of interest rates. It's a very interesting picture, if you Google that chart, you'll learn a lot about the world of finance, you have a very pronounced increase in rates in the 70s and 80s. And I feel in the next 40 years or downward trajectory down to the right. And I think with how politicized the Fed has become, there's just nobody is going to come and say, You know what, let's intentionally smash the button and enter into a multi-decade depression by bringing rates up to what we think might be market. There you go.   Sam Wilson  16:40 That's absolutely compelling. I love that you're taking a hard stance there. And I like that because that's, you know, it doesn't leave a lot of ambiguity on the part of the listener. It's like, Hey, this is where we're going. Alright, let's talk about multifamily being undervalued. I mean, what if we do have a recession, right, and then people don't have the spending money? Because I hear this from two different angles. If your tenants can't afford the rent increases, then how do the price, the assets continue to inflate?   Hunter Thompson  17:06 So rather than focus on the potential upside when it comes to recessions, let's talk about the downside. So everybody's investment thesis is different. But if I'm talking about 150-unit apartments in growing and robust markets, I think default rate of Fannie Mae-financed assets in 2008, was 1.5%. These high-quality large 100+, 150+, 200+ assets were not smashed during the recession. Many of them lost asking rents somewhere in the range of like 3%, while the properties themselves decreased in value by 30%. Right? So this is why my answer I always say, debt is so important, because the debt piece is usually the single most important determiner on whether or not investors get their money back. And so if I can account for a debt service coverage ratio that's appropriate and can account for a 2008 level decrease in rental rates, then I can withstand 2008. And if I can withstand 2008, I can withstand anything. That's a very ahistoric kind of moment in history. But it was not a moment created by the fundamentals changing. That moment was created by very unique loan products that hadn't really never been tried before. So let me explain a different way. Phoenix is a market that I'm very bullish on. And when I got into that market, I was initially very hesitant because of the notoriety that we all know of the volatility of that market. We all saw what happened in Phoenix in 2007, and 2008, 2009, for context, there was a time when several counties in Phoenix, excuse me several locations in Phoenix, where 40% of the employment was construction 40%. That's all anyone was doing in like all these neighborhoods. And so when the construction business stops, they'll neighborhoods basically stopped, right. But that whole thing was created by those unique loan products, buying loan people to buy houses that would never qualify otherwise, right. Now, what we have in Phoenix is an insane supply and demand imbalance created by population growth, job growth, income, growth, rent growth, etc, etc, resulting in massive rent growth. So those types of metrics don't just get deleted. If you have 100,000 people moving there a month, those people don't come and go, that's a non-volatile metric. That's the sound fundamental that's going to create some really pronounced results for investors that are willing to buy into that market. So my answer to your question is, when you have those types of tailwinds not based on unique ahistoric loan products, but based on sound fundamentals, the downside is very well protected. Of course, it's important to get appropriate debt, but the supply and demand imbalance validates that thesis from my perspective, at least.   Sam Wilson  19:45 I love that. Let's circle back to the accredited investor conversation where you were saying that less than 1% I think of accredited investors have private placements in their portfolio. I think was that the stat you'd use?   Hunter Thompson  19:55 I actually didn't say the exact number I said it was basically nothing. I believe it's less than 5% But here's the thing, what should the percentage be? 90% accredited? I mean, how many accredited investors, people that have a million dollars of net worth, let's say? I mean, certainly, if they knew what you and I knew, right, they would almost all be interested, right? But they don't. Right. So that's going to change. It's already changing 506(c)s, for example, which previously accounted for about 1% real estate transactions now think like 5x, that number is going to 5x. Again, it's just a matter of time, right? So if you and I are here and well-positioned, man, we can ride this wave. And the only reason I'm kind of speaking like this, is that it's just natural and prudent to constantly be thinking about the downside. But sometimes you get in the habit of doing that to the point where you're gonna cost yourself more gravely than if you were bullish. So if you sat on the sidelines starting in 2017, and said, cap rates can't go any lower, I'm done. I mean, you got to think about what you have done, not only in terms of the potential upside but also in terms of your inflation risks that you're suffering out through being on the sidelines. So there you go.   Sam Wilson  21:07 Suffering from inflation, risk time value of money, I mean, you've lost your opportunity cost has been enormous. One of the things I think that's gonna be really interesting in this space is tokenization. And the blockchain coming to real estate. And I think, to your point, there's all this money on the sidelines that doesn't know how to get to these private placements. And I think as we see the blockchain make its way into the real estate sector. And suddenly, the liquidity or the illiquidity of real estate, suddenly, you know, take turn it on its head now becomes a liquid transaction, where you and I can trade shares and our buddies, you know, multifamily project in Phoenix, you know, with a click of a button, when that starts happening, I think we're gonna see an even further flight of capital into the space. And then I think you're really right, then cap rates are gonna just keep, you're gonna be down to the bond markets right now where I got a brother in law that trades bonds and like, they're like trying to make you know, five pips on a $20 million bond. And it's like, Wait, yeah, banks are spending $20 million to make five basis points for six. What, this doesn't make any sense. But I think the same thing is gonna happen is that compression just because again, the more capital that goes into a particular asset class, the more that the yield gets squeezed. I think that'll be it's another really compelling, I think, argument to that, that this goes, this is just going to continue to go down.   Hunter Thompson  22:22 I agree, let me just put a little bit of my spin on that particular topic. You can be way late and very successful in real estate because of the speed at which the asset class moves. That's why it's so compelling, it works all of the time, you don't have to have the best deal in the world, as long as you're participating. This is why my thesis made sense. Are you guys getting this? Let me say it another way. So I got into the business in 2010 or so. And at the time, all the people I was like, getting to know and learning from were saying, Hey, this is the opportunity of a lifetime. I've been in this business for 40 years back the truck up. And I was thinking back what up, I don't know what I'm doing. You know what I mean? Like I didn't have enough knowledge. So four years later, I was kind of thinking, holy cow, the deals I'm getting now are better than deals I saw in 2010 because my knowledge, my confidence, my network grew faster than the market recovery of the biggest correction in the history of real estate, maybe other than the Great Depression. So what I mean by that, is, while I am so excited about this opportunity in real estate, you can move slow and still win because the point is not the speed at which you move to buy deals, if you buy a bad deal, it's going to really set you back, but participating depending on where you are in your growth curve. If you're just listening to podcast now for the first time, you haven't yet done a deal, perhaps that's what I mean, when I say go all in, go all-in on education, the time is now to do that. It doesn't mean go and get into an illiquid investment. Similarly to the world of the tokenization of real estate. If you think that this is a potential thing that's going to have a lot of legs, I don't want you to have to be the person that actually makes it happen. You can let someone else go and incur that risk, figure it all out for you you can be three years later, you're still going to get tremendous, tremendous upside because this is not the world of innovation. This is the world of copying others that have had success. If you want to go and innovate, think about it like that, the risk of what you'll incur by trying to be the person who tokenizes all the real estate in the world or whatever it is fine, but you better be certain that you're gonna have a potential for like 100x 1,000x type of return while I'm clipping along at 16 a year, and I may catch you if you take a couple of years to figure it out.   Sam Wilson  24:31 That's fantastic. Hunter, I've loved this. This has been great. You've shared a share with us a lot of golden nuggets, kind of your investment thesis how you guys see 2022 shaping out what you guys are doing to protect your downside, but also make sure that hey, you get to participate in the upside wherever this market takes us. So I think this has been an absolutely tremendous episode. Thank you for coming on today. Let's jump here to the final four questions. The first one is this. What is one tool or resource, think software, it's something digital, that you find you can't live without?   Hunter Thompson  24:57 Oh my god. I'm not gonna tell a whole story you've been able so let me go blabbering, blabbering. But I will just say that Calendly, guys, come on, it's $15 a month, I don't want to talk to your assistant, let me click the link and schedule a call.   Sam Wilson  25:10 Amen to that. That's awesome. Question number two for you. If you could help our listeners avoid just one mistake in real estate, what would it be? And how would you avoid it?   Hunter Thompson  25:17 It's always disproportionately focusing on raising money and due diligence and not focusing on debt. Debt is 70% of the capital stack or more. And it almost always accounts for when people lose money, it has to do with debt. So focus on debt. I'll give you a couple of examples. How long is the interest-only period? What's the loan to value? Who is the lender? Have the lender invested and lent on this particular asset class before? Is there other lenders that are similar to them? How knowledgeable is the particular like just going on and on about the particular loan product and who the lender is and how big the lending market is of your asset class can help you tremendously when things actually go wrong.   Sam Wilson  25:54 Man, that's gold. Love that. Question number three for you, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Hunter Thompson  26:02 So I have a pretty robust education branch of our firm, which is kind of head by raised masters. And that's how I give back in a purely capitalistic forum. Definitely not philanthropy. It's not cheap. But the success stories that we've helped create from people that are able to raise money for their deals is so rewarding. That's the thing that's most fulfilling in my life. I love helping people invest. But the SEC says, only got to work with accredited investors. These people are all good no matter what. I really love helping people, you know, quit their job, become a successful entrepreneur, 10x their freedom in their life, through their ability to bring capital the table. And so that's kind of how I do it.   Sam Wilson  26:43 Man. That's fantastic. Yeah, and if you want learn more about that, I think, what's the website for that?    Hunter Thompson  26:47 Raise masters. I would go to raisingcapitalforrealestate.com/never-scramble.   Sam Wilson  26:53 Love it. Absolutely love it. Yeah. And I've been privy to a lot of people who've been through the Raise Masters program. That's pretty cool. So cool. Hunter, if listeners want to get in touch with you or learn more about you, what's the best way to do that?   Hunter Thompson  27:03 Raisingcapitalforrealestate.com for all the capital raisers out there. Those who are aspiring to be and if you're interested in investing passively, it's A-S-Y-M, capital, dot com.   Sam Wilson  27:12 Hunter, thanks so much. Appreciate it.  Hunter Thompson  27:14 You're the man.    Sam Wilson  27:18 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Should you invest in multifamily this year? There's no better time to invest in multifamily than today, and Bronson Hill will tell us why. Bronson is a real estate expert and a general partner in 1,400 multifamily units worth more than $120 million.  In this episode, he will share his experience jumping into the multifamily scene after working as a highly paid medical consultant. Initially, he did not want to invest in multifamily because he thought he needed a lot of money to start. This is probably the myth that many other aspiring investors believe in too. Well, Bronson will debunk this myth and share a couple of lessons that you can apply in your real estate investing right now.    [00:01 - 03:41] Opening Segment Bronson Hill shares his secret in learning multifamily investing Aspiring investors can enter the multifamily scene by doing this event [03:42 - 13:27] Staying in Front of Investors What you should be looking for in a multifamily partner Bronson gives some details about their monthly meetup Listen to what Bronson will say the current inflation rates [13:28 - 17:36] Building Your Multifamily Network Why Bronson and his team are staying away from Class A assets Bronson defines the Margin of Safety and why you should think about it The importance of networking in real estate according to Bronson [17:37 - 21:09] Closing Segment A tool or resource you can't live without Vidyard A real estate mistake you want the listeners to avoid Don't try to bring a great property manager to a new market Your way to make the world a better place Stopping human trafficking  Reach out to Bronson See links below  Final words   Tweetable Quotes   “ I think in general, when you're looking for partners…you want to know you're working with somebody that you can trust, somebody that you know, has your interest in mind, [and] will really have similar values to you.” - Bronson Hill   “If you're willing to do the work, you're willing to network, you're willing to try and make offers and just keep going for it, you'll find [a deal].” - Bronson Hill   “Go to events where there's going to be a lot of people there and just start asking questions…and figure out what people do and what's their biggest challenge.” - Bronson Hill   -----------------------------------------------------------------------------   Email bronsondavidhill@gmail.com to connect with Bronson or follow him on LinkedIn. Do you want to know the single best investment strategy during (and after) a pandemic? DOWNLOAD THE FREE report here.   Listen to his podcast, Mailbox Money Show, to grow your income without spending so much time. Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Bronson Hill  00:00 Don't try to bring a great property manager to a new market and other people will do and they'll do fine with it. I've seen that a couple times, not just in my own deals, but other people's deals. And so I like to see who's got established relationships. It's the relationships with vendors in the market with staff with other things. If they're from another market, even if it's two hours away, it's gonna be really hard sometimes to find new people, staff members for the property, or even vendors that come in and work and I've just seen it, and these property managers will be very cool. We'll come in and we'll do this and everyone's to expand, but I just prefer not to be the first one that they're expanding on, you know. So that's, I think the biggest thing.   Intro  00:34 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:45 Bronson Hill is the Managing Member of Bronson Equity. He is a general partner in 1,400 multifamily units worth over $120 million. Bronson, welcome to the show.   Bronson Hill  00:57 Hey, Sam, really excited to be here with you. I love talking about real estate, love talking about scaling business, and really excited for the conversation.   Sam Wilson  01:04 Hey, man, it's loads of fun. I'm looking forward to jumping in here. There's three questions I asked every guest who comes on the show. In 90 seconds or less? Can you tell me? Where did you start? Where are you now? And how did you get there?   Bronson Hill  01:13 Yeah, so I started, I was a high-paid consultant in the medical field worked with a lot of physicians realize the time for money trade, even for physicians that were getting paid a lot of money. Some physicians I knew works 80 hours a week and made millions of dollars, literally, but it was too much. And they didn't have freedom of time. And so that was most important to me, started with single family did a small single family portfolio that I had a kind of a chance meeting with a cousin I hadn't seen since I was a kid. And he said, “Why don't you do multifamily?” I said, Well, I'd love to, but I don't have the money. He said you can raise the money. And I just you know, he said read this book, go to this podcast, you know, do all this stuff and learn. And I did it. And basically a couple of years later, I raised a total of about $15 million and was able to leave my great corporate job that I thought there were golden handcuffs. And now I'm doing real estate full time, we've got about 150 million in multifamily assets, mostly in the southeast. And I just love it, man. It's just such a great business to be in.   Sam Wilson  02:08 Man. That's fantastic. I love the truncated stories because they make it sound like you know, it was just one success after another tablet. Yeah. And then oh my gosh, look at this 150 million bucks later, we're rocking and rolling. And we didn't hit a single speed bump. But I don't believe that. Yeah, I mean, some things that were some challenging pivotal moments. Maybe we're you know, you're like crud, we're at an intersection here. What did you do?   Bronson Hill  02:31 Like you said, there's a few of them. I think that one of the biggest ones is just it's so hard to get going. I mean, I'd say of those couple years, it took me about a year to really get going. And that's not uncommon. You know, there's this friend of mine, Michael Blank that says he talks about the Law of the First Deal, like getting the first deal can take a long time. But once you get the first deal done, once you're a general partner on a deal, the doors start to open, people look at you as an insider, and it changes everything. So for me, I started kind of through some of the books I was reading, I really starting a meetup, was a really great idea. So I just encourage anybody listening, if they want to get into real estate multifamily, just start a meetup. And this is literally how it went for me. I was doing single family, I had a larger meetup in town where I had, you know, been going for a number of years, I basically approached this person and said, Hey, let's start another meetup that's only multifamily. And all lead out do the work. And we'll lead it together. She said, sure. We started leading in the first meeting, we had 60 people there. And basically, I found my first investor there, he's like, I'd invest in you and one of your deals, I was like, I don't even have a deal. But I got together with him for coffee and showed him what a deal would look like. And then I introduced him to another guy I met at that same meeting. And so that kind of got me started. So I raised 100,000, for adeal, but it took a while before I found kind of the right partners, and it was really able to scale up after that.    Sam Wilson  03:42 Yeah. Talk to us about the partner search. I mean, you know, there's the life partner search, and there's the business partner search, and they both seem to take an inordinate amount of time. Tell me about the business partner search.   Bronson Hill  03:53 Yeah, so I think in general, when you're looking for partners, a few things. One is obviously character, you want to know you're working with somebody that you can trust, somebody that you know, has your interest in mind, will really have similar values to you. So I spent a lot of time a lot of people bring me a lot of deals, and they're like, I want to partner with you on this, or I want to work with you here. But I really come back to like is this somebody that I can trust and it takes time to figure that out. Reputation is huge. It's a pretty small industry. So I try to work with people that I know are that are kind of well known in our circle and I also do a background check on every partner as well just to see if there's something that I'm you know, I'm missing in that process. But I think in general, you know, being kind of looking at how you and what your strengths are. So my background was medical sales. And so there's kind of two routes people go either you find deals if you're more of an engineer type or you love numbers or CPA, you can kind of go the route of finding deals or networking brokers and kind of being more of the operations or you do you work with investors and create content and you're more of kind of a sales type of role. So those are kind of two routes for me I kind of realized you know, if I'm more on this side, I need to partner with people that are really good on the operation space. So I've got one of my partners now has over 10,000 units, has been doing it for 25 years has a great track record great experience. So my lack of experience in asset management is not a shortcoming, right, because I have a partner who's handling all of that, which is really great. So finding complementary partners, I think both in you know, as a life partner, as well as a business, I think is really important.   Sam Wilson  05:16 Yeah, absolutely. Tell me about raising money. I know, you said for the first deal, you raised 100,000 bucks. I mean, that doesn't go far in a multifamily investment.   Bronson Hill  05:25 Yeah. So yeah, the first that was something I left out there actually, one of the challenges, I went to all my friends and family, and I said, “Hey, we got this great multifamily deal.” And I had something like 62 conversations with friends and family, either in person or over the phone, and the questionnaire is everything, and I had literally zero, zero invest. And so you know, it's challenging to go from there to, you know, to get the 100, you know, it wasn't a lot of money. But what really got me going is I went to somebody that I saw really a lot of value from, and I basically said, “Hey, how's it going, you know, raising money,” because they were kind of more on the active side of teaching people how to syndicate, but they had a huge reach. And I was like, man, there's gonna be people on here that are doctors or lawyers, or retirees, they don't want to go buy a building. So they're gonna want to be more passive, but he just really wasn't focused on that. So I said, “Well, what if, you know, we created something here together, where we had kind of a funnel, and I would kind of do calls or kind of work with folks. And we kind of set up a way for people to get involved.” And so it really just, you know, dramatically increased the amount of money they were able to raise that we able to raise together, so instead of 600k, and having to do a second webinar, by the time, you know, year and a half later, we raised $8 million in 24 hours for a deal. And so I had about 1000 on-on-one phone calls with different investors to just, you know, try to qualify and kind of tee them up for the next deal. So that was a great learning experience for me to cut my teeth. It wasn't all you know, super easy. I was working full time while I was doing that. So I was taking calls at 6 am, sometimes at 6 pm. And just whenever I could find time to take these calls, it was crazy, but it was definitely worth it.   Sam Wilson  06:50 Yeah, that's really, really intriguing. And maybe we don't have to dig into the story too much. But I think that's one of the things that I think people commonly struggle with is finding the investors. So one of the things you did if I hear correctly, is you found someone with a potential investor database but wasn't really leveraging it for that. And that right.   Bronson Hill  07:09 Yeah, that's right. Yeah. So we worked together for a couple of years on some stuff. And then I branched off on my own about a year and a half ago. And since then, we've just continued to, and we raised about $6 million, around 6 million in 2021. And so we keep going after it, but it just gave me a lot of experience. And so a lot of times people and I'm not I don't think mentorships are bad, I think they're good. And I think if somebody has a high net worth, and they're busy, and they need somebody to kind of push them into you can do that. But I also think if you just look around and go to somebody who's a high-value person, and you say how can I serve you, you can open up a lot of doors, it's amazing how it can open up doors.   Sam Wilson  07:38 Yeah, absolutely. The raise that you know, you guys have done in the past, or they've been 506(b)s, 506(c)s. And then why do you guys focus on one or the other?   Bronson Hill  07:47 Yeah, so we've done both, I've done a couple of 506(c)s  about a year ago. And 506(b)s, and they were good. I mean, it was kind of again, when I was more kind of launching my own thing. So I was working with this part. And I had kind of really launched Bronson Equity, which is my group. And so I did some advertising and different things. And it you know, it works. Okay, I think I think 506(b), you know, for kind of your network that you kind of privately share, people love the idea of like off-market deals or his special deal. But don't tell anybody kind of those kind of deals and so, but if I will succeed, the ones you can advertise or for credit only minute, they can be great, too, they have, the SEC has actually made it a little bit easier to where you don't have to verify accredited status as often as they once every five years. And then you can actually do some of it a little more. You don't have to always use third party, you can use documents. And you'd have to make sure that your data matters. I'm not an attorney to sort of that. But it's gotten a little bit easier in that area.   Sam Wilson  08:37 Yeah, that is interesting. And I've heard that stat before that it's every five years now. And yet, if you go to some of the third-party verification sites, they'll still tell you it's only good for 90 days. So I've never I haven't quite got the clarification on that. And maybe you and I can work on that when we get get off air. But one of the other things that you're doing right now, I think you're still running the weekly meetup. What are some other things you're doing right now to stay in front of investors?   Bronson Hill  09:03 Yeah, so we have a, we have a monthly meetup. It's in-person that's called FIBI. So if anybody's in Southern California, we are in the city of Pasadena. So we usually, we're getting back to it after COVID It's been much more shut down here that I'm sure where you're at. But at least I do that we do a monthly virtual event, which is either on inflation or it's about multifamily investing. We bring several operators in and those have been very well attended and a lot of great feedback. Those are also available on YouTube, which I do a lot on YouTube. And then I try to go to a lot of live events. So I as I mentioned, I was in an event last weekend, I'm had to do another one this weekend. And it's a great way I think to get eyeball with investors and just meet people with a lot of people don't really want to invest unless they've met you. I have people that literally found me on YouTube and watched my YouTube videos and invested which is amazing, right? But it's more uncommon than it is common and I think I do also do a podcast called the Mailbox Money Show, talking about different forms of passive investing. So I know your audience is a little more active, mine's more passive. So just a lot of professionals that are looking to, you know, reduce taxes, get out of Wall Street and find consistent returns.   Sam Wilson  10:05 Right. Man, I love that you're always working on deals. What are you doing right now? Especially in the multifamily space to find opportunity? Because it seems to be super competitive.   Bronson Hill  10:16 Yeah, so we closed about 1,000 doors last year. So we're growing a lot, we've got new stuff we're working on right now. And it's amazing when you're in a particular market deals can come to you. I mean, we got a deal recently that it was a completely off-market deal, so that we were the only ones at the table. And, you know, it's a very different experience than being one of 30 at the table or being one at, you know, one of 20 and having to try to make your case. But I think, you know, there's a couple of ways, you know, one is through relationships. One of my partners, as I mentioned, one who has, you know, 25 years experience knows a lot of people. And so we've bought some properties from one of these owners, and he's like, I've also got this other property, and it's, you know, property that's three $400 a month under rent. And we're just seeing that, you know, he just really didn't do a lot of work on it, were able to get it from this particular sellers, as long as it's your personal relationships with the seller. Other times, it's just you own the property next door, and the brokers are basically bringing the deals to you say, hey, you know, how can we make this work. And we found that everything's for sale at the right price, we actually had a property that we weren't planning to sell for five years, we bought it in Jacksonville, Florida, which is one of our main markets we work on, bought it for 27 million, bet last March, and it was 288 units, they're going to work in class apartments, we sold it nine months later, in December, for 37 and a half million, we made 10 and a half million, almost, you know, close to double the investor equity in a short amount of time. And we're able to 1031 the majority of those investors into another deal. So you know, it is hard to find deals, you know, markets are going crazy, but they are out there. And if you're willing to do the work, you're willing to network, you're willing to try and make offers and just keep going for you'll find something   Sam Wilson  11:47 Right, man. That's really, really intriguing. Talk to us. You know, I guess we've talked a little bit about markets. We've talked about raising capital, talking about some of the hiccups you had early on. Let's talk a little bit about inflation and where you see the multifamily market going. Let's talk about that for a second. Is that okay?    Bronson Hill  12:04 Yeah, so we talk a lot about inflation. Some are different events, something I'm a student of as well, you know, I think it's really important not just to look at real estate, or multifamily real estate, a lot of people that really lost their shorts in 2008, 2009, they weren't paying attention to kind of the overarching economics of what's happening, right. And there's some just incredible things happening, we've never seen, I mean, they've created about 40% of the currency in existence just in the last two years, right. And that's just staggering. So everything is going to cost more. So the long-term, you know, effect is very inflationary. The dollar itself has lost 98% of its value since the Fed came into existence in 1913. So we know it's going to continue to happen. There's no way to stop it. So long term, it's there. But you know, if interest rates rise, which is what everybody's talking about, will that cause asset prices in general to go down? I think in single family, it definitely could, multifamily maybe a little bit. But I think, in general inflation and rents typically go hand in hand, it's a little bit lagging for rents. But I think, you know, in general, if you have long term debt, or like a lot of the stuff we're doing now is three-year fixed rate stuff that you can extend, you know, kind of bridge debt that you can extend, I still think there will be options that you can handle, as long as they don't raise rates really sharply, which I don't think they're going to do I mean, inflation is going to keep going up, they're gonna kind of stagnate, they just don't want to raise rates too high and all of a sudden have things crashed. But it's a very interesting time right now. So you have these long-term inflationary factors, and then some short-term deflationary risks, but I think multifamily is gonna weather it really well.   Sam Wilson  13:28 Yeah, there's that. And then just like you said, the money printing, it's hard to say where this all winds up, what are some things you guys are doing just to make sure that your portfolio is buttoned uptight?   Bronson Hill  13:40 Yeah. So I think the biggest thing you know, we've stayed away from Class A stuff, you know, no offense to anybody who's doing Class A, but I think I personally think there's a lot of risk in Class A-type of apartments, people look at them. They're like, Oh, this is so beautiful. Look at all the amenities. I'd love to live there. They're brand new apartments, but the returns are way lower. And this is what a lot of REITs own. And so for example, where I live in Pasadena, California, two-bedroom right now will go for 4500 a month at some really high-end apartments, right. But if there's a recession, they're not going to get 4500, they might get 3,000, maybe. So that's going to dramatically affect the returns will be some losses there. So REITs will kind of go up during times like this, and then they will crest down. Now what we do, Warren Buffett has this principle, he talks about the Margin of Safety, right, you have some sort of kind of margin of safety, if things don't go the way you want, you want to create a margin of safety. And so one way is by being very conservative on the numbers that you're projecting, being more conservative, I'd much rather under promise and over-deliver. The second thing is the Value-add Approach in multifamily. So what that means is, you know, we don't just take brand new stuff, we're taking older stuff, we're seeing, you know, rent increases of $200. If we spend $10,000 per unit, we can see those rent increases. So what happens is, even if rents, in general, go down, we still have that, you know, we made these properties better, and so the rents should hopefully be higher than they would have been otherwise. So it puts a little more margin of safety. That's also why the returns for value-add multifamily are typically about twice what a lot of the class A or  the non, you know, stuff that you don't add value to as it's much higher.   Sam Wilson  15:07 Right. And the other thing with your value add is that if you get halfway through, you renovate half the units, and it's like, hey, look, you know, we got to pump the brakes, you don't have to pump that money into the property necessarily.   Bronson Hill  15:18 Yeah. And we're seeing that we're seeing sometimes, you know, the, this property I mentioned in Jacksonville, like we did a little bit of exterior work, we didn't really even get too much of the interior. And yet, we saw we already got to our number. So we're like, Okay, well, everything's for sale at the right price. So, you know, that will happen. And that's the thing, and you can test it out. So the other thing, we have another Jacksonville property we closed on about six months, five months ago, and we expected, you know, $200 a month rent bumps, what we're seeing after renovating 10 of these we're seeing about 350. So you know, again, it depends on where you're buying, but I like we'd like to buy in places where we see that population growth is business-friendly, landlord friendly, and warmer places. A lot of those kind of southeast markets.   Sam Wilson  15:56 Yeah, man, that's absolutely intriguing. What is one piece of advice you would give to somebody that is looking to scale like, what would you say to somebody said, “Hey, man, I want to get into multifamily. I want to follow in your footsteps?” What would you tell them?   Bronson Hill  16:08 Well, I think the biggest thing you can do is to go to events, go to meetups, go to especially I would say meetups are good if you're in a metro area, if not go to national events, go to events where there's going to be a lot of people there and just start asking questions and starting to hear and figure out what people do and what's their biggest challenge. And then also, instead of just asking, “Hey, you know, what's the biggest success? Or what's going well,” ask them, you know, especially if you start talking for a little bit, say, “Well, tell me about your biggest challenge or your biggest, you know, mistake or your biggest failure or something” and people will share, they'll say, oh, yeah, you know, this is gone. Well, but let me tell you a story. And I think you learn more from those stories. There's actually a saying that says, A wise man learns from their own mistakes, but a genius, learn from the mistakes of others. So if we get curious about that, it's amazing things that can open. But I do think the value of networking is just you cannot underestimate how powerful that can be.   Sam Wilson  16:55 Man, that's so funny, because not five minutes before this phone call, I had somebody email me. And they said, “Hey, man, I hear you're going to do such a conference here in a couple weeks. You know, this is my position in business. I'm not really seeing the value in it. And I just kind of wrote back and I'm like, dude, like, here's the three reasons I always go to these large national events. And it's not for the any of the reasons you said that, you know, you don't need to go” so anyway, I second your wholeheartedly. Second your comment there that? Yeah, go to big events. It's amazing what you can learn just by being in the room. Yeah, I percent. That's fantastic. I think it's actually where you and I finally met here face to face not a month ago. So yeah, that's tons of fun. Let's jump here to the Final Four Questions Bronson. First one is this: What is one tool or resource you find you can't live without?   Bronson Hill  17:42 I think one tool or resource that I use a lot. There's a video service I use for some of the content production that I do, because I you know, my businesses creating, whether it's podcasts or different things like that, there's a kind of a screen recording service called Vidyard. And some people might say it has nothing to do with real estate, but it records your screen as you're kind of going through, you know, pointing things out, it's really helpful. Rather than having to get on a call with somebody to be able to kind of explain a process or even with an investor, I've had to do that with here's how you get on your portal. And here's how you do and if you're working with busy people, any way you can kind of explain things and create a replicatable process. So when you have that question again, you can already just say, Oh, I've got this and just send it over there, right?   Sam Wilson  18:20 Right. Yeah, that's absolutely tremendous. And yes, you hit it nail on the head, and especially something where they can hit play. It's on-demand at that point, yeah, you're not going to get on a call. So that's what is one mistake you can help our listeners avoid, and how would you avoid it?   Bronson Hill  18:34 I think the biggest challenge that we've had over the years, we had a property that just mean no easy way to say it, we just got the wrong property manager. And I think one thing I learned from this particular situation was don't try to bring a great property manager to a new market now that people will do and they'll do fine with it. I've seen that a couple times, not just in my own deals, but other people's deals. And so I like to see who's got established relationships, it's the relationships with vendors in the market with staff with other things, if they're from another market, even if it's two hours away, it's going to be really hard sometimes to find new people, staff members for the property or even vendors that come in and work and I've just seen it, and these property managers will be very, “Oh come in” and we'll do this and everyone's to expand but I just prefer not to be the first one that they're expanding on. You know, so that's, I think the biggest thing.   Sam Wilson  19:18 That's a great piece of advice. Question number three: When it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Bronson Hill  19:25 Yeah, so my big why is really trying to stop human trafficking in the world. So today 2022, there are 20 to 40 million human slaves in the world more than there's ever been in history of the world. And there's, you know, sexual human slavery, there's labor, slavery, there's different things and I've just gotten really involved as a cause I am involved with called Dressember. Actually, my sister started this and they raised about 25 million for fighting human trafficking for creating awareness advocacy, and that's at dressember.org. People can check that out.    Sam Wilson  19:56 How do you spell that?    Bronson Hill  19:57 So just the word dress so like D-R-E-S-S-E-M-B-E-R, so it's in the month of December, they do it so they can find the word dress with December but guys wear bow ties, women's wear dresses during the month of December and it's a way that you can create awareness and try to stop human trafficking.   Sam Wilson  20:14 That's very good. Thanks, Bronson. Last question for you. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Bronson Hill  20:21 Yeah, so I created this special report. It's called the Single Best Investing Strategy During and After a Pandemic, 24 colored pages. I just talk about a lot of the kind of the unfair advantages of multifamily investing. If somebody is interested in you know, talking about you know, partnership or looking at, you know, investing or just looking to kind of learn how to get moving, you can check out at Bronsonequity.com.   Sam Wilson  20:41 Thank you so much, Bronson. Have a great day.    Bronson Hill  20:43 Hey, Sam, thanks for having it was a great time.    Sam Wilson  20:45 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Should you jump from residential to commercial real estate? Adam Craig has done it, and he's here to tell you why you should follow him and many other investors who have jumped to commercial already. Adam is the Founder of CLE Real Estate Group, an Ohio-based real estate investment company.  Since 2013, he has closed over 80 real estate deals and acquired a rental portfolio worth more than 8 million dollars. ​Adam's success is rooted in a genuine passion and enthusiasm for real estate investing.   [00:01 - 02:19] Opening Segment Adam Craig talks about his journey into the real estate industry He talks about the asset classes they're investing in right now [02:20 - 11:21] Why Jump From Residential to Commercial Adam reveals their secret in underwriting properties on sale How to raise private money for your deals The importance of drawing your investor or lender profile Listen to Adam's explanation The reason Adam's team is self-marketing and self-managing The disadvantages of following Adam's business model [11:22 - 13:50] Closing Segment A tool or resource you can't live without Their property management software, TenantCloud A real estate mistake you want our listeners to avoid Don't be too intricate on your properties Make them basic, clean, and neat Your way to make the world a better place Helping new and experienced investors through social media Reach out to Adam See links below  Final words Tweetable Quotes “Once you get past that initial group of friends and family in your immediate network, [you] just had to sharpen up [your] presentation [of the deal].” - Adam Craig “We're not typically concerned with credit score, but cash on hand, income coming in, the ability to pay, obviously, are the big determining factors [in vetting tenants].” - Adam Craig “I'll get together with any investor looking to talk real estate and I'll give my two cents on whatever issue they have…It tends to pay back tenfold in relationships and networking and issues down the road.” - Adam Craig   -----------------------------------------------------------------------------   Email adam@clerealestategroup.com to connect with Adam or follow him on LinkedIn and Instagram. Visit CLE Real Estate Group to find value-add properties in the residential and commercial spaces! Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Adam Craig  00:00 The offering to do the build-out obviously takes more management. We end up dealing with a lot more headaches because tenants aren't happy with X, Y, or Z. So if we can, we encourage them to get their own people to do it, but we will sometimes assist with the cost of that because a lot of the mom and pop investors that we work with don't have the budget for first month's rent last month's rent, build-out, no income, so we try to ease the pain of that any way we can as long as we get our money somewhere down the road. Now another drawback of that would be if the tenant doesn't perform certainly wasted a lot of money, building up their space. But so far, we've been pretty lucky with that.    Intro  00:35 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:43 Adam Craig is a real estate investor since 2013. He has more than 80 deals completed in residential and commercial. Adam, welcome to the show.   Adam Craig  00:51 Hey, thank you for having me. Excited to be on.   Sam Wilson  00:53 Hey, man. Pleasure's mine. Same three questions I ask every guest who comes to the show. In 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?   Adam Craig  01:00 Sure. I started just outside Cleveland, Ohio, I went to school for business finance, right after school finished up a degree that I thought I'd be using, but ended up starting my own business. From that business. I invested everything into real estate started with some single family homes, eventually evolved into the commercial side of things. 2018 was when I made my first commercial purchase. Since then been doing a mix of residential and commercial with the focus being primarily on commercial. So right now, that's where I'm at and looking to eventually leave the single family space in the rearview and concentrate solely on commercial.   Sam Wilson  01:34 Right. What kind of asset class are you buying right now?   Adam Craig  01:37 Mostly, office, mini strip plazas, things of that sort, I didn't think I'd be getting into that. I thought maybe apartment buildings was where I saw myself, but kind of fell into that in 2018. And it worked out. So well. We've kind of been going after that asset class ever since.   Sam Wilson  01:50 Are there buying opportunities in office right now?   Adam Craig  01:53 Yeah, in my market, there certainly are, and it's not strictly office, it's a combination, sometimes flex space. But yeah, when COVID happened, office space was definitely on sale. And in my market, there's still some really good deals.   Sam Wilson  02:04 Yeah, what is flex space? Can you define that for us?   Adam Craig  02:06 So we always say we're rehabbing office space. But I mean, we've had you know, guys who build furniture to banquet centers to, you know, all kinds of businesses go into our space. So they're not technically all office space, we have just about everything that goes into it.    Sam Wilson  02:20 Okay, very, very interesting. So things went on sale, I guess, talk to us about how you underwrite something that is on sale? And then how do you get financing for it, because it's on sale for a reason.   Adam Craig  02:31 Yeah. So just like we did on the single family space, everything in the commercial world that I buy is distressed. So it's either vacant or nearly vacant, meaning, you know, banks don't typically touch it until it's stabilized. So private money is how we finance that, I have a hard money lender that I used for a lot of years. And since about 2017, I started developing some private lending relationships. And that's really grown considerably. So I finance them all with private money, refinance them with the bank after they're stabilized.   Sam Wilson  02:58 Right. So talk to us about that private money. Is there, what advice would you give to somebody, you know, looking to kind of repeat your process? What should they be doing in order to go out and find especially private money, you guys are going to need large sums of money. So how do you secure that?   Adam Craig  03:13 So I would not say I'm an expert at raising private money. I've only been doing it for about four years. But I've certainly learned a lot considering it's, we're only about four years in and I've probably got about $2 million left out to me on the private world right now. The biggie is, once you get past that initial group of friends and family in your immediate network, I just had to sharpen up my presentation. At first, it was pretty easy. I just told people what I did. They know me, they trust me, they like me, you know, they give the money. I, after that, you really need to sharpen up just the whole presentation of the deal. You can't just say this deal is great. We're going to make a bunch of money, which I was naively thinking in the beginning. So now I have just a brokerage company would have a nice flashy presentation showing some returns showing pictures of the building a lot more insight. And I like to prep them before the deal. So I don't just come at them and say, “Hey, I need $85,000.” I say this is the deal coming down the pipeline. If you're interested, let me know. I'll get you some more information. And that has that's worked a lot more than just bringing them on when I need the money.   Sam Wilson  04:10 Right. Yeah, that's really intriguing. Are these going to be typical syndication type deals when you say private money, or are they just strictly lenders in your projects?   Adam Craig  04:19 Right now, we're just doing strictly lenders on the projects. We're doing mostly million and under deals right now. So as I grow and I start to need bigger amounts of capital, I can see that need to syndicate and partner and share equity. But as of now, if I'm able to raise it on a strictly loan basis, that's the route I've been taking.   Sam Wilson  04:36 Yeah. When it comes to that, I would assume that you know, there's a certain investor profile or call it investor or lender profile, what's a typical return that you would offer on a project?    Adam Craig  04:48 So we average about 10% returns and a lot of times we'll offer a point or something for the logistics of closing. I would say the investor profile for me tends to be an older investor looking to diversify, and someone who's not looking to put their money into something that's, you know, a low-risk return, we don't advertise the saying it's a low risk, but we always say, you know, we're not the rollercoaster of the stock market, it's a nice steady 10 to 12% return. And for younger guys, that doesn't really appeal, they're aggressive, they want to be in aggressive assets. So it's pretty rare where we get a young guy that gets excited about 10%. But you never know, we do have a few guys that, you know, around my age or younger, who are very happy with 10%.   Sam Wilson  05:26 Yeah, you know, you're right. You never want to pigeonhole anyone or any demographic, you know, for that matter into saying, “Hey, this is what they always do.” But it does seem to be the older you get, the more predictable those cash flows become, the more important those predictable cash flows become, the less of you know, hitting a home run. Tell me about what your strategy is when you find an office building or a flex space for turning it around. What are the other owners done, or not done that you plan on doing?   