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Why The Right Syndicator Believes In Education With Pili Yarusi – Real Estate Women

 

A syndicator could make or break your real estate career. Many consider them the person in charge of your success. That is why before diving deep into the game, you need to arm yourself with the right syndicator. In this episode, we welcome back to the show Pili Yarusi. Pili is a syndicator herself and is the Cofounder and Operator of Yarusi Holdings LLC. She speaks for the second time on the show with Moneeka Sawyer to share great tips on finding the right syndicator for you. Pili takes us across her journey and offers insights on the importance of education and taking mindful action. At the end of the day, this is your investing journey. You need to protect it as much as you can. Begin by choosing the right people who can help you towards success. Join Pili as she guides you how.

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Why The Right Syndicator Believes In Education With Pili Yarusi – Real Estate Women

Real Estate Investing For Women

I am so excited to welcome back to our show, Pili Yarusi. I had her on the show a couple of years ago. We had an amazing conversation. You should go back, look her up, and check out that one. I’m so excited to have the next conversation and share with you all the ways that she’s grown and all the new things that she has to bring to the conversation. I’m super excited about this conversation.

Before we head into that, let me reintroduce you to Pili. Pili is a loving mom and wife whose goal is to lead with Aloha by example. Pili is a Cofounder and Operator of Yarusi Holdings LLC with her husband Jason. Yarusi Holdings is a multifamily investment firm that repositions underperforming properties through operational efficiencies, rebranding and value add renovations.

Pili and Jason have managed the successful and profitable exit of these multifamily properties. The Yarusis have an active real estate portfolio of over $100 million. She co-hosts Multifamily Live, The Jason and Pili Project, MOM – Moms of Multifamily and MORE – Moms of Real Estate. All can be found on Facebook, YouTube and anywhere you tune in to shows.

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Pili, welcome back to the show. How are you?

I’m so good. Thank you so much for having me back on. That was so many moons ago. We were giggling about how amazing it is that we laid the foundations for the people that we become with the things that we read and the things that we do years ago.

Through COVID, you moved locations. You were active on Clubhouse. I’ve been watching all your events on social media. It has been amazing to watch you grow and then to hear in your bio all the numbers and how things are so different than they were years ago. Congratulations. You’ve done an amazing job.

Thank you so much. It was interesting to hear you read some of our old numbers when we were starting, like our triple-digit units. You said we had 100 and something units.

Ladies, we were reading over her bio first. It was the old bio from years ago. It was 426 units and 100 and something in direct management. Look at those new numbers.

We’re at $200 million in assets in direct management and over 2,000 units. We took down our first building in 2017 and here it is. It’s almost 2023. It’s been an amazing ride. It’s been so much fun.

Take us through your journey a little bit. You’re a syndicator. We have a lot of syndicators that come on this show. I’d like to hear about your journey. For me, one of the things that I want to chat about on this show is I feel like my ladies have heard a lot about syndication. We’ve highlighted some amazing syndicators like yourself. Some are amazing and some, I don’t know enough about to say.

My ladies know that the syndicator or the person in charge is the single most important indicator of success. The ladies have had a little bit of a challenge as far as making a move toward investing in these syndications. I’m not sure if you’ve dealt with that, what your experiences have been around that and what advice you can give the ladies. That’s where I wanted to head. Let’s start by reminding us of your story and telling us about the journey over the last few years.

I want to answer both questions at the same time. I’m going to start with something that you and your ladies can think about. For a syndicator, my most important job and this is per the SEC Regulations or the Securities and Exchange Commission, I need to make sure you’re educated. That’s my biggest concern. My second biggest concern is that I need to make sure that you know me and that I know you.

It doesn’t surprise me, honestly, that it’s such a big leap. Number one, you need to get educated about this new asset class. It’s something that you keep on hearing about but haven’t dove into because it takes a little bit of education to dive into correctly. We talk about passive investing all the time. A true passive investor knows what they’re getting into first and understands it.

When it comes to real estate syndication and going in with a syndicator like myself, I want you to know me. I want you to have access to me. I want