Adam Craig  05:53 I think a big asset for us, our big advantage for us has been self-marketing and self-managing, I thought I didn't want to get into the weeds of real estate. When I first started investing, property management was kind of how I started. And ever since then, I've evolved out of property management more into self-managing with an employee that I can oversee. So I have spaces down the street from some of my buildings that have been for lease for, you know, six months or a year, if not longer, will come in there will rehab the unit. And then we'll have at least up while their property is still on the market. There's combination of reasons why we're able to lease them quicker, obviously, rehab space is more desirable. But I'm just on top of the leasing a lot more than a broker who has dozens and dozens of properties typically is. Facebook has been a huge way that we've been actually leasing places. Unfortunately, they don't have a commercial section, but we have been posting some ads in the residential section and we typically have a picture of the office with office space in the actual pictures so people don't get confused. So far, Facebook hasn't kicked us off, thank God, because you know, we're technically you know, misrepresenting the category. But I would say like 80% of our commercial applicants and tenants have come from Facebook in comparison to Loop Net and drive by signs.   Sam Wilson  07:02 Wow, that's intriguing. Do you think there is a price point where that makes sense to advertise a base like that on Facebook?   Adam Craig  07:10 The advertising we're doing is free. So if you're saying the price point for the least yeah, I think it's a lot of the smaller businesses and mom and pop shops that are out there, mostly everything we have is maybe 23,000 square feet or less. And we tend to break those up into considerably smaller units, because the areas that we're buying in has a lot more small businesses than they do big corporations or LLCs, trying to move into the area. So we tailor it to the smaller business a little bit higher turnover. But in return, we can charge a little more per square foot.   Sam Wilson  07:40 Yeah. And you said one of the things you guys are doing, what the other owners didn't do was you're self-managing. Is there anything else you find where you think I can add value here, or I can turn this property because you know, where's the kind of completion of those sentences maybe.   Adam Craig  07:53 So we're adding value to the building, typically, because they've been distressed for so long. So it's a lot of properties near us, it's a shelf space, and they're telling their tenants, you know, you have to build out you have to do everything, our buildings are typically partially rehabbed or white box-ready, and then in addition to that will offer to do build outs for attendance and amortize the cost of that build out over their lease. So we try to be really flexible as the landlord to fill these things up. So we can get them refinanced in the banks' hands instead of our private lenders. So I don't think a lot of my competition is as aggressive doing that. They tend to hand over the space and say this, is it.    Sam Wilson  08:26 Right? Yeah, that makes a lot of sense. What are some downsides to doing that, you know, amortization of the lease, or the build-out or being aggressive? Is there some downsides to that?   Adam Craig  08:36 Well, that the offering to do the build-out, obviously takes more management, we end up dealing with a lot more headaches, because tenants aren't happy with X, Y, or Z. So if we can we encourage them to get their own people to do it. But we will sometimes assist with the cost of that because a lot of the mom and pop investors that we work with don't have the budget for first month's rent, last month's rent, build out no income. So we try to ease the pain of that any way we can, as long as we get our money somewhere down the road. And another drawback of that would be if the tenant doesn't perform, certainly wasted a lot of money, building out their space. But so far, we've been pretty lucky with that.   Sam Wilson  09:09 Yeah, that's interesting. How do you vet the tenant to make sure they are going to perform or at least vet them as well as you can.   Adam Craig  09:15 Similar to our residential single family space, the application we want to see get we're not typically concerned with credit score, but cash on hand, income coming in, the ability to pay, obviously, are the big determining factors and a lot of our, they're not micro-units, but a lot of our units that are maybe 1,500 or 2,000 square feet or less, we're not betting the tenant is the same. We you know, we just signed a lease on a commercial restaurant, and that was $4,000 a month. So we've rented that tenant a lot differently than we did the $900 a month tenant. So the smaller space is, we're not too concerned about it. Typically a partner a couple of partners can afford $1,500 a month without a problem.    Sam Wilson  09:52 Right. Yeah, absolutely. The research and time spent vetting that tenant isn't worth it because it's 900 bucks on month, and there's not the same eviction laws commercially, that there are residential, it's just much easier to get out and stop paying and to replace that tenant to. So obviously, it's like you're saying, you know, 900 bucks a month, that's an easy tenant to find somebody else to fill that gap.   Adam Craig  10:15 Yeah, yeah, the bigger spaces tend to take longer, obviously better rewards for waiting it out for a bigger tenants. But with our buildings financed on higher interest loans, we're much more, I would say, aggressive and filling them. And with that comes maybe converting some of the bigger spaces to small spaces if the tenants want that.   Sam Wilson  10:30 Right. Yeah, absolutely. Talk to me, once you get these stabilized and refinance, what sort of debt terms are available in the office and flex space right now?   Adam Craig  10:41 We're pretty much seeing right now the rates are anywhere from four to four and a half percent, 20-year amortization with five-year adjustable, so pretty standard across the board with what we're doing. I have been trying to break into getting bank financing right off the rip, which has been an uphill battle. But I've got some relationships with some banks now who said, you know, I recently had a deal that I wasn't able to get an offer on quick enough, and it's under contract. But this was a 100% vacant building. And I talked to my lender enough about the building to possibly get some 70% financing right off the rip, which I didn't think could be done. But being on shows like this and talking to other investors. I know people are doing it. If you can get ground-up construction, you should be able to get bank financing on vacant buildings.    Sam Wilson  11:22 Right. Yeah, you should. And especially once you've developed a track record that says, Hey, I know how to turn these around. I mean, that's the, they're betting on the jockey as much as they are the horse. So you know, getting a few of those reps under your belt is certainly helpful as well. Adam, I've enjoyed this. It's been lots of fun. Thanks for taking the time today to come on and chat. Let's jump into the final few questions. What's one tool or resource, think digital, think software, maybe that you find you can't live without?    Adam Craig  11:46 I would say our property management software, there's a million of them out there. The one we use is called tenant cloud. But when I think back to the 90s, or days where I wasn't managing properties, or even alive, I don't know how they did it, picking up checks and picking up applications. The ease of the software we have these days just makes managing a lot of doors for one or two people pretty simple.   Sam Wilson  12:04 Right. Yeah, that's exactly what it does. It cuts down on manpower. That just simplifies the process as a whole. I love that. What is one mistake you can help us avoid? And how would you avoid it?   Adam Craig  12:14 I guess I would throw this back to single family by single family days. For a lot of years, I was over-improving a lot of our single families, you know, really fancy finishes, over-detailing areas, thinking a little bit too much about the rehab at the end of the day. Just put in something clean, something nice, get it ready to go. We've had customers we flipped houses too and I later found out they ripped out our beautiful tile design only to put it in their own. So that was kind of a wake-up call. Don't get too intricate. Make it basic, make it clean, make it neat. Move on.    Sam Wilson  12:41 Right. Love that question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Adam Craig  12:47 So I wish I could say it was something more impactful than offering my real estate information. But right now I'm offering a lot of help to new and experienced investors through social media outlets and other avenues and I'm not charging anything for the service. So I'll grab coffee. I'll have a phone call. I'll get together with any investor looking to talk real estate and I'll give my two cents on whatever issue they have or just a job about real estate. It tends to pay back tenfold in relationships and networking and issues down the road.   Sam Wilson  13:11 That's awesome, man. I love it. Adam, if our listeners want to get in touch with you, what's the best way to do that?   Adam Craig  13:15 You can visit my website, CLEinvest.com. I am also on Instagram as Adam The Investor.   Sam Wilson  13:21 Awesome. Adam, thank you for your time today. I do appreciate it.    Adam Craig  13:25 Thank you.    Sam Wilson  13:26 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Are you a Silicon Valley executive? Should you leave such a lucrative career to invest in real estate? Well, Todd Sulzinger did, and he's flourishing in his new role as the President of Blue Elm Investments, which helps investors acquire mobile home parks that can grow their wealth.  Todd took an unusual transition to real estate investing. That's why he is kind enough to share his reasons for jumping into real estate, the benefits of investing in mobile home parks, and a few outlooks that aspiring investors should consider when going into this niche. He is also a part of the book collaboration called, Success Habits of Super Achievers.   [00:01 - 02:58] Opening Segment Why Todd Sulzinger leave the Silicon Valley for mobile home park investments His story behind this unusual transition How he educated himself about mobile home parks [02:59 - 12:14] Investing in Mobile Home Parks These are the lessons that Tood learned from his very first deal on mobile home parks Mobile home park owners don't want park-owned homes, but Todd does Here's why Todd talks about tenant turnover in mobile home parks He gives his outlook on the mobile home park business in the next 12 months [12:15 - 14:08] Closing Segment A real estate mistake you want our listeners to avoid Not taking action Don't fall into analysis paralysis Your way to make the world a better place Volunteering to buy other people food Reach out to Todd  See links below  Final words   Tweetable Quotes “Make sure you can get inside all of the vacant park-owned homes and if you can't, that can potentially be a deal killer. ” - Todd Sulzinger “That would be definitely one of the advantages of [the] tenant-owned home model. If somebody owns their home, they're likely to stay in that house.” - Todd Sulzinger “I would say another big mistake that I see people make is not taking action… I think the only thing to do is put a stake in the ground and after you've done as much analysis as you need to, go in and take that step and actually acquire real estate.” - Todd Sulzinger   -----------------------------------------------------------------------------   Email todd@blueelminvestments.com to connect with Todd or follow him on LinkedIn. Visit Blue Elm Investments to invest in mobile home parks and grow your wealth! Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Todd Sulzinger  00:00 If you're going into buying a park with park-owned homes to really make sure you can get inside those, that's the condition. I would say another big mistake that I see people make is not taking action just kind of going into that analysis paralysis mode of, you know, waiting to find out is it the right market is the right time. And I think the only thing to do is you know, put a stake in the ground and after you've you know, done as much analysis as you need to go in and take that step and actually acquire real estate.    Sam  00:25 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:36 Todd Sulzinger is a former Silicon Valley finance executive-turned-real estate investor and CEO of Blue elm investments, a private equity real estate firm currently focused on mobile home parks. Welcome to the show. There are three questions I asked every guest who comes on the show. In 90 seconds or less, can tell me where did you start? Where are you now and how did you get there?   Todd Sulzinger  00:54 I grew up in San Jose, California, went to San Jose State University jumped into a corporate finance career spent a few years working in the UK for this one particular company came back here, you know, continue to try to chase the Silicon Valley IPO dream and, you know, ended up kind of over a multi-year period of time deciding I wanted to focus on real estate and made a transition a couple of years ago out of my corporate finance role into working on real estate full time do putting together syndications and have made a focus over the last couple of years focusing on mobile home parks.   Sam Wilson  01:26 That's really, really intriguing. I mean, when I think of Silicon Valley finance executive, I don't think mobile home parks.   Todd Sulzinger  01:35 It's not a typical transition. I know, I did have another pretty big player in the mobile home park space by the name of Jefferson Lilly who has his own fund and has a great podcast. And he also had a tech background and made the transition into mobile home parks. And just through some, you know, investigation, research, and connections that I've made and relationships I built, as I was looking into what asset class to work with, I ended up kind of making my way to mobile home parks, definitely wasn't where I thought I would end up when I started.   Sam Wilson  02:03 What are some things you did to get comfortable with that asset class?    Todd Sulzinger 02:07 Well, it was good, probably a couple of years of research, you're reading books, listening to podcasts, you know, learning about real estate in general, along with getting educated on how to actually put together real estate syndications. And then I found some early investors that I was working with, that wanted to get involved in mobile home parks just because they had also heard about some of the benefits of that asset class. Around that same time, I got connected with a mobile home park consulting company, also based here in California that consults on parks across the country. And they're a couple of hours away from where I live. So once I connected with them, I knew I could bring my passion for real estate and finance background long was their expertise in the mobile home park business and merge those two together and just started talking to brokers and looking for deals around the country and finally found my first parks in Georgia a couple of years ago.   Sam Wilson  02:59 That's very, very interesting. Well, walk us through that first deal. What did that look like? Where is it now? What have been some things you've learned?   Todd Sulzinger 03:06 Oh, yes, the parks that I bought, there were 71 spaces across two parks about a mile from each other in a town called Milledgeville, Georgia. And, you know, it took me I would say, probably, you know, maybe eight or nine months to find those parks I made offers on a couple of different parks, some that either didn't get accepted because I was outbid. A couple of other ones that fell through just because of, you know, through the due diligence, decided not to move forward and actually found these parks through the MHP Broker, one of the big nationwide brokerage firms. And that's one thing interesting about the mobile home park space is there, you know, there's a few brokers that focus on mobile home parks. Now there are commercial brokers that might every now and then get a listing even some residential brokers, oftentimes, because it might be a mom-and-pop owner that just has a relationship with a local real estate agent and says, “Hey, can you list my park for me?” So a lot of different ways you can find a park. So I found these parks that they were they had kind of a great value add component because the guy that had run the park hadn't raised rents, and he had claimed he had not raised rents in the 15 years that he had owned the park. So rents were below market, there were some vacant spaces and some vacant homes. We had the ability to get seller financing to purchase the park. So yeah, so there were just those couple components that led us down the path that had us go ahead and close on those the first deal I put together.   Sam Wilson  04:23 Yeah, tell me some things you learned on that project?    Todd Sulzinger 04:26 Well, so the project was, you know, the timing, unfortunately, wasn't great. We bought the park at the, in September of 2019. And that we're just starting our turnaround process. One of the first things we had to do was all the tenants were paying in cash, because, you know, the owner may or may not have been claiming all of the income that was coming in not sure. But those records weren't clear. So we had to convert people over to not paying in cash. So that took a little bit of time had to swap out managers, this kind of leading into 2020 and then the COVID hit so you know during that time once the eviction courts were closed it really, they did hamper our ability to, you know, get some of the tenants were paying out. Some people's jobs were affected by the pandemic, other ones took advantage of the situation that courts were closed and they couldn't be evicted. So that, you know, things kind of slowed down in our turnaround. I think one of the things that I learned through that process was we were able to get inside quite a few of the park-owned homes. This park was 71 spaces that, it came with about 55 Park owned homes. And during the due diligence process, we weren't able to get inside every one of the homes, we had the seller sign a separate affidavit to say there's no significant structural, electrical, you know, roofing defects at the homes, and he happily signed it. Once we took over, we found that there was a lot more damage to the homes and you know, kind of maintenance needed to go to the homes to get those really livable. And once we took over a lot of attempts were like, “Hey, this is like new companies here.” Now we're going to start you know, bringing into them all of our maintenance requests. So big lesson learned there was to do, you know, really be able to make sure you can get inside all of the vacant park-owned homes and if you can't, that can potentially be a deal killer.    Sam Wilson  06:06 Right? Yeah, man, those types of things you'd eat you alive. You know, most of the time, Todd, you find that, you know, mobile home park owners don't want to own park-owned homes. But yet you took down a park that was you know, chock full of park-owned homes, Are you actively trying to get out of that? Or is this the business model you want to implement?   Todd Sulzinger 06:26 It's really the business model that we wanted to implement. And this was really from some of the guidance of this mobile home park consulting firm I worked with who's been in the business for 15 plus years. And they've really found that while there's you know, more kind of more brain damage, more headache, potentially more work around a situation where the park owns the homes because you have to take care of the maintenance. So kind of, you know, dealing with, you know, tenant calls, whatever goes on with maintenance on a house is similar to how you would if you owned a single-family house or an apartment building. But if you have a good onsite manager and maintenance team who can handle those know how to kind of manage that tenant base as well as that kind of park, then oftentimes, in certain markets, like the ones I'm in Georgia, where the house rents are between, say, 500, 600 dollars in a market where the lot rents are $200. So you might be getting a three to $400 spread per month per house. So let's say you know, even round down to an additional $4,000 a year, it's typically not going to cost $4,000 a year to maintain the home to you know, deal with a clogged toilet, and you know, changing lightbulbs, and even additional turnover that's associated with having park-owned homes. So really, this is kind of the business model you want to have. I know there's a lot of park operators that really want to focus on parks that only have tenant-owned homes, or if they buy parks with park-owned homes want to try to sell those to the tenants as soon as possible just to collect a lot rent. So you know, there's not there's pros and cons to both models. It really depends on what kind of, you know what kind of park you decide you want to run.   Sam Wilson  07:57 Right? Yeah, that's absolutely intriguing. That sounds more when you have that many park-owned homes, you would need more boots on the ground, I would assume?   Todd Sulzinger  08:06 Yes, definitely. Like the parks in Georgia, we actually have a husband and wife team in the park that take care of both kind of day to day management showing up to tenants collecting rents, as well as somebody who's kind of actively doing a combination of tenant calls that come up for regular maintenance issues. Or if somebody they came to home actually going in and doing those turns on the unit. And sometimes if it's a maybe more difficult project, you might need to bring in a crew to kind of do a bigger rehab that, you know, it seems like at the high end, we've seen 10 or $12,000 if the home is in really bad shape for us to get it ready for a tenant. Sometimes it might just be a couple $1,000 if there's maybe some walls that need to be repaired, potentially some floors that need to be replaced various things like that. So yes, definitely. You've got to have, you know, more people on-site to be able to handle those maintenance issues.   Sam Wilson  08:55 What's the deal that you have with the husband and wife team? They live on-site and they get free rent? What's that mean? How does that work?   Todd Sulzinger  09:02 Yeah, so they live on-site, they get free rent, and then we pay an hourly wage to them for the time they're spending working at the park.   Sam Wilson  09:10 Wow, that's great. Probably for them. And for you really in the end. What about I mean, unit turns? I guess that'd be another question. I have how often with a park-owned home does, do you have a you know, tenant turnover? I would obviously do more often than you would if it were just straight lot rent. But what's the stickiness of the tenant?   Todd Sulzinger  09:30 Yeah, so that would be definitely one of the advantages of tenant-owned home model. If somebody owns their home, they're likely to stay in that house. You know, even if lot rents increase because of the cost of moving a house to a different park. If you can find a park with a vacant lot could be three, four or $5,000. They are stickier. So you do have higher turnover. You know, we kind of build into our financial models a 10% vacancy rate, again, kind of like depending on the market, depending on the timeframe, you might see higher or lower numbers in that. We've seen that you know because of COVID and eviction moratoriums that happen, it was really been kind of hard for us to gauge what an average is because we had tenants that were, you know, staying in the park some cases for over a year and not paying rent because they couldn't be evicted. In a normal market, you know, maybe they would have started paying because they, you know, didn't want to be evicted and tried to find another place to live, or they would have, you know, moved out as soon as they knew they were going to be evicted. So because I've owned my parks kind of, you know, 80% of the time, during the pandemic, we haven't really seen good enough trends to be able to make an assessment of what that looks like.   Sam Wilson  10:33 That's really, really intriguing. What do you see your business looking like in the next 12 months,   Todd Sulzinger  10:39 I recently closed on a park in Arkansas, in Northern Arkansas in October last year. So that was a park that's about 80% occupied but still needs some cleanup. In terms of, you know, swamp just kind of a lot of debris and mess around the park, things get cleaned up, a lot of the homes haven't been maintained well through the years from the by the previous owners. So we need to kind of go in and clean the park up, improve the reputation. And again, it's a slow process, like you know, every month making progress, getting vacant homes, rehabbed, you know, trying to find new tenants for those homes, and then also slowly trying to clean up the look and feel of the park. So that's going to be you know, a big project, I'll work on the, you know, over the next year to really stabilize that park and increase the occupancy. And then you know, outside of mobile home parks, I've been, you know, talking to my investors about different opportunities in the mortgage note space, I've invested personally in mortgage note funds in the past, and I'm looking into possibly putting together a fund around those because I've invested those personally, it's kind of a great asset class because it's kind of a more consistent, safer income, you know, less upside potential, but still something backed by real estate. So that's something I'm looking into for the next year.   Sam Wilson  11:49 Man, that's fantastic. I love that I love what you've done, you know, you take an action, you've gone out, you've purchased several parks, you've certainly earned your stripes early on. So that, you know, hopefully get those behind us. And yeah, just love what you've done. So far, the mobile home park space and, you know, also keeping track of where you go also in the mobile or in the mortgage notes space. So tons of fun, Todd, I've certainly enjoyed this. Let's jump into a final few questions here. What is one mistake you can help our listeners avoid? And how would you avoid it?   Todd Sulzinger  12:15 Yeah, one mistake that I did mention in terms of it, like if you're going into buying a park with park-owned homes to really make sure you can get inside those. That's the condition. I would say another big mistake that I see people make is not taking action, just kind of going into that analysis paralysis mode of, you know, waiting to find out is it the right market is the right time. And I think the only thing to do is you know, put a stake in the ground and after you've, you know, done as much analysis as you need to go in and take that step and actually acquire real estate.   Sam Wilson  12:42 Right. Yeah, absolutely. I love that when it comes to investing in the world. What's one thing you're doing right now to make the world a better place?   Todd Sulzinger  12:49 One thing I do pretty regularly is I volunteer for that, with a Second Harvest Food Bank doing grocery deliveries. So they've got a great program where they, you know, delicate, take donations from people to, to buy food for families that can't afford it. And they have a great program where you can volunteer to actually go to their site, pick up a bunch of groceries and kind of go around town and make deliveries. So that's something I've been doing for a while. That's a lot of fun.   Sam Wilson  13:10 That's awesome. I love it, Todd, if our listeners want to get in touch with you or learn more about you, what's the best way to do that?   Todd Sulzinger  13:16 Yeah, my company name is Blue Elm Investments. That's Todd@BlueElmInvestments.com. So reach out there. I've got an investor club link that you can click on if you want to find more about passive investment opportunities. I was also part of a book collaboration last year called Success Habits of Super Achievers. And if you go to my website, there's a download link to get a copy of the ebook.   Sam Wilson  13:39 That is fantastic. Todd, thanks so much for your time today. I do appreciate that.   Todd Sulzinger  13:42 Thanks, Sam. Awesome.   Sam Wilson  13:43 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Is there a crash coming? What should real estate investors do if it does come?  Dani Beit-Or will answer these questions and provide more tips to survive an economic crash. To be more specific, he will share the behind-the-scenes in how he accumulated 5,000 residential properties throughout his 20-year real estate career and why he's almost always in “buy mode.” Dani is the Chief Executive Officer of Simply Do It Real Estate Investments, which he founded after surviving the 2008 economic crash. An immigrant from Israel, he was able to devise new investment strategies and value systems that have helped him become one of the top industry leaders in the United States today.   [00:01 - 04:42] Opening Segment Dani Beit-Or shares his journey from Israel to the United States The important role that Dani's team plays in the US real estate market [04:43 - 09:20] Surviving a Market Crash This is the reason Dani has decided to migrate and invest in the US real estate market Dani said he probably has over 10,000 conversations with real estate investors Here's what he learned from these conversations Dani's thoughts about the potential crash that's been going around real estate circles [09:21 - 15:30] Cash Flow Over Quality What kind of properties should you buy for the long term? The beauty of buying for cash flow instead of equity Dani reveals why he prefers the interest rates to be going up …and if possible, going up faster [15:31 - 17:08] Creative Ways to Pay Off Mortgages Dani prefers 30-year data over 15 years, and here's why Here's a creative way to finish paying off your mortgage earlier [17:09 - 19:38] Closing Segment A real estate mistake you want our listeners to avoid Going into real estate with no plans Set your expectations first before starting investing Reach out to Dani See links below  Final words   Tweetable Quotes “I think that a lot of people just jump in and start asking for properties and start asking for assistance…and they don't even take five minutes to set their own expectations.” - Dani Beit-Or “Hopefully, if the interest rate goes up, more buyers will say we're not buying. That will make it easier for us to buy.” - Dani Beit-Or “I tell my clients [to] just write what [their] either ideal day looks like or [their] threshold deal looks like, and then when [they] have that, [I ask them] ‘What is your value in terms of the deal you're looking for?'” - Dani Beit-Or   -----------------------------------------------------------------------------   Email dani@simplydoit.net to connect with Dani or follow him on LinkedIn, Facebook, Twitter, Instagram, and YouTube. Remotely invest in rental properties by visiting Simply Do It Real Estate Investments. Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below:   Dani Beit-Or  00:00 If you're buying now, and you're listening to this, and you say, Oh, he said, this quality long term, and exactly in 10 years you thought you will sell and that's when the crash it, guess what, just be patient, you know, people get, easier said than done. I can vouch for myself, I was patient because it was not a pleasant feeling to know that a property that you paid 194 is not worth 84,500. That's not a pleasant feeling. But at the same time that I was seeing this, I also realized that the rent is improving. I told myself, be patient, when you buy well, good place, good location, all those things that I keep telling others. Absolutely.   Intro  00:36 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:48 Dani Beit-Or is a residential real estate investor and mentor with experience in more than 5,000 units in the past 20 years. Dani, welcome to the show.   Dani Beit-Or  00:57 Thank you for having me. Thank you. Pleasure.   Sam Wilson  01:00 That's a lot of residential property. 5,000 units, maybe we'll get to where that number comes from here a little bit later in the show. There are three questions though, ask every guest. Where did you start? Where are you now? And how did you get there? In 90 seconds or less.   Dani Beit-Or  01:15 Yes. So I'm originally from Israel grew up in Israel served in the Israeli Special Forces. I realized early on after getting my engineering degree that working for corporate Israel is not the way I want to go. It's not the way it's gonna advance me financially. So I started looking into different investments, I caught Wiley Tel Aviv, found out, discovered the US residential investment, fell in love with it, moved in 2004, after doing two or three small investments to this country, continued investing in residential real estate and their started working with investor helping them do pretty much the same what I'm doing was doing, putting trucks for myself and letting others ride those tracks invest in different us Metro. So I'm now in Southern California have been 10 years in Northern California 18 years in this country, 100% of my time when I'm not with my family and friends is devoted to working on investment properties, helping others invest in residential properties throughout different us metros.   Sam Wilson  02:22 That's really, really intriguing. So when you say that, that brings up a lot of questions, which I'm just going to maybe ask it simply and say how…   Dani Beit-Or  02:31 How what? Sam Wilson  02:32 How are you helping other people invest in metros?   Dani Beit-Or  02:34 Yeah, so what I found over the years is a lot of people, especially my, most of my clients are people who live in the West Coast, and majority of them I in Europe, in East Coast, but the majority is anywhere from Seattle to San Diego, a lot of them come to the realization that real estate is very beneficial. They understand that that's the starting point, the idea, right, the vision, then the next thing they do, and I've been doing it for 18 years, there's they look around and say, wait, this million-dollar home rents were 3,000 or you know, or at $750,000 home rents versus 2500. You know, the math doesn't work, right? I heard that, you know, in other parts of the country, it's not that expensive, and it works better. And then they come to the realization, where should I go? How should I buy? Who should I work with? How can I trust, you know, who can I trust? How can I overcome all the challenges of lending and management. And that's where we come in, we come in to close the I call it the knowledge gap to handle people in the process of making those decisions, from idea to actually exit, full execution of ownership. And then we also close the operational gap. Maybe I should put it here and saying okay, we vet teams of property managers very carefully. We vet realtors, and we train them very carefully. We handpick vendors, we handpick lenders, so we closed that operational gap. So we're not just knowledge and advisors, like go invest in real estate, we say, we're going to help you with the knowledge and fear and concerns and issues before you start, during the process of buying, and post-purchase. But also we have the teams the properties that will take you all the way through, you know, I would say ultimate to ownership, but many of my clients have been with me for so many years. They're coming back, you know, to do a 1031 exchange, to sell, to grow further. So it's kind of it always continues. This is a long-term relationship. People tend to accumulate houses over the years and not buy all at once and they don't kind of stop that's just, yeah,    Sam Wilson  04:37 That's really intriguing. Why did you decide to go that route as opposed to just building a portfolio yourself?   Dani Beit-Or  04:43 I've started by building a portfolio to myself, and I'm still you know, it never stops. But for me, I fell in love with real estate, the US real estate, I found that I'm good at, you know, operational or good at you know, working with people I'm good with helping people in advising them. And I just felt that this is my in a way my I don't have to call it my calling, but like I have had probably well over 10,000, one, one conversation with actual investors and potential investors, I'm just talking about the initial conversation, not the ongoing well over 10,000 for those 18 years, in IRM, you know, the next call that is later that was maybe held on Friday, I feel fresh, but for me, the fact that I've had conversations like this one for more than 10,000 times similar conversation, and I'm not completely like off, not again, on the contrary, I'm excited. I'm energetic, that kind of tells me I'm in the right spot with myself, first of all, and then I think that projected, you know, to the people that I speak with, right. Full disclosure, not all 10,000 became clients.    Sam Wilson  05:50 You'd be selling a different book, if that were the case.    Dani Beit-Or  05:53 Oh, my God.    Sam Wilson  05:54 Let's talk about this. I mean, some of the questions, you know, that we hear in commercial real estate and residential real estate, is there a crash coming? Is there a price decline? I think because residential real estate and commercial are tied, you know, and one declines probably both do in their own different ways. But talk to us about what you see coming and what you're telling people when that topic comes up.   Dani Beit-Or  06:16 So I'll divided into two. First of all, I want to emphasize I'm in the real estate of the residential kind of category. Right? So I'll tell you in a second, what I think about what's coming, but I want to tell you first how I mitigate because these, there's one thing I can tell you and the people who are listening to this, I have no idea if we're going into a crash, when we're going into a crash. I only know this, you know, I've started investing in 2002. So 20 years right now, it's when I started, I really picked up the pace in 2004. And guess what, I went into the crash of 2008 personally with multiple properties. But with clients even more, right, when I say clients, it wasn't my property, but I was there with my clients in the trenches, helping them out of problems issues, speaking to banks, loan mitigation, you know, shorts, and all of that I've done years of just dealing with that fun part right of the industry. So and that taught me a lot a lot. So for me, the crash of 2008 was a significant, that was my PhD in a way I came in with experience not a lot of experience, but some experience not complete beginner. And that was my PhD in real estate, but that taught me a lot things that you know, that I never thought I would know. But I have learned or I've seen and research it, I read it myself that in this country normally every 10 years we have a slowdown right every 10 years or so, right now we are late into the slowdown you know, because it's been 12, 13 years so it should be coming. So I am after the crash one of the things that I started to kind of you know, in my mind conceptually doing is saying the next one is coming right this is something I started with my DNA in 2009, ‘10, starting is that if the next one is coming and I don't know when let's prepare for it, how do I prepare for it? Well, I buy in growing markets, I buy quality real estate not crappy real estate, I buy in in growth you know growth of population and jobs or indication of this is where happening I buy with the numbers make sense. So I do a lot of decisions along the way I call it medium-sized important decisions, not small, not insignificant, and not everything is critical in the process of you know kind of picking up the areas the properties, the due diligence, the valuation from macro to micro etc. And all those decisions are putting me on a path that if I buy quality in a potentially resilient market or potentially has more sturdy you know, potential for resilience when the next one is coming, and I'm holding it long-term, there's a very good chances I will survive well the next crash or the next downturn, no guarantees, but I am not in the guaranteeing or promising business. I am in the risk management, mitigation, reducing risk kind of a business in I am putting myself and my clients on a task and saying let's buy quality. Let's you know analyze well, let's evaluate correctly in good markets. We are probably going to be okay even when the next downturn hits. Now, as someone who's been through that point right, the bottom, I can tell you that what I have seen is that while my house you know example one of my house that was purchased for close to $200,000 in Orlando, that was the almost the purchase price went all the way to 84,500, 84,500. So less than half not a pleasant day, right day era period, but rents kept going up vacancy kept going down in that house over time, being patient. It was bought well in a good metro in a good location in the metro in a good community, not a luxury home. Not anything fancy. Just nice middle class home in a good area. And slowly it came back and exceeded REITs. I was patient. So quality time, right? That works very well. I think those are the most mitigating factors we can help in resilient markets. And you got to be patient, real estate, especially bought with a mortgage last time be patient. And if you're buying now, and you're listening to this, and you say, oh, he said, this quality long term, and exactly 10 years you thought you will sell and that's when the crash it, guess what, just be patient, you know, people get, easier said than done. I can vouch for myself, I was patient, because it was not a pleasant feeling to know that the property that you paid 194 is now worth 84,500. That's not a pleasant feeling. But at the same time that I was seeing this, I also realized that the rent is improving. And I asked myself, are you in rush? Is there any rush? Do you need to spell? Okay, I told myself, be patient, ready to buy well, good place, good location, all those things that I keep telling others. Absolutely. Right. The house is obviously, you know, much, much higher than this right now. And I think that's why real estate was a good fit for me. Because in stocks, you get nervous. What do you do? Click right, right? In real estate, you get nervous, you do click and nothing happens. You need to wait 30 days, 45 days, 60 days, if at all for something to materialize, you have to be patient. Right?   Sam Wilson  11:24 That's it. Yeah. And I think that's the beauty of buying for cash flow is that we don't really care. I mean, I do care what the valuation is. But I don't really care as long as it's making money every month, like, okay, so you say it's worth 200,000? Or toward at 84,500? Is it still making money every month? All right, like just that allows you to sleep at night. Talk to me about Is now a good time to buy? I mean, what do you think?   Dani Beit-Or  11:49 I got to tell you, 18 years in this country, there was never a time within buy, never, not a single period of time. 18 years of a buyer. I've been buying properties, working with my clients, 18 years. I think it's more about discipline analysis, evaluation, doing the work properly. I can tell you right now, five minutes before you and I started this conversation, I wrapped up a call with one of my international buyers for the first time, we just went over the inspection report that took place. Was it yesterday or the day before it can't remember maybe yesterday. And he's nervous, right? Because he's not familiar with the construction, with the material, with the, you know, and I told him, we went over the report, I told him what I think we called the inspector together. We just this is 10, 15, 20 minutes ago, where the conference go with the inspector, we went over the report, I told him my opinion. And then I said, I want you to know something, if you feel nervous, stressed a lot of uncertainty, no problem. Walk away from this house. No problem at all. I can tell you, I have buyers that will take it because I know my buyers list, but he's maybe too nervous. The houses by the way the house is 1976. The report was very good relatively today. It was good objectively, and it was good even for this age of a house. But still, you know, he's nervous. So I told him, You know, it's okay. You don't have to buy this house. Yeah, nothing wrong with the house, by the way. I mean, this cosmetics and stuff in there, as you would expect. But for him, it's the first one. So a little bit, you know, nervous.   Sam Wilson  13:19 What are you telling people to do on debt right now?   Dani Beit-Or  13:24 Excellent question. So let me tell you, first of all, what I wish for, I want interest rate to continue going up and if possible, faster. And I'll tell you why. Because people think this is counterintuitive. It is. But it's not. And this is why. So we are in a period where there's a lot of demand and a lot of shortage, right? So there's, you know, supply and demand is really the challenge here. Many buyers not enough properties, a lot of competition in the residential, almost every metro around the country almost everywhere. Very tough to be buyer, right? Like I told you earlier, I am a buyer all the time, like I am 95% buyer 5% seller, right or maybe 90-10. So I want to continue buying, I want easier time for myself and my investors to buy. So I tell them, if I hope that interest rates will go up, it will maybe move away some buyers because they're saying oh my god, this is going from a year ago to 3%. Now it's 4% Oh my god, it's a no, no, no, no. Well, in my mind, 4% is cheap. In my mind, in my experience. 5% is still you know, maybe not as cheap but not that expensive. You know what? Hopefully, if the interest rate goes up, more buyers will say we're not buying. That will make it easier for us to buy and I tell my investors so let's assume it's 5% and we are buying a property at 5%, oh my god the cash flow is tight. Yes, hang in there. Most likely within 3, 4, 5, 6, 7 years something will happen and you will refinance to lower rate but let's lock down the property, the quality one, hang in there. Be patient again with a patient, and we will probably read, you know, reposition or improve your finances, you know. So you may start with few years of more tight cash flow. And over time, hopefully, you know, the rent will go up, creep up like it usually does. And the rate at some point will go down, and you lock yourself into a good out. So it's gonna be a little bit tougher on the capital, guess. So what be patient long-term quality easy? People don't get that right. So simple. Still not hard to execute.   Sam Wilson  15:31 Yeah, absolutely. Do you prefer a 15 or 30-year data? Or what are you looking at right now? What do you like?   Dani Beit-Or  15:36 I'm 30. If I could do 40, or 50, I'll take that too. When we're talking, I'm, before I was born in Israel, right? When you come to this country, and you see those amazing mortgages, they do not exist in many other countries, that, unindexed, right. So we borrow now, in our principle is not indexed to the cost of living. This is crazy, right? What does it mean? There's erosion of the principle, right. So that's why I rather take with a cheap rate, even 4%, I see it as cheap. So 30 years, you know, it is a little bit higher rate. But you know, typically, but the cash flow is going to suffer less because you are more to the amortization schedule, and the payments are lower. You are, there's a longer-term erosion of the principle, also a benefit. Plus, if you really want to pay your mortgage or 30 mortgage in 25 years or 20 years, you want to be flexible, easy, it's super difficult to pay your 15-year mortgage in 20. Right. I love the flexibility. I love the more payments for the cash flow. You know, I love the fact that what it does for my principal, it's gonna so, and by the way, let's face it, most of us would not hang on to the mortgage for 30 years.   Sam Wilson  16:48 No, certainly not. Dani, I've really enjoyed this. Yeah, certainly, thanks, taking for the time to break down your business, why you do what you do. And kind of what you see, you know, it's you said it over and over the right time to buy real estate right now. You're always in buy mode. Yeah, I like the conviction that you have behind that. So that's loads of fun. Thanks for coming on today. Let's jump here into the final three questions. We will do three questions today. Here's the first one what is one mistake you can help us avoid? And how would you avoid it?   Dani Beit-Or  17:16 Well, I think that a lot of people just jump in and start asking for properties and start asking for assistance, which, joining mailing list, and they don't even take five minutes to kind of set set their own expectations. What's my budget? What am I looking for bedrooms, bathrooms, and you know, kind of write down that. I tell my clients just write what your either ideal day looks like or your threshold deal looks like. And then when you have your, you know, who says it has to be residential? Who says it has to be my, you know, out of state? What is your values in terms of the deal you're looking for? You're more in cash flow, you want appreciation, yes, mortgage normal, kind of outline those 10, 15, 20 questions with yourself for five minutes with your coffee in the morning or a cup of you know, like a wine in the evening. Then sign up on the rights, you know, databases or everything that comes your way, compare it, here's a property I'm looking, here's my data set, compare it, if it's irrelevant, shove it away, if it's relevant, explore further. Absolutely. But you know, just running all over usually ends up with doing very little or getting lost.   Sam Wilson  18:26 Right, and then if our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Dani Beit-Or  18:31 So my web identity everywhere is, my company's name, which is Simply Do It. So Facebook, we're Simply Do It. YouTube, Simply Do It, web, Twitter, all of those areas. I'm not necessarily very popular or actively in all the social media, but Simply Do It, just as a catchy name is where you would normally find us, our website is shockingly, simplydoit.net. So that's very easy. On Facebook, you'll find us to get in touch with the website through one of the social media easily Simply Do It.   Sam Wilson  19:08 Dani, thank you for your time today. I do appreciate it.   Dani Beit-Or  19:10 My pleasure. Thank you for having me. Thank you for excellent questions.   Sam Wilson  19:13 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Is it advisable to leave a niche where you had been dubbed as the “king?” Joseph Evangelisti did leave his kingdom as the “Flip King” and turned his attention to the self-storage space because of the advantages he discovered along the way. He will discuss those advantages in this episode and share some tips on how to capitalize on all of them. Now a business investor, peak performance coach, and 4x best-selling author, Joe can be heard in the Legacy Blueprint Podcast, where he meets with industry leaders to discuss the life-changing strategies they implemented to be successful.  [00:01 - 02:26] Opening Segment Why the former “Flip King” Joseph Evangelisti stop flipping houses What made him fall in love with the self-storage niche [02:27 - 07:37] Investing in Self-Storage Joe shares his daily experience as a self-storage developer This is where real estate opportunities arise according to Joe The big changes in the self-storage space new investors should know [07:38 - 12:24] Holding Self-Storage Properties in the Long-Term Joe considers his team as developers and not operators, What's the difference then? He  reveals their secret to holding self-storage properties in the long-term Joe talks about the current biggest challenge in the self-storage space [12:25 - 15:12] Building a Portfolio of Self-Storage Properties The importance of building a portfolio according to Joe What's happening on the supply chain side of self-storage? Joe gives a sneak peek [15:13 - 17:26] Closing Segment A tool or resource you can't live without His phone Google products A real estate mistake you want our listeners to avoid Not thinking about your end goal first Think about your end goal first then plan backward Your way to make the world a better place Giving back to the community where they are investing Reach out to Joe  See links below  Final words Tweetable Quotes My biggest opportunities in life have come from relationships, whether it's through investors or partners or joint venture operators or even the people that work in our team and our culture.” - Joseph Evangelisti   “...the [self-storage] industry itself is absolutely on fire…if you put the right management in place and you fill it up, you have a cash-flowing asset.” - Joseph Evangelisti   “I would start with the end [goal] in mind…what's the exit? What are you doing it for?” - Joseph Evangelisti   -----------------------------------------------------------------------------   Email joseph.evangelisti@gmail.com to connect with Joe or follow him on LinkedIn. Listen to the Legacy Blueprint Podcast to learn from industry leaders on how they achieved what Joe calls a “life-changing transformation.”   Join the Storage Syndicate Mastermind to grow your network and pick the brain of real estate's best! Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Joseph Evangelisti  00:00 I think whenever we're trying to decide, like, what's the feasibility of a site and what's going to fill up, obviously, you want to rent every square foot and you want to come up with a blended rate that makes sense. You can't just build all five by fives, you know, you have a site that works and makes sense. So you got to blend it in, you got to make sense of it. But you know, let's say you have 100,000 square foot facility and you have, you know, 10 or 15 of those RV spots. That's taken up a significant amount of square foot that's kind of almost guaranteed to be rented in certain areas. So there's that trade-off, or it might be a little bit less per square foot, but it's gonna stay occupied.   Sam  00:30 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:42 Joseph Evangelisti, he is once known as the flip king. He is now the host of the Legacy Blueprint Podcast and a leading expert in real estate investing, specifically in the self-storage industry. Joe, welcome to the show.    Joseph Evangelisti  00:54 Thanks, Sam. Appreciate for having me. Hey, man,   Sam Wilson  00:55 Thanks for coming on. Same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?   Joseph Evangelisti  01:02 Man, where do I start? So long story, construction background general contractor dad went in the military was a builder in the military, US Navy Seabees, came out, flipped about 1000 houses over 12 years, got burnout on volume and the turnover and tried to find something more scalable, three, four years ago flipped entirely into self-storage development and never looked back.   Sam Wilson  01:23 Wow, that's a handful all at once, flipped 1,000 houses.   Joseph Evangelisti  01:26 Yep. Over a 12-year career, you know, we did wholesale retail brokerage fix and flip the whole gamut of things over for a long time. But you know, it just wasn't a scalable model. We were doing up to 100 houses a year towards the end of it. And it was just churn and burn and churn and burn and chase closings. And you know, we just got to a point where it's like, how do I leverage the opportunity, we have such great investors and partners that we have and create bigger for them. Right? You know, we started looking into commercial. This is pre-COVID. And you know, I had retail and apartments to choose from and, you know, office and all that type of thing. And somehow I stumbled into self-storage. And I remember every call, actually telling somebody this story. Last week, I talked to what is now one of my mentors a couple of years ago, and he said to me, he had a similar background. He was a fix and flipper, and a developer and he restaurant tour, build all kinds of stuff. And he said to me, Joe, the first time you build a self-storage, you'll never touch a single family house again for the rest of your life. You want to build your own house, you'll hire someone to build your own house going forward. And he wasn't wrong.   Sam Wilson  02:27 That's a good prediction. I like that. So you guys got into self-storage. I mean, it's one thing to shut down everything you shut down, which I'm sure it was hard in and of its own right to finally just pull the plug on it right. But then what was the next thing you did? If somebody wanted to copy your footsteps? And the next thing you did? You said, Hey, I'm getting to self-storage. But now you're going into self-storage developer. That's a brand new game.   Joseph Evangelisti  02:47 Yeah, we actually cut the bold we started with development from scratch. So you know, construction was our game. We knew what our strong suits were. I knew I wanted to get into the industry. And you know, since then, we've obviously, we've looked at existing structures, and we've gotten involved in existing deals, but we knew we wanted to be ground up. Like it's always been something I wanted to control I wanted to build, I wanted to make sure I ended up with the product that I wanted to end up with. And it's kind of been our model ever since I think a lot of people are kind of shy away from it because of the numbers and how big it is. And you know, it's a little bit scary. And it is scary. Trust me. Don't get me wrong, but you first do it the first time. But the results are just enormous. They're incredible. And you know, I'm glad we did it that way.   Sam Wilson  03:25 Yeah, absolutely. So you know, doing ground-up development, but you weren't a ground-up developer in single family. You guys were all fix and flip.   Joseph Evangelisti  03:33 I did a lot of new construction houses we've probably built, I say a lot. I mean, we probably built 40 or 50 new construction houses in the last decade. Most of them were fix and flip. But we've done a lot of granite construction. And back when I said I was in the military, I got out I did commercial contract management for Defense Intelligence Agency, big government contract work. So I'm not shy or, you know, I'm knowledgeable about big commercial construction and things like that, you know, so it wasn't something that we weren't afraid to tackle.   Sam Wilson  03:58 Talk to me about defining what opportunity looks like for you guys, because there's land everywhere. And there's people everywhere. How do you guys say, “Hey, here's an opportunity for self-storage build.”   Joseph Evangelisti  04:08 Self-storage is one opportunity. I really think the opportunity, Sam, is in relationships, right? Like we've actually, my biggest opportunities in life have come from relationships, whether it's, you know, through investors, or partners, or joint venture operators, or even the people that work in our team and our culture, you know, so for me, it's always about how do I build relationships that are going to last over the course of time and we can benefit from each other, we can help each other grow. Storage is like the byproduct, right? It's like the thing that comes off the assembly line when you do it, right. But for me, it's about trying to find great people to team up with. So we've actually culminated that into a mastermind, which we could talk about, but you know, the whole idea was, how do I teach people what we do, help people understand the concept, help bring them along in some way, shape, or form, whether they have very little real estate experience, whether they have development experience, whether they're designers, contractors, or they're in the game already, or whether they're accredited investors and they just don't know where to put their money in safely and how I bring all those people into like an atmosphere where, you know, they can create more opportunity for each other. Right? Not just, you know, ultimately for legacy and for our construction company, but you know, where not every opportunity is the right fit for me, not every opportunity, the right fit for you. So like, why waste that opportunity if somebody else can take advantage of it? And so, yeah, we've created a mastermind group around that. And it's been really successful to watch people grow just by making connections inside of that group. It's kind of like a partnership.   Sam Wilson  05:27 Right. That's really, really intriguing. What are some things that you've done in order to nurture those relationships that are mutually beneficial for you?   Joseph Evangelisti  05:35 Yeah, we're, we're nurturing every single day. In fact, that was just got off a live call, my team does three live calls a week with that group. And my acquisitions guy just spent an hour talking about, you know, different MSAs in different areas that we're looking in, and why we're looking in areas that are shifting and what the nature of the business is doing, you know, a lot of storage is moving into outdoor storage, RV boats, I mean, it's a massive influx, obviously, you know, COVID drove a lot of that, but it was a big shift in the way Americans are vacationing and deciding on what to do with their excess money. And, you know, that obviously affects storage, right, it affects where they're going to put their stuff and how they're going to store their stuff. So, you know, our acquisitions guys are on top of that and trying to find the best locations, best sites, and you know, teaching it to others, so we can all learn together.   Sam Wilson  06:18 Yeah, that's really, really intriguing. Talk to us about that a little bit. Are there some shifts you guys are taking? You know, because of the increased demand in RVs and boats? Are there, I mean, are you guys building those facilities now?   Joseph Evangelisti  06:30 Yeah, we're actually, most of our facilities are, they have what we call XXL, we have these oversized units available now. And we can charge a premium for them. And they're essentially big enough to park an RV, you know, they're at 14 by 45, right. And we're finding that people are willing to pay a premium to be able to store their RV, and either climate control or non-climate control some of our climate control, just so they can pull in and have a heated space, where you know, they want to go for, take their RV out, it's like, they can keep their clothes, they can keep the thing stock, they can plug it into the wall, like they don't have to de-winterize to use it. Right, they can just pull up, parked their car in the parking lot hop in and go for a ride. So there's a big premium for that, but they're willing to pay. And so yeah, we're incorporating that into a lot of our sites. The other big shift that's happening is where we're buying our sites, right? Like, you know, Florida and Texas are the two fastest-growing states in the top five fastest-growing states. So we're a lot of our stuff is shifting down kind of like the southeast, where the people are when where the product is needed.   Sam Wilson  07:27 That's interesting. Talk to us about I mean, the per square foot basis, I would think in an RV storage, it would be less than say, if you're renting somebody on a 10 by 10 unit no?    Joseph Evangelisti  07:38 Well, it is obviously because obviously, the smaller the unit, the more dense the income level per square foot. But that doesn't mean that you can't blend it out over the course of the site. Right? You know, it's just an opportunity to add, you know, when I think whenever we're trying to decide, like, what's the feasibility of a site, and what's going to fill up, obviously, you want to rent every square foot and you want to come up with a blended rate, that makes sense, you can't just build all five by fives, you know, you have a site that works and makes sense. So you got to blend it in, you got to make sense of it. But you know, let's say you have 100,000 square foot facility, and you have, you know, 10 or 15 of those RV spots, that's taken up a significant amount of square foot, that's going to almost guarantee to be rented in certain areas. So there's that trade-off, or it might be a little bit less per square foot, but it's gonna stay occupied.   Sam Wilson  08:19 Right. Yeah, less per square foot. But 100% occupancy is worse, or better than more per square foot but not occupied. So that's really, really intriguing. Talk to us about your business plan. I mean, self-storage isn't tremendously operationally complex, but you guys do not self-operate. So talk to us about that.   Joseph Evangelisti  08:36 Yeah, I always tell people I look at us as pure developers. I mean, my job is, you know, people will say, like, you know, not that we're, you know, naive to lease-up terms and all that type of thing. But people will say, “Well, you know, what do you do for marketing? What do you do for lease up? What kind of specials you have to run? Like, you know, what do you have to sell people to get,” and I tell him, I don't know, that's not my job. That's not what we do, right? Like our job is to go build them really, really well try to build them within a budget that makes sense. Get them stabilized, get them to refinance, and then turn the keys off to the guys that are awesome at operating that understand, you know, marketing, some of these companies, the bigger ones, you know, the cube smarts, extra space, the life storage, they're so deep into SEO and a website lead gen and you know, that literally send a targeted ad to you, that's different from me, because maybe I like to golf, and maybe you like to boat, and they know it, right? So they're just so advanced at it. It's just not our game. Like, I can't compete with it, I have no interest in competing with it. And frankly, I'm great at what we do. So let's do that. So yes, I look at us as pure developers, we're going to keep the asset long-term, most likely is the goal. But we're going to hand it off and get it managed by the proper, you know,   Sam Wilson  09:42 how are you guys holding the asset long-term? A lot of developers I know, you know, buy it or you know, develop the land, get it up, get it, get SEO and then you know, sell it because that's just maybe you're able to get it stabilized and then sell it. So how are you guys? What's your secret sauce to hold it for the long term?   Joseph Evangelisti  09:59 I mean, so the real secret sauce that made the self-storage game right now, 2021 has been the best year of recorded history for self-storage, you know, price per square foot rents are at all-time high, they can see percentage at all-time low, that something like $9 billion in self-storage changed hands up until like November of 2021. I don't think I've seen the final numbers yet. It's just the industry itself is absolutely on fire. And so, you know, stabilizing and keeping it's not hard. You know, if you put the right management in place, and you fill it up, you have a cash-flowing asset, which, you know, when we started out to do this, that was the goal, it was, you know, how do we create a billion dollars in assets and keep them under management and keep them cash flowing? The challenge, frankly, Sam, like we were talking about before hit record is, you know, it's the competitive nature of the people who are buying right now, some of these big REITs, you know, they have billions and billions of dollars, and they're paying two points, you know, to hold the money. It's like, it's free money, you know, so they're in this absolute acquisitions buy-up mode. And, you know, frankly, they don't want to develop, that's not their game, just like my game is not management. So, you know, they're looking to acquire everything that they can, including the stuff that they have under management agreement with us. So it's getting quite interesting, you know, when we go to compete the management agreement, now we're just now we're competing the management agreement with like, you know, who wants the best first right of refusal, along with their management agreement? Who might buy us in the first couple of years, that type of thing? So just an interesting shift, just in the last six to nine months, frankly.   Sam Wilson  11:23 Yeah, no, that's a thought I hadn't crossed my mind yet, in this asset class, is that somebody like Cubesmart or would they watch the life storage or somebody like that, they may want to just be a direct buyer from you, when you're ready to dispose of it or move it, you know, in two or three years, is that right?    Joseph Evangelisti  11:39 They're really our target buyer. Like when we build these facilities. And again, I'm not doing anything, I don't think that's what we do a lot of things that are unique. But when I say when we build, like, my goal is to build a Class A asset. I want 80,000 square foot plus asset, I'm doing that not because I'm greedy, or I want to just only build big stuff, I'm doing it because that's the stuff that the REITs are looking at, right? The big players are looking at those numbers, they're not looking at stuff that's 20,000-square-foot, or 30,000-square-foot, unless they can package it up and portfolio it with, you know, three other sites nearby, and call that a package. And it's over 100,000 or 200,000 square feet. So I'm trying to build the things that those guys are going to want to fight over. Right? That's the end game, right? So that's kind of why we build bigger facilities is again, it's not an ego trip, it's more of what's the best ROI for us and for our investors.   Sam Wilson  12:25 That's kind of the thrust of the show is How to Scale Commercial Real Estate. It's like, the reason we scale is for all the things you just mentioned, because your ROI is better at scale, and it is building something half of that size. So it is absolutely, yeah, that's really, really intriguing. What are you guys doing right now, when you're getting stupid offers, you know, right at, you know, say stabilization?   Joseph Evangelisti  12:45 Yeah, we're smiling first. We're kind of patting ourselves on the back a little bit. But no, I mean, the reality of it is, you know, our goal, like I said, to set out the beginning was to build a portfolio. So it's kind of a challenge, you know, you kind of got to pick, what's the best site to sell? Which ones are we going to sell? Are we going to sell? Are we going to leave them in a management agreement? So yeah, we have to pick and choose site by site, what's the best again, it's always the best thing for us and our investors, right. So sometimes you have the investors on board, and they're like, No, I want long-term money. You know, is it going to be a good tax advantage to sell? You know, there's a lot of components that go into it. But yeah, I mean, frankly, if we're gonna sit there and get an offer, that's above what we conceptualize that a pro forma, you know, two years ago, it's kind of hard to pass up on that.   Sam Wilson  13:25 Right. It sure is, what are some challenges or potential headwinds you guys are facing right now?   Joseph Evangelisti  13:30 I think what a lot of people are analysis materials, its people, its labor, its resources. It's timing. You know, weather is always a factor in construction, but it's something we live with, we deal with, you know, the steel industry threw us for a loop last year, you know, went up 40%, came back down. 15%. I mean, we're kind of in a place where, you know, we're making things happen. Luckily, we're still at or below budget on just about everything we're building. But that comes from a lot of like, it's day by day, you know, like our steel guys will literally say like, “Hey, let's execute on this deposit and it's good for the next three months. Let's wait let's wait let's wait let's wait okay, go” you know, and that extra 10% might be a couple $100,000 or more just a material savings. So we're literally communicating on a daily basis with all of our teams. Most of our, a lot of our builders are nationwide, which is really good because we can lock in rates on multiple sites even though we're building across six different states. So you know, it's good to have really good relationships and the kind that are there because they want to build long term with us as well. You know, so we're just doing our best to stay ahead of it whenever we can see, you know, shifts like that coming in the supply chain.   Sam Wilson  14:34 Yeah, that's absolutely intriguing. And I don't know I mean, I guess you'd use the futures market to kind of hedge some of that if you wanted to, but that adds another layer of complexity to your business as well. So that's really intriguing. I love what you guys are doing, I love how you're doing it. I think it's a unique gang, a lot of you know seeing this done a lot of different ways you know, they bring construction in-house or they bring you know management in-house I've seen you know the value add strategy. I love just a pure, I am a developer that's what I do and I stay in my lane. Mindset, I think that's something that would serve most of us, you know, take the little page out of your book and apply it to our own life. Joe, let's jump here to the final four questions. What is one tool resource think digital thing software that you find you can't live without?   Joseph Evangelisti  15:13 My cell phone? Obviously, I could run my entire business off my cell phone. But I know a lot of people probably could do that. I think that's, you know, number one digital resource, honestly, is the Google products. I mean, we went to Google all the time, Google Calendar, Google Notes, Google Tasks, Google Docs. I mean, they do such a great job of making that free and just sucking you into their environment. I have to say, the probably number one for most of my businesses.   Sam Wilson  15:33 Right. Yeah. Understood. When it comes to investing in real estate, what's one mistake you can help our listeners avoid? And how would you avoid it?   Joseph Evangelisti  15:39 I would start with the end in mind. You know, when I started my fix and flip business, it was just for cash. It was like, “How can I create a cash machine?” And I never really thought about what was the end game. The end game was just let me flip more houses. Let me flip more houses. Let me flip more houses. And then finally, we just got burned out. You know, we have a clear and definitive end game in this business, which is we want to stack resources and build a billion-dollar portfolio. We sell a few off between now and then it might happen. But you know, start with the end of mind, what's the exit? What are you doing it for?   Sam Wilson  16:05 Right? I love that. Question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Joseph Evangelisti  16:11 Yeah, we're big givers, love to give back. Every time we build a site, you know, we're thinking about what's the local charity, we can help. I'm a veteran. So we do a lot for veterans charities. One of my, I'm on the board with a company right now that's actually placing, in fact, we placed a ball last week, 47-unit apartment complex in Northeast Philadelphia for veterans. So, you know, my big thing is, you know, growth and contribution. Like I think all of us as leaders should be growing and listening to good stuff like this every day. And you know, also at the same time, how can we contribute to give back to our communities and our, you know, the people around us.   Sam Wilson  16:41 I love it. Joe, if our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Joseph Evangelisti  16:45 I mean, they can find me on Facebook, go to Joe Evangelisti at and if they're interested in tapping into our mastermind, our partnership, they can go to storagesyndicate.com, we call it the Storage Syndicate. They can go there visit and they can see what we got going on.   Sam Wilson  16:57 Fantastic. Joe, thanks for taking the day. Certainly appreciate it.    Joseph Evangelisti  17:01 Thanks, Sam. Appreciate it.    Sam Wilson  17:02 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Can vacation rentals allow you to quit your day job? Kirby Atwell will definitely agree because he's experiencing it firsthand. Formerly a military officer, he decided to invest in real estate, believing that it could help him take control of his time and spend more time with his family.  That's when he realized that he was wrong and he only wasted five years of his life without gaining anything. Eventually, he found himself investing in short-term rentals and never looked back. He will share his story in this episode, as well as give a sneak peek into his daily experiences as a short-term rental investor.    [00:01 - 02:32] Opening Segment Kirby Atwell tells us how he jumped from the military to real estate investing What he realized in his first five years as a real estate investor [02:33 - 07:15] Investing in Vacation Rentals Kirby only discovered short-term rental properties by accident Here's what he learned from this discovery Their business model thrived during the first year of the COVID-19 pandemic Kirby tells us how The power of automating your business according to Kirby [07:16 - 12:57] Doing Market Research for Vacation Rentals Can you leave your regular job with vacation rentals? Kirby shares his experience Kirby explains how they found out the demand for vacation rentals He reveals how they're doing market research, which is important for their business [12:58 - 16:14] Building a Business That Supports Your Lifestyle How to manage your involvement in the day-to-day operations of your business The biggest problem that aspiring real estate investors face Make your business work to support your lifestyle, not the other way around Here's how [16:15 - 19:26] Closing Segment A tool or resource you can't live without Microsoft OneNote Any notetaking app Pen and paper A real estate mistake you want our listeners to avoid Not having a clear outcome Plot your life goals to draw a clear picture of what you want Your way to make the world a better place Providing memorable experiences to their tenants Teaching investors how to buy their first short-term rentals Reach out to Kirby See links below  Final words   Tweetable Quotes “The more unique the experience [in your vacation property is]...the higher you're going to get paid.” - Kirby Atwell “I think a lot of people get into real estate investing in general without understanding what the clear outcome that they're after and I think that's the biggest problem.” - Kirby Atwell “If you don't sit down and actually plot out what you want your life to look like, you will never get there, you're not going to just accidentally end up at an ideal lifestyle, and it's never going to happen.” - Kirby Atwell   -----------------------------------------------------------------------------   Email kirby@greenvethomes.com to connect with Kirby or follow him on LinkedIn. Sell your house fast in Northwest Indiana with Green Vet Homes! Buy high cash-flowing, affordable, and short-term rentals in 30 days by enrolling in this Masterclass by Kirby!   Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com   Want to read the full show notes of the episode? Check it out below: Kirby Atwell  00:00 I think a lot of people get into real estate investing in general without understanding what the clear outcome that they're after. And I think that's the biggest problem. You know, that's how I lost five years, flipping properties really, in that getting ahead, financially speaking, because I didn't have a clear, I just was kind of doing what other people who look successful were doing. And I thought, well, this is going to lead to success because, you know, I'm flipping houses and people are telling me I'm successful, and we're making money. So it's gonna lead me somewhere successful.    Sam  00:34 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:42 Kirby Atwell is a former military officer who achieved financial freedom through vacation rental investments. Kirby, welcome to the show.    Kirby Atwell  00:50 Sam, it is awesome to be here today.   Sam Wilson  00:52 Hey, thanks for coming on, man. It's always good to interview. Well, I'm now a former Hoosier, I guess I can say I lived in Indiana for 30 years. But now a fellow Hoosier. That's a good time, there's three questions I asked every guest who comes on the show in 90 seconds or less, can you tell us where did you start? Where are you now? And how did you get there?   Kirby Atwell  01:08 Yeah, so I kind of went through a big transition in 2011, I was serving in the military. And I'd gone to West Point and decided that I no longer wanted the security of the paycheck on the first and 15th. And I was going to jump in real estate full time and figure this thing out. And I would have all this success really quickly and kind of underestimated how long it would take to get rolling with that. And so I started a flipping company, initially, and I partner with two partners, and we flipped over 70 houses around the Chicagoland area, because I thought that was the way to make quick money, you know. And what I realized about five years later, is that we had built a treadmill that we were on with accumulated no assets, we had made a lot of money. And then we put the money right back into the business, hiring staff sending out 10s of 1,000s of dollars in marketing, all the stuff that you do when you don't realize, you know, the impact it's going to have. And so, five years later, I was sitting there in the exact same position I was when I started financially speaking, you know, obviously, we had learned a lot created some really great relationships. But that's when I really got into rental properties at that point in 2016.   Sam Wilson  02:14 That's interesting. Yes, you're telling a painful story that I know all too well, personally on the flipping thing where you're like, wait, I'm five years ahead. Yeah, I paid for my life. Yes, I've learned a lot. Yes, I put some money aside, but I'm not really further ahead. So what was the next step from there? I mean, you know you're doing what, tell us what you're doing now.   Kirby Atwell  02:33 So initially, I got into long-term rentals. From there, I started accumulating a portfolio of 26 properties, mostly single family homes. And it was great. But in 2000, end of 2017, 2018, I discovered short-term rentals kind of by accident, because we moved from Chicago to Northwest Indiana. And we're rehabbing this house on Lake Michigan. And we're like, you know, we've got this walkout basement, and I keep hearing all this stuff about Airbnb and how much money people are making. Let's just convert this unfinished basement into a one-bedroom apartment, you know, spend an extra $30,000 doing it and see what happens. And so we did that. And the first three months, it was right before summer that we finished. That first summer, we made about $22,000 on that one-bedroom basement that was really small. And I was like, you know, there's something to this, if I can scale this, there's some money to be made here. So that's really the turning point for me when I really just slowly started focusing on vacation rentals.   Sam Wilson  03:31 That's fascinating. So what did you do to educate yourself on the short-term rental space?   Kirby Atwell  03:36 Not as much as I should have? Probably I can learn the hard way. You know, we just jumped into it. We tried it ourselves on that first one in our own property. Several years later now, I look back at that experience. And I realized we could have made probably double what we made that summer, the demand was just super high. We booked up almost immediately for the whole summer. So we were charging way under what we should have been charging, even though we were ecstatic with the results. So so I kind of learned as I went, that was it was kind of on-the-job training. But I wish I would have educated myself more because I, we could have done a lot better more quickly.   Sam Wilson  04:12 Yeah, that's really interesting. Tell me about you, so you guys got into short-term rentals. And what, where do you see it going from here? Is there still opportunity in short-term rentals?   Kirby Atwell  04:22 Yeah, we got in, you know, just prior to COVID. Really, I mean, a year or two prior to COVID. And, and you know, when COVID happened, we're like, you know, is this just not going to work anymore, because everything was vacant immediately. What we found then, just you know, a month or two later, all of a sudden we started booking up like crazy on the summer of 2020. And it really kind of helped our business if anything. I know there was you know, Island destinations and stuff that just got crushed. But for us it was people from Chicago, Indianapolis, Detroit saying, “Hey, we just canceled our Florida vacation. We still want to go somewhere. We want to stay in a house. We don't want to stay in a hotel.” So in a lot of them, they're like, this is our first time using Airbnb. And so they got a whole house for the cost of what they're going to pay for a hotel, right. And so they're not going back, you know, to use in a hotel. And so the demand just shot through the roof after that happened because people were kind of forced into using it. But the supply didn't shoot up like that. So it's starting to a little more, you know, more and more people are getting into it. But there's still this huge supply and demand differential. So the cash flow is just not even in the same hemisphere as a long-term rental, same property, you know, I'm buying in affordable locations, Michigan City, Indiana. And you know, it's three, four times or plus three, four times plus the amount of cash flow.   Sam Wilson  05:42 Right, which is absolutely crazy. Operationally speaking, your short-term rentals are complex. So where are you guys, unit count-wise? And then what have you done to really kind of reduce that operational burden?   Kirby Atwell  05:55 Yeah, they certainly can be it's more hands-on we, it's kind of funny, though, I think it's easier to automate, because there's so many online tools, and it was designed around a remote platform. So there's so many aspects that you can do remotely. So we have a great, we have two key people on the ground that do everything on the ground and our properties or a half-hour away from us. So I can go there. Initially, I did. And I think it handicap me, I wish I would have started with something remote because it would have forced me to think like a business owner quicker. But now I treat them as if they're remote, I haven't been to my properties in a while because we have a great cleaning team. And we have a great handyman. And between all the underground tasks, between like, you know, refilling the supply closets, cleaning the properties, you know, touching up the properties between guests, it can all be done by those two individuals. And then in Florida, we've got a really great guest relations person who's never been any of our properties. But she responds to inquiries immediately, she answers guest questions, she knows our properties better than we do, I think. And so she handles the ethical side of it. So today, you know, we have six or seven turnovers, and I'm not involved with any of them. But still, you've got that higher cash flow. So we have 13 listings now that we own. And we really, it's pretty much all automated at this point.   Sam Wilson  07:16 That's fantastic. At what point in time on it again, I know for everybody, this will be different. But at what point in time that the number of units that you own pay for your daily living expenses.   Kirby Atwell  07:26 When we sat down initially and started looking at it, my wife and I decided at once we get to eight vacation rentals, we were, feel really comfortable with me leaving my job, she was already staying at home with our two kids. And so, you know, we were kind of roughly “guesstimate” or estimating based on the couple that we had in the beginning that we could get, you know, at least $1,000 of cash flow. Since then we've been able to do much better than that, after all our expenses and set-asides on each property. So we, you know, estimated that at eight, we should be more than comfortable to for me to leave my job plus that freed up so much more time that allowed us to keep buying more of them. So I was the CFO of a nonprofit as well while I was growing my rental business. And I left about a year ago when we were kind of at that inflection point.   Sam Wilson  08:15 Right. That's really, really cool. Talk to us about what you guys are doing. You know, you live in Northwestern Indiana, you got 45 acres there that you're on, and you're doing some really cool stuff with us. Tell us about that project.   Kirby Atwell  08:26 Yeah, so the first property that was talking about where we put Airbnb In the basement that was on Lake Michigan. It had no yard. And we also didn't have kids really we just our first son was just born. So we didn't realize how impractical it was going to be once we started having kids to be living right on a lake with no yard. So we realized that we wanted more space. And also we wanted to expand what we had in our basement that was working so well and scale it a little bit. So we started looking for some land. And we found this old farmhouse on 45 acres that had several outbuildings that we could rehab as well. And so we bought this land. And also my parents bought another 10 acres next to us and that house so they were able to move over from Illinois as well. So the plan here, we rehabbed the house first and we actually rent our house that we live in on Airbnb sometimes. So we'll leave for a long weekend and throw it up on Airbnb. And we're just shocked at what people are willing to pay for, you know, to stay on this land. It's pretty nice. And so since we rehabbed the house, we moved in here, we rehabbed this barn in the back where my wife's putting an antique shop that she runs. We also put an Airbnb or residential one-bedroom unit there with a loft that can sleep six, and then on the back of the barn, there's this covered patio area where we can host events. We also have an antique barn that we, it's over 100 years old that we rehab, and we could have you know, small events in that barn as well. So we think it's the best of all worlds because our land pays us and this is just the starting point. I mean, we could we're talking about putting you know air streams or Airbnb, tiny houses or cabins out on the other acreage, that sort of open land, but this is just kind of the first phase of it, and the land's paying for us to live here. And we get the benefit of being able to use the land, you know, we have 20 chickens out here, we get to grow, you know, all kinds of fruits and vegetables, and the kids just run wild. And so we love it. It's definitely a lifestyle business for us.    Sam Wilson  10:22 Yeah, that's really, really intriguing. How did you determine what the demand would be for that product? I mean, to go out and rehab a barn, it's not a small endeavor, you know, ad unit to do everything you've done to it, just to see if it works?   Kirby Atwell  10:35 Yeah, that's a good question. It definitely has taken more than I initially estimated, because I hadn't ever rehabbed the barn before, and hadn't done a project of this scale. But basically looking, you know, at competitive properties, you know, I review the comps on Airbnb the same way people review accounts on the MLS. And I look at where, you know, I can see the previous reviews of other properties in the area. And I can see what their booking calendar looks like, or they booked out for the next several weeks or months. And I can see, yeah, there's a lot of demand here. And I can see the price point that our competitors are asking. And also, we kind of did our own market research going to other experiential type stays where, you know, we went glamping last year at this place in Michigan, where it's, you rent a tent for $350 a night. But it's like the most luxurious camping experience you've ever had, you know, and it's on land similar to ours. And so why can they charge $350 a night for a tent when you know, others are charging, you know, $50 a night. And so it's understanding how to market it. And that's what it's all about. And Airbnb loves it. They are pushing experiences like crazy. You can search on Airbnb Treehouse stays, you can search here, so you can search all these unique stays. And the more unique the experience, the better, the higher you're going to get paid. So we were able to kind of see what others are doing here and start to run the numbers. And when you have 20 tents that are paying you 350 a night, you start to run those numbers. And this is insanity, how much money they're making.   Sam Wilson  12:04 Right. Yeah, absolutely. That's really, really intriguing. You guys did market research. And I'm assuming that's part of the Airbnb platform as a host that you can use to go back and do research.   Kirby Atwell  12:14 Yeah. So there's a platform called AirDNA that is sort of the leader, I think in data for short-term rentals, you know, they can collaborate, they compile all the data for, you know, you can search an area and see, what's the average price point, you know, nightly rate, what's the average occupancy rate? How many are there in that area? So that's a starting point, I look at that as like the 20,000-foot view of an area. And then I'll drill down to the actual comps right around me, you know, within a mile or if you're more remote, you know, within 10, 20 miles, you know, who else is renting? What types of properties? Are they renting? How much are they asking per night? And so you can get a really clear picture of how much you can expect to make just from those two sources.   Sam Wilson  12:58 Right? That's really, really intriguing. What about I mean, again, using your property, go back to the operational complexity, you know, because that's one of the hurdles that keeps, well, in commercial real estate, it keeps prices high, the more or lower, excuse me, relative to the amount of income it makes, in the sense that you're, the more operationally complex it is, the higher the cap rate it trades at because it's just, it's more work. So when you look at this business, how are you going to intentionally build this on your own property, such that it doesn't just tie you to another long-term job?   Kirby Atwell  13:29 Yeah, it's a good question. I think we are a little more willing to be involved here. I mean, my wife's vision, she would love to just, you know, sell off the Michigan City properties which are a half-hour away and just have our own, you know, rentals that we manage, and are a part of that guest's experience, we like, you know, interacting with our guests. Some people don't like that, you know, and they don't have to do that. But, so I think we're going to be a little more involved with the units here. But in the same vein, we can use the same systems that we have in Michigan City, you know, the same cleaners, since all of our properties are within the same area, you know, driving distance to each other, we have great economies of scale. So the same cleaners, the same handyman. So when our guest relations person is managing, you know, all of the guest inquiries and the bookings, and, you know, issues come up throughout different stays, she's reaching out directly to the handyman to come and, you know, fix something or, you know, line up the cleanings in between the guests. So, again, it's I don't think we're going to be significantly involved unless we want to be so it's one of those where you can kind of set your own involvement if you want to.   Sam Wilson  14:39 Right, that's interesting. What advice would you give to somebody who may be interested in getting into their first short-term rental?   Kirby Atwell  14:45 Yeah, I think a lot of people get into real estate investing in general without understanding what the clear outcome that they're after, and I think that's the biggest problem. You know, that's how I lost five years, flipping properties really in that getting ahead, financially speaking, because I didn't have a clear route, I just was kind of doing what other people who look successful were doing and I thought, well, this is going to lead to success because, you know, I'm flipping houses, and people are telling me I'm successful, and we're making money. So it's gonna lead me somewhere successful. But now, I totally did a 180. And we got super clear on what we want our life to look like. So there's a lot of opportunities that come across my plate that would make money that I turned down all the time, because we're super clear about our goals now, and what we want our lifestyle to look like. And that's how we based all our decisions, and it's led us to be able to both leave our jobs. And, you know, I work with my kids right outside the door here outside of my office. So, you know, I see them all day long throughout the day. And it's a lifestyle that we absolutely love. So it's not just about the money, get clear about what you want your lifestyle to look like, and then start investing in properties that are going to support that lifestyle.   Sam Wilson  16:00 Right. That's absolutely brilliant. And well, well said, I love that. Cool, man, this has been great Kirby, thanks for taking the time to jump in today. Let's jump into the final four questions. What is one tool or resource think, you know, as it pertains to your business in particular that you find you can't live without?   Kirby Atwell  16:15 It's kind of elementary, probably. But Microsoft OneNote is something that I have used for the last probably six years, and I've got each year separated. And then within each year, I've got my notes, my goals, ideas, and then properties, you know, I have all my properties listed. So notes for those individual properties. So you know, all the stuff that before that was kind of a jumbled mess in my head, now I organize and I have a way of capturing the ideas and thoughts that I have in a cohesive way. So that's kind of been a game-changer for me. And it doesn't have to be OneNote. It can be any sort of notetaking, either pen and paper. For me, it's just easier because it's always on my phone, it syncs with my computer as well. And so wherever I'm at, if I'm listening to a podcast, I can just write down ideas in that.    Sam Wilson  17:00 Yeah, that's absolutely brilliant. I love that. Question Number 2 for you is, what is one mistake you can help our listeners avoid and how would you avoid it?   Kirby Atwell  17:07 I would say again, going back to getting super clear on your outcome, setting your goals, taking the time to do it. I know you can listen to people talk about, you know, goal setting and understand goal setting, conceptually, but if you don't sit down and actually plot out what you want your life to look like you will never get there, you're not going to just accidentally end up at an ideal lifestyle, and it's never going to happen. So get super clear about that. And that will help you make so many decisions in your life that you're going to labor over Should I take this job, should I move here? Should I date this person? If you're clear about what you want your life to look like, those decisions become much, much easier.   Sam Wilson  17:46 Right. Yep, absolutely. Question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Kirby Atwell  17:52 I would say, you know, there's really two things that we do. One is provide amazing experiences for our guests. So if I'm having a bad day, I just go on Airbnb, and I start reading our reviews. And it is awesome to hear people just rave about the properties. And you know, they're like this made our whole vacation. This is awesome. Like, we're definitely coming back. So I think that's super satisfying compared to some of the tenant issues that I had in the past with long-term tenants. You know, it's kind of night and day difference. And then also we teach people how to get their first vacation rental. So you know, I see people's lives changing buying these high cash-flowing assets that allow them to, you know, eventually leave their jobs as well.   Sam Wilson  18:34 Right. That's super cool. Kirby, if our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Kirby Atwell  18:39 Livingoffrentals.com/start is the best place to start. So Living Off Rentals is the platform I started several years ago. It's kind of a community that's grown over the years and that's, you know, the best place to get more information there.   Sam Wilson  18:53 Thank you for your time today. I do appreciate it. It's been great to have you on the show and look forward to connecting with you soon.   Kirby Atwell  18:58 Awesome. It's been great being here. Thanks.   Sam Wilson  19:00 Thanks, Kirby. Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

What is the right mindset when you expect a “loss” in real estate investing? Tim Vest has been knocked down before, but he was able to get up again due to his tenacity and knowledge in real estate investing. He will share in this episode some of his experiences in investing in multifamily, including his team's practical strategies to shorten the renovation process of their properties.  Tim has 15 years in real estate investing and development, partnering with developers to develop raw land and purchasing and investing in single family rentals, fix and flips, and multifamily. He currently owns over $100M in real estate assets.   [00:01 - 03:09] Opening Segment Why networking and coaching are important in real estate Tim Vest shares his thoughts He gives his outlook on the real estate development industry [03:10 - 08:45] A Potential Major Shortage Why it is hard sometimes to syndicate a new development Tim explains Tim shares how his company is preparing for a potential major shortage of houses He talks about one of their exit strategies that you can follow too [08:46 - 15:26] Shortening the Renovation Process Equity is almost secondary to cash flow for investors according to Tim He tells us why How to apply bridge debts to your properties This is how Tim and his company are shortening the renovation process [15:27 - 17:53] Closing Segment A real estate mistake you want our listeners to avoid Not having a mentor when you're starting out Find a mentor who has done what you plan to do Your way to make the world a better place Promoting soccer to the youth Reach out to Tim See links below  Final words   Tweetable Quotes “It's tough to do ground-up development. It all comes down to what your investor network looks like.” - Tim Vest “You just got to do what you can to mitigate [risks in real estate], but you got to understand, it's gonna happen. If you do it long enough, it's gonna happen.” - Tim Vest “The biggest mistake that I made that I would say I'd go back and change as [is that] I will always have a mentor from this point forward. Always.” - Tim Vest -----------------------------------------------------------------------------   Email tvest@harvestpg.com to connect with Tim or follow him on LinkedIn. Check out Harvest Properties Group to see multifamily opportunities available to you! Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Tim Vest  00:00 Two main factors with renovation right now or development is you mentioned it earlier resources. So subs, contractors, and materials, delays due to materials so we look to whatever we can to shorten the window on those types of things. For instance, we're buying almost a lot of our renovations, we're buying our materials upfront, you know, if we know over the next year, we're going to turn 32 units. We're buying 32 units worth of materials. Today, we're having a container dropped on the back of the property with a padlock on it, and we're putting our materials in that container.    Intro  00:36 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  01:04 Tim Vest has 15 years in real estate investing in development from partnering with developers to develop raw land to purchasing and investing in single family rentals, fix and flips, and multifamily. He currently owns over $100 million in real estate assets. Tim, welcome to the show.   Tim Vest  01:01 Hey, thanks for having me. Sam. Great to be here.   Sam Wilson  01:04 Hey, man pleasure's mine. Same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell us where did you start? Where are you now? And how did you get there?   Tim Vest  01:11 Yeah, sure. Let's see where to start 90 seconds or less. I started in 2006, doing land development. And then a couple of guys in the IT industry that already doing that. They piqued my real estate interest in started buying raw land, getting it ready for developers moved over into fix and flips shortly after 2010 after coming out in 2008. And everybody knows what happened then, got into fixing flips single family and then pivoted into multifamily shortly after 2018. That's where I am the day. And how did I get there? Just you know, strong networking and lots of good coaches and mentors, man, those made all the difference in the world to be honest.   Sam Wilson  01:47 That's intriguing. So it's fun to talk to people with a background in development. Do you see more opportunity in the development side today? Maybe even than you did in 2006?   Tim Vest  01:58 Yeah, oddly enough, I think people were kind of I hate to say it this way, but kind of manufacturing, the demand for, you know, development back in 2006. You know, what's the old saying, you know, when you see somebody who's got a $10 an hour job, and they own three homes, that kind of thing? You know, it was real easy to procure a loan back then. So, you know, here we are today, and there is a legitimate demand for housing in this country. There's a big shortage, a major shortage. And so yeah, there's a ton of development opportunity, I still have a lot of good connections in the land space. Got some buddies running a really strong land fund. And you know, the word I'm hearing from them right now is they have small builders all the way up to the big national builders calling and say if you got land, I want it, that's just point building, you got land, I want it. And so yeah, there's a lot of opportunity right now for development, for sure.   Sam Wilson  02:55 Is that and you guys are strictly you know, you said in 2018, you moved into multifamily. We've some of the things that we've heard from around the country are that now it's even cheaper just to build ground up than it is to go buy, you know, older vintage stock, what does that look like for you guys?   Tim Vest  03:10 Yeah, if you can get the lay it, it makes sense, then, yeah, it's absolutely, you know, I got a, I know a guy who just took I want to say 150 some acres, and, you know, went through the rezoning process. And now, you know, they're going for it. And they're definitely paying less per unit than I am for existing. You know, so there's definitely opportunity there, my partners and I, we have some land that came with us, purchase that we did late last year. And we're probably going to be kicking off to develop that on that this year, as well in we will end up coming in cheaper per door on development than some of the existing stuff we're purchasing.   Sam Wilson  03:45 Right, which is kind of crazy. Because I mean, lumber prices, raw material prices are so high, that it's still it's kind of mind-boggling that you can still get into these deals all done for less than you could buying something new that's 20 years old.    Tim Vest  03:59 Yeah, man, the demand though, the demand for existing a, you know, it's just absolutely crazy. You know, for every, if you're not going direct the seller, and even if you are, there's, you know, multiple offers on it, even some of my broker connections, where it's just me and three other guys, you know, you imagine something that's on the market that everybody can see. I mean, they're getting 10, 15, 20 offers on something, they're just bidding each other up. And, you know, a lot of that's going on, the money is so cheap. And then on top of that, you know, we're seeing a lot of guys with who are doing syndications. Sometimes it's hard to syndicate a new development because there's no cash flow for two years. So you know, if you don't have an investor base that's looking strictly for an equity play. You know, it's hard. It's tough to do ground-up development. It all comes down to like what your investor network looks like.   Sam Wilson  04:45 Yeah, absolutely. You know, what do you think, what the Fed does in March? How does that affect all of this demand-supply, inflation, like, what's this all look like to you and how are you guys preparing for it?   Tim Vest  04:58 Yeah, so we can only go off what they're telling us they're going to do, right? Because March isn't here yet. But if we take them at their word, they're going to raise rates at least half a point, you know, we're hearing from some of our lending partners that they're planning on three quarters of applying. So we'll say, what are we doing to prepare for it? You know, quite honestly, we were kind of preparing for 12 months ago, in our underwriting for anything that we purchased last year that had a refi of it and say, the next two years, we were underwriting those refi's, at the five, five and a half percent rate. And, you know, I hope that doesn't come true, I'd love to see those come back in at more like four and a half. But I don't know that we will 24 months from now. So one of the ways we're preparing for it is we're underwriting even more conservatively on things we're looking at right now, quite frankly, we're trying to do less revise in, you know, two years, and we're trying to talk to our investors about that. It's like guys, like I get it, everybody wants their initial capital back. But there's also something to be said for locking in at four and a half percent, and just letting the market increase our cash flow every year. So that, you know, we're talking to our investors about that. And then the other thing we're doing to prepare is, we're even going back to some of the stuff we already own, and saying, “Hey, I know we underwrote it at five and a half on a refi. But let's make sure we are prepared for even worst case. And let's go back and see what it looks like a six, six and a half.” And if that's if we don't hit it great, but let's just be prepared, right?   Sam Wilson  06:26 And what do you do with that information? When you look at that, because you know, you own the deal? You got your investors already in it, we run through it now, not long, not at five and a half an hour at six and a half? What's your action item? Once you do that analysis?    Tim Vest  06:38 A couple of things, you know, are there ways to you know, even though you're underwriting into that, are there ways to more aggressively go after expenses and rent pumps, you know, we were going to be a little more conservative on rent bumps, you know, to try to keep the vacancies low, but maybe, you know, let's figure out, you know, instead of going after 1,250, let's see what 1,275 1,300 looks like, you know, can we get there with that? Can we get there with less renovation, right? Or do we just need to go ahead and suck it up, put the money into it and go for a much higher level renovation? You know, we're looking at those different things. And then one of the other things we're looking at is, hey, if we only have to pull out 65 versus 70%, you know, on the refi, you know what I mean? Keep 65 versus 70% in on the refi? You know, we're looking at stuff like that. And then one of the biggest places we're starting to look is, hey, if we were in a bridge product, and we were expecting 24 months on this bridge, you know what if we go in and we more aggressively go after the renovations, then we try to cut our renovation timeline from 24 months to 14, and let's refi 14 months versus 24 months. So we're looking at all those different pieces.   Sam Wilson  07:49 Yeah, I would imagine if you can truncate your renovation timeline, obviously gonna cost you more money upfront in the sense that you may renovate units, either that aren't leased, or that you just have to put that CAPEX budget to work sooner. Yeah. And what you're predicting is that maybe your bet is that interest rates, I'm asking for correction if I get this wrong, that if interest rates rise, then you can lock in a refi sooner than later.   Tim Vest  08:11 Absolutely. Yep, your 100%. So let's go ahead and refi it, even if you have to do something like, Hey, we were projecting 80% of your capital back in 24 months, hey, look, this is the market, this is what the rates look like. So we're going to go ahead and get you 70% in 14 months, but we're also going to make sure we lock in at potentially a full point lower than if we waited another 12. So you know, it's not the ideal scenario, but it is a very strong scenario. And you know, quite frankly, you know, we always go into things with multiple exit strategies, right? And this is one of those exit strategies.   Sam Wilson  08:46 Yeah, that makes a lot of sense. And I don't know any investor who would fuss if you gave them 70% of their capital back and like, oh, boy, we're saving the whole point on interest potential.   Tim Vest  08:55 Yeah, I mean, you know, and then you just show what those returns look like, like, you know, we're gonna be able to keep the cash on cash stronger for you. And, you know, at the end of the day, that's what, quite frankly, that's what a lot of our investors are looking at, like the equity is almost secondary to them, or the cash flow, right? Because, like I mentioned earlier, I don't have a ton of investors who want just equity, you know, they want things that cash flow within six months. And that's one of the reasons why we don't do more ground-up development as we just haven't built a network that's kind of leaning towards that. So…   Sam Wilson  09:25 That is really, really intriguing. How much of your portfolio has bridge debt on it? And what are you doing to offset the risk?   Tim Vest  09:33 That's yeah, currently, right now we have two properties that are on bridge debt, and those were medium to heavy value add properties. And that's the reason we did bridge on those. And then quite frankly, on at least one of those, I think we're going to be able to accelerate the renovation timeline. I think we're going to be able to cut at least eight months out of it, you know, take a little more handholding because instead of just waiting for leases to run out, we're going to be actively working With the tidbits to move them in, you know, around the property, instead of saying your lease is up, you know, I know you want to move on, we're gonna say, hey, there's a renovated unit across the parking lot, let's move you over there. Let's get access to your unit, you know.   Sam Wilson  10:14 How do you have those conversations with tenants? Because from my standpoint, or vantage point, moving stinks. Oh, but I don't know, like next to move, how do you coax a tenant to move across the street?   Tim Vest  10:27 I don't know because I don't like it. I'll be honest, I, you know, I've been in my house for 16 years now. For that day I move, it's gonna be painful. I'm just gonna open the door until my neighbors take whatever you want. But yeah, moving does stake, you kind of got to make it worth their while, you know, hey, I'm going to give you a renovated unit, you're paying 1,150, today, 1,175, for something brand new, basically, you know, something like that. Or, you know, you got folks who, you know, they just want something a little bit nicer, work with them on that, or quite frankly, you know, we have a number of tenants that are kind of saying, you know, I don't want the rat race at all. So, you know, if you got an opportunity to let me move on, you know, we can do that as well. And quite frankly, that's not typically a problem for us on any of our properties, because we get a waiting list almost on everything we have. Because there is a shortage of housing in this country. And if you have high vacancies on properties, there's usually a warning sign there, I know.   Sam Wilson  11:25 That's really, really intriguing. What are some ways on shortening the renovation process? How are you doing that?   Tim Vest  11:33 So a couple of things. And this is one of the things our lenders don't like right now, one of the biggest issues, two main factors with renovation right now or development is you mentioned it earlier, resources. So subs, contractors, and materials. Delay is due to materials. So we look to whatever we can to shorten the window on those types of things. For instance, we're buying almost a lot of our renovations, we're buying our materials upfront, you know, if we know over the next year, we're going to turn 32 units, we're buying 32 units worth of materials today. We're having a container dropped on the back of the property with a padlock on it. And we're putting our materials in that container. So that when you know when that unit's ready, we don't have a 4, 6, 8-week delay waiting on countertops or cabinets or whatever, it's a little more money upfront. But you know, our contractors, our subs seem to like it because they know that when we're ready for that the stuff they need to do their jobs gonna be waiting on, sitting there. So that addresses the second piece, which is when our subs come to work for us, they know that they can show up, get the job done and move on. They're not going to be doing something today, then they got to wait a week on a countertop, put those in, and they got to wait two weeks on toilets, you know, you name it. They can show up, everything's there, they can knock it out in a week.   Sam Wilson  12:57 That's really, really intriguing. I love that planning. Why do you say that your lenders don't like that?   Tim Vest  13:04 Because our lenders don't like to pay for the materials upfront. So if you're dealing with like a construction loan, they don't tend to like for you to go pay for all your materials and have them sitting on the site because let's be honest, like having material sitting on a site does introduce some risks, a risk that those materials walk off, right, as a lender, and I completely understand it. As a lender, you don't want that, but you don't like it when materials go visit. So you know, we get that, oh, we try to work with them, we try to show them the things that we're doing to kind of protect those, even to the extent with one of our lenders, we said hey, you know what, here's the padlocks we're doing, we're going to have a third-party checking these things in and out. And we're putting cameras on the property, we'll put cameras on the property that focus strictly at the containers. And we'll be able to keep an eye on everything as well. As you know, we'll have a third-party on-site there that's checking materials in and out when a sub wants a countertop that big, it's checked in and out, right. So you know, we're just doing some things there to help the lenders kind of allay their fears a little bit, if you will.   Sam Wilson  14:05 How, I love the third-party idea. I mean, just in case anybody's listening to this and goes, that's a really great idea, but I have no idea how to implement that.   Tim Vest  14:13 We tend to leverage our property managers for that we get our property managers to kind of keep an eye on the materials, and we will do regular checks, right? You said that you took two cabinets out this month, you know, check them off, and then we'll do an inventory at some point, reconcile what's actually still sitting in the container.   Sam Wilson  14:31 Right. Yeah, I mean, cuz having been in the trades myself for a very well, the first third of my life, maybe I can tell you and having had 30 some odd employees in the trades, that stuff walks, even if they're your in-house employees, and you're like, hey, wait, that was where is that and you go to find out a month later you're like, Okay, this is not going as planned. So yeah, that's a really good way to handle that.   Tim Vest  14:54 Yeah. And even to your point stuff, walks, installed stuff walks too, right. That's a conversation we had with a lender recently, he's like, woah, you know, it's just sitting there, you know until it's installed. And I'm like, I've had H-fax walk off a property after they were installed. I mean, you know, I mean, it's never 100% bulletproof, right? There's a reason insurance companies don't like to insure vacant properties, right? So, you know, I mean, things walk. So you just got to be, you just got to do what you can to mitigate that risk, but you got to understand, it's gonna happen. If you do it long enough, it's gonna happen.   Sam Wilson  15:27 Oh, for sure. And know that that's just the way you know, the cost of doing business. At some point, you just, I mean, you can't prevent it entirely. You can mitigate as much as you can, but you can't prevent it entirely. Tim, this has been fascinating. Thanks for taking the time today to break down kind of your business what you guys do how you do it. We didn't even get into really the conversation that I wanted to have with you about what you guys are buying and where but maybe we'll save that for another day. Right. Now, let's jump here into, we'll do the last three questions here today, the first one for you is this: what is one mistake you can help our listeners avoid and how would you avoid it?   Tim Vest  15:57 Yeah, I'll go back to 2006. I wish I would have gotten a mentor back in 2006. I just jumped in with my IT buddies and we started buying land. They'd been doing it. Either they knew what they were doing. So we jumped in. But hey, if I had a mentor back then maybe he would have looked at me and said, you know some of that money you're making you want to stick it back and wait for a rainy day instead of just reinvesting it and buying more dollar for dollar. Because quite frankly, when 2008 happened, I didn't have any dry powder sitting on the sidelines, and everything was invested. So that would be the biggest mistake that I made that I would say I'd go back and change as I, I will always have a mentor from this point forward. Always.   Sam Wilson  16:35 Right. That's brilliant. I love that. Next question for you, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Tim Vest  16:41 Oh, boy, what's one thing I'm doing right now to make a world a better place? I gotta say, one of the places that we're trying to give back, we're actually trying to do it locally. Here. We're trying to I have a little bit of an interest in youth soccer. So when we make some money, we try to give back and we tried to help. Soccer can be an expensive sport. We try to help kids who can't afford soccer to, that want to play soccer. We try to help them play.   Sam Wilson  17:06 And that's cool. I love that. Tim, if our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Tim Vest  17:12 Yeah, sure. So I'm always on LinkedIn, just look me up, Tim Vest on LinkedIn, or you can hit me up at my email Tvest@harvestpg.com. So that's harvest, P as in Paul, G is in George, dot com.   Sam Wilson  17:24 Tim, thank you for your time today. Certainly appreciate it.   Tim Vest  17:26 Yeah. Thanks, Sam. Take care, buddy.   Sam Wilson  17:28 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

What exactly is the next step after buying your first apartment complex? Many real estate investors say that your very first deal is usually the hardest, but once you pull it off, everything else will be much easier. However, many investors remain clueless on what to do next after buying their first apartment, which is why I invited Tony Castronovo in this episode.  Tony, Founder & Managing Partner at Novo Multifamily Group, will talk about his experience in closing multifamily deals and give a few tips to apply if you're already thinking about quitting your W2 job to invest full-time in real estate.    [00:01 - 03:42] Opening Segment Tony Castronovo reveals the story behind the largest property he could afford to buy How learning syndications influenced his next deals [03:43 - 08:49] The Role of the Sponsor in a Syndication Tony shares his experience in starting with a 506(b) offering  When you're playing the role of a sponsor, this is what you should keep in mind Listen to Tony Tony explains what risk-adjusted type properties are [08:50 - 12:52] The Right Time to Quit Your Day Job Tony reminds you to always look at your debt structure, and here's why Are you planning to quit your W2 job to focus on real estate investing> Here's a piece of advice from Tony [12:53 - 15:39] Closing Segment A tool or resource you can't live without Day planner A real estate mistake you want our listeners to avoid Thinking like a mom-and-pop Follow an abundance mindset instead Your way to make the world a better place Helping his kids become confident adults Reach out to Tony See links below  Final words Tweetable Quotes “...when you're in a sponsor role, when you're leading a syndication, it comes down to just ‘know, like, and trust…' that could take years of growing relationships.” - Tony Castronovo “I think there's always a concern no matter what asset class you're in, but I think you got to look at your debt structure.” - Tony Castronovo “...try to be judicious about your expenses, but if you cut it to the bone, that's just the wrong move.” - Tony Castronovo -----------------------------------------------------------------------------   Email tony@novomultifamilygroup.com to connect with Tony or follow him on LinkedIn, Facebook, and Instagram. Are you looking for affordable living at higher standards? Visit Novo Multifamily Group now! Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Tony Castronovo  00:00 I think there's always a concern no matter what asset class you're in. But I think you got to look at your debt structure. And for me whenever I'm structuring a loan for property, elect to have multiple exits, so you know, looking at securing longer-term debt, whether that means through extensions on a bridge or buying rate caps, or potentially, you know, getting longer-term agency loans that have favorable prepayment penalties, but I like the deals where, you know, I could exit say, three, four or five years and, you know, depending on where the market is, and the climate for a buyer, that's just the best situation.    Intro  00:43 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:54 Tony Castronovo is the Founder and Managing Partner of Novo Multifamily Group. They do multifamily real estate and they have over seven years of experience in the business. And I think right now you guys are almost approaching 800 units. I think if that's right, Tony, welcome to the show.    Tony Castronovo  01:09 All right. Awesome. Thank you.    Sam Wilson  01:10 Hey, man, pleasure's mine. There's three questions I asked every guest who comes on the show. In 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?   Tony Castronovo  01:17 All right, let's see if I can do it. 90. I started in 2014. In the single family space, primarily buy and hold and built up a small rental portfolio before I moved into multifamily in 2018. Started in multifamily. Just opening my checkbook buying the biggest property, I could learn a little bit about syndication along the way. And fast forward to today. I am approaching 100 units with a couple of acquisitions that we're looking to close here this month and next month.   Sam Wilson  01:47 That's absolutely fantastic. You said you bought the largest property you could afford to buy? What was the story on that?   Tony Castronovo  01:54 Yes. So that was a 1031 exchange and what I had done was I packaged up my single family portfolio, it was just a group of buddy homes. And for me, I didn't know how else to buy multifamily. I really didn't know anything about syndication or joint ventures or anything with a store. I just thought, hey, it's, you know, monopoly, right, I'm going to exchange, you know, a group of green ones for a red one. And you know, how do you do that? Well, you come to the closing table, and you bring as much cash as you can afford to purchase and there you go.   Sam Wilson  02:29 That's fantastic, and you said, then you started learning along the way about syndications. And so did that really tweak your business plan or the way that you then started acquiring more property?   Tony Castronovo  02:40 Yeah, it did. And not just, you know, from how do I acquire properties but how do I really grow and scale? You know, as I was operating the 20-unit, which is my first multifamily, I did a lot of hands-on, it was also a transition from me self-managing back in the day of the single family world to relying on third party property management. There was also a little bit of distance at play, where I used to have homes that were all 30 minutes away from me, but then I bought a multifamily that was about an hour and a half away. So that is convenient to get to. But during that journey of running and operating that property, I learned a little bit about syndication, I had been working with a lot of groups kind of locally, a lot of meetups, and learning the ropes from a few people. And within about a year of running my first property that was, able to syndicate my second property. And we also refined the first property to be able to put a skin in the game and bring some money to the table.   Sam Wilson  03:43 That's intriguing talk to us about investor relations. That's something or even finding investors. That is something that a lot of people who are scaling the portfolio, especially starting out, it's a slow grind at first, what was the process like for you?    Tony Castronovo  03:56 Yeah, so your listeners may be familiar with a couple of different offering types 506(b), 506(c) in the syndication world. And you're just exemptions to the SEC regulations for private offerings. And so we started with a 506(b), which is kind of the friends and family approach. That basically meant we could not broadly advertise and we needed to rely on pre-existing relationships. And so literally, I figured, how the heck am I going to pull together people who are interested in investing in a deal like this? And I just went through every email, every distribution list I could possibly get my hands on, and I put together a spreadsheet of about 200 people. And, you know, of course, I knew more people than that, but I didn't know that I knew more people than that. Right? Those people were close to me. And so that's what we started with. And, you know, we can talk about where I'm at today, but that was the beginning of it.    Sam Wilson  04:59 Yeah. What was that about? process like you got 200 people, and you say, “Hey, I've done some multifamily. I've done some real estate are looking to grow. You want to partner with me?” What would that conversation look like for you?   Tony Castronovo  05:09 I think that conversation had evolved for years, actually, because a lot of people in that sphere of a couple 100 were people that had kind of watched my journey in the single family space since 2014. And, you know, I had always kind of see me take a dilapidated single family house and turn it into something, you know, much greater than that, and what kind of results I was achieving and growing and having this portfolio and, you know, a lot of people kind of saw that. And so by the time I moved into multifamily, they were already thinking, Hey, Tony has got some experience here. And because I had also done the 20 unit multifamily now, I had relatable experience in that space. So as I brought a 60-unit to the table, to syndicate, really the conversation was pretty easy. It was just explaining the business case and how they get involved.   Sam Wilson  06:03 Right. Yeah, that's really, really intriguing. What have been some things you feel like you've done right, that other people should emulate as they are scaling up their portfolios?   Tony Castronovo  06:13 I think a couple of things I've done right, is I am all about transparency. So you know, when you're in, in kind of a sponsor role, when you're leading a syndication, you know, it comes down to just know, like, and trust, right, and how do you develop that? I mean, that could take years of growing relationships and kind of nurturing those relationships. But I think it starts with, you know, I've got nothing to hide, I want to communicate well, I want to share as much detail as any investor is interested in seen. And I like to educate. So as I was preparing for that 60-unit syndication, leading up to that for several months, I had been taking, you know, one-on-one conversations with people and bringing sort of a fictitious deal. And showing them this is what it could look like, right? Is something you'd be interested in, if it looked like this? And we just went through kind of the whole education on how it works, and how multifamily is valued and so forth. And, you know, I think that grease the skids a little bit.   Sam Wilson  07:18 Yeah, that's a great thing to do. You hit on a fictitious deal, you know, where you can show, hey, this is, you know, what we could project, a normal deal would look like, you know, take a look at this and see if this is of interest. Did you have any “no's” along the way? Or like, that's just way too outside of what we understand.   Tony Castronovo  07:35 Yeah, and I still get plenty of “no's,” you have to take somewhere, you have to have some thick skin in this business, right. And it's funny, I mean, sometimes the “no's” are just because it looks like too good to be true sort of thing. And they just don't understand multifamily. Sometimes the “no's,” surprisingly, are just because of the asset class. And funny thing is, as I started doing some C class properties that were real rough and lots of heavy lifting. And I think for new investors, especially, they can see how that value add will justify bumping rents and driving value. Fast forward, I started doing a couple of Class A properties and a beautiful sort of what I like to call, you know, risk-adjusted type properties. But people are like, “No, we don't see it. How are you generating value?” And it's different, right? Those are big amenity plays, usually, you try to buy something that it's still under market rents. But you're not going to force appreciation through renovation, right? Some people say no because that just doesn't seem to fit with their mindset has taught them.   Sam Wilson  08:50 How do you sell the project to yourself? And this is a question I've often had, when you get into class A, say there's no major value add? What about that asset is attractive to you?   Tony Castronovo  09:01 So when you're looking at Class A compared to C or even sometimes B, it's really more of kind of the golden egg at the end of the timeline, right? It's the equity multiple, you're having an appreciating asset in a stable market, you're not going to be cash flowing like you would in a class C. So you don't get that yield like you would in a class C. But it's as I mentioned earlier, risk-adjusted, right? You're not going to have big swings in your P&L. It's kind of steady Eddy.   Sam Wilson  09:33 Right. You're buying an income stream, essentially, without a lot of headaches. Is there any concern in class A property? If there is a downturn or a correction? Anything that you think or see on that front that may be concerning?   Tony Castronovo  09:47 I think there's always a concern no matter what asset class you're in, but I think you got to look at your debt structure. And for me whenever I'm structuring a loan for property elect to have multiple exits, So, you know, looking at securing longer-term debt, whether that means through extensions or bridge or buying rate caps, or potentially, you know, getting longer-term agency loans that have favorable prepayment penalties. But I like the deals where, you know, I can exit say, three, four or five years and, you know, depending on where the market is, and, you know, the climate for a buyer. You know, that's just the best situation.   Sam Wilson  10:31 Right. So you guys are at almost 800 units and I know we've talked about this off-air here, but you have just quit your W2 this last September and are going headlong into multifamily real estate, I would have thought before 800 units, maybe you would have exited a W2 long time ago. What was that process like? And then what are some concerns you have, I guess, going, you know, headlong in?   Tony Castronovo  10:57 I think, you know, it's kind of like bungee jumping, right? It's once you do it, everything is great and exciting and exhilarating. But it's that first step. So you know, for me, I always knew that I would go full time into this business. And I've been kind of planning that since probably, you know, 2015, 2016-ish as I started kind of getting into it. I had even, I remember talking to my boss at one point. And I gave him a timeline because he saw that I was growing in the space. And it's never a side gig for me, it was always two full-time jobs. Right? Right. I'm building a business, and I'm putting all my energy into it. But I also had a very demanding career. And it was not a nine to five, and it involved travel, involved lots of hours. But, find a way to get it done. You want something done, you give it to a busy person. Once I decided to leave, it was actually because I had left a job that I really enjoyed. It was working with a team that I really respected. But after the whole COVID, you know, downsizing, and so forth, I was getting a little concerned that maybe my time couldn't be sure. And so I kept raising my hand and say, “Look, I'll take the package. You know, I know what to do with that.” And it wasn't coming. Meanwhile, I had another company that had been courting me for some time. And they said, “Well, look, we'll bring you on, we'll give you a signing bonus. It's basically your severance package. And so I took a jump took a chance small boutique company and realize that our values really did not align. And so at that point, I said, “I've got to just focus on what I can do well, and I can look myself in the mirror and be excited about, passionate about, and feel good about.” And that made that very easy decision.   Sam Wilson  12:53 Right. That's absolutely fantastic. Tony, let's jump here into the final four questions. What is one tool or resource, think digital or software, that you find you can't live without?   Tony Castronovo  13:04 Well, I was gonna say, I can't live without a day planner. And I'm old school, I write on paper.   Sam Wilson  13:10 Now, that's great. I love that. It actually is not one I had mentioned here. So that's really, really cool. I love that. Question Number 2, what is one mistake you can help our listeners avoid and how would you avoid it?   Tony Castronovo  13:21 So something I learned from one of my partners, I was thinking like a mom and pop focusing on reducing expenses to the point where I was impacting quality of my product and my service. And you know, when you think of real estate, that means your apartment complex, right? And so thinking with that abundance mindset to say, you know, if we focus more on the top line, revenue solves a lot of problems, right? And then you've got a better product. And I'm not to say skimp or not, you know, try to be judicious about your expenses. But if you cut it to the bone, that's just the wrong move.   Sam Wilson  13:58 Right. I love that. It's absolutely true. Question number three is when it comes to investing in the world, what is one thing you're doing right now to make the world a better place?   Tony Castronovo  14:07 You know, I think I could do better here. Of course, like a lot of people I, you know, donate to charities, and I volunteer my time. But I think probably the best thing I'm doing for the world right now is raising happy successful kids that you know, need coaching, need love, need support so that they can be confident adults. And you know, I think anybody who's a parent can attest that that's our greatest legacy.   Sam Wilson  14:35 That is 100% spot on. I've got a first, front-row seat to children who are you know, not been parented by good parents. And so it is, yeah, always a good thing when we have good families and great parents taking care of the kids. So thanks for doing that, last question for you, Tony. If our listeners want to get in touch with you or learn more about you what is the best way to do that?   Tony Castronovo  14:55 They can certainly email me email as Tony, T-O-N-Y, at Novo, N-O-V-O, multifamily group dot com. And of course they can always reach me on my website which is novomultifamilygroup.com   Sam Wilson  15:10 Tony, thank you for your time today. I do appreciate it.   Tony Castronovo  15:13 You bet. Thank you.   Sam Wilson  15:14 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.  

In this week's episode, I'm very excited to be continuing my series of Adventures in House Hunting! For that reason, I have two very special guests, Johnathan Mazzeo and Zoha Raad. They bought their home in Concord California in August of 2020 and are enjoying their time living there with their two boys Daniel and Dean. They are a wonderful family that will share with us their experience becoming homeowners, and their decision to take risks and don't wait anymore to pursue their dream home! Jonathan moved to Berkeley to attend the University of California after high school. He remained in Berkeley after graduating, living in a rent-controlled apartment for nine years, during which time he got married and had children. He became an IRS Enrolled Agent in 2016, completed his master's degree in accounting in 2019, and became a licensed CPA in 2021 Zoha had a massive stroke at age 23,  which shifted her entire world-view and understanding of disability. Since that time, she has dedicated herself to improving her understanding of disability by pursuing a minor in Disability Studies at the University of California Berkeley. Zoha was introduced to Stephen through a disability rights activist and later became acquainted with his services.  Tune in and learn more about this new adventure in house hunting! [00:01 - 04:27] Opening Segment I welcome Johnathan & Zoha to the Show Their experience buying a condo in 2020 A pretty spacious place: A townhouse Their long-term plan Johnathan & Zoha share how they decided to be homeowners Living in a 2 bedroom apartment Freezing cold in winter [04:28 - 14:16] House Hunting  Johnathan's & Zoha's insight about renting vs owning Getting a bigger space they could afford Buying a hoe a the beginning of Covid Through the Looking Glass: They support children and parents with disabilities What happened when they met Stephen They change the mindset of not being able to afford a house The decision to not wait anymore How Johnathan & Zoha started to look for homes House hunting from the very start Evaluating the location BMR (Below Market Rate What they think once they've chosen the condo A cozy and enormous place A great design and location [14:17 - 25:15] Get the Offer Approved  How Johnathan & Zoha felt when the offer was accepted   “If it was meant to be, it would be”   Giving the best offer The concern that sellers might violate the housing law by favoring and disfavoring some buyer over another one Deals are no just business transactions, they are personal events How the moving process was Getting the keys They would've wished to hire a moving company They did everything by themselves The upgrades and work Johnathan & Zoha have done to the condo Repainting  some areas: bedroom, hallways, closets, etc. A small leak: used the home warranty The biggest advice for people who want to become homeowners Take the risk, act and don't be afraid  [25:16 - 27:47] Closing Segment A good agent makes a difference See the links below to know more about Johnathan & Zoha Final word Resources Mentioned: Through the Looking Glass  Tweetable Quote/s: “And I had visions of the holidays and of having nice winters. And actually, it turned out exactly like that. It's a very cozy place” - Johnathan Mazzeo “I thought, well, we could rent a couple more years and other nights below market rate, save a little bit more, maybe go after something like a single-family home in the backyard, maybe the market will go down,none of those things. I mean, obviously that hasn't happened.” - Johnathan Mazzeo  “If someone could afford the monthly payments, and it's a secure choice better than renting because you're throwing away money. You're helping someone else pay their mortgage.” - Zoha Raad To learn more, share feedback, or share guest ideas, please visit our website, or contact us on Facebook and Twitter.  Like what you've heard?  Please review us! That helps let other people know about the podcast. Accessible Housing Matters is dedicated to raising awareness about important issues around accessibility and housing, and getting conversations going. I'd love to learn more about what's on your mind, and get your feedback about the show. Contact me directly at stephen@accessiblehousingmatters.com to share your thoughts or arrange a call.

How do investing in heat pumps and working with refugees increase the value of your properties? Dave Holman and his team at Holman Homes have created several case studies that other investors can learn from. He will talk about in more detail the benefits of heat pumps and they can actually increase the net operating income of your properties, the reasons they've chosen to work with refugees, and some strategies applicable for both general and limited partners.  [00:01 - 04:59] Opening Segment Dave Holman spend a few years in Bolivia before investing in US real estate Here's his origin story The most important aspect of running a business according to Dave [05:00 - 10:00] Zero Fossil Fuel Buildings You can invest in real estate in your hometown Here's Dave's reminder for you Dave gives a sneak peek about this zero-fossil fuel building they're investing in What to know about tax credits according to Dave [10:01 - 17:57] Working with Refugees The relation of deflation and technology increase and the reason it matters Listen to Dave Dave doesn't plan to sell his buildings anytime soon Here's his strategy instead Why they're working with refugees for their properties How heat pumps increase the NOI of your real estate investments [17:58 - 20:37] Closing Segment A tool or resource you can't live without Genius Scan A real estate mistake you want our listeners to avoid Don't get involved in a project you're unqualified to unless you have the right people around you Get experience first Your way to make the world a better place Making communities better by providing opportunities to refugees Reach out to Dave See links below  Final words   Tweetable Quotes “...if you have local knowledge of what buildings and what areas in those local markets are good, you can invest in your hometown, you don't have to throw your money halfway across the country.” - Dave Holman “1031 [Exchanges], to me, might be one of the worst distractions for real estate investors because it makes you give up your properties.” - Dave Holman “Don't try to bite off more than you can chew or do a project that you're just wildly unqualified for unless you have a team around you that are all experts in doing this kind of project.” - Dave Holman -----------------------------------------------------------------------------   Email dave@holmanhomes.com to connect with Dave or follow him on LinkedIn. Do you want to invest in residential and commercial properties that benefit residents, investors, and the planet? Check out Holman Homes now Do you own a property in Maine? Visit Katahdin Property Management for quality property management services.  Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Dave Holman  00:00 We want to keep our money productive, you know, in other areas, either reinvesting and other real estate is down payments, you know stocks, crypto other assets to diversify that, you know, can get some of that trapped equity out of your real estate because I was at a point like one point I had 98% of my net worth in real estate, all in like one or two towns and I was like, that's probably not what a financial adviser would recommend. Maybe I want to get that down to 80 or 90 or something and you know, it's a give and take.   Intro  00:37 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:40 Dave Holman believes in doing well, by doing good. With over a decade of experience, Dave is a triple threat. He's a commercial broker, a syndicator investor, and a co-owner of Katahdin Property Management. Dave, welcome to the show.   Dave Holman  00:51 Thanks for having me, Sam. Appreciate it.   Sam Wilson  00:53 Hey, man, the pleasure's mind. same three questions. I asked every guest who come on the show in 90 seconds or less. Can you tell me? Where did you start? Where are you now? And how did you get there?   Dave Holman  01:00 Maine and Maine are the first two answers. That's easy. How do I get there part though? It's been circuitous. So you know, I grew up here a little bit north of Portland, left for college in Minnesota where I got turned on to green building and architecture, things like that. spent the next four years down in Bolivia, like everyone does. I started a chain of camping stores and bookstores with my then-girlfriend now-wife, you know who's Bolivian, we came back to the US and ‘09, went to business school, got my MBA, worked in nonprofits for quite a while, but started real estate investing for profit on the side. And I've now switched over to doing real estate full time, both as a property manager for my own properties, syndicator, you know, doing kind of two to $12 million deals right now. And as a broker helping other people buy and sell their properties here in Maine.    Sam Wilson  01:47 Wow. That's fantastic. That's a lot of moving parts and want to hear a little bit what was the camping store in Bolivia? What was…   Dave Holman  01:53 Yeah, it's called the Spinning Llama Bookstore and Outfitter, our father, we left it to our father-in-law, retired military guy from Bolivia. And he loved doing that kind of stuff. And it was an adventure. You know, we were selling, you know, maps and books and bikes to locals and tourists. And it was a great experience. And I tell people, in some ways, it's the most free economy to have a business in a developing country. And in other ways, it's the most restricted, because there's all these laws and their cumbersome bureaucracy and everything, but everyone just ignores it. And it's completely free commerce for a lot of the time. And the bigger you get, the more the laws you follow. And it gets, you know, harder as you move forward. So we were just a small little business there.   Sam Wilson  02:34 Wow. Yeah, that's really, really intriguing. Very interesting. I love that. And then you guys came back to the States. Where were you in Bolivia? Let me ask that.   Dave Holman  02:40 Well, Cochabamba is where the city where my wife's from, it's a really beautiful climate, you know, kind of like San Francisco, nice temperature flowers year round. But we had stores in La Paz, not a place that I really love. It's super high altitude, very cold, dangerous, very sloped and slippery, and it's interesting. And then we had a store in Copacabana, which is on a huge lake highest altitude navigable lake in the world. And that was a really fun place a lot of tourists travel coming through there.    Sam Wilson  03:12 Gotcha, man, that's really intriguing. So you took your wife from beautiful, sunny around climate and convinced her to move to Brunswick, Maine and do real estate, you must be a heck of a salesman, I love it. Let's jump into you know what you guys are doing right now. I mean, you've got some really interesting projects going on, we got to talk about some of them ahead of time, but really give me an idea I kind of the scope, and you know, some of the stuff you're working on now that that's really interesting. You know, I think there's a value and just kind of talking through some of the projects you're working on right now.   Dave Holman  03:42 Absolutely. My biggest piece, the most important thing to me is the team that I work with, and building that up around me because you know, all those different activities you listed in the beginning, I'm not doing any of those alone, I'm getting back up and help, you know, they make me look good. But I always try to be the dumbest person in the room in our staff meetings and hire people that are really great. And, you know, we try to be super flexible in our, you know, hours and our work schedules and the ways that we do things. And we've been able to recruit, you know, really talented, skilled people who don't want a 40-hour a week job, you know, they might want 23 hours this week, 17. Next, you know, 36 the next and it just depends on their family and their schedule. And that works great for us to get high talent. And so building that team is kind of my number one focus. And with that team, you know, we're managing about 172 units, which is a little bit deceptive, because you know, about a third of those are commercial and so some are very large, you know, so income-wise, that would be like having, you know, maybe 400 residential units or 500 or something because we've got law firms and restaurants and different commercial assets that we're managing and owning, and then as a syndicator on six different projects, you know, with a group of family friend investors kind of ever-expanding. So anyone out there can hit me up after this get to know me and work together if you're interested. We're just focusing in the area that I know best, you know, which is Southern Maine, you know, areas like Portland, the mid-Coast region around Brunswick, which is a very hot market. It's one of these tertiary markets that most people have never heard of. They're out there all over the country. So, you know, for everyone that's just kind of jumping on the bandwagon of like, oh, we all got to invest in Florida. Oh, wait, now the hot spots, Austin? Oh, wait, it's Ohio. You know, it's every state has good markets. And, you know, if you have local knowledge of what buildings and what areas in those local markets are good, you can invest in your hometown, you don't have to throw your money halfway across the country. But you can do that, too. That's the beauty of real estate, you can do so many different things. So those are, you know, some of the things we're working on a new development project, which I've never done before. So that's really exciting. And luckily, my best friend from college has done 15 of them before. So we got the dummy with the genius. And we'll balance each other out. But I'm the local boots on the ground. He's based in Minneapolis, Minnesota has built over 3,000 units up there. So we're working together on a 57 unit new construction project. In Brunswick, that'll be really interesting, it's going to be zero fossil fuel building, using all heat pump technology, it's going to have instead of a gas generator, battery backup. And we're going to get paid for that, in a sense by the electric company. There's some really neat things called Demand Response Technology, you know, where we're able to be a battery for the grid. Basically, when you get big enough batteries in your building, you can serve the power company, and they'll pay you to modulate your demand and flow of power. So that's an exciting kind of new tech piece that we're incorporating. And we're trying to make it all work. But it's a jigsaw puzzle, you know, construction costs in the east coast up here are about 30% higher than the Midwest, and they're high in the Midwest. So it's a challenging nut to crack. But rents are also rising very quickly. So we're trying to balance those factors.   Sam Wilson  06:48 That's really, really intriguing. Especially, you know, the electric backup, I mean, how do you even go about figuring that out? Like, where do you start with that, Hey, call the electric…    Dave Holman  06:59 Gotta know a guy, he got a guy for that or gal. So yeah, a friend of mine is an engineer who does a lot of renewable energy stuff he used to work for GE has been with different startups has his own startup called amply. He's kind of guiding us, you know, and how to incorporate this technology, what companies, you know, can provide it. So we're definitely not doing a DIY approach. You know, there are entities and groups out there that are working, you know, with multifamily operators, commercial operators on these technologies. And that's how we're going to partner basically, to do it.   Sam Wilson  07:31 Right. What's the 57-unit build? Like, what is the product?   Dave Holman  07:35 Yep, it's going to be four storeys high, about a 12,000 square-foot footprint. So an elevator, it's going to have a roof deck, a mix of studios, one and two bedrooms. So we'll have a mix of price points for people. It's in a kind of business park, in Brunswick, where there's been a lot of job growth. So pretty high demand, you know, it's for what we call workforce housing. So people earning, you know, right around that median income, which in this area is, you know, like 50 to 70,000 a year. And it should be, you know, a much-needed resource. Because right now, you know, you go on Craigslist, and there are sometimes you know, for towns of 20 30,000 people, there can be literally nothing for rent, or nothing for sale, because the supply is that tight.   Sam Wilson  08:14 Wow, that's intriguing. So you're going four storeys high, putting your electric, you know, system backups on it. That's absolutely intriguing. Talk to us about the tax credit sides of that. I'm sure you guys have researched that. And I want to the reason I'm asking you all these questions because you said earlier, that team is the number one focus. And so far, I've heard everything you say as well, I've coordinated with this person or I coordinate with that person. You said you don't want to be the smartest guy in the room. So tax credits, who have you worked with on that front? And what sort of programs are out there for this type of project?   Dave Holman  08:42 Yeah, that's a great question, and there's not a lot of tax credit incentives for what we're doing, at least on a federal level, you know, federally there's incentives for solar and even some Evie charging infrastructure. And we're going to do that. So we're getting, we're applying for I shouldn't say we're getting we're applying for a grant from an entity called Efficiency Maine, which uses the carbon pricing in New England area, they get their money basically from power companies and large polluters that have to pay to pollute, then they get to, you know, funnel it back out to things that are clean. So we'll hopefully get a grant for eight electric chargers, we're gonna add more on top of that, and basically every single parking spot in the underground parking of this building, we're gonna wire to have a charger in it someday, because it's crystal clear that in 20 years, someone driving a gas car is like today, someone driving, you know, the old model T, you know, antique truck, it's not going to be a thing in 20 or 30 years from now, and we're trying to build a building. It'll be around for 500 years. So we want it to be flexible for the future. I mean, obviously, and 500 years if we're not all in jets and spacecraft, we failed, but, you know, we'll take it step by step incrementally.   Sam Wilson  09:50 Right man, that's really, really intriguing. Talk to us about where you see long-term rates going and what you guys are doing strategically right now on the refinance front.   Dave Holman  10:00 Yeah, great question. I love listening to macroeconomic podcasts, listen to economists, prognosticate. And I swear right now, Sam, there are brilliant arguments for inflation and deflation, there are fantastic arguments for rate rises and rate falls, right? My guess is that rates in the medium to long run are going to be falling in, in the short run, slightly rising. And so I say in the short run slightly rising because we got an inflation problem, the Feds gonna try to tackle that they're gonna probably make a couple of rate hikes before they completely realize they've broken the stock market and all their rich friends are gonna cry about it, and they're gonna stop. It's my jaded, cynical interpretation. You know, some people are planning on seven or eight rate hikes right now, I'd be amazed if they got away with more than three. And I think that's sort of market consensus as well. But in the long run, look at Europe, look at Japan, look at a lot of Asia, all of them have negative rates, you know, they are desperately trying to generate inflation. And they've been unsuccessful up until just recently when you turn on the fiscal spigots and you're giving stimulus programs, that is successful in generating some level of inflation. But globalization, the primary driver of deflation has been severely disrupted by COVID-19. As those disruptions get ironed out, supply chains get reconnected resources, get back online, I really think that fundamental narrative of deflation and technology increase is going to continue.   Sam Wilson  11:22 That's interesting. So you guys though, are locking in rates right now, which is really interesting, if you think that rates in the long term are going to go down.   Dave Holman  11:31 Yeah, so we're locking in now, because I think, you know, we have maybe a one to three-year rising rate environment, let's call it and then you know, we're locking in mostly five-year fixes. We're doing one seven right now because the rate is as good as the five. But I started out in an environment where I thought rates were going to rise a lot, and I wanted all 10-year fixes. But these are relatively small properties. It's not the end of the world, if we have to lock in higher rates five years down the line, the incremental savings we get in the meantime is pretty significant. There's 30 or 40 basis point difference, sometimes between the five and 10-year rate, and that matters, especially if you might end up in 10 years in a lower rate environment than you're in now.   Sam Wilson  12:09 Right? Yeah, absolutely. And the reason you're doing that is…   Dave Holman  12:13 Well, we've gotten our loan to value ratios, our LTVs, down, you know, from the 80, or even 90%, if we're using construction loans, etc. When we purchase, you know, within a year or two under good management, you can get that down to 60, even 50, 40%. Because you've increased the cash flow, the NOI of your building, you've increased the profits by controlling expenses and increasing rents basically, appropriately. And so you know, when your LTV is down around 40, or 50%, you've got a lot of money trapped in that building, that's twiddling its thumbs doing nothing, you know, really productive for you. And you can pull it out tax-free with a refinance. And to me, that is 1,000 times better than selling your building. Sure, I've never sold anything, I don't plan to sell anything. Because to me, it's a shiny object, you know, that 1031, to me, might be one of the worst distractions for real estate investors because it makes you give up your properties. And look, anyone who sold three years ago, is looking now it's like, oh, wait, my property's worth double what I got for it, if I just hung out for 36 months, you know, I'd have double the wealth. And so we follow a buy-and-hold long-term management stabilization, you know, refinance every five to 10-year kind of strategy. And so far, that's been working really well.   Sam Wilson  13:26 That's really, really interesting, what is the loan to value that you will typically take these properties back up to?   Dave Holman  13:31 75 to 80, it depends on what the bank is comfortable with, however, what we do is use some of those refinance proceeds to put a big fat sleep-at-night cushion, you know, in the checking account of each property. So, you know, we might have, let's say, 10 grand a unit just kind of socked away for the rainy day when we need it. So even though our cash flow has diminished, we're able to handle the bumps in the road that come along. And, you know, we have larger reserves that are not in the properties that we can loan to the properties, you know, as needed. But in general, you know, we want to keep our money productive, you know, in other areas, either reinvesting in other real estate is down payments, you know, stocks, crypto other assets, to diversify that, you know, can get some of that trapped equity out of your real estate because I was at a point, like one point I had 98% of my net worth in real estate, all in like one or two towns, and I was like, that's probably not what a financial adviser would recommend. Maybe I want to get that down to 80 or 90 or something. And, you know, it's a give and take.   Sam Wilson  14:31 Mm hmm. Yeah, absolutely. That's really, really intriguing. And it's and I'm always curious what, you know because people got trapped in 2008 taking too much money, you know, they reified the heck out of their properties all the way up until the bubble pop, and they're like, oh, no, now I got way too much leverage against this property.   Dave Holman  14:46 Right. And there were two risk factors there. One is working with a bank you don't know or trust, and only one bank. So we work with a diversity of banks, and they're all local. And there are people that you know, I know them. I might know some of their kids and families. You know, we're on a first-name basis with the banker. If you go to Wells Fargo, Bank of America, if you're not 100 million, you're nothing to them. I mean, they will foreclose on you in a heartbeat. Oh, sorry, Sam, your LTV got below the, you know, covenant in the mortgage, you didn't read the fine print, sorry, we're taking your property, even though you're making the payments. And that happened in ‘08, you know, banks took properties that were making their loan payments, and that happens in financial crises. So I think it's really key to work with banks that you're on the same page with and you have that conversation in advance and say, hey, if our value goes down below the purchase price, but we're still making loan payments, are you cool? Are we cool? You know, what do our covenants or documents say about that? That's really one of those finer points to think about. But in the financial crisis, there were a lot of people that were just their mortgage was sold and resold and packaged and repackaged, and they were way out, you know, in that paper trail, and you know, it doesn't matter to a bank or a financial institution to foreclose on someone that is just a tiny fraction of their portfolio. And they're like, oh, we need some liquidity. Let's start, you know, squeezing people. Right, you know, you either need to pay the difference or you were gonna foreclose, and that is unfortunate.   Sam Wilson  16:04 Wow, that's absolutely wild. Thanks for taking the time to explain that to us. One last question here before jumping to the Final Four. Tell me about heat pumps and refugees.    Dave Holman  16:13 Yeah, so we work a lot with refugees, immigrants, asylum seekers to this country, they're in homeless shelters, or right now, we've worked with a lot of Afghans on military bases, trying to find units for them to live in, you know, those people and particularly served our country, you know, from theirs, we want to give them a place to live. And we're not doing it as a charity venture, we're getting paid, you know, by government programs by local governments. And then pretty quickly, a lot of times, when these people get green cards, they're the hardest workers, you'll find, you know, they were earning $1 an hour in their country, if they can get 10 or 20 here, they've got two or three jobs right away. So that's been really rewarding, you know, on an emotional level, to just be able to physically create the American Dream for people, partner with them on that. And then heat pumps that is a great technology, especially in an area that has an extreme heating or cooling need. Those are just better than the old fossil fuel systems that we have in Maine, you know, Maine, we have the most oil-heat as a percentage in the country. It's dirty, it's expensive, it breaks, it's terrible. And it doesn't have any AC capability, or dehumidifying, or air filtering, and all the benefits that heat pumps bring. Plus, the landlord is often paying those systems, if it's centralized in a multi-unit building. I inherit a lot of buildings where I'm paying 6, 7, 10 grand a year for heat, if you put in a heat pump to each unit, it's on their own electric meter, that tenant if they want to 80 degrees in the winter, and their windows open, great, they can pay for it, it's on them. So that, you know dramatically increases your NOI in a lot of cases, because there was a lot of inefficiency being generated by these centralized heating systems that are old dinosaurs, and then when you know, oil goes up to $100 a barrel, you know, you're screwed, whereas if you're relying on the electric grid, that is a very big baseload of power, it's rarely going to have major price spikes, you know, and that kind of thing. And you can actually generate your own electricity with solar if you want to go an extra step beyond that.   Sam Wilson  17:58 That's really, really intriguing. I love it. Dave, thanks for taking the time to come on today. This was loads of fun. Let's jump here in the Final Four questions. What is one tool or resource you find you can't live without?   Dave Holman  18:08 Well, my phone but more specifically, I'll give you guys an app, you know, that I think is great. It's called Genius Scan. And for all the mail, the paper documents that come in, click of a button, you get a really crystal clear, you know, cropped image, color, or black and white from that piece of paper, eliminate shadows, you can PDF it you can put it in Google Drive, Dropbox, you know, anywhere you want. Great little app, you know, for just a mobile scanner, that's as good as any flat deck bed scanner around.   Sam Wilson  18:37 That is awesome. Yes, I love that technology, the ability to skip the scanner is really, really helpful. That's awesome. Question number two, what is one mistake you can help our listeners avoid and how would you avoid it   Dave Holman  18:49 In the skiing areas, we say don't get out over your skis, which means don't try to bite off more than you can chew or do a project that you're just wildly unqualified for unless you have a team around you that are all experts in doing this kind of project. But I would encourage people to you know, kind of in when you're starting out kind of live within your means, get some experience under your belt, get a property or two, take a year or two, to kind of learn things before you start getting ambitious and going for bigger deals.    Sam Wilson  19:17 Right? Love that when it comes to investing in the world. What's one thing you're doing right now to make the world a better place?   Dave Holman  19:22 Well, we mentioned refugees, we mentioned heat pumps, you know, we're striving hard to you know, make our communities better. We're engaging a lot with local organizations as well. So an example I'll give, we're gonna paint a mural on the side of one of our buildings where the paints kind of flaking off its brick on the side street, and we're gonna make this huge 90-foot-long, 30-foot-high mural for the town to enjoy there.   Sam Wilson  19:43 That's cool. I love stuff like that, David, if our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Dave Holman  19:49 Yeah, they should just give me a shout: 2075175700. It's my personal cell phone. Nobody ever calls so you should try it. We got a website at Holmanhomes.com. Our property management group as well, Katahdin Property Management, if you own property in Maine. Happy to help.   Sam Wilson  20:05 Awesome, and we'll make sure we put links to those in the show notes as well. Dave, thank you so much for your time. I do appreciate it.   Dave Holman  20:11 Thank you. Thanks for having me. Take care.    Sam Wilson  20:12 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Why should you hire a virtual assistant (VA)? Charlie Wessel realized that he could spend more time raising capital if he lets go of the tasks in his business that he is really not interested in. This is a reason he hired virtual assistants and it is why you should do the same.  Imagine not worrying about what to post on your social media channels because you have someone who will do it for you or being confident you can reach out to your networks consistently because you have someone writing emails to them. Charlie will share some tips on how to pick the right VA for your business so you can focus more on the things that really matter to you.    [00:01 - 03:16] Opening Segment Investing in residential real estate was a “nightmare” for Charlie Wessel He tells us why Charlie talks about his reasons for jumping to multifamily [03:17 - 08:42] Why Hire Virtual Assistants A not-so-cheap investment that can scale your business Beware of gurus out there who might not be of value to you Here's how to spot them according to Charlie Charlie tells us the importance of hiring virtual assistants (VAs) How to hire the right VAs [08:43 - 15:16] Why Attend Conferences How Charlie finds his deals and what kind of deals he's investing in Should you attend real estate conferences? Charlie weighs in Charlie says he's interested in self-storage and here's why [15:17 - 18:40] Closing Segment A tool or resource you can't live without ActiveCampaign A real estate mistake you want our listeners to avoid Not measuring buildings while looking from a flex space You should always measure the buildings Your way to make the world a better place Giving to charities Reach out to Charlie See links below  Final words Tweetable Quotes “You got to get out, meet people…your network is your net worth and vice versa.” - Charlie Wessel “You really got to bet on the jockey, not the horse…that's why I really only focus on doing deals with guys that have a really good track record, a really good work ethic…” - Charlie Wessel “The easiest, smartest, safest way to [build real wealth] is through multifamily real estate.” - Charlie Wessel -----------------------------------------------------------------------------   Email info@cordellcapital.com to connect with Charlie or follow him on LinkedIn. Check out Cordell Capital to start investing in multifamily! Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below:       Charlie Wessel  00:00 I do see a lot of good opportunities in boat and RV storage, kind of like what you were talking about what we've been talking about, you know, I don't know a lot of self-storage sponsors, but you know that game has always killed it. That's always been a really good bet. I am more in the multifamily just out of default cap rates are just crazy compressed right now. So you really got to bet on the jockey, not the horse.   Intro  00:27 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:38 Charlie Wessels started in commercial real estate in 2017. He is now a member of the general partnership on four deals in 486 doors. His primary focus right now is raising capital from accredited investors. Charlie's been married for 20 years has three kids and I had the pleasure actually meeting you, Charlie, I think at the Intelligent Investors Conference here just a few weeks ago in Los Angeles. So Charlie, welcome to the show.    Charlie Wessel  01:02 Yeah, thanks, man. Yeah, the first time we met, we had breakfast together. We just kind of were standing there like two last puppies. And we're like, Hey, you wanna have breakfast together? Yeah, dude, let's do it.   Sam Wilson  01:10 Let's do it, man. Hey, I love it. Every guest who comes on the show, I ask the same three questions in 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?   Charlie Wessel  01:18 I started in residential real estate had several rental houses, nightmare, complete nightmare. And then we moved into commercial real estate from advice from a real estate broker, a buddy of mine, I was in general contracting. And all I work for was the commercial real estate brokers, we did commercial construction. And he told me to build real wealth, you got to get into commercial, and the easiest, smartest, safest way to do it was in multifamily real estate.   Sam Wilson  01:46 Man, that's brilliant. And that's a good broker to give you those tips because I to cover a background in the trades. And you know, we did lots and lots of large-scale commercial construction projects. And I don't know what the disconnect there is right between the guys doing the work because we ran a flooring operation. We had 30 some odd guys doing millions of dollars a year in projects, but I never had that thought when I owned that company. Why don't I go buy the building and run the project myself instead of just being a contractor? So what was that transition? Like for you running a probably a successful commercial contracting company and then getting into multifamily?   Charlie Wessel  02:22 Yeah, it was a big firm, I actually sold it in 2016. All the guys that we work for, yeah, they were brokers that turned us on to them. But all the people that cut my checks, own the bills, Right. So they were tinted outfits. And I mean, these guys had they lived on Daniel Island or Sullivan's Island, or somewhere around here in Charleston, where there's big ass houses that are worth a lot of money. And they just, you know, they kind of float on their own beat, man. And yeah, I want to be like those guys. So anyways, yeah, that's kind of what got me started was seeing all these people that were writing the big checks to us,   Sam Wilson  02:58 Right. Yeah, I think that's really interesting. It's a point that I make, you know, more often than not, which is if you have an industry, or maybe it's not real estate, but want to get anything you want. Go find somebody 20 years further along in the business than you see what their life looks like and see if that's where you want to be in 20 years. If the picture that they present isn't the life you want to lead, don't go do what they want what they're doing.   Charlie Wessel  03:17 Absolutely, man, that's kind of why we got caught up. Why was that I rec was the conference was because of we're raised masters, and there's just so many guys there that have done hundreds and hundreds of millions of dollars worth of real estate that are actually in that program. You look at them, and you're like, Why? Why are you in here? You know, you raise $60 million last year, why would you be in here, Right. And, you know, they're like, man, we can always sharpen the game. Let's sharpen the sword and get out there. And you know, we get around people that have proven their methods. And it's like the Ray Kroc theory, man, don't reinvent the wheel brother. You know, he started McDonald's said, hey, look, if you want to own McDonald's, you do it this way. Right. And you'll be successful. I promise. So yeah, we just follow the lead of successful people.    Sam Wilson  04:00 Man, is that one of the ways you know, that you've found, you know, the way to, I guess scale your portfolio is by just surrounding yourself with like, people?   Charlie Wessel  04:07 Yeah, absolutely. You know, we talked about it. It's not a cheap investment, but it pays itself off quite handsomely. And then just from surrounding yourself with the people, you know, deal opportunities, capital opportunities that come in to your deals. It's yeah, you got to pay to play man.   Sam Wilson  04:24 That's really interesting. How did you select, you know, the programs that you are a part of? I mean, there's so much out there and a lot of it, I'll just say it is garbage. So yes, you know, and I hate to say that, you know, publicly here on the show, but it is there's so much the people I call go route or guru, but no do you know they're gonna sell you a course but they can't raise $1 in their life.   Charlie Wessel  04:45 Right. And I went to their conferences. Yeah. So I went through their conferences, you know, and sat through their programs. And, you know, I do a lot of research on people, man. I mean, I can Facebook and LinkedIn stalk somebody in a heartbeat man, and really find out what the They have what they don't have what they say they have. And, you know, I started off going to one guy's conference who's a guru who really didn't. He had like two deals. And I mean, within the first year, I was where he was, and he had a slew of, you know, quote, unquote, guys, he was training to do what he does, which I guess after a couple of deals, I mean, you know, every deal is different. And it's kind of the same, you know, mindset and, you know, underwriting and stuff like that. But still, I want to be under somebody who knows what they're doing. I picked 100 Thompson's course, man, just because I listened to his podcast for a couple of years. And his podcast is just brilliant. I mean, it really is. It's like your podcasts. It's no-nonsense. It's to the point. And it's information. You know, I want information I want meat and potatoes, man.   Sam Wilson  05:47 For sure. Tell me about a mistake, you know, that you've made here in the last four years or so maybe, maybe not even a mistake, but something you could have done differently that would have expedited your progress.   Charlie Wessel  05:57 Hired a VA sooner? Hmm, yeah, I hired a virtual assistant sooner. I mean, I was doing stuff that I shouldn't be doing. You know, I mean, stuff that is not, you know, it's not worth my time to do social media marketing. I mean, I'm, I post on social media every day, and I'll post it on Instagram every day for two years, man, I just got Instagram on my phone, like, a couple months ago, I don't even know how, you know, like, I have to type my VA responses, because I don't know how to respond on Instagram. So that's how, you know, she does that we still get investors from it. And, you know, that's just one of my little dirty secrets, I guess is I don't really do the social media stuff.   Sam Wilson  06:36 And that's okay. I think that's a common question, you know, that I see batted around on social media is, hey, you know, should Is it okay, if somebody else posts for me, things like that, I think as long as the content is informational, and is you know, sharing something of value for other people. A, okay to have somebody else post for you. You know, absolutely.   Charlie Wessel  06:55 I mean, I approve everything that gets put out there before it goes, is that like she just blindly throwing stuff out? But you know, I'll go in and edit it or something like that. She puts it all and dumps it all in a folder. And then I check it out and sticking it on prove folder, and then she uses it. So wow,   Sam Wilson  07:11 hey, that's cool. How did you hire let's talk about hiring a VA. There's so many resources out there. Now. There are virtual assistants or I guess the new politically correct term is virtual professional, whatever you want to call it. But there's so many different platforms that you can select from and or just go out and do a direct-hire on your own. What was your…   Charlie Wessel  07:30 Yeah, for sure. I'm not a very PC dude. And I haven't heard that term yet. So I'll have to run that by Mafi today and see what she prefers to be called, I guess. Yeah, but yeah, we use rocket station. I mean, they kind of put the whole thing together. When I hired a VA, I didn't even really know what I was gonna have to do. I just knew that I needed one because all the big boys had one and I want the big boys have so we rocket station, they lined it all up, you know, getting interviewed me for about 45 minutes or so and found out what my day looks like what I do. And they were like, yeah, we can fill this VA up with stuff to do.   Sam Wilson  08:06 Wow, that's really cool. Now that you have that time freed up, what do you focus on   Charlie Wessel  08:10 raising capital? Man? You know, I've played golf twice a week with several investors. And you know, my wife always says it's gotta be tough being Charlie Wessel. I'm like, Yeah, I'm a bad, darling. But yeah, you know, I'm here in my office every other day. And we have making phone calls. I have about four phone calls lined up today, you know, trying to put some deals together. Like, you know, we were talking about some deals. I got a call with that guy later this week. And hopefully we can get together on that. Yeah, man, just, you know, trying to make some coin out there, man.   Sam Wilson  08:43 How are you finding deals right now? I mean, it's a crazy environment to be in. You're based in Charleston, South Carolina, which I mean, if you're in the Carolinas, the southeast anywhere, like it's people are duking it out for multifamily deals and cap rates just keep compressing, what are some strategies that you're using to find opportunity?   Charlie Wessel  09:03 Well, I'll be honest with you, man, we're more on the capital raising side of it. So I have teamed up with several really good sponsors, and we come in as the capital arm and bring money into their deals, and we get part of the GP and we usually do, you know, the investor relations part of it. So we'll send out you know, investor emails and stuff like that. And, you know, we still I still traveled all the properties that we bring our investors to just from a fiduciary responsibility for our investors capital, you know, I mean, we still do our own due diligence and underwrite each property ourselves. But these guys that I work with, man, they're pretty Stand Up Guys, and they have a pretty good track record.   Sam Wilson  09:46 That's really fascinating. What did you I mean, obviously, bringing capital to table is one thing taking the investor relations off of their plate is another. How did that conversation you know, evolve because you go in, you're like, Hey, my name is Charlie Wessel. I'm new. To multifamily, and I want to work with you, they're gonna go Okay, Charlie, tell me actually what happened.   Charlie Wessel  10:05 Hey, man, you know, you don't know what you don't know and you don't you know, I didn't do it until I did it. So it was kind of one of those things man where I just met some people at a conference and they had like 12 or 13 properties. And I was like, yep, these are the guys I want to get around because they know what they're doing. You know, I don't hang out with many people that have done one or two deals, we make sure that these guys, we vet these guys really well. And you know, I just met him at a conference, I've met every single one of them at a conference actually, that I work with. One of them was at a meetup group here in Charleston, that happens on Friday mornings at like, 6am. And we all break bread and have coffee and talk about it. And yeah, I met lawyer and developer down here in Charleston, and we have a deal in Greensboro that is just killing, I mean, killing it. So yeah, it's just all about making, you know, good relationships out there with the right people.   Sam Wilson  10:57 You know, that's interesting. And I found the value and like, we were talking about this, before we kick this off, was the value in conferences. You know, when I first started out, I think I've really found the value in the content being presented. Now, I don't go to conferences necessarily to sit and listen, you know, whatever is being talked about on stage, I go to stand in the hallway and talk to people like you. And it sounds like that's kind of your take on the matter as well. Yeah.   Charlie Wessel  11:20 100 sent out a survey and said, what was the best session of his conference that I thought that I had, because there was a lot of sessions there. And it was a lot of really good information. And I did sit through most of them. But the best sessions I had were out in the hallways and at breakfast with Sam Wilson. I mean, you know, I'll be honest with you, Sam, I mean, I plan on knowing you for a long time to come in. Right. And you know, if we can do some deals together, that'd be great. You know, if not, we can go hunting and go shoot animals again. Or something, man, I don't know.   Sam Wilson  11:49 Sounds like a winner. Man. That's fantastic. Yeah, I love that. What are some hints or clues you would give to people? Maybe if they haven't yet begun attending larger conferences? Somebody goes to one of these? What's the best way to maximize your time?   Charlie Wessel  12:03 I would say a roomful of big people, man, you know, I can freeze up pretty quick. One on one with somebody I can talk like nobody's business. But you know, around a bunch of people, I don't know, I can stand in a corner real quick and just look around at people. Right. But you got to get out there and shake some hands, man. I mean, you know, I was amazed at the first two conferences I went to, I found myself standing in the corner looking at everybody, I don't know. And I just, you know, just started walking up and talking to people. And it was a whole lot easier than I thought. I mean, being a contractor, you know, most of time we're kind of introverted, right. So yeah, you got to get out meet people, man. I mean, your net worth is your network, and vice versa. So…   Sam Wilson  12:45 Yeah, and I think the other interesting thing is that, in general, I'm totally an introvert. And so I have to really focus and say, All right, when I walk up to meet you, we're both standing in line. They're like, hey, this guy's looking for a manual, say don't eat breakfast. Yeah, let's do Yeah. Okay, cool. That is not my natural go to right when you get invited either, man, Right. But when you get in conference mode, it's like, Hey, wait, you just got to remember that everybody else probably wants to hang out and talk to people too. So you might as well just go up, shake hands. Hey, I'm saying I'm nice to meet you. And yeah, and just start asking questions.    Charlie Wessel  13:15 See, it's easy to do after the conference when the drink start flowing. But before at breakfast, man, I really don't you know, I'm not looking to socialize.   Sam Wilson  13:25 Well, sorry, I ruined that breakfast for you. No, no, no, it was great. Let's talk a little bit about what you see happening here in 2022. I know you guys are focused predominantly on multifamily. Are there other asset classes that you're interested in? What do you see the next I guess what's left in this year? 10 and a half months remaining for 20.2?   Charlie Wessel  13:43 Yeah, I mean, me living by the coast, I do see a lot of good opportunities in boat and RV storage, kind of like what you were talking about what we've been talking about, you know, I don't know a lot of self storage sponsors. But you know, that game has always killed it, that's always been a really good bet. I am more in the multifamily just out of default, cap rates are just crazy, compressed right now. So you really got to bet on the jockey, not the horse. You know, these guys. That's why, you know, I really only focus on doing deals with guys that have a really good track record, a really good work ethic, and they put their nose to the grindstone every day, and they're really focused on making sure the business plan is followed on these properties. And you know, when you have to pivot, you got to pivot. But, you know, for the most part, we've done really well.   Sam Wilson  14:34 Right, I love your points there, of betting on the jockey, not the horse, because that is certainly the name of the game right now. And that's the first thing I always tell people to focus on. Like if you're looking at a deal passively. You got to look at first and foremost, who is the sponsor? Absolutely. Then you look at the market and then you look at the very last thing you should care about is the actual deal itself. So yeah, and I think the same thing holds true on when you're our Investor Relations and being part of the GP but also him The capital raising side is that you got to align yourself with the right people first and then the rest will fall in place.   Charlie Wessel  15:05 100% man because you know, I can lose my money. I can't lose your mind.   Sam Wilson  15:09 Right. Yeah, that's absolutely true. I will take risks with my own capital that I will not take with investors' capital. Absolutely. Yeah. I mean, I love that chart. Let us jump here in the Final Four questions. First one is this what is one tool in digital thing software that you find you can't live without?    Charlie Wessel  15:25 Active Campaign.    Sam Wilson  15:26 Ah, that's an interesting one. Did you figure that out on a pretty robust program? Have you figured that out on your own?    Sam Wilson  15:32 No, that's why God made a VA. I love it. Okay. Very good. Active Campaign. Yeah, that's a good and very again, robust program. Love some ActiveCampaign. Question number two, what is one mistake you could help our listeners avoid? And then how would you avoid it?   Charlie Wessel  15:46 Measure the building? If you're looking at a flex space? Yeah, we got deep into a project, you know, had probably $7,000 and due diligence caught up on a flex space here in the Charleston area. And we never measured the building man. For some reason. It was so stupid. So something so small is taking out your measuring wheel and measuring it. It was 30% less square foot than was advertised. So no wonder it penciled out like a champ. Because I mean, you live and die by square footage and flex space.    Sam Wilson  16:14 Wow. Was that from an assessor's office problem where it was just incorrectly measured there? Or was the broker incompetent?   Charlie Wessel  16:22 Yeah, no, it was a little self-entitled broker that just don't like to work very much. Wow. Never heard you say I bought a measuring wheel that day, went to the Hallmark store, bought a bow slapped it on the damn thing and dropped it off at his office.   Sam Wilson  16:40 That's an expensive measuring wheel.   Charlie Wessel  16:42 I mean, very expensive measuring wheel.    Sam Wilson  16:44 Yeah, I hope it had a gold handle or something for 7000 bucks. Man. That's a great lesson to learn. Thank you for sharing that. I've not heard that. You hear all sorts of stories with that question. That's a painful one. So think…   Charlie Wessel  16:55 Yeah, square foot doesn't really matter that much in multifamily. But in flex space, or office or something like that. I mean, that's what the rent goes by.   Sam Wilson  17:02 Right. Yeah. 100%. That's tremendous. Thanks for sharing that question number three for you. When it comes to investing in the world. What's one thing you're doing right now to make the world a better place?   Charlie Wessel  17:10 I tell you what, man, we give to a couple of different charities here. One is the low country pregnancy center. It's a Christian-based organization that helps, you know, newly found pregnant women in a bind, and they go in and help them out quite a bit. We give them quite a bit of money every month, I really firmly believe in what they do. You know, they've saved 1000s of babies here in the Tri-County area. Another one is the Fellowship of Christian Athletes. I played football in high school. We give them money as well.   Sam Wilson  17:41 That's really cool. Yeah, both of those are tremendous resources. Thanks for doing that. Charlie. If our listeners want to get in touch with you or learn more about you what is the best way to do that?   Charlie Wessel  17:49 You can go to Cordell Capital and sign up our investor club list and in the top right-hand corner of the website, and we can meet that way. Or you can send us an email info at Cordellcapital.com.   Sam Wilson  18:04 All right, we'll make sure to put that in the show notes. And just for those of you who are listening that is Cordell, C-O-R-D-E-L-L, capital dotcom. Charlie, thank you for your time today. I certainly appreciate it.   Charlie Wessel  18:14 Thank you, Sam.   Sam Wilson  18:15 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Will you trust subprime borrowers?   From Blake Selby's experience mixed with proper risk management, it is possible! Blake is the Owner of Selby Rentals, which has serviced the greater Quad Cities Area and has since expanded to 11 states and takes on complicated transactions and creative financing arrangements, allowing them to carve a unique niche in the market.   He discusses how offering lower cost loans becomes advantageous by shifting the focus towards the asset–it is less about the borrowers and more about the asset itself. Low LTV is key as it becomes possible to work towards offsetting the risk. Blake also shares the reality in the private lending space on fees and the way his company creatively solves problems considering state laws.   [00:01 - 04:43] Opening Segment   Blake Selby shares how he started from owning a gym to getting into real estate How he managed high asset value and wiped off all the bank loans   [04:44 - 10:48] Becoming an Asset Lender Blake's experience in growing the team and vetting borrowers Why Blake didn't opt the usual route of starting with bringing in an outside fund The rationale behind considering subprime lenders and offsetting the risk   [10:49 - 16:38] High Loan-to-Value is King The realities of the private lending space on hidden fees and appraisal Creatively solving debt problems - low LTV is key Beware of online private money - vet that title, company, and attorney   [16:39 - 18:56] Closing Segment   A tool or resource you can't live without Google Drive A real estate mistake you want our listeners to avoid Don't trust of low renovation estimates and high ARVs Your way to make the world a better place Helping downtrodden areas Reach out to Terry See links below  Final words Tweetable Quotes   “Sometimes, you'll find somebody who is asset rich, cash poor, and credit poor. So I can pull off of those assets, without the borrower ever having to come up with any money themselves, to help them purchase another asset… Sometimes it is maybe they'll make enough money off of that to solve their problems. ” - Blake Selby   “We can actually make some money off of extensions, which is a whole lot better than finding a new client, you know. Your existing customer is a lot easier to make money off of than a new customer, which has an acquisition cost and wasting my office employees' time.” - Blake Selby -----------------------------------------------------------------------------   Email selbyrentals@gmail.com to connect with Blake or follow him on LinkedIn. Visit Selby Rentals and look into the creative financing opportunities. Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Blake Selby  00:00 I'm not one to criticize anyone else's business plan, just probably people a lot smarter than I am. See things that I don't see. So I just look at the raw details of what's in front of me. And I say, “Does this make sense for me to lend on?” “Do I feel safe and comfy?”. And if I do, and if it's a good enough return, that's always variable by every deal is different. But if the returns are good relative to the comfort level, then I'll usually just greenlight it.   Intro  00:23 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:35 Blake Selby of SelbyRentals.com is a private investor that likes to explore the many revenues of real estate. One of the fun interesting facts about Blake is that he actually got into real estate from owning a gym. But you know, that's not what we're here to talk about today. Either way, Blake, welcome to the show.   Blake Selby  00:51 Thank you for having me. I appreciate it.   Sam Wilson  00:53 Hey, man, that's a hoot. You know, how did you go from, I got three questions. I always ask everybody, but I am, I do want to talk about it. How did you go from owning a gym to being and investor in real estate?   Blake Selby  01:03 The quick 30-second version is owned a gym, had it for three years, turned it around, sold it to a chain, use some of that money to parlay into owning over 300 rental units, and then sold about two thirds of those large profit, enough to be able to start a private lending operation and still own the other things I had outright and pay off all my debt. So that's the, essentially, how we got to this point. So you know, now we've got a, just our assets in the company are about 10 million, and then other our debt is about 100,000. So that gives you an idea where we're at.   Sam Wilson  01:37 Gotcha, man, that's absolutely fantastic. And I think you've hit the three questions. I asked everybody who comes on the show, which is where do you start? Where are you now? And how did you get there? And I think you win the award for the most succinct way of unpacking all that information in, so, well done. Hey, I'm looking forward to jumping in today. So you guys, you own the rentals, you have 300 of them, which is a lot of single family rentals to own. And what prompted you to sell those off?   Blake Selby  02:00 We were blessed with buying into an inclining market. And so when we picked a lot of these up, in ‘15, ‘16, ‘17, when it came time for 2019, 2020, we had already appreciated so much. And a lot of these, we got sold just before the pandemic and a little bit into it, which in my opinion, was a great time to sell, especially for the types of assets we were selling. We weren't in the $500,000 home spaces or anything like that we were in the lower end rental. So for us, the appreciation from COVID didn't really happen with that lower range as much. So we definitely sold it at the right time, I feel.   Sam Wilson  02:35 Man, that's fantastic. And then you said “Hey, why not go into the private money lending business?” I mean, that's kind of a next logical step. Maybe, I don't know, how did you get involved in that?   Blake Selby  02:44 I had been doing some lending concurrently with the rentals along the side. But it was a very small part of the business, less than 10%, until 2020, when it became about 80% of the business. And now it's almost exclusively, you know, what we do. So it's been a great path forward, it's obviously less management intensive. You know, I basically, it's sort of a binary option, I'm either paid or I'm not. So, but there's only two outcomes that happen. And then of course, we may have to do dispositions if we don't get paid, but that's pretty rare, so.   Sam Wilson  03:16 Right, that's tremendous. Break those numbers down for me use the numbers 10 million in equity a hundred thousand  in debt, what does that mean?   Blake Selby  03:22 So we've got a combination of real estate assets we own, obviously, our own private mortgages that we generated, and then also some mortgages that we finance some of the homes to folks. And so when you combine all that, together, we've got a couple of smaller sister companies that we own, and all of that together is about 10 million in just overall asset value, the company value would obviously be higher, but the asset value is there. And then we just have a little baby $100,000 loan on our office building, where we run our office out of, and that's our only debt. So we paid off all the bank loans. We have no investors, no bank loans, you know, we don't have any private loans, all of its wiped, we're just 100% you know, and so it's just myself as the owner of the company 100%. And then I've got 10 full time employees, five, which work in the office, and then five VAs, so they each go pretty much 40 hours a week.   Sam Wilson  04:13 That's a light team and Dave Ramsey would be proud of you on the debt free except for $100,000 loan, which I'm just really curious. I mean, it seems like at that point it'd be more of a nuisance than just writing the check and be done with it.   Blake Selby  04:28 It's just like, it's 3%, you know, and so yeah, we just have, we're gonna just wait till it, you know, balloons in five more years or something, and then we'll just pay it off then. But we just have it's already set up on, you know, to be paid every month. So we just didn't, didn't bother with it. Sam Wilson  04:41 Right, the $800 a month it cost does not matter. That's really intriguing. Absolutely love that. I mean, one, that you have a light team. Two, I mean, in this day and age, like everyone preaches that against real estate, and you're kind of the opposite on your business side. And yet the very thing you're doing on the other end of the spectrum is leveraging that against real estate for your borrowers. So talk to us about that experience, you know, starting that out, but then really growing the team around that. And then especially as it comes to vetting your borrowers as to making sure you're making sound investments, because you're the 100% of the company, you're the one that's going to lose.   Blake Selby  05:17 I would say, we're an asset lender is the best description of what we do. So the borrowers, while we love our borrowers, we really don't look at the borrowers that hard when we look at a deal, we're looking more at the asset itself, which is very helpful for some flippers, landlords, and especially when they've got deals that are in a weird price range. Like let's say, under $50,000, right, let's say they've got a deal, their banks really don't want to mess with it. And the fees that are associated with private lenders, and banks often, and hard money lenders, with under 50 grand can be excessive, you know, high percentages. So, we do zero upfront fees on any of our loans and then we do no monthly payments. And so, with those two things being there kind of makes us a unicorn and we're also a little lower LTV. So where a bank might be 75% LTV, we're closer to 50%. Because again, we're not running credit, we're not looking at the borrower, if they can repay us. We assume, you know, from the jump that we're not going to get repaid from the start. And then we work backwards from there. So we just start worst case scenario. And often we're pleasantly surprised, but we have to kind of look at the downside first and then go backwards, so.   Sam Wilson  06:25 Yeah, that's really intriguing. Well, not only is it a weird price range, which you're adding up here, right, because this is your business. But I mean, I've been there and we first started out and that especially here in the Memphis market, you could find houses for under 50 grand, which is just impossible to finance.   Blake Selby  06:39 We do higher prices, too. We just that's just one example of kind of an area where we find a lot of success, you know, under the 50,000. Certainly under, I would say, 80% of our loans are probably under 200,000, to give you an idea.   Sam Wilson  06:50 Are you lending just in the Iowa, Davenport, Iowa, area. Are you nationwide? Where are you?   Blake Selby  06:56 I would say we're nationwide, but we're not in every state yet. I'd like to be. So we're probably in about 12, 13 states right now and pushing out more and more as time goes on.   Sam Wilson  07:05   Right. And you said you have no outside private lenders who are funding the loans you're writing. That's a common business model in the lending space where, especially for a private money lender, like yourself to bring in outside capital, build a fund and then lend from that fund? Why have you chosen not to go that route and does that cap your potential, you know, how many loans you guys can do?   Blake Selby  07:26 So what I thought about, you know, when I started this is basically to focus on the core business, which is that and if half of my team is dedicated to sourcing outside money, that's half of my team that I don't have, you know, sourcing the, I guess, the deals to use our money on. And so, you know, with that being said, I like keeping everything streamlined, keeping everything in house, I'm not beholden to anyone else as far as their terms, and I'll finance some deals that I know no one else would ever touch. So that's kind of helpful, and they wouldn't touch them, because they don't understand them. It's not because they're bad deals are actually fantastic deals. For example, someone who has a 400 credit score, right? I might finance that person, right? Whereas somebody else would say, oh, my gosh, I'm not touching this person with a 10 foot pole, they could be in a bankruptcy, and I might still finance them. So these are all things to, you know, to consider. So we're okay with borrowers that are very, very, you know, sub prime, I would say.   Sam Wilson  08:18 Yeah, that's really intriguing. And I guess you're offsetting that risk by, you know, keeping your LTV very low. Let me ask you this, if you have a borrower with a 400 credit score, it's unlikely that they're sitting on a pile of cash, where they can turn around and say, “Oh, okay, well, I'm giving the owner 70%, you know, 70%, of what the house is worth.” And so they got to find the other 20%. How do those two work together?   Blake Selby  08:39 So what ends up happening is you do actually find that some people that are cash heavy are credit poor, which is shocking. I never would have thought that it's like how can those two things exist simultaneously. And usually, it's just a timing issue, where they've gotten maybe a settlement or an inheritance or some kind of a huge chunk of cash. But then again, they don't have the credit built up, or sometimes in some cases, no credit at all. Also, sometimes you'll find somebody who is asset rich, cash poor, and credit poor. So I can pool off of those assets, without the borrower ever having to come up with any money themselves, to help them purchase another asset, if that's what they're looking to do if they find some, you know, I don't, you know, judge anybody's business plans. I mean, if they think that, if they're in that pickle, if they think that buying another asset is the way to go, you know, sometimes it is. Maybe they'll make enough money off of that to solve their problems. I'm not one to criticize anyone else's business plan, there's probably people a lot smarter than I am. See things that I don't see. So I just look at the raw details of what's in front of me. And I say, “Does this make sense for me to lend on?” “Do I feel safe and comfy?”. And if I do, and if it's a good enough return, that's always variable by every deal is different. But if the returns are good relative to the comfort level, then I'll usually just greenlight it.   Sam Wilson  09:54 Wow, that's really, really intriguing talk to me. You guys said you're also doing something unique in doing seller finance deals where you're just selling to an end buyer. Was that right? Did I misshear you?   Blake Selby  10:04 Yes, so we still do acquisitions. That's not the biggest part of our business. But we'll basically acquire properties with the sole goal of doing dispositions as soon as we get it. So if we end up buying a property for, let's say, 30 cents on the dollar, we're going to quickly then try to offload it for 90 cents of the dollar, just to get that spread in between. And sometimes if somebody's got a down payment that's decent sized, you know, 20, 30 cents, well, then all of my risk is gone, because I've recouped my capital. So why wouldn't I just hold the note? And then I can avoid paying the capital gains taxes, you know, all at once. And so that can be very helpful for us on from a tax liability standpoint.   Sam Wilson  10:42 Right, yeah, absolutely. If you can get an infinite return on an investment, why not, or close to it, that makes all the sense in the world, that's really intriguing. What have been some things that you've learned in this business that were surprising, I guess, that you really didn't expect out of the gate?   Blake Selby  10:55 I was shocked at how many lenders charge upfront junk fees, I couldn't believe it. And also, I was surprised how many lenders require monthly payments, even for short term mortgages, which is an overhead. So to a flipper, that's a nightmare, because they're having to come out of pocket for repairs and monthly fees. So we've kind of become a flipper's dream, where they come to us, they put you know, only the cash up toward the purchase, or if they have some collateral, they can just do that instead. And then basically, from there on out, they don't owe us a dime until the thing sells, or they refinance us out, which is pretty fun.   Sam Wilson  11:28 Yeah, ‘cuz we're seeing a lot of times in the private lender space, you know, 2 and 10, or 4 and 12, we're seeing a lot of you know, and I'm out of that game. But when I was in the single family flipping space, I mean, those were not uncommon fees. So how are you making money on this, if you're not charging those types of fees?   Blake Selby  11:46 Right, so we don't, we don't even charge points, which is pretty wild. So it's a very cut and dry, what I do is I look at a flat amount. So we don't do percentages or anything like that. If I'm loaning, let's say, $50,000, I'm gonna say, you know, 50,000 bucks, you know, you can have it for a year, pay, you know, pay us back and, you know, nine months a year, let's just say it's a year in this example, maybe I make 10 grand, but that's all I make. I mean, it's a flat 10. You know, never anything else that goes along with it. There's no hidden fees, no appraisals, no nothing. So it's basically you know exactly what I'm making on day one. And you know, that on the 50. I'm loaning out 50, 60's coming back, and it's the easiest paperwork imaginable, so. Sam Wilson  12:26 That really is. I mean, so you set flat fees up front, I'm certain, I would imagine, you have contingencies in there for the duration of the loan, you can't...for 10 years.   Blake Selby  12:35 No, it's usually we, our two most popular loan periods are one year and six months. So you can see that we generally attract flippers, and you know a lot more, because that's usually their time windows. Sometimes we'll build one in where it's like an option at six months, and then they get an option at a year, just depending on how long they think they're gonna go for, but it'll be cheaper, the less the length is run that flat fee down.   Sam Wilson  12:56 Right. And that makes sense. I mean, there was a boat and RV storage facility we just sold last week, where we brought in some private money to fill in the gap between the first and because I didn't want any money on my own in the deal. And there was a minimum payment due on it, which is fine. I mean, it was like, hey, we're gonna loan this and no matter what I pay it back, if it's within the first 36 months, this is what you owe, and which was great. So it sounds like similar thing to what you guys are doing right there. Is that a way of getting around? Because I've seen this, you know, as much as I hate it, because the state will charge you 18% interest on our state tax that's due. And then they say that you can't charge more than like eight point, I think in Tennessee, the maximum interest rate you can charge on a loan is 8.75%. Right? So the state set these rates, is that a way by defining $1 amount and not the interest rate, you get around kind of those state laws that define maximum interest rates?   Blake Selby  13:44 You can and there's actually some great ways to get around owner occupied with the Dodd Frank, you know, deals as well. And those are, that's kind of some things that we figured out along the way, you don't necessarily have to do a loan, you don't necessarily have to do a mortgage, you can do a purchase with an OP, you know, basically give them a first right, you know, that's another way to go about it too. So I can just go and purchase the property and then give them a first right of refusal, which are two separate transactions. So it sort of behaves potentially, you know, like one but again, that purchase to that option to purchase is optional. It's not debt, right. So there's no debt instrument if it's, you know, you can't secure something that's optional, right? Sam Wilson  14:21 Yeah, that's really intriguing. That was something I always wondered about, I would see these money lenders playing in what I would probably say some gray space, which we were all happy borrowing money, and they're all happy lending it no one right wheel, but it was, you know, there were rates that were far above that you're like, right, you know, do whatever it works for me. So I'm gonna keep quiet. But that's really interesting. I always wondered about that, like, “How's their what are some ways to creatively solve this problem on the lender front?” That's really, really intriguing. And you said you guys don't really have a whole lot of take backs right now. Is there ever any fear of that with a correction or anything else?   Blake Selby 14:55 So the way that, because we're so low LTV, I think that inherently just prevents a lot. Because nobody's gonna let us have, you know, the property for that amount of money, we would let them sell it, you know, obviously before that happened. And also another reason we don't have as many take backs is because if things are working, oftentimes if somebody needs more time, I'll say, “Hey, you know, this is what I'll charge you for an extension,” you know, so we can actually make some money off of extensions, which is a whole lot better than finding a new client, you know, your existing customer's a lot easier to make money off of than a new customer, which has an acquisition cost and wasting my office employees time and you know, this and that. So, you know, we try not to, and again, we're not in the business of holding property, so we would end up selling it anyways, so.   Sam Wilson  15:38 Yeah, absolutely. Makes sense. Blake, is there anything else? Or what are, let me ask this question a different way, what are some things I should have asked you that I hadn't that you'd like to share with our listeners?   Blake Selby  15:46 That's a great question. I would say just be very careful, especially with like, online private money, that whether it's hard money or private lenders, because there are so many people who say that they're a direct lender, but they're really not a direct lender. They're actually just daisy chaining, you know, loans. And then also, they're gonna charge you upfront fee. So never pay an upfront fee, unless it's to an attorney, or a title company. Never send a wire to an individual and you better vet that title, company and attorney, make sure they're a real person, look them up, make sure they've got reviews, make sure they've got a good web presence. If they don't, you should be very concerned.   Sam Wilson  16:21 Oh, yeah, absolutely. That's interesting you say that, because I go back to the days of starting out and scrambling for capital. And yeah, I just saw so much of that. I'm like this is all suspect. This is all absolutely suspects. You bring up some great points there that maybe if you're just starting out in this space that you really should be paying attention to and looking out for. Blake, thank you for your time today. Let's jump here into the final four questions. First one is this - what is one digital tool or resource you find you can't live without?   Blake Selby 16:46 Google Drive is just fantasti for us. We love it. We are a cloud based company. We're on Drive exclusively, we pay extra for the extra services that it offers. So we just can't say enough about the Google and the drive products.   Sam Wilson  17:00 Right, man, that's absolutely fantastic. What is one mistake you could help our listeners avoid? And how would you avoid it?   Blake Selby  17:05 Don't trust ARVs. Don't trust ARVs, what I mean by that is you can go into a market and when somebody says there's an after repair value of you know, 200,000 on this house, you may not realize the amount of work it would take to get it to sell for that price. You know, so two things that, two caveats to that. Beware of low renovation, estimates and high ARVs, those two things can kill your profit margins, and sometimes take your profit margin away entirely.   Sam Wilson  17:34 Oh, man. Yep, you said it, especially if it's a wholesale deal. You got to do your numbers yourself, that's for sure. Question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Blake Selby  17:44 So one thing, by doing some of these lower cost loans that a lot of banks won't touch, we're you know, preventing loss in some lower end neighborhoods. And we're also putting some capital into some neighborhoods that probably wouldn't get it. So I would say that we're, you know, kind of helping, you know, downtrodden areas by doing what we're doing. Certainly can't do it alone. But it's, you know, we're taking steps toward it.   Sam Wilson  18:06 That's awesome. Blake. If our listeners want to get in touch with you learn more about you or your loan products. What is the best way to do that?   Blake Selby  18:12 The easiest way is our website, which is SelbyRentals.com. It's on my hat here. I'm not sure if it'll show up on screen there for you, but SelbyRentals.com has everything from contact info to videos to everything that you need to know about private lending.   Sam Wilson  18:27 Awesome, Blake, thank you for your time today. I do appreciate it.   Blake Selby  18:30 Thank you too, Sam.   Sam Wilson  18:31 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Can foreign investors invest in the US real estate market? Absolutely, they can, and we have Terry Yonker to tell us how. Terry is the Lead Broker at Buckeye Realty, which helps its clients from all over the world build wealth and financial freedom through real estate properties in the United States.  He joins us in this episode to talk about his role as a real estate broker for foreign investors, the unique challenges that they needed to overcome, and some tips for those outside the United States who also want to take advantage of the country's promising real estate market.    [00:01 - 04:01] Opening Segment Terry Yonker tells us why he's in the brokerage aspect of commercial real estate How he came up with the idea to bring foreign real estate investors in the US [04:02 - 09:37] Brokering For Foreign Investors How was Terry's initial experience working with foreign real estate investors? The role of a real estate broker in a foreign real estate investor's life What investors should know about master lease programs [09:38 - 15:38] Investing With Foreign Investors The challenge you need to overcome if you also plan to bring foreign investors to the US Terry shows a sneak peek of what's happening in the backend of their fund model How Terry and his team send money abroad [15:39 - 18:56] Closing Segment A tool or resource you can't live without Mindomo A real estate mistake you want our listeners to avoid Being afraid to work with real estate companies first Instead, try to learn from them  Your way to make the world a better place Being involved politically as a registered libertarian Reach out to Terry See links below  Final words   Tweetable Quotes “We talked about scaling to that next level to foreigners that really, without a relationship, I don't even know how that's possible.” - Terrence Yonker “Don't be afraid to go with one of the big [real estate companies] where you can learn the ropes and then you put your own spin on it.” - Terrence Yonker “These [foreign investors] were losing a lot. They didn't know about taxes, they didn't know about [homeowner's association], they didn't know about all the things that we take as second nature and they were losing their life to taxes. So what we started doing is assembling them...” - Terrence Yonker -----------------------------------------------------------------------------   Email info@buckeyerealty.com to connect with Terry or follow him on LinkedIn. Visit Buckeye Realty to see how they help clients all over the world in investing in the US real estate market.  Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Terrence Yonker  00:00 Our biggest thing is just they have the trust in the initial phases. You know, and this is where we are in ours, it's the trust of them to invest in our fund, you know, and I don't know how without working with people for years, you can have that again, maybe that's what you guys do a little better. Maybe we could talk offline to see that part, you know, but these are guys that we've been working with on the broker side for years and years and have relationships and unwinding and going over there. We lived over there for three years, three months in France to where most of our investors were met with all of them. So that was a challenge that we overcame. And so I would be curious how to scale, we talked about scaling, you know, to that next level to foreigners, that really, without a relationship, I don't even know how that's possible because we'd like to have relationships with all of our people.   Intro  00:39 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:51 Terry Yonker brings a wealth of experience and industry-specific knowledge to every new venture, whether he's facilitating deals or bringing innovative programs to the market. He currently serves as the Lead Broker for Buckeye Realty. And even more fun, they are working with foreign investors to bring foreign investors here in the United States real estate market. Terry, welcome to the show.   Terrence Yonker  01:11 Thank you. It's glad to be here.   Sam Wilson  01:13 Hey, man pleasure's mine. Same three questions I asked every guest who comes on the show. In 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?   Terrence Yonker  01:20 Where we started, I was in a small town of Punta Gorda, Florida, Southwest Florida, love the lifestyle but couldn't figure out how to make any money. You know, ‘cause it was a small days before remote work, you know, now remote work is like a piece of cake. But back then you couldn't do it. So started getting into residential real estate. That was about 18 years ago. Since then, morphed into commercial, on the commercial side of the business, my wife and daughter, we've since moved to Orlando, we're here in downtown Orlando right now, and just moved into the larger markets, larger products and still have some of that same core from 18 years ago in southwest Florida. So it's been a great ride.   Sam Wilson  01:52 That's really, really intriguing. So you guys moved more into the brokerage side of things in the commercial space. Is that, that I follow that correctly?   Terrence Yonker  02:00 Yes. In a small town in those small towns, you know, it's like some of your residential people and your Chamber of Commerce people are the same guys that own the commercial buildings. So, you know, as opposed in the big city here in Orlando, a lot of guys are niched out. But what we found in a small-time when you're on the Chamber of Commerce, and these are your guys, these are your guys and whatever they need, or gals, and whatever they need, they need.   Sam Wilson  02:19 Right, talk to us about launching a brokerage firm, and then why did you ultimately end up deciding to get into the fund model and bringing foreign investors? What's the story behind even the iterations of that, those ideas?   Terrence Yonker  02:33 Oddly enough, it's just when I was being just a regular broker for land, I ran into some French guys in southwest Florida, and they came in, and that's one of my languages is French. And there weren't many in Punta Gorda that spoke French at that time. So they came in thinking that they had a great deal and what I discovered is that there was a French guy in the United States buying lots for like $5,000 selling it to them for about 50 telling them what a great deal it was. So as we dove on, peel that onion, I mean, there are hundreds and hundreds of people that got taken like that. So after I unwound them and a lot of my loss, but we unwound them, and we had to move into a model of how can we have them come in and invest rather than taking it in their names. I mean, these people were losing a lot. They didn't know about taxes, they didn't know about HOA, they didn't know about all the things that we take as second nature and they were losing their life to taxes. So what we started doing is assembling them and saying, Hey, there's got to be a better model. So we first started with their LLC. And basically, I was managing like a whole bunch of LLC for them again, a little bit inefficient, and I was you know, is a lot of how can I say judiciary duty for them? You know, they trusted me like a brother at that point. And then so that's how we started exploring this fun mob and syndication because that's built as like you guys do, it's built for that where they can come in, you know, the limited partner. And so that's how we've evolved just out of necessity to be honest because at one point I could only handle so many you know, Florida LLC is owned by these foreigners and I'm a statement of authority and there's just chaos. So the model now is a lot cleaner and tighter.   Sam Wilson  04:02 Yeah, that's intriguing. So you had all these people with all these properties tied up in LLC, they weren't doing the right things with them. You said, hey, look, I can help you straighten all this out. And then eventually said, You know what, Baggett, we're not doing this anymore. Did you guys have them, I don't even know how that would work. How did you end up not managing, you know, continuing that management of all the LLC, or just finally say, Hey, guys, I can't help you anymore. Good luck.   Terrence Yonker  04:23 Well, no, that, we did the opposite of that because they had stuff as I discovered in Detroit, Vegas. I mean, it was chaos. So we started just unwinding them from all these pieces, and then maintain their LLC here in Florida, this foreign-owned LLC, which then becomes the investor into the fund or the syndication. And so that's kind of how we kind of, and something you know, some had it in their own name, and they have to pay FIRPTA, which is 50% and do all those things. And they're good, they got burned and they don't come back in, you know, but fair enough, but we have a good pool of the people who still wanted to, especially with what's going on now where you can't get across borders or you have a hard time with the COVID law. and everything. You know, I think they appreciate having an American here that they can trust doing that stuff is more valuable. And I mean, it's always valuable. But I think it's more valuable now than ever.    Sam Wilson  05:10 Right. Yeah, absolutely. What is your fund investing in now?   Terrence Yonker  05:12 It's a master leases for vacation rentals here in Orlando. So we work primarily with a company called Sonder but there are a handful of other ones will they'll do a master lease for 50, 80 units for five to seven years, we provide the product, they do a master lease, and then they try to make a spread, you know, from the fixed fee that they're paying us to what they can get on the vacation rental market. And it's pretty standard. We're kind of we're copying it, you know, it's not anything necessarily revolutionary, but we're just dabbling into it and putting it together, you know, so we're trying to do a copycat model on what's already working.   Sam Wilson  05:43 Let's dig into the master lease. So there's a company, this company, then goes out to property owners and says, “Hey, look, I'll do a lease on your property for five, seven years, this one will pay you,” right? Correct, the property owner of one end, and then they come to you guys for the investment capital, what are they using that capital for? Furnishings? For staffing? for overhead? What are they using it for?   Terrence Yonker  06:04 They don't come to us for anything, we buy the units. So they're sitting here saying we need to invest in 30 units in this area. But we don't buy we're ready here for a lease. So we purchased the units and provided it to them, they do all the improvements themselves, almost like a bond. So that's where they're here, right and ready to expand their market. And not just them. There's other companies like that, that will buy bulk. And they say we're just we just need units, can you give us units and then we go out, provide them, have our spread? And then you know, ours is almost like a bond, you know, where we have a fixed amount, and they try to make it on that?   Sam Wilson  06:36 Did they come to you with the properties they want to buy?   Terrence Yonker  06:40 We've worked with them for years. So yeah, we kind of have an idea, you know, the criteria because we help them source them initially, that's how this whole thing got started. They said, Hey, you can help us we can't, you know, we don't hire you as a broker. But you can help us go. And so we put together a couple of deals, the broker didn't get paid, by the way, but you know, just kind of like googling the long game. And so that's how we found the targets. And then it's kind of open because they're like, hey, we want to expand if you can help great. And again, and then when we call other vacation rental companies as well, you kind of find a hot spot. And they say, Yeah, we're good to go on that as well. So we prefer the master lease for a bunch of units, but we can even do onesies, twosies, with the traditional, you know, vacation rental ones.    Sam Wilson  07:18 Right, right. Yeah, that's intriguing. So you guys go, you find the unit, you find a bunch of units. And then you go to this group and just say, “Hey, guys, we want to sign a master lease with you.” What are some of the things you like and don't like about the master lease program?   Terrence Yonker  07:32 Well, what we do like about it is that, again, it's fixed, almost like a bond, you know, to where you're you don't have to worry about vacancies, you know, we use a multifamily model. And we're filling out the pro formas. You know, vacancy rate, zero escalations built-in already, long term, you know, management fees, and almost nil because they just take care of it all. So all those variables that come out of our model with the traditional multifamily go in are great. We like that. What we don't like too much is that you know, it adjusts to CTR, but with this guy, Joe in there and the Fed print and I don't know with all you got me, I guess if you have annual leases in the multifamily space, you can raise rents, but boy, inflation just puts a crank in everything longer term, especially with these longer-term leases. So that's the one piece where we have to just make sure we build in big enough inflation escalators and when they can manipulate that with CPI and things like that. It's almost like you know, grasping and ghosts, as you know, and your business as well.   Sam Wilson  08:24 Well, for sure. Is there a way moving forward to tie your leases to whatever the CPI number is to where you say, “Hey, look, annual rent escalator isn't 2% It is CPI plus 50 pips,” I mean, what is their way to do that?   Terrence Yonker  08:39 Sure, absolutely. They'll agree to not having a cap, right? Because that's the thing, you have a cap because both sides are kind of getting squeezed. So it's like a dance, right? Like, if you can do that without a cap or a limit per year. I mean, that's the ultimate idea. We haven't quite been able to negotiate that strongly yet, perhaps you have, you know, to where, hey, if it goes up to 10% and we're 10% plus, you know, and that's tough, that's what we're all dealing with right now.   Sam Wilson  09:03 Yeah, that's a super intriguing point. Because, yeah, there's not a lot to be done with that in the long-term lease space. I mean, you look at this, you know, industrial warehousing, it's a hot topic right now, but you're signing five, you know, you might not renew for five years. And it's like, if we continue, which again, with you know, with the unprecedented printing of money, we continue doing this and every year we're going up potentially seven, I think on the low end 7% I'm getting like even they say 6.7% but on the low end, you're going up 7%. Gosh, I mean, compounded over a five-year period and suddenly that triple net lease is not so attractive anymore.   Terrence Yonker  09:38 Right? And it's not unprecedented, you know, I mean, we're a couple of decades away now but you know, got if you got a guy like Paul Volcker back in the day that came in and squash, you know, for maybe our parents or grandparents, it's cost inflation. I mean, they'll tell you stories of 18% and menus being on paper because you had to change it's hard for us to imagine in the world that we've come up in but I guess to the core that's the number one thing that we're looking at, but cuz when I like when I say it's like a bond if we're signing almost like a bond for bonds or but good question inflationary environment, right, you got like bond at 7%. And interest rates are at 12. And you know what? That's the value of the bond or the fact of bonds.   Sam Wilson  10:12 Yeah, absolutely. Absolutely. What have been some interesting things you've discovered, in building a fund that brings in foreign investors. I can only imagine that there's quite a bit of paperwork and reporting.    Terrence Yonker  10:25 Yeah, well, we're just putting our toes in it right now. So we're, you know, we're not full onboard to where we've filed all the reports and had to do it all. So right now we put together with them. So our biggest thing is just they have the trust in initial phases, you know, and this is where we are in ours, it's the trust of them to invest in our fund, you know, and I don't know how, without working with people for years, you can have that. And again, maybe that's what you guys do a little better. Maybe we could talk offline to see that part, you know, but, you know, these are guys that we've been working with on the broker side for years and years, and have relationships and unwinding and going over there. We lived over there for three years, three months in France to where most of our investors were met with all of them. So that was a challenge that we overcame. And so I would be curious how to scale, we talked about scaling, you know, to that next level to foreigners, that really, without a relationship, I don't even know how that's possible, because we'd like to have a relationship with all of our people. And that's been the biggest thing I think that we've overcome has been the most important to our fun.   Sam Wilson  11:18 Right. In talking about that fun, where there's some filing things upfront that you found were different. We said, hey, you know, what, we're taking important investors' money. This is, you know, I mean, even all the way down to exchange rates. So if somebody's sending you euros, right, yeah, how does that process work?   Terrence Yonker  11:32 We do it through, Oh, there's a couple of companies on there can do that we use, it's currencylive.com, which is a currency exchange function. So they actually use US Bank coordinates for wiring. So we've done that where they put money in, you can switch it to US dollars, their currency exchange company, or money corp currencies, direct is another one. And that's what they do is they get the best rates that go on the market, and then bring it in to the US. So that's fairly simple. And we like to use it because it documents as well, that I want guys coming over briefcases boy, dad, you know, yeah, you bring it in and do that. And then the structure too like what that US LLC is another one we found when they were investing with those, if you're a foreigner, everything is great, Florida, LLC, but there's an estate tax risk. So the government passed a law that said if you're a foreign owner of the LLC, and you pass away, there's a huge estate tax, and they take almost the whole LLC, which again, doing this as a hack. When I first started, I didn't know. And then we started getting in with the attorneys and said, “Hey, you have to bounce it with a foreign company and then it's all protected.” So those are like the two big items, I think, the oopsies that maybe we made that we corrected and now have some expertise in because like we were just doing it wrong and hustling. And then now you get the attorneys and structure correctly and it's been great   Sam Wilson  12:46 What about sending money back when it's time for money to go back to France? I mean, what are the…    Terrence Yonker  12:51 Well, the same thing, the same thing applies the wise we and that's where I alluded to earlier like when you can send it to there with US coordinates in New York bank, it's in the wise calm or currency direct so that men have a bank account, and it sits there, they can convert it and bring it back. Now our guys typically don't like to bring stuff back to Europe, again, I mean it with the tax rates and everything. So we have a sitting in there. And when they've come here as well, we've opened a local bank account because they have to be present to sign so for their LLC, they'll come over will go in present themselves in person have a US LLC US bank account, they can just have it here, and it's all legit. And I'm a signer on the account, and we just do it that way as well. So ideally, they come over, if not, we let it season in that you know, currencylive.com account and take a look, you can look it up that way calm when you're offline, see what they're all about.   Sam Wilson  13:37 Right. That's tremendous. What are return profiles? When you guys are doing a master lease on 50 or 80 units? You said those units are going to go Airbnb properties or some sort of short-term rental properties. Is that what you guys are working on right now? Yeah. So what's our return profile look like?   Terrence Yonker  13:52 Well, you know, we do it right at 8% cap right off the get, you know, so 8% prep, 8% cap rate, like when we come in, or we won't do the deal, you know, we have to come in, and we have to have our basis at that because they're coming in on their side, they're good, they're gonna sign it this amount. So we have to acquire there. So that's what it looks like. I mean, we're, we do 8% prep, we split it 50-50 up to that, and we're looking at about 12 or 13% with appreciation when we exit and but it's pretty straightforward in that regard that that's, you know, and for the foreigners as well, you know, we like to do it at 8% and a lot of multifamily. I think right now it's six, maybe seven. So given the, you know, increased risk with this product that people aren't as familiar with, we like to go with eight and then even if it's not for us with as I mentioned, as we've been, you know, shopping these, and that's another thing with the fund model, you can't just blast it out to be like private as a broker. That's like, you know, nails on the chalkboard for us. We like to scream from the rooftops. So one of the things we can do is when we broker these, its seller, even if say your group or a foreign group says, Hey, I don't want to be in your fund. I just want to buy them ourselves. Well, then we can broker that deal and say, “Hey, because these people will sign with whoever gives them the 20 units.” Right. So that's an that's more my wheelhouse like I can breathe easily without like screaming from the rooftops, I can do all the performers and everything. So that's kind of how it looks either for an individual investor or with our fund.   Sam Wilson  15:11 Man, that's absolutely intriguing. I love how your business has grown and changed over the years and moving with your investors. And also just moving where the opportunity is, I think that's really, really intriguing. Thanks for taking the time to break down the master lease on us. And I mean, this is kind of a little bit different spin on the short-term rental game. But you know, you're bringing in foreign investors, you're doing master leases, and it's a different ballgame, really, actually entirely. So that's certainly unique. And I appreciate you taking the time to share with the details on that. Terry, let's jump here into the final four questions. The first one is this what is one tool or resource you find you can't live without, think digital, software, something along those lines.   Terrence Yonker  15:48 There's a program called mindomo.com. And it's mind mapping. And so I didn't realize I was a visual person until I got a hold of this, you know, I have lifts and I would strike. This is a mind map where you can make, connect all the dots. And we have since put our whole Procedures Manual into this visual representation of how our deal flow goes how our thought process goes. It's visual. And so yeah, you know, if you're a person like me who's visual and likes conceptualizing it and the list of checklists don't quite do it for you. This has been a game-changer for us in our business as well, because everyone's on the same page.   Sam Wilson  16:20 And you said mind, M-I-N-D, domo, D-O-M-O?   Terrence Yonker  16:23 Yes. All one word. M-I-N-D-O-M-O dot com.   Sam Wilson  16:27 Excellent. I look forward to checking that one out. That's really unique. If you could help the listeners avoid one mistake, what would it be and how would you avoid it?   Terrence Yonker  16:34 You know, one mistake going in when I came out of I got my MBA at Ohio State and I came out anti-demand, if you will, right. So all the big companies and this and that I said, “Oh, you're silly to do that. Let's get a, roll up our sleeves and get in the weeds.” I would say especially if you're coming out again, in the business, don't be afraid to go with one of the big, CBREs or some sort of big company like that, where you can learn the ropes and then do you put your own spin on it. So that's, you know, if I could go back and do it again, I'd maybe take some of their tools of the trade because I see what they do. And you know, it's good. But you can put your own twist on it without being a slave to the machine. You know, when you come out.   Sam Wilson  17:10 Right. I love that question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Terrence Yonker  17:15 You know, right now with what's going on with these COVID lockdowns and our, take on freedom, I have to admit, I'm a registered libertarian. So I just went to Canada training this weekend. And I think now with everything we're doing, the biggest thing you can almost do is push back against these tyrants because having lived in other countries around the world like this is recognizable as tyranny. Right? Fair enough. If you're an American that's had generations of relative peace, it's not recognizable, and you say, Oh, they just want our safety. They're not letting us have meetings because they want to be safe. So I don't necessarily believe that. So it's at that point where I think I almost have to get involved politically on libertarian side to try to push back on this because if you don't push back, it just goes to your China, you know, example, if you want to see the end game, go to China and see their social scores.   Sam Wilson  17:58 That is the end game. You're absolutely right. Terry, if our listeners want to get in touch with you, what is the best way to do that?   Terrence Yonker  18:06 Buckeyerealty.com. Go there, we got a link to set up a call or talk about some of this stuff. I'll put a link on there, Buckeyerealty.com/bricken. And then we can continue on but this specifically what we're talking about here that's going to have the video here that we're doing a link to this podcast, and then also where we can talk specifically and elaborate a little more on what we covered here today specific    Sam Wilson  18:26 Fantastic. Thank you, Terry, for your time today. I do appreciate it.   Terrence Yonker  18:30 No problem. Thank you. Great being here.   Sam Wilson  18:31 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

How to select the right insurance for your real estate investment? Matt Sutika is on a mission to help investors answer this important question. Formerly a No. 1 State Farm agent, Matt is now Chief Insurance Officer at Obie, simplifying real estate insurance for investors who want to protect their hard-earned investments.  He drops by in our podcast to talk about his journey to the real estate space and the importance of investing in quality insurance for your properties. You don't need to be overwhelmed by all the information about insurance that you're seeing all over the Internet. He is here to make them easy to understand.  Matt is also an award-winning entrepreneur and business owner in the multifamily and habitational insurance sector.   [00:01 - 04:14] Opening Segment From State Farm agent to syndicating in real estate Here's Matt Sutika's journey These are the characteristics of an ideal client according to Matt [04:15 - 14:44] Insurance in the Real Estate Space Insurance is important in real estate, but many investors remain underinsured Matt tells us why Matt lays out the unique value proposition that they offer to their clients The changes in the insurance industry that investors should know now [14:45 - 17:54] Closing Segment A tool or resource you can't live without Outlook A real estate mistake you want our listeners to avoid Not talking with your insurance person You should do this so you will be more guided in closing a deal Your way to make the world a better place Taking care of his newborn baby Reach out to Matt See links below  Final words Tweetable Quotes “...as we know in the real estate space, closings don't just go perfectly 45 days from the time you get your purchase agreement. There's a lot of stuff that goes and you really want someone in your boat with you that can be a part of the journey.” - Matthew Sutika “The number one mistake [in real estate insurance] is not talking to your insurance person before you do due diligence and you give your report to what you want the seller to provide you before you go under contract.” - Matthew Sutika “ Insurance really is a good data driver for what happened [in the property]. It can really show you a lot about the financials and all kinds of things right.” - Matthew Sutika -----------------------------------------------------------------------------   Email matthew@obierisk.com to connect with Matt or follow him on LinkedIn and Facebook. Protect yourself and your investment by visiting Obie now! Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below:   Matthew Sutika  00:00 The biggest thing that we do is first from an understanding, so most people that when working with us understand and I take them through this, you know, five to seven-year journey, right? And this is probably about 10% of the help because probably after I talked for about two minutes, the clients kind of started to think about something else, but the general is that just like anything else, insurance goes through cycles right now, you know, maybe that's a four-year, five-year cycle, right? Right now we're in the height of everything, you know, we've had also some pretty big factors with, you know, our 2021 or 2020 scenario in the country and, you know, and everything so we have this perfect storm where everything's high.   Intro  00:38 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:47 Matt Sutika is the Chief Insurance Officer for Obie insurance. Obie specializes in habitational and multifamily insurance. Matt, welcome to the show.   Matthew Sutika  00:56 Hey, thank you for having me.   Sam Wilson  00:57 Hey, man, pleasure's mine, same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell us where did you start, where are you now, and how did you get there?   Matthew Sutika  01:04 Yes, I can. I started as a captive State Farm agent in Indianapolis, I left that to grow an insurance company for a real estate firm called century 21. If listeners are familiar with that, so grew that which got me into the real estate and insurance combo. And then most recently, in 2020, moved on from just doing the smaller real estate to more getting into the large multifamily across the country. So that was my journey from you know, small captive to, you know, working for, with a real estate company to now working with syndicators and people purchasing real estate.   Sam Wilson  01:41 Interesting. And do you guys multi assets or is it just all multifamily?    Matthew Sutika  01:47 Multi assets. So we get we have a couple of departments, we can do the, you know, 1, 2, 3 unit, what I call like Mom and Pop rentals or large schedules or portfolios, we all over the countries, we have a department that does that you can if you actually the one to four-unit, you can go to our website and get an instant quote and bind yourself if you want any of the 50 states one to four units, which is nice, and then anything from the five to what's called like 75 units in that space, also what's called like lesser risk, which is like your shopping malls or your big commercial buildings, we have kind of the medium market. And then we have the 75 and up which is your larger multifamily. So we have three different departments, all 50 states. So technically from one unit, all the way on up, we can help you anything I say building-related and insurance, we're probably your you know, your go-to.   Sam Wilson  02:36 Right, that's really, really intriguing. Walk us through, if you have the ideal client, right, the ideal person that came to work with you, what would they do? And then why would they do those things?   Matthew Sutika  02:48 I think my ideal is partnership. So I love whether, you know, you have one unit or you are buying apartments all over the place. I love the field and you asked me my journey earlier why I got into the real estate and then why I got into you know, doing larger multifamily and things like that is it was the people I enjoyed, you know, somewhat of my industry can be treated as a commodity, you know, the Geico and, and Flo from progressive have created this, you know, save $1.15 minutes thing. And so I really liked the people. So that's always my answer is, you know, if you come to me as a partner where you want my expertise help, and you just really want to make insurance is there at your closing, you know, that's my ideal client, those who you know, want to go out to the 17 different brokers and shop it around or those who don't want to really, you know, treat you as anything more than that you're just the insurance guy for quote, that's probably not a good, you know, mix. And the reason why that's important is there's going to be times where we do save you money, but there's always going to be times where you really need us to go that extra mile or cut something here or do something here, stay till midnight, so you can close the next morning. And that's where partnerships really, you know, come into play. Right? If you know, on the easy stuff, you can go to anybody but a lot of times as we know in the real estate space, closings don't, you know, just go perfectly, you know, 45 days from the time you get your purchase agreement like there's a lot of stuff that goes and you really want someone in your boat with you that can you know, be a part of the journey.   Sam Wilson  04:15 Yeah, that's absolutely intriguing. I think you're absolutely right. One of the things that we see a lot right now is that people are either or we're seeing that people are underinsured. How does that happen? And then why do you think they got there?   Matthew Sutika  04:29 Yeah, I mean, the simple answer is a lot of people who are underinsured probably are your cash buyers. If you right now, if you have a lender on your, you know, your asset, most likely there's that's the first layer of protection. The lender is going to make sure that you are not underinsured that you have a lot of the coverages and that we're providing them most of the deals. I'm working right with the lender or their consultant to make sure the insurance is in place. So I don't see that as much on new purchases unless it's a cash deal or they have a lender who just doesn't care just basically like, hey, just, you know, get me a certificate, which is a very rarity. And then you also see it once someone's own the asset potentially for a little while, and a refi happens, that's where I really see the person who's underinsured. But if everyone does their job, the lender and the insurance person, you should be covered correctly, especially nowadays, you know, these loans are very well protected and they really do double check and triple check to make sure the insurance is correct.   Sam Wilson  05:27 So you were saying, in a refi?   Matthew Sutika  05:31 A refi. We'll use a real life example, you're an insurance program and insurance broker, I did the first insurance and I had to go through all the lender requirements, and I had to ensure that $20 million, you know, for that asset, right, and I did it all, it was all on the, you know, the appraisal and everything like that, also, when you're going for a refi and you go and a local bank comes into play, and they're really not looking either looking at things over, or they really aren't as strict with the requirements. And that owner goes to you, right, and says, Hey, quote this out for me, and you quoted at $10 million, right? That's what you quoted it at, you're trying to because you know, what's to say, the owners, like, hey, I want to save money, that's probably why they went to another insurance person, right? And so you do at 10 million saving all this money, you send over the certificates to that new lender, who has maybe a local bank or something like that. And that local bank just approves it, you know, they're just, they're not really looking at it or doing the due diligence that first lender did at purchase. And now you have a $10 million insured building, instead of 20. Now everything went correct, right, like the lender approved it, the insurance person did what you asked, cut your insurance in half, but now you are underinsured. So just off the hip example. But things like that can happen. And it really comes down to when the checks and balances go out of whack and also in that same scenario, you changed insurance brokers, which caused the problem, right? If we would have done the ideal scenario, that owner would have just came back to me said, “Man, I got to reduce costs, how can we do that?” right, and then we give some options. And then what we might have the underinsured conversation, and we might see if the bank is okay with it, but at least then the insured knows what they're getting into. Hey, I can move you to 10, I think you should be at 20, we know that this bank will approve 10. But just let you know, you're insuring your place for half. So if this thing burns down, you know, only 10 million it's coming not 20. But at least then you are making a business decision as an owner compared to a price decision that ends up being a poor business decision, if that makes sense.   Sam Wilson  07:25 It really does. One of the things that we're seeing in the market right now is and, it's been happening in probably last year and more, but it's hardefning of insurance rates. How are you helping? I mean, forgive me when I say this, because obviously, you're very well educated, very well trained in your space. But you're an intermediary in the sense that you don't have control directly. Matt does not say, “Okay, here's the insurance rates, right, you can only say, here's what our insurers are willing to insure your property for this, what's gonna cost you.” How are you helping your clients deal with the hardening of the market? And then what can we be doing to maybe absorb some of that or make it easier as we move forward?   Matthew Sutika  08:00 Yeah, so you know, our biggest thing that we do is first from an understanding, so most people that when working with us understand, and I take them through this, you know, five to seven-year journey, right? And this is probably about 10% of the help because probably after I talked for about two minutes, the clients kind of started to think about something else. But the general is that just like anything else, insurance goes through cycles. Right now, you know, maybe that's a four-year, five-year cycle, right? Right now we're in the height of everything, you know, we've had also some pretty big factors with, you know, our 2021 or 2020 scenario in the country, and, you know, and everything. So we have this perfect storm, where everything's high. Back in 2018, 2019, insurance was free. Like, that's how it felt it was so cheap, right, we were getting all these amazing rates. And the only real problem is that if people when they're going out to look at a new risk, they're still looking at ‘18, ‘19 rates, and they're like, This one used to be 300, a door in Texas, and they're not seeing that journey to the next era. It's like the same person who complains the gas is not 99 cents anymore. They don't understand this whole, like hot topic of inflation and other things. Right. So that's the general action. The next thing is, as I mentioned, for a partner, if I'm doing a ton of deals for you, you know, we have ways to reduce premium from my end, maybe it comes out of my side, you know, maybe it doesn't, but I have ways to help a partner. And I'm willing to do that when I'm doing 1, 2, 3, 4, 5 deals. Like I mentioned, you want someone in the boat with you at that midnight hour that can maybe move the needle if have to, you know, we're a willing partner both ways. We're not just here to you know, leech on, write a policy for you and make money. Like if you're hurting a little bit, we might hurt a little bit. And I think that's the give or take in the relationship. And then the last thing is, you know, we're willing to put the effort in, you know, at the end of day, like you mentioned, we do go out to the carriers and we are subject to their rates. But what we're willing to do is we might go out to 500 carriers for a client to just do everything we can to either get, you know, the smallest reduction. And then also, you know, the last thing which I'll bring up is that, you know, we do have a lot of premium in these markets. And we do have really good relationships. So I do have a few silver bullets, a few favors on the back end with these particular carriers that if I have to, you know, ask or if I do ask, they usually helped me out now that might not move the needle from 100k to 50k. But, you know, I might ask for a favor and get it from 100 to 95. Because, you know, I just placed X amount with them the previous week. So there's a lot of facets, just overall to end with. We are 100% in this space, which does give us the advantage due to all those things I mentioned.   Sam Wilson  10:41 What's an annual escalator on average we should be budgeting in our underwriting for insurance. Let's, multifamily is hot. So let's talk multifamily.   Matthew Sutika  10:51 Yeah, so I do kind of a mix allocation. Right. So I think when things are priced well, you're anywhere from like the five to let's call it 9%. You know, and I'm talking about Yeah, the large multifamily Right. in markets like right now you're looking a lot more in the like 8 to 17 range, we try to keep everything if we physically can under 12. I mean, that is always our goal, carriers willing, if I had my way, these carriers would just do zero every year. But so that's kind of where we're at. So if you do like kind of a split average and estimated somewhere in that seven to 10 range, you'd probably be pretty close looking over like a five-year scale. Now in the single family smaller stuff, you can probably get away more in like the three to seven mark, you know, there's just there's small premiums not as big of a boost, but the large multifamily also, too, you know, I don't want to bore the listeners here. But there's a big difference between renewals in Texas and Florida compared to Indiana or Illinois, you know, I mean, from coastal, you know, our, you know, there's a lot of factors going on. So, individually, those are other things we would discuss, you know, you're in Texas or you're in Tennessee, you know, you're in a high crime area, you're in a weird, there's six hurricanes in your area last year, like what do you think's gonna happen? Right, you had 17 claims, like, you know, so those are the overalls. And then individually, we're talking to our clients based off their, you know, individual risk and kind of what they can expect. And a lot of our clients reach out mid-year and kind of ask us for some updates as they're projecting out for the upcoming year. And we're happy to do that.   Sam Wilson  12:21 Right. So the number I heard there was on an average, if you said, hey, you need to stick this in a spreadsheet, obviously, location-dependent, but anywhere from eight to 17% annually, is where we need to be kind of targeting the end, like you said, you try to keep it under 12. Even if we use 12, number's higher than what we've been using, you know, in the last five years, that certainly is $100,000 policy that can add up fast. So…   Matthew Sutika  12:44 Absolutely, you know, and those are the numbers right now for the market. We're in in, you know, 2022 here, but I do think, again, like I mentioned with the you know, still looking at ‘18, ‘19 rates that probably held true back that, you know, maybe even I remember a ‘19 actually on renewals, sometimes I was lower than the previous year. So you're going to get that and that's why I think if you use that blended around the seven-ish, you know, seven, eight, you're going to be pretty good inaccurate. Also, lender requirements have skyrocketed compared to what they were a few years ago. So that's a factor that people don't really affect, you know, equate in there as well as it's not just his insurance rates going up. But it's also the lender requirements and what they're wanting covered. And you know, instead of a 5 million umbrella, and now they want a 50 million umbrella instead of you know, 180 days of indemnity. Now they want 365, instead of 12 months, right now, they went two years around. So some of it is lender driven as well, or bank driven, right, that's moving up the needle a little bit as well that it always looks like the insurance person, is this going higher, but sometimes it's the lender requirements as well.   Sam Wilson  13:50 Well, yeah, certainly. And that just stands to hold makes sense. Because if the lender is requiring more of the insurance company, hey, you guys need to take on more risk than the insurance company's gonna say, Okay, we're gonna offset that risk by increasing the cost of the policy to the borrower, or to the, you know, the insured. So, I mean, that all those things just kind of stack up. That's really, really interesting, Matt, thanks for taking the time to break down kind of the state of the insurance industry, what you guys are doing and how you're doing it. It's certainly fascinating. And again, thank you for the kind of giving us some tips and clues on what to do with a hardening market and how we should be underwriting you know what numbers we could be plugging in. Now, obviously, those are location-dependent but using that like you said, 7% plus is a number that we should at least be sticking in our spreadsheets for annual rent or not rent at escalate of annual cost increases on our insurance. So that's absolutely fantastic. Let's jump here into the final four questions. What is one tool or resource, think digital, think software, that you find you can't live without?   Matthew Sutika  14:45 Outlook, I am a, Outlook. I will hold out until Microsoft stops producing that but everyone laughs at me because we are a Gmail as a company and I am like the one Microsoft Outlook that they have to pay for monthly and I'll never give it up unless they make me.   Sam Wilson  15:01 That's funny, man, I love that. Great. Question number two, what is one mistake you could help our listeners avoid and then, how would you avoid it?    Matthew Sutika  15:08 The number one mistake is not talking to your insurance person before you do due diligence and you give your report to what you want the seller to provide you before you go under contract. I think that is often missed and it's an opportunity to lower costs. And also find out a lot about the five-second on it is that, you know, if you can get the last runs and the current policies during that period of due diligence, and you put that in there, one, you see what the loss history was, was there a bunch of murders and slip and falls and, you know, crazy GL claims, was there a bunch of fires, and then also on the current policies, you actually really get to see if the OMs were legit, or when they were putting their T-12 number in. So those two things are your key. And I see a lot of people miss that.   Sam Wilson  15:52 That's a great one. That's a great point. I love that. So you're saying before you take a look at an asset, you're like, hey, I love this, I'm about to put a letter of intent and that's when they should be calling you in before they send that LOI.    Matthew Sutika  16:02 Yeah, for the LOI. And even if you get your LOI accepted, you have that due diligence period before you're under contract. You know, when you tell them what you want, say I want copies of those five-year loss friends, and I want copies of current insurance policies. Insurance really is a good data driver for what happened you know. It can really show you a lot about the financials and all kinds of things right and you can really see, if you're on the fence and all of sudden you see six murders and a couple of fires you might pull out before you go under contract, you know, it could really switch you also know you're about to write a big check for insurance if you see that too. Right. So you, we can adjust your numbers real fast too.   Sam Wilson  16:37 Right? No, that's absolutely fantastic. I love that .When it comes to investing in the world, what's one thing you're doing right now to make the world a better place   Matthew Sutika  16:44 Right now for me, just top of the head is I have a four-month-old and that is my concentration of their I guess a selfish one but at the name drop my four-month-old pen, at least every podcast or the wife won't give me allowance this week, you know?   Sam Wilson  16:59 No, that's fantastic, man. Good luck to you getting any sleep. Last question for you, Matt. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?   Matthew Sutika  17:07 Social media is probably the easiest. If you just, under my name, Matt Sutika. S-U-T-I-KA.  LinkedIn, Facebook. Feel free to send me a message or you can go to OB RIS calm and get a hold of me and then my cell phones 312-877-2692. Feel free to text her call me and then of course email, matthew@obierisk.com.    Sam Wilson  17:28 Thanks, man. Appreciate your time today. Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Should you be concerned about having “too many cooks in the kitchen?” In real estate, that means having to work with too many people, which may affect the quality of deals you're investing in. Keith Meyer is co-principal at Symphony Capital Group with three equally capable investors, and he does not see this as a problem. Rather, he sees this as an opportunity to bring in people from diverse backgrounds, which has helped their company invest in over $100 million assets under management.  Finding the right partners is a good way to start your real estate business, but it is easier said than done. Keith is here to tell us the right way to form partnerships to close more deals.    [00:01 - 03:13] Opening Segment Keith Meyer tells us how he applies his engineering background to real estate Here's the backstory of how he and his co-principals found one another [03:14 - 13:55] How to Find Deals Worth Investing In How to define roles with your co-principals according to Keith Keith reveals some of their secrets in closing deals You should set this system up from the start He also shares the criteria they are using to choose the markets and assets to invest in [13:56 - 16:42] Deals You Can Pursue This 2022 Is it worth investing in mobile home parks? Listen to Keith's suggestion Keith talks about his team's plans for 2022 Here's where you can jump in with them [16:43 - 19:33] Closing Segment A tool or resource you can't live without Monday.com A real estate mistake you want our listeners to avoid Being afraid to work with people People in real estate are generally more than willing to help out Your way to make the world a better place Being involved in affordable housing Reach out to Keith See links below  Final words   Tweetable Quotes “When you can get your hands on a 40+ unit [mobile home] park, do it, lock it up, and you will be able to find partners that will help you take it down because they are worth their weight in gold these days.” - Keith Meyer “...a big part of our mission statement is being able to raise equity because what we're doing is…we're bringing our investor network into quality deals.” - Keith Meyer “Don't be afraid to ask for referrals or to get involved people…because [real estate] is such an abundance industry.” - Keith Meyer -----------------------------------------------------------------------------   Email keith@symphonycapitalgroup.com to connect with Keith or follow him on LinkedIn and Facebook. Do you want to invest in real estate without any hassle? Check out Symphony Capital Group now! Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com     Want to read the full show notes of the episode? Check it out below:   Keith Meyer  00:00 You really need to put a lot of attention and consider it a core business process to have traceability and tracking of how your relationships are evolving. So that's where something like a CRM, a customer relationship management software system is really critical. That was actually the first system that we set up before anything else at our company was right, we want to build these relationships for you. We're all young guys in our 30s, you know, you see decades of doing this. So we're going to do it the right way and really put in the foundation for that. So I'd say that's one of the biggest things that's you should set up right from the start.    Intro  00:34 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:44 Keith Meyer is a multifamily apartment sponsor and syndicator acquiring properties across the Sun Belt. And fun fact, he's also a mobile home park owner. Keith, welcome to the show.   Keith Meyer  00:54 I'm doing great, Sam, how are you doing?   Sam Wilson  00:55 Hey, man, I'm doing great. Thank you. Appreciate you coming on. Same three questions I ask every guest to come on the show in 90 seconds or less. Can you tell me where did you start? Where are you now? And how did you get there?   Keith Meyer  01:04 Yeah, I started in the Midwest. That's where I'm from originally been out in the southwest. Last couple of years, by way in New Mexico live in San Diego, California currently. So I'm part of the multifamily syndication team. Now we focus primarily on the sunbelt states. So we closed deals in Kansas City, a couple of deals in Texas couple of deals in New Mexico and Arizona over the last few years. And I started much smaller than that. So happy to dive into that a little bit deeper with you today.   Sam Wilson  01:28 Man, that's fantastic. Yeah, absolutely. Tell me about the team you're on now. And then maybe we'll hear kind of the backstory.   Keith Meyer  01:35 Sounds good. Yeah. So right now I'm a Principal with Symphony Capital Group. We were founded about two years ago, here in San Diego, one of four principals, you all come from a different background. So I think we've formed a really strong, cohesive team. In that regard. I'm primarily on the front end, deal sourcing and vetting an acquisition side. So you just can imagine this hyper-competitive environment, you need really need to build in systems and competitive advantages to be able to not only source deals, but underwrite them and make competitive offers in a timely fashion. So I think my engineering and systems background has really lend itself to being able to hone that in and make that one of our core competencies.   Sam Wilson  02:11 Absolutely, yeah, it takes an engineer to really make something a machine like that run really well. How did you guys pick the four of you? I mean, was it just I mean, it's kind of hard, you know, finding partners is, is a challenge, let alone finding four ones that want to join up and form a company?    Keith Meyer  02:27 It is. It's funny, I get asked that question a lot. It was very organic. So we met each other just through commercial real estate networking meetings around San Diego and kept bumping into each other on regular basis saw that we all had, obviously a similar work ethic that we're showing up at seven o'clock on a Tuesday night to attend these meetings. And we got to talk and deeper and deeper and saw that we were kind of in similar facets of our real estate journey, although came coming from different angles. So saw a lot of compatibility in that regard. And, you know, took it pretty slow at first in terms of looking how we could work together. And that ultimately culminated in forming a company. And now here we are in 2022, with over $100 million assets under management, and we're really a driving force in this industry. So, very proud of where we came from and where we are today.   Sam Wilson  03:14 Yeah, absolutely. Yeah, that's really, really intriguing. So there's four of you eventually, how did you guys define roles? I mean, did you guys take personality tests and sit down and say, Okay, this is what I'm good at.   Keith Meyer  03:23 I mean, what that would have been smart. Yeah, I know, that's becoming kind of a popular approach. And that's not a bad one at all, you know, we kind of built the whole apple off and just saw what each other was good at. And then what we enjoyed doing so you know, fortunately, again, we came from pretty different backgrounds. So I'd say we were 70% of the way there just kind of common sense wise, when we were able to hone in the last 30%, just through working together and building out systems and things like that. So it's funny, we just had our annual retreat back in December, and each year, we kind of revolve and redefined our company roles a little bit, and this year had the least amount of changes because we had really had it pretty locked in and updated throughout the year. So it was nice to see that we kind of stuck to our guns, what we had planned from the previous year, and had that laid out pretty well.    Sam Wilson  04:08 Yeah, absolutely. Are all four of you full time?   Keith Meyer  04:12 Almost. We are getting there that as a 2022 goal. And I'm very confident that we'll get there probably around halfway through the year.    Sam Wilson  04:19 Right. That's absolutely awesome. I mean, you know, that's a lot of assets to take down in a very short period of time, what are some of the things you feel like you've done right that others should emulate?   Keith Meyer  04:28 And I was thinking about that before the interview. And I would say one of the biggest things that does not get enough attention is, is staying organized and follow up. And I mean, with individual people, we've built up a big enough network and brand that we get introduced to all sorts of cool, interesting people that are very capable of helping us get to where we want to be, but you can't just you know, shoot off the occasional email and then leave it at that and assume that they're gonna follow up and you're gonna remember what you talked about three weeks from now, and all that stuff, you really need to put a lot of attention and consider it a core business process to have traceability and tracking of how your relationships are evolving. So that's where something like a CRM, a customer relationship management software system is really critical. That was actually the first system that we set up before anything else at our company was right, we want to build these relationships for you. We're all young guys in our 30s. You know, you see decades of doing this. So we want to do it the right way and really put in the foundation for that. So I'd say that's one of the biggest things that's you should set up right from the start.    Sam Wilson  05:28 That's really intriguing. I'm not, no one's calling the show and said that outright yet. And I think that's absolutely brilliant. Because there's so many different ways. I mean, so many different relationships we have, right? You've got peer-to-peer, where it's like, Oh, hey, you know what, you might build a present opportunities to me, then you've got you to your investor base. And that's a whole different set of relationships. I mean, there's just there's a lot of relationships to keep track of, and to remember, hey, I want to connect with Person X. And then yeah, that's intriguing. I don't know there's a million of them. So you're not being called upon to sell one in particular?    Keith Meyer  05:59 No, yeah. I'm happy to talk about it. Yeah. So we use HubSpot. That's a system that I like a lot, their free version is great. So it's really easy to get up and started with, integrates with Gmail. So you can tracking you know, remember, set reminders to check on emails and set tasks and things like that kind of operates as a project management platform as well. And it's funny, what you just said is exactly right, Sam, then the other consideration is that there's so many communication channels these days, right? You know, email is just one of 10 ways that people communicate pretty common these days. So being able to track all that and then you know, have kind of understand what each channel's purpose in uses for as well as something to really focus on. And as you build more personal relationships with people like brokers or co-sponsors, or property owners, you'll go from, you know, kind of the more templated formal email approach to text messages to maybe they'll jump on a Slack channel with you or WhatsApp chat or something like that. So that certainly evolves, which is great, but it's really critical to stay organized with that stuff. Are they just gonna let a lot of things fall through the cracks by accident?    Sam Wilson  07:04 It's so true. It's so true. And I'm guilty. You're convicting me right now, as you say it, because you're guilty of like, oh, man I should have followed up with and then it's six months later, it's like, yeah, the ship has sailed. Yep. And that costs money, money, because it took time and money to build that relationship. And then you lost the opportunity, you know, presented by that, what could have been presented by that relationship? It's like, oh, yeah, that's absolutely intriguing. So you guys set up a CRM out of the gates that, hey, we're going to do this, this is how we're going to track you know, our relationships. And then what was the next step you guys took.   Keith Meyer  07:37 So then we continue to build on our business systems essentially, kind of starting with underwriting. So Jeremy, one of my fellow principals comes from a very in-depth commercial underwriting background. So we kind of took the best parts of other models and other examples that we had come across before and created a pretty customized underwriting system, which we are probably unread 50 of that if I had to guess at this point, it's unbelievable how much that tool in particular morphs and evolves over time. Yeah, especially on the front end, the deal screening end that is so critical these days, we're in a fortunate position in Symphony Capital Group, where we have very strong deal flow these days. And I know that's not always a case for certain operators. So we want to be able to take advantage of that and not waste that opportunity. So with that, we need to be able to pretty quickly screen a deal to see if it meets our criteria. And if it's worth spending, you know, an hour to three hours underwriting or investigating more deeply.   Sam Wilson  08:34 What are some of the things you look at when you say that there are high-level things that are particular to you guys, you say, “Hey, this is something this is go no, go or investigate further?” What are some of those initial screening things you guys take a look at?    Keith Meyer  08:47 Great question. So it's two faceted, I would say one is the property. And then the second is the actual sponsor, or the deal structure itself. So properties, a little bit more straightforward. I think for the average investor, that's gonna be looking at things like market demographics. So we do have co-star access. And that's great for getting sub-market, zip code level, street-level type demographics. So and, you know, it's a 50-page report in some cases. So you still have to be very adept at pulling out the relevant content in a relatively short timeframe, and then plugging it into our model. So we look at things like median household income and rent as a percentage of that income. So you want to see that residents especially if you're in kind of the mid-tier B class properties aren't cost-constrained. So you don't want more than let's say, a third of their income being spent on housing in that case. And then we would also look at things like job growth and population growth, there probably are two other biggest sub-market criteria that we look at just to make sure that now we're underwriting to five-year holds in most cases. So we want to make sure that they're still a good growth trajectory as far as jobs income and rent growth over that time frame.   Sam Wilson  09:51 What about a property say I shipped you a deal and say, “Hey, key, you know, here's something I think you'd be great for you guys in the right market.” Like what do you guys look at? So you said hey, you know, learning that skill of saying now not for us, there's some things you guys have to check off in order to spend that three hours initially underwriting it.    Keith Meyer  10:08 Alright. Yep, so I mentioned some market itself, we'll look at value-add opportunities as well. So the rents pretty well understood, and especially if you're looking at making a competitive bid, and you're going to be up against a couple of other groups, in almost every case, these days, if not dozens of groups that are, you know, almost as adept as you are, in many cases, you need to look for that competitive advantage, as far as how do you generate additional income to that property? So a lot of times, we'll look at how the utilities are being maintained, are they even being billed back at a flat rate in the first place, that's kind of an easy place to start, but they're actually much more advanced ways of recuperating a lot of those utility costs and reducing the expense in the first place. And there's some companies out there that specialize in that coming from the mobile home park space, were big on installing water sub-meters to monitor water usage, and then, you know, get a real-time accurate read via a cellular network in that case. So a lot of emphases, I would say, in that regard on utilities, and then also looking at the vintage and the infrastructure of the utility systems themselves. If you're dealing with a lot of older cast iron, or concrete sewers are older plumbing, water pipes, that's not modern PVC. Now you're gonna have to underwrite to a fairly substantial CAPEX reserve because you know, that's going to come one of these days. So that's something that can differentiate a property pretty quickly as well. And then there's some more creative income generators. Additionally, that'll become pretty popular in our arena on the permanent side, things like internet tech packages, working with telecom providers to institute those are kind of win-win situations because you can bring high-speed internet capabilities, a lot of times, they'll kind of upgrade the infrastructure on the building for you. And then you are offering that at a better price point to your end residents. But then it's also a value-added to the building operator themselves. So that's something that we look at. Additionally, things like introducing more amenities, you know, dog parks, covered parking, things like that, and then billing back for that accordingly, I'm going to in a five cap for cap rate environments, and every dollar of income that you can generate results in 20 plus dollars of value to the property, little things like that can really add up quite a bit over time.   Sam Wilson  12:16 Absolutely. Let's hear the backstory, you know, that you talked about. We haven't quite got to that, you know, what were you doing in real estate before you guys form Symphony Capital Group? Was that in mobile home parks, or tell us what that was?    Keith Meyer  12:29 Yeah. So I started from a couple of different angles, sewing on my backgrounds in kind of more traditional engineering and got my engineering degree in the Midwest and started out in the corporate world working a couple of different jobs and operations capacity, nothing directly into real estate to start, I actually bought my first primary residence at a pretty young age in my early 20s. And Mexico lived in that for about five years. And then when I was making a career transition still in the corporate world, and this is about 10 years ago, about San Diego decided to hang on to that property and try out this whole landlord thing. So that was my first direct personal introduction into being a rental property operator, my family did have exposure to that previously. So my grandfather was a residential developer. And he kind of got my father involved in some property investing aspects, although my father was primarily in the corporate world at the time, and then he actually made a late-life career transition into commercial brokerage. So we had owned a couple of things here and there, back in the 90s, we bought a mobile home park in the Midwest, and it was almost on a whim to an extent, I shouldn't say that. But really, this is, you know, back pre-Internet era, embedded a lot of different investment opportunities, knew the benefits of real estate more from a network level than a direct level at that point. And all things came across settled on mobile, home parks is the best investment at the time. And it's funny how right we were, and I wish we would have been more emphatic about it back then. Because that was back in the days of 15, 20 caps, and now they're almost as low as apartment buildings are right now. It's unbelievable what's happened in that industries. So that is to say all those different exposure points kind of put the, planted the seed in the back of my mind, I'd say, you know when I became a direct landlord on that single family saw how you know, how things work, how the tax implications are, how nice it was that a couple $1,000 a cash flow each month and you know, that kind of started the Genesis I would say, and that's my start. And then there's been a bunch of steps between there and over the last 10 years to gotten to where I am today.   Sam Wilson  14:33 That's really intriguing. Are you guys also looking for mobile home parks now, or is it strictly multifamily?   Keith Meyer  14:40 We are. It's pretty, it's still fairly rare. I'd say to syndicate those just because the deal flow isn't there. There's only X amount of parks you know, it's a fraction of what's available on the apartment side. Right. But I would say there's still a good five-year window probably of getting very solid deals, and I think the asset class is gonna remain very strong for a variety of reasons, not the least of which is home affordability. So when you can get your hands on a 40+ unit park, do it, lock it up, and you will be able to find partners that will help you take it down because they are worth their weight in gold these days.   Sam Wilson  15:12 That's really, really interesting. Yeah, just like you said, the affordability of homes. It's the last affordable housing solution.    Keith Meyer  15:20 We couldn't agree more.   Sam Wilson  15:21 Yeah, yeah. It's pretty incredible. It is also, I mean, you can tell that there's interest in the space just when you go to the manufactured housing manufacturers. I mean, it's almost impossible to get a new supply even right now.    Keith Meyer  15:33 Yeah, they're on about a 12-month backlog. Which is yeah, same issue we're seeing on, you know, site-built housing as well. There's just not enough supply of it right now. So demand is through the roof.   Sam Wilson  15:44 Right. Yeah, it'll be interesting to see certainly where that goes. 2022. What do you guys want to do in 2022?   Keith Meyer  15:51 A lot of things. So like I mentioned earlier, we did our annual retreat back in December. And it was nice to be able take some time to work on the business and not just in the business, scrambling and, and hustling every day. So we actually set aside some time to map this out appropriately. And, you know, we have our goals as far as acquisitions and equity raise and things like that. And that's really a big part of our mission statement is being able to raise equity because what we're doing is we're bringing investors, we're bringing our investor network into quality deals. So we want to make that number as big as possible. And we're proud of where we were last year. But we want to 10, 10x that this year if we can and fortunately, with a deal flow that we have, if we're able to execute appropriately, I feel very confident and doing that this year. So I would think we're going to have maybe an acquisition every month, something like that would be a realistic goal for us and we're on pace for that at this point.   Sam Wilson  16:43 Man, that's fantastic. Absolutely fantastic. Keith, let's jump here into the final four questions. And you may have already answered this, what is one tool or resource you find you can't live without?   Keith Meyer  16:53 So I mentioned the CRM, I also like a project management system. So we use monday.com to kind of manage our deal pipeline, essentially. So you have the people pipeline management through the CRM, and then you have the deal acquisition and execution, pipeline management, and other traditional project management type software. So that's a really good one.   Sam Wilson  17:11 Right. Oh, that's great. What is one mistake you can help our listeners avoid and how would you avoid it?   Keith Meyer  17:16 Don't be afraid to ask for referrals or to get involved people. That's part of the reason why I'm really, really drawn to the real estate industry in particular, is how willing people are to help to give out information and valuable information for free. And you know, they're very willing to do that to share, because it is such an abundance industry. So if you have a question, there's tons of online platforms or meetings, or pick up the phone and call somebody, reach out on LinkedIn, and chances are, you're going to get a solid response.   Sam Wilson  17:43 Fabulous. Question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?    Keith Meyer  17:49 Well, yeah, we are proud of our involvement in affordable housing. And again, that's something that I caught on to pretty early I would say is the growing need for that. And now the world and our country, maybe in particular, is not doing a great job of providing that. So you know, we target properties to where we can still remain affordable by those metrics. And we're getting deeper into the actual subsidized housing space as well because I see a long runway for that I think we're gonna be left with no choice, but try to improve the access to that type of house. And so that's something that I'm pretty passionate about personally, that's   Sam Wilson  18:21 Awesome. Keith, if our listenres want to get in touch with you or learn more about you what is the best way to do that?   Keith Meyer  18:26 So our website is SymphonyCapitalGroup.com. My email is Keith@Symphonycapitalgroup.com. We're all over all the social media channels, can't miss us, Instagram, LinkedIn, Facebook, and my partner, Ellis Hammond runs an amazing YouTube channel with a ton of good real estate educational content on there, so check out Ellis Hammond's YouTube channel and then sign up for our email list because we send out a lot of good content. We just did an educational webinar today on how kind of what we talked about how to screen and better deal and what criteria specifically in 2022 You want to look at if you're wanting to get into a syndication as a limited partner with investment capital.    Sam Wilson  19:05 That's awesome.  Keith, thank you for your time today. I certainly appreciate it   Keith Meyer  19:07 You as well, Sam, great talking to you. Take care.    Sam Wilson  19:08 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Is it possible to retire early by investing in real estate?  Joseph Cornwell, formerly a police officer and now a real estate agent, believes that it is possible. Also a general contractor and real estate investor, he buys distressed properties and turns them into value-add investments that are attractive to many buyers. He shares in this episode the events that led him to jump from the police force into the real estate space and the steps that investors can take to scale into larger multifamily properties.    [00:01 - 02:47] Opening Segment Joseph Cornwell turned from police officer to real estate investor How did he do that? The story of how he acquired 35 apartments with 13 garages [02:48 - 07:25] A Creative Way to Generate More Real Estate Income The potential revenue of a garage in your real estate investing Joseph shares his experience so far scaling multifamily real estate What many real estate agents lack according to Joseph He reveals his secret in finding new clients as a real estate agent [07:26 - 12:25] How to Scale to Large Multifamily Real Estate Joseph talks about his plans to scale into larger multifamily properties The biggest challenge that Joseph anticipates in finding a deal You can replicate Joseph's successful entry to real estate These are the steps [12:26 - 15:03] Closing Segment A tool or resource you can't live without BiggerPockets A real estate mistake you want our listeners to avoid Working with the wrong contractors Find referrals first from people you trust Your way to make the world a better place Promoting financial freedom and literacy Educating new real estate professionals Reach out to Joseph See links below  Final words   Tweetable Quotes “Having relationships with those brokers…focusing my time on reaching out to those brokers, and trying to be one of their first points of contact and move those properties is very important.” - Joseph Cornwell “ I think you have to decide early what is your goal and that will help you develop your strategy.” - Joseph Cornwell “When working with contractors especially, I would definitely try to get referrals from people you trust.” - Joseph Cornwell -----------------------------------------------------------------------------   Email jcornwell@realtyonestop.com to connect with Joseph or follow him on LinkedIn. Visit Sibcy Cline Realtors to find out if you're fit to become a real estate agent! Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com Want to read the full show notes of the episode? Check it out below: Joseph Cornwell  00:00 I think you got to decide, you know if you want to be a full-time investor, which is, you know, what I'm into now, where I'm headed. You got to decide to make that obviously, you know, a big part of your life and world. And for a long time, I did the W2 job and the investment. And it was very difficult. I was working, you know, 60, 80, 90 hours a week sometimes and it was not sustainable, and I shouldn't have done it as long as I did. So I think you have to decide early what is your goal and that will help you develop your strategy. But you know, if you're looking to operate a business like mine, where you're offering multiple services within the real estate business, then you have to kind of dive into it.    Intro  00:38 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:46 Joseph Cornwell is a former full-time police officer turned real estate investor, agent, and general contractor. Joseph, welcome to the show.   Joseph Cornwell  00:55 Hey, thanks for having me.   Sam Wilson  00:56 Hey man, pleasure's mine. Same three questions I ask every guest to come on the show, in 90 seconds or less, can you tell us where did you start, where you are now, and how did you get there?   Joseph Cornwell  01:04 Sure. Yeah. So as you mentioned, I was a full-time police officer for the past 10 years. I just quote-unquote, retired from my W2 job last year, started real estate investing about six years ago, which led me into getting my real estate license and becoming a general contractor a couple of years after that, as I started doing rehabs on my properties. And that led me to scaling up my portfolio. Right now I have 35 apartments and about 14 garages spread out on those properties, and lucky to scale up into larger multifamily this year.   Sam Wilson  01:38 Man, that's fantastic. Tell me the 35 apartments, but then 13 garages? What's that?   Joseph Cornwell  01:45 Yeah, so I actually bought a six-plex, here in Cincinnati, where I'm based, that had 10 storage garages behind it. So that kind of got me into very small scale, self-storage. Those are all separately rented either to tenants or non-tenants. And that kind of gave me the idea with the construction company that I own to maybe start building some more garages to add income on some of my other properties. So like I said, I don't know the exact number. But we have 14, 16, garages, something like that, that we rent on our properties, thE rental properties.   Sam Wilson  02:15 That's really interesting. So you've got a single family home or a multifamily home, whatever it is, I'd say it's a quad Plex. And it's got some garage that's not attached to the structure. And you separate that out on the lease and say, “Hey, we're going to lease that separately to somebody else.” Is that right?    Joseph Cornwell  02:30 Exactly. Yep, we offered to our tenants for a discounted rate, obviously, you know, especially if you're like a duplex, for example, I know having people come and go through the driveway, and the property is not ideal. But I've had times where tenants don't want it and usually can get a lot more rent, you know, for a non-tenant. So we offer both ways and do whatever is easiest.   Sam Wilson  02:48 That's really, really intriguing. I love that. Yeah. How do you navigate the coming and going of random people at the property?   Joseph Cornwell  02:55 Yeah, so we are storage, strictly states that is daylight hours only. And it's only for storage. So you know, we don't have people run in, you know, oil change shop or something like that ever garage, it is strictly for storage of items very similar to like, you know, the mom and pop or franchise storage company would work. And typically our tenants are gone during the day. So it's not an issue. But if we did have an issue, then those tenants communicate, we do an introduction. And obviously, you know, it's kind of a small-scale housing. So everybody kind of knows each other, obviously, if this was 100 units or something to be a lot more management to coordinate all that.   Sam Wilson  03:30 Right. Yeah, that's interesting. What is the additional revenue that a garage like that can produce?   Joseph Cornwell  03:36 Yeah. So for example, and this was pre, you know, lumber prices jumping up on us a couple of years ago, but we were able to build a large, side by side like 24 by 24 garage for about 20 grand, that was our costs through the construction business. And we're able to rent that out for 300 a month. So you know, it's a 1.5% rent-ratio, new construction with you know, no expenses, no utilities, no CAPEX, because it's all brand new. So obviously, you know, we could buy apartment deals like that we do it all day long. And you know, to do that with storage is even less headaches than residential. So, nowadays, I would probably cost quite a bit more to do, but it made a lot of sense a couple of years ago,   Sam Wilson  04:12 Right. That's absolutely intriguing. Thanks for breaking that down. Scaling small multifamily. You said you started about six years ago. Is that right? Okay. Cool. And so in that time, you've been able to acquire 35 apartments, and that was enough to allow you to, you know, quit your full-time job.   Joseph Cornwell  04:28 Yes, exactly.   Sam Wilson  04:29 That's fantastic. Talk to me about what your business looks like today. I know you guys have your hands on a lot of different things. What's been the iterations of your business? And then how did you scale each of those pieces?   Joseph Cornwell  04:40 Yeah, so I like I said, I got my real estate license about five, six years ago. And mainly I started as a brand new investor, I started working with some real estate agents that I had just known from buying personal houses and things like that. And I quickly realized that most real estate agents don't know anything about investment property. So that kind of led me down my path of getting my own license at the time I thought you, “No, I'm just gonna do this to buy and sell my own investment property.” But it kind of organically grew into, you know, its own business. I had other investor friends, like, “Hey, I know you got a license, do you mind showing me this or might help me do this,” and it kind of out of my controls almost, you know, grew into its own business. And I was like, Hey, I'm making decent money doing this, I should maybe actually put some time and effort into it, see how much I can scale this. So that led me into scaling that into a much more profitable business than my previous law enforcement job. And again, same situation, I started hiring contractors on my properties, I was buying to rehab, I started doing all the work myself. And when I ran into things I didn't want to do I started hiring people, I quickly realized that hiring and firing contractors was not a lot of fun. And I had the idea that if I, as an investor, I'm struggling with hiring reliable contractors, then it's probably a lot of other people in my market with the same issue. So I'm going to put the time and effort into building out a business around that service. And I started hiring full-time employees to do my contracting for construction and scale that up. So as of now we have seven full-time contractors that work in the business, and I've one full-time assistant, and she helps with the construction and the sales side with the agent business as well. So as far as the agent business, it's still just me and my assistant that run all that.   Sam Wilson  06:13 Gotcha. That's really, really interesting. How did you go out and find new clients? I guess, you know, for the construction business, I mean, you're running two very different, it seems. Businesses, obviously, they both serve probably the same person. But how did you even find those clients?   Joseph Cornwell  06:27 Yeah, so I very early on in the process, and not really even intentionally, I started posting everything I do on Facebook, you know, I was taking pictures showing before and after photos, I made business pages for those companies. And that quickly, organically grew as well, people started kind of liking and following our pages, enough, where we were getting the word of mouth, people have seen what we're doing, and they're like, “Wow, that's a great kitchen, you know, let me call them and see if they would do our kitchen or bathroom or basement or whatever it may be.” So we started getting outside clients that way, very organically through Facebook, you know, not even doing any paid marketing or anything like that just kind of word of mouth and seeing it on social media. And then we also obviously get a lot of referrals from our sales business. So if I sell a house for somebody, and they want a kitchen done, they know I have a construction company. And we kind of pass referrals back both ways, right? If I redo a kitchen for somebody, and next year, they get to sell their house, they already know me and like me, and trust me, hopefully. And then they've called us to, you know, help them buy and sell real estate as well. So both businesses kind of, you know, help prop each other up in that way.   Sam Wilson  07:26 Right, no, man, that's absolutely fantastic. You know, those are revenue-producing businesses, I think that we talked about earlier, you know, that allow you to continue to invest your own money back in real estate. So what does the future look like? And do you see it changing kind of on your investing strategy?   Joseph Cornwell  07:42 Yeah, so historically, I've done you know, the BRRRR method, I buy very, very, you know, distressed properties that, you know, sometimes need full structural rebuilds, you know, foundation issues, everything you can imagine. So, on the residential side, from the 2, 4, 6, 8 unit properties, I bought the last five, six years, that's what we've been doing. As anyone who's in, you know, large rehab business knows with labor issues, supply chain issues, material issues, it's becoming increasingly difficult to hit, you know, budget and timeline on those construction projects. So I'm hoping this year to transition into more of a stabilized asset that is not necessarily turnkey, I mean, I'm still going to look for value add properties, like we all want, but I'm hoping to get into larger multifamilies, you know, the mid-size, the 20, 30, 40, 50 units, that's kind of my next goal. And instead of doing full, you know, rebuilds on these properties, we want to focus on just doing apartment turns, which were, you know, a little bit more efficient, easier to find material for. And, you know, we can turn those apartments a lot faster than we can do an entire, you know, structural and mechanical rebuild on a house.   Sam Wilson  08:47 Right. Yeah, that's an excellent point. You don't know what your turn time would be per unit. But it's got to be a lot less than a single family house. And of course, if you can go one apartment to the next to the next, I mean, your scalability on that is just so much greater, you know, job sites across town, that is absolutely intriguing. I love that. What do you think is going to be your method for finding and acquiring those larger properties?   Joseph Cornwell  09:10 Yeah, so at least here in Cincinnati, I mean, most of those mid-sized multifamilies, which is a small percentage of the inventory is controlled by the commercial brokers. So having relationships with those brokers, which I have with some, you know, focusing my time on reaching out to those brokers and trying to be one of their first points of contact and move those properties is very important. There are some still owned by Mom and Pop owners that you can direct market to which we've done in the past and plan to do again, because typically, it's a little bit smaller than, you know, the large scale funds and syndicators are looking for, you know, they're looking for the 100+ units typically, so there's not as much competition with the big boys and that's mid-sizeD space. But you know, it is still mostly broker controlled as far as the sales so doing direct mail and working with the brokers will be our opportunity to find those deals.   Sam Wilson  09:59 Right. That's interesting, what are some challenges you see in that kind of, you know, middle market, but that kind of lower multifamily count? Like, what are some challenges you perceive, you know, acquiring that 30 to 50 unit size property?   Joseph Cornwell  10:12 Yeah, I mean, I think just inventory is an issue. So, you know, I don't know the exact number of top my head, but let's say, you know, if there's 1,000, you know, multifamily units in my area that are over 10 units, I'd say, you know, probably 10% fall in that mid-range category. So just from a numbers standpoint, you're already looking at a very small percentage of inventory. And then obviously, as we all see, there's a very short inventory issue on every size of real estate, right, so large multifamily, small, and even residential, a lot of people just aren't selling right now. So that's gonna be the biggest challenge is even finding deals that are able to be sold. And then once you find them in, you're trying to get them at a price that makes sense for the value add strategy that we're looking to do.   Sam Wilson  10:54 Yeah. And I would imagine, you know, those unit sizes are going to be more vintage property, as well. So you know, then you're also working with an older product. Gotcha. That's absolutely intriguing. Hey, tell us I know, we've talked a little bit about, you know, where you've come from, where you guys are going, the type of products you're looking for, if somebody wanted to kind of replicate your success or do what you've done, what would be some things you would tell them to start off first steps?   Joseph Cornwell  11:18 I think you got to decide, you know if you want to be a full-time investor, which is, you know, what I'm into now, where I'm headed. You got to decide to make that obviously, you know, a big part of your life and world. And for a long time, I did the W2 job and the investment. And it was very difficult. I was working, you know, 60, 80, 90 hours a week sometimes and it was not sustainable, and I shouldn't have done it as long as I did. So I think you have to decide early what is your goal and that will help you develop your strategy. But you know, if you're looking to operate a business like mine, where you're offering multiple services within the real estate business, then you have to kind of dive into like it like I did, you know, get your real estate license, maybe that means getting trade licenses, depending on what state you're in. You know, obviously, if you're going to operate a general contracting company, there's a lot of hoops to jump through with that as well, depending on your state. So I think it's really deciding what you want to do and kind of work backward to build a strategy around that. Yeah. And I don't know if the way I did it necessarily makes sense for most people. But it certainly is a way to do it. And it works. And it has worked and hopefully will continue to serve me in the future. But you know, the hardest part is it is difficult, no matter what route to take is going to be difficult. So you just got to really dedicate, you know, a big part of your life to doing it.   Sam Wilson  12:26 Right. No, that's a sound advice. And certainly appreciate that. Let's jump here to the final four questions. The first one is this, what is one tool or resource you find you can't live without?   Joseph Cornwell  12:35 Yeah, I would say BiggerPockets is probably one of the best, you know, real estate, social networks that have been a part of I've been on there before I bought my first property. And it's been a massive resource. And I'm sure most of the listeners here probably have heard of it. But that's probably the most helpful resource I've had. Since starting real estate.   Sam Wilson  12:51 That's awesome. Question number two, what is one mistake you would help our listeners avoid and how would you avoid it?   Joseph Cornwell  12:56 When working with contractors especially, I would definitely try to get referrals from people you trust. And I would definitely have a system that whether it's a contract or some sort of structure in place where you're only paying them for completed work, and you're checking the work when it's completed. Either you or somebody else you trust is checking it, don't get burned, like I did in the beginning by, you know, giving 1,000s of dollars away to people who aren't doing the work are not doing it correctly.   Sam Wilson  13:20 Right. Oh, yeah. Happens all the time, unfortunately. When it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Joseph Cornwell  13:27 Yeah, I think for me, one of my you know, philanthropic goals, if you want to call it that is to give back to others who you know, are on this journey behind me. So I recently started a YouTube channel where I'm basically just gonna lay out everything I've done and, and I've had a few videos out now where I'm gonna try to help other people get to where I'm at. And hopefully, Excel passed that as well. And I do the same thing with some of the local high schools. I teach some, you know, financial literacy classes as a guest speaker. And that's something I want to hopefully grow into like an actual company, nonprofit, where we help other people, learn financial freedom, learn financial literacy, learn how to invest because unfortunately, in this education system we're in in America, it's not really taught. So we're hoping to pass that message on to other people that will hopefully have an advantage that we might not have had.   Sam Wilson  14:15 That's awesome. I love that Joseph, if our listeners want to get in touch with you, or learn more about you, what's the best way to do that?   Joseph Cornwell  14:20 Yeah, so you feel free to email me anytime, it's JCornwell@RealtyOneStop.com. My Instagram, Facebook, and YouTube, I think are on the links that we have here on the show. So feel free to reach out on any of those platforms or email me anytime.   Sam Wilson  14:35 Awesome. Joseph, thanks for your time today. Certainly appreciate it.    Joseph Cornwell  14:37 Thanks for having me.    Sam Wilson  14:38 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.  

Our guest for today is Darren Smith, an industrial commercial real estate investor. He partners with people looking to make a secured and consistent return on their money backed by cash-flowing real estate. We talk about a variety of topics in such a short amount of time, especially his experience in investing in industrial real estate properties. He reveals the strategies and decision-making processes that helped him purchase over $10 million in real estate through his almost 2-decade career.  [00:01 - 04:41] Opening Segment Darren Smith talks about his journey to industrial real estate Why he build a company, only to let it go in the end [04:42 - 11:34] Shifting to Industrial Real Estate Darren talks about his process for selecting the person who will lead his company This creative lead generation technique sets Darren apart from his peers The most important factor for Darren when buying properties [11:35 - 16:56] Investing in Industrial Real Estate Here are Darren's tactics to protect his team from non-renewals Why building relationships and rapport with sellers is important Should you be in many markets, finding deals? Darren won't advise this, and here's why [16:57 - 19:56] Closing Segment A tool or resource you can't live without Google Sheets A real estate mistake you can help other investors avoid Do not jump into real estate right away Build your bank money first Your way to make the world a better place Providing job opportunities to people Reach out to Darren See links below  Final words   Tweetable Quotes “Everything that we do in real estate, it all comes down to that relationship and that rapport with sellers.” - Darren Smith “I'm not saying don't make the leap [to real estate] eventually, but just make sure that you have enough of a base and then also that you've put some bank money in your portfolio where you have property leverage.” - Darren Smith “If you're just going out submitting cash offers or blind offers through brokers, you basically have no shot in [the industrial] market.” - Darren Smith -----------------------------------------------------------------------------   Email darren@solidgrowthproperties.com to connect with Darren or follow him on LinkedIn. Do you want to sell your property fast without having to go to an agent? Visit Solid Growth Properties now. Connect with me: I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.   Facebook LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com   Want to read the full show notes of the episode? Check it out below:   Darren Smith  00:00 Like everything that we do in real estate, it all comes down to that relationship and that rapport with sellers, and it's the same thing with your tenants. So having those conversations, finding out what are their needs and desires and hey, what's fair and work that out through the process, and if you can pull it off great, you know, do it. I know some of my tenants will another one of my tenants is the Army Corps of Engineers, there's zero chance they're going to agree to that they are so fixed in their ways. And so some you just work it out in other ways.   Intro  00:23 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:35 Darren Smith served almost six years in the Army, and he spent the last 18 years as a professional real estate investor. He has flipped rented and wholesaled hundreds of residential properties, and in recent years, has purchased over $10 million in real estate. And now he's full-time in commercial industrial real estate assets. Darren, welcome to the show.   Darren Smith  00:54 Hey, thank you very much for having me on Sam.    Sam Wilson  00:56 Hey, man, the pleasure's mind. same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell us where did you start? Where are you now? And how did you get there?   Darren Smith  01:03 I started back in the service, as you mentioned in 1997, did six years in there, got out of the service did a lot with computers. So I continued on with that for quite a few years. But at the same time doing residential real estate I had a mentor who was also in computers who did real estate and I sat next to him for about a year or two. That's how I got started real estate, was just Rich Dad, Poor Dad reading his books, following him along and picking his brain, everything I could go into his rentals. And long journey up and down had some big failures to be perfectly honest in the crash. But started back at the bottom of real estate back in about 2012, 13, was an assistant to a wholesaler, eventually start off doing that on my own. When I moved out to Colorado, build up a residential real estate business, there over several years. And I was doing really well, move back to Pennsylvania, which is where I am currently. And over that time last four years have done the transition from residential to now, I am 100% industrial real estate.   Sam Wilson  01:58 That is fantastic. Let's take a few minutes and talk about your transition. Because you're back in Pennsylvania, transition out of residential into commercial because I think it's a fascinating kind of story how you had a functioning business and it was making money. And you hung up the cleats and said, “Hey, I'm going to commercial real estate.” tell us that backstory.   Darren Smith  02:18 That's pretty much what it was I have done residence for a while and I liked it. Don't be wrong. It was a great business for a long time. But I really saw friends doing the commercial side, I have some that were doing all aspects of commercial office retail, industrial and multifamily. And then but most of my friends probably 90% are only doing multifamily commercial. And I kind of looked at all those options. And we can get it if you want. But I chose the industrial avenue, and that's the one I've stuck with. So I've been doing that for a couple of years while running my residential business. Thankfully, I had some awesome employees, they just, they do fantastic work. They allow me to run my business in Colorado while I live in Pennsylvania. And actually, they ran the residential business in Pennsylvania as well. So they ran both sides of the country. And it just didn't take me much time. And so I was able to do both. But as I scaled that up, as I scaled industrial, you just start looking at where you're spending your time where you're getting your return from. And then where you see yourself, I read a book called Vivid Vision this last summer. And it really spoke to me, it's it's probably a lot of things your listeners have already heard. But when you really like sat down and went through an actual day and close your eyes and think about it, I didn't see myself in a residential space anymore. And so my employees, they've been so fast, fantastic. I knew if they were able to take this and run with it on their own, they practice even running it anyway, I thought how great would that be for them. So it was a win-win because it's great for me, because now I can focus 100% on industrial. And as we all know, when you do switch from residential commercial, you basically had a zero or two to every deal you're doing. And so it allowed me to scale and it will much faster, but also them I mean, the lifestyle they're gonna be able to have now running and owning that business and having all the profits I think is going to be great for them as well. So it kind of was an easy decision and you know, knock it out a couple of months, it was pretty quick.   Sam Wilson  04:00 That is absolutely intriguing. Because you read the book, and you said, you knocked out a couple of months, you said, Hey, man, I'm out. I'm moving into commercial full time, you gave the company away, right? That's right. So most people, and this is not maybe this is the greed monster in me or whatever it is. Or maybe just like, hey, I've put years and years into building this company. And the last thing I want to do is, after all my blood, sweat and tears, because it's really difficult to build a functioning company that produces a regular steady income, I'd say hey, look, I've earned the right to let you guys continue to operate this and I will collect you know, whatever it is maybe last but I'm gonna be more of a hands-off owner and you said instead look, I don't want the middle distraction, and I can bless you guys have a good time. That's courageous.   Darren Smith  04:42 Why do we ultimately do a lot of what we're doing here? It's obviously, there's a lifestyle component to it. But you do get to a point where giving back you know is important. And you know, we think of charities we think of you know, rotary and do stuff in your church, but you know, the people around you like charity starts with very starts with your employees as well and they have given so much to me, so I really do see it as you know, it could be seen as generous doing that to them. And maybe that was, but at the same time, they gave so much to me. So they were generous to me for so long. And as I said, it also allows me that time and that mental bandwidth to just focus on industrial, so I will benefit out of this, they will benefit out of this. And so I guess I just didn't see it quite that way when I was going through it.    Sam Wilson  05:21 And that's incredible. Very cool. So I love it. So how did you select? I'll get off of this, like, I'm hammering home on this, but how did you select the person that would lead this company? Were they already at the top? Was it already like main lead person, you're like, “Hey, man, I'm gonna give you the company.” Or how did you decide who gets equity? And who doesn't? I mean, that seems like it'd be a tough decision when you're basically giving away the farm.   Darren Smith  05:40 It was a bit of a challenge. But since they've run it for so many years, it really, you know, the top leaders, they were pretty obvious. So it wasn't that hard of a choice. It was just split equally, you know, between the people who were already running the show.   Sam Wilson  05:54 Gotcha. Fantastic. I love that. So let's talk industrial. Where are you finding opportunity right now? And let's start with that I've got about 12 questions for you, you can think of right out of the gate. But tell us how you're finding opportunity on industrial, how you plan on scaling that.   Darren Smith  06:08 That was what was so great about starting with residential is that is, you know, Doggy Dog out there, it is so competitive. I mean, I've literally spent millions of dollars in marketing on the residential side. And so to take all the lessons learned over there, and then apply them back to commercial, because honestly, super simple. It's the basic core things that were working. And I did them at a very high level. So I in fact, I have examples here, I use the auto pin handwritten letters, I put a real stamp on them, I put a business card and everyone with my picture on it, then. So everything has to just be high class in how all your communications are done. And so I just took the same residential marketing I'm doing and I started with mailers. And that has been really successful. For me, the cost is, gosh, a 10th of what I used to be spending on residential, and yet I get much more many more leads from those letters that I send. And people talk about that I just every week, somebody will tell me, “Hey, I love that you wrote me a letter” or I love that, you know, you know that you wrote this out, my kids would have just typed this where they say, “Hey, you know, look like good looking guy” or whatever, you know, they talk about the picture. And so being able to see me as they're talking on the phone, so I want to propose to you, if anybody's looking on the commercials, you're doing residential, don't send out your 35 cent postcards on the yellow thing, you're not going to get calls make your numbers are so much smaller. And my whole list is less than 6,000 properties. Right now. I'm growing that a little by little but not that much wants to do with hundreds of 1000s, you know, on our list on so much debt per month. Oh, yeah. Yeah. So that was how I made that transit. That's how I'm finding opportunities. I have started doing cold calling here recently. But again, I don't do the hired out yet. I may do it at a small scale. But I don't do the triple dialers I do one at a time because I want to have that high level of professionalism. You know, I want to do it, where I'm speaking with the person and it talks to them. And I have great conversations, I don't get the calls of, hey, take me off your list or worse, as you all know, when people are calling me it's like, Hey, thanks for writing, you know, what's this all about? And it's just I love the conversations I have with commercial property owners, because it's a different level of sophistication. You know, when you talk about why I made that switch as well, I think at the aggravations that we have closing deals where you make 10 $20,000. And it's just like, oh my gosh, that the headaches can drag out for six months. And not that industrial doesn't have long closing times. I mean, they can take you know, six months or more I've I closed property last year, I was talking to the guy for over two years. But when you get to the end of the road, one your gains and your profits are significantly more. But two, you're dealing with a different level of sophistication and people that they have their lives together for the most part, you're not coming to bail them out of, you know, whatever tragedy that's, you know, half the time self-inflicted, a lot of these are there people that have money, I close to a 40,000 square foot warehouse last Thursday, and he had more than enough money. He didn't even eat the money from the sale. But I was able to help him with simplifying his life in some ways getting him an income stream, we did a partial seller finance on this one. So it helped them with some taxes. Just got to where I want to be. And just it was much easier conversation.   Sam Wilson  08:59 That's fantastic. Yeah. I love that in the autopen handwritten letters. Is that a machine that you have there at your house or I mean, or your office? What do you use, seven, nine out? Or what's that look like?   Darren Smith  09:09 I don't, I use two companies. I use Open Letter Marketing, which is a great one that's kind of turnkey, they put the stamp on, they mail it out. I have mine delivered, unsealed. And without a stamp, I like to put a little bit of a different stamp on again that that touch. I think though, I just ordered a couple of 1000 with a bouquet on them. So I use pioneer direct and they mail them to me handwritten open with no stamp.    Sam Wilson  09:32 Yeah, that's super cool. Yeah. And it's funny that the creativity in that and it's the little tweaks that set you apart, right when you're doing, you know, direct mail or when you're doing cold calls or things like that. It's like it doesn't take a lot to be different. And I've heard some really interesting stories on this show. I mean, there's one guest who sends a Rubik's Cube in a box and it says, Hey, let's figure this out. Right. So it sends all of his information with a Rubik's Cube but let's figure this out. And he gets calls from it. Like, I mean, he's I think he's gone so far as to send them a pair of shoes like there was some question killer deals like, Hey, here's a pair of shoes. You know what, I can't read what the story was behind that. But it's really unique just going the act, and that's not scalable, right? Like, it's not scalable, but yet, I think it puts you at the front of the line, which is, you know, that's where you need to be. So talk to us about the type of industrial you guys are doing. Are you doing manufacturing and you want warehousing? Or what are you getting into?   Darren Smith  10:21 For me, it's really, I focus more on the square footage, and, you know, the zoning ICSP right. And then for me, it's location is the absolute most important factor for what I'm buying. As far as the, you know, what they're doing in the building, it's all sorts of things. It is it's, you know, general warehouse, one of them was actually mostly office, you know, it was kind of like that flex space, a building spot. It's a forklift rental repair service, you know, company did a cabinetry making, you know, business last year, that was a huge 152,000 square feet building, I did not buy that myself, that was an assignment. So I'm doing both, buying, you know, and assigning properties. But really anything as long as the things you're looking for is, you know, the location has to be number one, the condition of the property, you know, when things have been upgraded, all the same stuff, you look at a house, just, you know, different terms you have to learn, but really in commercial comes down to the tenant, that is absolutely the most critical thing that you're looking at. And that's what banks are going to look at. So when I'm on all my whole properties, I get bank financing for the majority of it, you're just never gonna find, you know, cheaper debt, I'm getting three and a half percent debt right now locked in for seven years. I mean, you can't beat that. And so having that long-term tenant in who is, been there a long time with their longevity, then have they invested in their building themselves, you know, what's their credit rating, you know, haven't been profitable last several years. So those are things you really want to make sure that you lock-in.   Sam Wilson  11:35 Cool. Well, let's talk about this. I mean, one of the problems that I see in long term leases in triple net leases, which a lot of imagine that's what you're dealing with your double net, or triple net leases, is that they don't renew, but every three or five, or whatever the renewal periods are, in a time of hyper, we're in, you know, accelerated inflation, how do you protect yourself in that?   Darren Smith  11:58 That's an excellent question. Because you're right, that's very real. And it's something that we weren't having to deal with before. So I'll tell you one way of doing it, and I lucked into this, I inherited the lease that's on the building I closed last week, but it is tied to the Philadelphia consumer price index for all goods and services. So the rent automatically increases every year based on inflation. So if you can get that clause in your lease, you're obviously doing pretty well. And it's helpful. I do have some buildings that obviously don't have that big 10. And they have, I think, you know, two and a half or 3%, you know, kind of annual increases. And those, you're right, my costs are definitely going up every single year. But what I'll say is that your costs, like let's say, you know, utilities, if it's a gross lease, and you're paying utilities, they're going up significantly, but as your overall intake of your property, it's not a huge part of that income. So let's say your expenses on it are 10%. Well, even if those 10% expenses go up 50% In year, let's just say some crazy number, but really, your expenses on the property have only got 5% as a total rent. So since my rent on the property went up, 3%, I'm either you know, breaking even so I didn't make any more money that year. Or maybe I lost just just a little bit. But my principal paydown is obviously still going, you know, in the right direction. And my appreciation for the properties in general is going up. So you look at what industrial is going up, I think nationwide went up 9% last year, and I think even more the year before. And so I'm kind of baking in appreciation over time that I know when I do have renewals that come up, I'll be able to capture that. But as long as I can ride out through that period, I'm not concerned if I made the same cash flow one year to the next or maybe lost a small percentage, because I know overtime principal pay down and appreciation will make up for that.   Sam Wilson  13:38 Right. Yeah, that's intriguing. How hard would it be to on lease renewal? Or how agreeable do you think tenants would be to saying, Hey, we're tying all our leases now to the Philadelphia Consumer Price Index. I mean, as a landlord, the owner, I mean, that's, especially when we see numbers, just I mean, we saw what 6.7% published, you know, maybe not even the actual because they don't count the things that all of us have to pay for every day. So it's like, you know, how hard would that be to pull off? You think?   Darren Smith  14:05 Sam, that's a great question. And I just learned about on this, I read that for the first time a couple of months ago. And there's the first lease I have with that. So I wish I could speak more to it, but I can't. What I will tell you is like everything that we do in real estate, it all comes down to that relationship and that rapport with sellers, and it's the same thing with your tenants. So having those conversations, finding out what are their needs and desires and hey, what's fair and work that out through the process. And if you can pull it off great, you know, do it. I know some of my tenants will another one of my tenants is the Army Corps of Engineers, there's zero chance they're going to agree to that they are so fixed in their ways. And so some you just work it out in other ways,=.   Sam Wilson  14:39 Right, yeah. Good luck on that. Good luck. The Corps of Engineers to agree to a CPI-based or you know, the least tied to the CPI. That's wild man, that's absolutely fantastic. You buy in across the country or you sticking sticking to specific markets?   Darren Smith  14:52 I'm sticking to just my market, if I can't drive there in two hours, I'm not going to look at it and I know people that do it both ways. And for me, I love it. have ADD, and I need to focus. Like I can't do too many things at one time, my brain just doesn't function that way. So if I'm in too many markets, I want to be the master of where I'm at.   Sam Wilson  15:08 Yeah. How did you build that? 6,000 property list? I mean, it seems like this would be a fairly broker-controlled asset class. So and you're going all off-market direct to seller. Is that right? Are you also working with brokers? I do questions in there. Sorry.   Darren Smith  15:25 I do both. I work with brokers as well. In fact, I've wholesale buildings through brokers, where I have it under contract to either lease or sell the building. And I have that worked out with the seller, they know the owner, they know what I'm doing. And so I've listed properties on the commercial MLS, if you want to call it that, and sold them that way. So brokers are a great asset, one of the properties that I own. In fact, the first property I bought was a listed property, it just sat for a while. But I still have to talk with the sellers. I'd never buy a property where I'm not sitting down with the seller because I got partial seller finance on that one as well. And so you need to have that conversation to really make it a win-win. If you're just going out submitting cash offers or blind offers through brokers, you basically have no shot in this market. Don't even waste your time to be honest, completely wasting brokers' times waste anybody's time, where I get my data, I use Reonomy, R-E-O-N-O-M-Y, is a source I've been using last year, I recently got costar access as well. And so I've been pulling lists from there. And I there's a I think it's easy excel.com or there's it Maury is his name. And he has a website. And he makes Excel macros where he will combine all your data for you and do this cool stuff. So he makes these macros I combined my files together. And then that's what I take. And I load that into Mojo dialer. I send that off to my mailer to get the kids into.   Sam Wilson  16:37 Right, yeah. And I'll link to Maury as well. I know exactly you're talking about, I think he's somewhere out in California. But yeah, it makes them really cool. I mean, it does all wizard. Anything. Yeah. And you will custom build some crazy widgets inside of Excel that you're like this thing could launch a rocket. What are we doing here? That's really cool. I love it. Man. This is great. Darren, thanks for coming on today. I've certainly enjoyed this jump here into the final four questions. The first one is this, which you've answered like you've taken most of my first question already. But what is one tool or resource like digital software, something along those lines you find you can't live without?   Darren Smith  17:11 Ah, I go complete old school Google Sheets. I've had all these high powered CRMs, and Salesforce and all this stuff. And I gone back to Google Sheets. And my most important thing is I put a column with the next follow-up date. And every morning, I just sort by that date and what's do, knock them out.   Sam Wilson  17:27 Right. I love that. That's great. What is one mistake you could help our listeners avoid? And then how would you avoid it?   Darren Smith  17:32 The one I probably did was, I made many, many, many, when it comes to mind is I got laid off from a very well-paying computer consulting job six years ago, and I thought I got this real estate thing. I was making money. And I was doing okay, and my wife and I recently got out of her fellowship. So I thought, Okay, I got this, I can make the transition, I don't need to go get a job, because I could have got one the next day. And I did. And that was a mistake. Because if I had gone back and got another one for maybe a year or two, I would have been able to take more of my profits from real estate and hold onto more properties. And I would be further along than I am right now had not done that. So I'm not saying don't make the leap eventually. But just make sure that you have enough of a base and then also that you've put some bank money in your portfolio where you have a property leverage that way, because your W2is a huge asset for that. And I didn't have that for a number of years.   Sam Wilson  18:22 Right, man, I love that. That's great. Cool. Question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Darren Smith  18:29 So for investing side we're talking specifically just with the business and not charity. What I'm trying to do is I think the, everything I see like Mike Rowe doing and these other people were that there were jobs where people, where skill training is so critical right now and so lacking. And so we have a manufacturer association here in town. In fact, I'm meeting with the president of that next week, we're having breakfast. And I want to matching up the people who are in my buildings that have these jobs, these high-skilled jobs that are needed with the manufacturer association. So we can put those two together for apprenticeships and things like that. I said, it's in my vivid vision I have it all planned out what I want to do perfectly the full because I am in the beginning stages of that. It's what I am working on at this time.    Sam Wilson  19:05 I love that there and our listeners want to get in touch with you or learn more about you what is the best way to do that?    Darren Smith  19:09 Yep, my company is Solid Growth Properties. So Darren, D-A-R-R-E-N, at solid growth properties dot com. Shoot me an email I'm happy to connect with any and everybody whether it be they're interested in industrial real estate, or whether on the private money side, I do make quite a bit of money and send out a lot of checks every week to my private lenders. And that works really well for them.    Sam Wilson  19:28 Fantastic, Darren. Thanks for your time today. Appreciate it.   Darren Smith  19:29 Thanks for having me on. Sam. Have a great day.   Sam Wilson  19:31 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode

Are there any opportunities for military members and veterans to invest in real estate? Absolutely!  Here to open up real estate opportunities for our brothers and sisters in uniform is Navy veteran, Phil Capron. Phil founded Mission First Capital to give an option for military members–both active and retired–to participate in real estate investments for as little as $5,000 at a time.  Having been investing since he was on active duty, Phil knows the exact problems that military members face and offers solutions that fit whatever lifestyle they want to live.    [00:01 - 02:29] Opening Segment Phil Capron tells us how to utilize the Veteran's Administration (VA) Loan He recapped how he jumped from the Navy to the real estate space [02:30 - 15:42] Crash Course on Reg A+ Funds The problem with using your own capital in real estate deals What motivated him to start a Reg A+ fund When should you do a Reg A+ fund? A Reg A+' fund's advantage over crowdfunding Phil talks about the kind of investors who can join a Reg A+ fund Should you be a military member first in this type of deal? [15:43 - 19:22] Closing Segment A tool or resource you can't live without His personal relationships Slack A real estate mistake you can help other investors avoid Don't procrastinate by telling other people your goals and finding a way to make them happen Your way to make the world a better place Helping his fellow military members and veterans to invest in real estate Reach out to Phil See links below  Final words   Tweetable Quotes “Just know that if you're committed to an outcome, and you're creative, and you lean into your network and create win-win relationships, almost anything can happen.” - Phil Capron “[Real estate] is a team business. What I found out pretty early is you can only go so far alone, you can only go so far with like a small partnership.” - Phil Capron “What we like to say is investing with us today will not change your lifestyle, but it could change your life.” - Phil Capron -----------------------------------------------------------------------------   Email phil@missionfirstcapital.co to connect with Phil or follow him on LinkedIn. Start your real estate journey together with your fellow military members and veterans by visiting Mission First Capital.    GRAB A FREE COPY of Phil's book about VA loans here. Connect with me:   I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.     Facebook   LinkedIn   Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!   Email me → sam@brickeninvestmentgroup.com   Want to read the full show notes of today's episode? Check it out below:    Phil Capron  00:00 You can go invest on a platform and pick your deal, pick your jockey and go for it. What we are offering and the story we're telling admission first is you're investing in a suite of properties across a few different asset classes across multiple proven veteran real estate operators, so 100% that are known and operated real estate opportunities.    Intro  00:24 Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.   Sam Wilson  00:32 Phil Capron has 10 years in the business and as of today, over 500 apartment units. His focus is expanding the real estate opportunities for military members and veterans, and he's also the founder of the Reg A fund, Mission First Capital. Phil, welcome to the show.   Phil Capron  00:47 Hey, glad to be here. Thanks so much for having me.   Sam Wilson  00:49 Hey, man, the pleasure is mine. Same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell us where did you start, where are you now, and how did you get there?   Phil Capron  00:56 Rapid-fire. So I started as a special operations guy in the Navy. My job was called Special Warfare Combatant Craft Crewmen. Basically, we drive the small fast boats and crew them to take Navy SEALs, Green Berets, and other special operators to their maritime missions. I bought my first house using what's called the Veteran's Administration Loan, which enabled me to buy it with zero money down, moved all my buddies in, live for free, thought that was pretty cool. When I got out, I got my real estate license, because I knew there was something to this whole real estate thing. And, you know, through dozens of transactions with buyers and sellers started flipping houses and buying single-family rentals. And after, you know, a few dozen of those, again, just banging my head against the wall, I thought there's got to be a better way. I'd read all the books, Rich Dad Poor Dad, investing in duplexes, triplexes, and quads, you name it, you know, I understood it academically. But I actually took action, you know, eight or 10 years later, bought a 13-unit complex. And you know, that was 2017. And from there, racked up a little over 500 units between now and then. And that brings us to present day with Mission First Capital, which is yeah, we're the first Regulation A+ fund backed by real estate in existence that we know of specifically designed to help active duty service members and veterans push over the first domino to start a chain reaction of improvement to their financial landscape and their future.   Sam Wilson  02:16 Man, that's fantastic. I love that. So yeah, just a few short years, you've gone from zero apartments to 500. That's awesome. Have you done that using your own capital? Have you done that through raising funds before you started the Reg A fund? Or what did that look like?   Phil Capron  02:31 So here's the problem with your own capital. It will eventually run out. And for me, it was a pretty quick process because it didn't have a whole lot. So I actually acquired the 13-unit with $5,074.01 of my money, the purchase price was 910,000. So we could take the whole show talking about that. But just know that if you're committed to an outcome, and you're creative, and you lean into your network and create win-win relationships, almost anything can happen. So that one brought in a couple of debt partners, so they weren't attached to the property, just promissory notes against me, for you know, about $40,000, the seller held a second for $60,000, the seller had held a first for $810,000. Over the first year, I use the cash flow to pay off the second and I paid off my buddies pay them a nice interest rate. And I actually just sold that property this year for a profit of about $215,000. That's pretty cool to see that for a cycle. And so then yeah, I was out of money, and I had to go and raise money. So what that look like for me was joint ventures, I'd find the deals, I was a master evaluation within my little corner of the world. So my next deal was 108 units. And it was a screaming deal. We got it for just under 4 million, it appraised for 5.5. And today, it's worth just under nine. So brought in a few partners and that deal, killed it there, then yeah, a few more joint ventures, a few more syndications, a little bit of my own money here and there, but primarily other people's because they're much larger projects. And if you're gonna scale, I think it's important to grow that muscle but where you start is using your own, making the mistakes, skinning your own knees, because in this game, you do not want to be losing other people's money or your days will be numbered.   Sam Wilson  04:11 Right, man. That's absolutely so true. I love that the Reg A fun, that's a fun conversation, just from a sense that it's expensive, time-consuming. A lot of people steer away from it just from those two standpoints. So tell me why did you decide to do it? Well, first of all, if just in case our listeners don't know what it even is, tell us what it is, then tell us why you did it. And then you know what it cost you give us all the breakdown on that.   Phil Capron  04:35 And why you shouldn't. Yeah. So Regulation A+ under Securities and Exchange Commission is you're able to accept non-accredited investors. So that's somebody who's not a millionaire and doesn't make 200 grand a year. Most private equity offerings for folks that are quote, accredited investors. it bugged me that doing all these apartment deals I wasn't able to include many of my military friends and colleagues. So Regulation A+ the strength of it is that you can take non-accredited. The downsides is it's very regulation-intensive, a lot of red tape, very expensive, and probably a quarter million into the thing at this point, a lot of different entities, government entities that are looking into you and verifying you and auditing you and three different sets of accountants. So it's kind of a mess. And unless you're planning on building something really, really big and you're really well-capitalized, don't do a Regulation A+. Do a 506(b). And again, do that friends and family kind of thing. And once you build a brand for yourself 506(c), it's accredited only. But you know, that's a great path. And that's why most people go that angle.   Sam Wilson  05:40 Yeah, I understand. So do you, is it something you regret doing at this point?   Phil Capron  05:45 No, because in addition to continuing to scale my real estate portfolio and making money for my family and things that are important to me, the mission, pun intended, Mission First Capital, is to enable 10s of 1,000s of active duty service members and veterans to start their financial journey with us. Because most people just don't know that opportunities like this exist. And maybe investing a small amount of money with us, relatively small, will sort of like to spark and encourage somebody to go and do their own real estate deal, their own small joint venture or syndication, and that's the power. But if they're just working, you know, regular job, a military job, and you set a little bit of money aside every year invest with us. You know, that's a great thing, too. It can really change futures, what we like to say is investing with us today will not change your lifestyle, but it could change your life. And I really believe that. So there's a contribution point as to why I'm willing to endure all this regulatory nightmare.   Sam Wilson  06:45 Right, yeah. I mean, I can only imagine that just compliance alone is going to eat the better part of someone's job in a year. So that's really interesting. I guess, with that in mind, knowing the burden that running a Reg A fund places on especially a smaller operator, how are you offsetting the cost of administration, and also knowing that, hey, we're gonna have ample deal flow to were doing this make sense.   Phil Capron  07:10 So not offsetting, and, you know, I racked up over 500 apartment units, but I'm in selling mode right now. And everything that I have is going into Mission First Capital because you know, it's a machine and the purpose of it is to enable opportunities for those passive investors that get involved with their first investment with us. But also, for guys like me, who find their first 13-unit deal, their second 100-unit deal, I didn't know which way was up, you know, with either one of those deals, really compared to where I am now. If I had somebody that was willing to come alongside me with the equity, the net worth guarantor ship, the senior debt origination, and negotiation, you know, the legal aspect, the investor relations, all of that stuff, it would have been a godsend. And if you're doing a JV or syndication, you have to have people who fill those roles, you're losing, quote, unquote, a lot of your deal to have people fill them. And if they're not professionals, then what's to stop them from taking their football and going home, because that happens, right, life circumstance happened to people. So by building this machine, I'm able to partner with veteran real estate operators who've proven that they know something about their little corner of the world, and they're great at multifamily. They're great at Airbnb, the greatest self-storage, and I can pour rocket fuel on their growth and enable them to keep more of a deal than they would have if they did the standard syndication route, and for a lot less hassle. So that's what we're about here.   Sam Wilson  08:37 Gotcha. So this fund will not necessarily service deals that you are the general partner on, it will simply service what you intend on going in as maybe a fund of funds and other people's opportunities.   Phil Capron  08:48 So yeah, I get the fund to fund idea. But really, for us, it would be like a joint venture between Mission First Capital and yeah, Sam, the veteran in Memphis, you know what I mean? And we would just drop a JV. And, you know, obviously, we protect the investors first, but we want a sponsor that's bringing us great deals and creating massive value to make great money. Yeah, grow to grow together.   Sam Wilson  09:15 What's, I mean, when you talk to the potential investors, what's their minimum investment? I mean, a lot of these are Reg A+ could be in, you know, a crowdfunded deal. And you could have a minimum investment, you know, 10 bucks, whatever it is. So what's that look like?   Phil Capron  09:30 Exactly, yeah. And it's so funny learning about all the different money personalities and how people approach this type of opportunity. Crowdfunding is nothing new, right? So you can go invest on a platform and pick your deal, pick your jockey and go for it. What we are offering and the story we're telling admission first is you're investing in a suite of properties across a few different asset classes across multiple proven veteran real estate operators. So 100% veteran-owned and operated real estate opportunities. So that's, you know, sort of our stick. And if one goes bad, which, even if you do everything right, sometimes the deal goes bad at one. But we lost 12-unit to a fire last year that, you know, the insurance company still hasn't paid us out. And we can't get any new Department of Veterans Affairs or section eight residents, which is sort of our bread and butter until the building's rebuilt. So it's like a total Murphy's Law situation. So that individual project, it's really tough on us, right. But if you look at my whole portfolio, if it was blended, it would be just like kind of an aside, like, Okay, well, it's still like the values there, like the business plan is solid, you just need to be able to rebuild and everything is cool. So by investing in a suite of properties, diverse locations, asset classes, and operators, I believe that's a little bit of a hedge, rather than your typical crowdfunding, just one deal with just one operator.   Sam Wilson  10:52 Sure. Yeah. What did you maybe I missed that? Did you answer the dollar amount?   Phil Capron  10:56 Oh, I'm sorry. Our minimum was 5,000. Okay, so there's other out there, that might be cheaper. But, you know, like I said, I'm looking for a domino that can be pushed over that starts a chain reaction for these folks. And if it's much less no offense to folks that are working on getting their first investment together, but it has to be somewhat meaningful, it has to be able to snowball into something, right. And at 500 bucks, I just Okay, yeah, 20 years from now. Cool. But we're trying to accelerate growth.    Sam Wilson  11:23 Yeah. I mean, who really cares? If you double your money in 16 months, if all you put in was $1? Like, that's not a meaningful challenge now, or not a meaningful, yeah, just not meaningful in any capacity. When it comes to a Reg A fund, can you guys have accredited and non-accredited is that, did you answer that already? Maybe…   Phil Capron  11:42 Sure, yeah, we sure we can accept just about anyone, our criteria is you cannot invest more than 10% of your annual income, or 10% of your net worth, whichever is higher. So let's say you make $50,000 a year as a whatever military member, cashier labor 5,000 would be as much as you can do unless say, you own a stock portfolio, you know, retirement account, some rental properties of your own, and maybe your net worth is a quarter-million will then pay your minimum that we are allowed to accept just went from 5,000 to 25,000. So, you know, there's some different, on our website, there's some different, like questionnaires with the investor screening that helps you figure all that out if it's not clear.   Sam Wilson  12:25 And is that an obligatory minimum or maximum, I guess? Or is that something that is just what you guys advise your clients, and…   Phil Capron  12:34 It's part of the Regulation 80+ law. So yeah, we have to abide by that. So you come in, and basically, you certify what you make what you're worth, based on, you know, the calculations that are laid out in the forum. And, you know, that's just sort of is what it is, and, and also, we want people to be responsible, you know, it's, we're not anticipating being 100% of anyone's portfolio, I think that's reckless, I think you should have your, you know, 401k, if you're a W2 earner, you should buy your first home, you know, if you're in a position to do it, house hack it by duplex, things like that, those are all things I'm definitely in favor of, but to seek information and to seek opportunities. And we're creating an opportunity where there was none before where it wasn't well known. So we're trying to bridge that gap.   Sam Wilson  13:20 Right. What's it cost annually to keep the maintenance up on that, aside from the compliance you have to do in-house, like just filing fees with the SEC keeping that thing alive? And, you know, legal, what's that number?   Phil Capron  13:33 So it's gonna change the more investors that we get in because it makes the audit more complex and more properties that we buy. We've got a few under contract right now. So all, I'm not trying to be evasive. But it sort of depends on all of that in what is property of the individual entity, controlling 123 Main Street. And what's the purview Mission First Capital, to just throw a dart at? I'd say maybe 50,000. So it's tremendously expensive. So if you're not going to be raising 10, 25, 50, 75 million, it just, it's going to eat into your bottom line. So…   Sam Wilson  14:06 Oh, gosh, yeah, you can't support that on a, you know, two or $5 million raise annually just doesn't make any sense. I really, intriguing now, and again, you said you guys have a few properties under contract right now. But yet, is that through the joint venture structure that you have with other operators? Or is that stuff that you…   Phil Capron  14:24 A couple of them are mine, and a couple of them are with JV operators, so we would be looking to be the single check writer to come in and say, hey, you need, you know, half a million bucks. Let's do a JV, make it happen. It meets all of our criteria   Sam Wilson  14:39 Right, and one of the criteria you'd mentioned there was a veteran-owned real estate investing company, that's really niche, especially as you're going into, you know, potentially very large acquisitions. So how are you identifying those people?   Phil Capron  14:52 Okay, so let me make a caveat. So 100% veteran-owned and operated. Let's say that you have a buddy in Memphis, who's an Army veteran, and says, Sam, we're gonna do this deal. And then you guys both bring mission force capital, this deal. You guys are partners. That's great. We're partnering with you. But it's, there's a veteran at the top. What I mean is, there's plenty of money out there. And I just need to make sure that it's going towards helping a veteran build their real estate portfolio. And, you know, their new career after serving the military. It doesn't mean that necessarily they couldn't have a couple of people on their team that weren't, there has to be somebody that's in a meaningful role that brings us quote, the deal.   Sam Wilson  15:36 Right. Gotcha. Very, very cool. You're listening to that. And that rings a bell with you. Now you need to schedule a call with Phil. Phil, let's jump here into our final four questions. What is one tool, think digital, like a software, one tool or resource that you find you can't live without   Phil Capron  15:51 Dying? Because when I was reading the preliminaries, I had a different thought on this. Yeah. Well, I say what I was gonna say…   Sam Wilson  15:57 I've changed the question a little bit. So what was your…   Phil Capron  16:00 You know, to define as a resource might sound strange, but to me, it's my relationships. I mean, my girlfriend, like she, you know, empowers me to do everything that I want to do every day, she inspires me. You know, my friends, my team, my employees, like, this is a team business. What I found out pretty early is you can only go so far alone, you can only go so far with like a small partnership because everyone brings something a little bit unique by pouring into those closest to you and like, you know, the court relationships to me is my greatest asset, my greatest resource, right, from a tech perspective, Slack, I guess, just trying to declutter all the emails and everything and just sort of have a metric of where everything's going on an hour-by-hour basis across a lot of departments a lot of deals, then that's nothing new. So sorry.   Sam Wilson  16:49 No, no, that's good. It's interesting when you start hearing different things, you know, I've heard Slack a couple of times, but it's surprising the number of times you don't hear it, or yet, there's a lot of other things out there. But no, that's one that you know, email is the bane of a lot of people's existence. So finding a way to get that organized in a meaningful way. Absolutely. Question number two for you is this. If you can help our listeners avoid just one mistake in real estate, what would it be and how would you avoid it?   Phil Capron  17:14 Procrastination. You set a goal, you tell a bunch of people, and you find a way to make it happen. Because for me, you know, it was eight years, 10 years from when I'd first read the books. And when I first understood real estate, there's something to this, I like was making these steps I thought was taking action, like working as a real estate agent. Okay, I'm in real estate, now. I had a job, flipping houses still had a job, right? You need to find a way to start buying real estate now. So the best way in my experience to do that is to tell people what you're up to, allow them, your network to sort of conspire for you with resources, that could be capital, that could be specializations, that could be, you know, a lot of things that would be useful to building your team. And then just sort of that peer pressure of I said, I was going to buy a rental property in 2022. And it's December 30. You have to face your family and friends and say, Yeah, I shouldn't, I failed, right? So I lied to you, or I'm a failure, one of the two peer pressure.   Sam Wilson  18:12 I love it. Don't procrastinate. Question number three, when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?   Phil Capron  18:18 So just sort of the charter of Mission First Capital, it's to turn the light bulb on for these military members and veterans to start investing in themselves and their financial future. And for those who really want to go hard into real estate to pour rocket fuel onto them and enable them to build their business, their family, and their community.   Sam Wilson  18:36 Yeah, I love that. That's great. Phil, if our listeners want to get in touch with you or learn more about you what is the best way to do that?   Phil Capron  18:43 Probably through the website MissionFirstCapital.com, spelled just like it sounds.   Sam Wilson  18:48 MissionFirstCapital.com. Okay, great. We'll be sure to make sure we include that in the show notes. Phil, thanks so much for your time and coming on today. This was great.   Phil Capron  18:56 Thank you, sir. This is awesome.   Sam Wilson  18:58 Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.

Donna Cameron, After many incredible years in nonprofit management, has been spending her time “pursuing unanswerable questions in good company.” She started this journey by living out one year of being intentionally kind, one day at a time. She blogs about the power of kindness, and has written the award winning book, A YEAR OF LIVING KINDLY, a love letter to the ways kindness is power in our lives and that of others. Donna also helps organizations progress into their future by leaning into their values and visions. Through her work, she helps boards and leaders to identify their values and increase their own individual efficacy, as well as the effectiveness of the organizations themselves. Join in on this movement of goodness and learn some of the wonderful lessons Donna learned after a year of living kindly! [00:01 - 5:32] Opening Segment I introduce Donna Cameron Quick bio Donna shares her background A desire to go beyond ‘nice' Donna's deep dive into the essence of Kindness Kindness even has physiological benefits The goal is experience and change, not perfection [05:33 - 14:48] A Year of Living Kindly: Living Your Legacy What you give your attention to will expand ‘Which wolf do you feed?' Donna's background on nonprofit Too many are focussing on only what's wrong Pay attention to what really matters How kindness changes the legacy you leave Legacy is not just what you do but your intention People remember how you touch lives What you could lose in pursuit of success [14:49 - 24:09] A Year of Living Kindly: Kindness is a Verb Being kinder than you need to be Extending yourself past what's expected Nice vs. kind - Kindness is a verb Staying in tune with kindness Set up Google alerts for the latest kindness happening in the world Examples of different stories Program your algorithms with goodness in the world Looking for positivity? Subscribe to our Newsletter to find joy and wonder in your inbox [24:10 - 35:26] A Year of Living Kindly: Health Benefits and Work Life Donna breaks down some of the health benefits of kindness Scientific evidence and studies of the healthy effects Kindness produces oxytocin and serotonin Even when we witness is towards someone else Lowers blood pressure and inflammation in the body Slows aging and reduces chronic pain Reduces the risk of heart disease The effects of kindness on our work lives The time of ‘nice guys finish last' in business is over Kind business cultures are the ones that win Research findings from Forbes that kindness in business is key Creates an atmosphere of safety to express ideas and collaborate Both kindness and incivility is contagious What we experience most we tend to emulate “The ah-hah” moment: We have a choice of what we want to spread How to spread kindness practically “We live in a knee-jerk world -” Utilize the power of the pause Stay curious Think before you respond Withhold your immediate judgements Assume good intent [35:27 - 40:30] Closing Segment A reminder of the power of the pause The power of your click Your clicks matter to what gets seen Teaser for The Goodness Exchange How to connect with Donna Links below Final words Tweetable Quotes: “What we look for really is what we find… It's really a matter of who you want to be, and what you want to look for in life and that's what you're going to find.” - Donna Cameron “Even if we only witness kindness to someone else, those hormones are produced in us and they lower your blood pressure, reduce inflammation, they fight heart disease… It's like a wonder drug!” - Donna Cameron “If we experience rudeness or incivility, or even witness it, we are more likely to be rude in our next encounters. Kindness is the same: if we experience it, we are more likely to be kind.” - Donna Cameron “We assume one another's good intent… If we can do that, it changes everything.” - Donna Cameron Resources Mentioned: Podcast: What Business Can Learn from Nature Books: A Year of Living Kindly The Second Mountain - David Brooks TedTalk: Dewitt Jones - Celebrate What's Right with the World David Brooks - The Second Mountain The Power of the Pause - Lynda Ulrich Articles: Firefighters Mow Man's Lawn After Coming to His Rescue 13-Year-Old Kentucky Girl Gives Sneakers to Bullied Boy Police Share Tea with Elderly Couple Why Would One Man Fill Over 600 Potholes? Why Kindness in Business is No Longer an Option - Forbes Magazine Connect with Donna on Twitter, Facebook and LinkedIn. Be sure to check out https://ayearoflivingkindly.com/ Conspiracy of Goodness Links: Conspiracy of Goodness Summit https://www.cogsummit.com/ Conspiracy of Goodness Network https://conspiracyofgoodnessnetwork.com/ Conspiracy of Goodness on Instagram https://www.instagram.com/goodnessnetwork/ Dr. Lynda's Book: https://www.dr-lynda.com/book/happiness Ever Widening Circles https://everwideningcircles.com/ EWC APP: https://everwideningcircles.com/good-news-app-ever-widening-circles-app/ Affiliate Partners http://everwideningcircles.com/partners Donate! https://www.paypal.com/donate/?token=I-nvmUrlbDfU67bRoWWdOhFxiAM_W81jtIFBGCYzfCL6fG8oSUOg9ONIL9WR8LDjLEeYj0&country.x=US&locale.x=US EWC Ed: https://ed.everwideningcircles.com/

It’s no secret that it takes money to make money, and David Kidder has a strategy that will propel you forward to gain the capital you need to either start or scale your business in a way that I think we are all familiar with by now but with a perspective you may not have thought of. David Kidder is an entrepreneur, keynote speaker, and an angel investor in over 40+ startups. He is currently the co-founder and CEO of Bionic, which unlocks new growth for the world’s largest enterprises, based on the tools of venture capital and entrepreneurship. Previously, David co-founded SmartRay Network and he is the co-author of the New York Times bestselling series, The Intellectual Devotional, and The Startup Playbook. With such a rich resume and wealth of experience, I’m excited to dive right in and learn more about how to raise money through networking from the master himself. Things you will learn in this episode: *[00:01 - 06:06] Opening Segment* * Sponsored ad * I introduce today’s guest, David Kidder * Angel investor * CEO of Bionic * Author * Be sure to check out guestio.com ( https://guestio.com/ ) and start booking * David gives us some background on his story * Grew up in upstate New York * Lack of resources growing up * Opening and closing doors * Finding purpose in the time you’re given *[06:07 - 14:50] Finding Your Path, Passion vs. Obsession* * David talks about finding your path * Don’t chase money or opportunity * What do you care about, and why you? * You can’t fake it * The difference between passion and obsession * How you want to spend your time vs. HAVING to do something * Passion doesn’t ask the hard questions * Obsession causes you to care more about the outcome * David shares about tools to deal with stress * The kinds of fear * Zero-sum fear leadership * Leading yourself * The importance of mindset * Time, place, and talent * A word from our sponsor *[14:51 - 28:12] How to Raise Money Through Networking* * Who you know or what you know? * What you know * Relationships have to come from a place of giving value * The ‘what’ is knowing yourself * David’s tactics for people raising capital through building relationships * What you do to create value - the follow-up * The lure you use - stating what you care about to attract the right people * Knowing what you care about * Being able to ask for something * Asking creates intention which creates conversation * Energizing outcomes * Closing someone on your ideas * Capital raising is a full-time job * What is the strategy * Understanding the goal and jobs of the investors * The questions to ask *[28:13 - 35:02] Closing Segment* * A relationship that changed your life * Surprising Investment relationships that created value for David * David talks about the tests of relationships * People who are all in * RaNDoM RoUnD * How to engage with David * Links below * Final words *Tweetable Quotes:* “Some doors that close are simply because of effort… and some others doors open because of other things like I was good which was creating.” - David Kidder “It's sort of like a lure, you only want to catch certain types of fish… Being out there and stating what you care about for people to find you is the first step.” - David Kidder “How can you create value for them [investors] if you don’t understand their job; what their goal is? I think it’s really important to understand the jobs around the table and the outcomes of the goals.” - David Kidder *Resources Mentioned:* * New to Big ( https://www.amazon.com/New-Big-Companies-Entrepreneurs-Permanent/dp/0525573593 ) * The Startup Playbook ( https://www.amazon.com/Startup-Playbook-Fastest-Growing-Startups-Entrepreneurs/dp/1452105049/ref=pd_lpo_14_img_0/137-6799907-8302800?_encoding=UTF8&pd_rd_i=1452105049&pd_rd_r=8a34d83b-9be1-402e-9cf7-3167c9be3363&pd_rd_w=FAJ7i&pd_rd_wg=1nz3Y&pf_rd_p=337be819-13af-4fb9-8b3e-a5291c097ebb&pf_rd_r=Y2W388ZRZ3KMNNW2F4Z4&psc=1&refRID=Y2W388ZRZ3KMNNW2F4Z4 ) Connect with David on Twitter ( https://twitter.com/davidskidder?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor ) and LinkedIn ( https://www.linkedin.com/in/davidskidder/ ). Go check out https://www.davidskidder.com/ to unlock growth and go on the offensive! Did you love the value that we are putting out in the show? *LEAVE A REVIEW* and tell us what you think about the episode so we can continue putting out great content just for you! Share this episode and help someone who wants to connect with world-class people. Jump on over to travischapel.com/makemypodcast ( https://travischappell.typeform.com/to/kmf5p4 ) and let my team make you your very own show! If you want to learn how to build YOUR network, check out my website a travischappell.com ( https://travischappell.com/ ).  You can connect with me on Facebook ( https://www.facebook.com/travis.chappell15 ) , Instagram ( https://www.instagram.com/travischappell/ ) , and Twitter ( https://twitter.com/traviscchappell?lang=en ). Be sure to join The Lounge ( https://www.facebook.com/groups/byncommunity ) to become part of the community that’s setting up REAL relationships that add value and create investments. 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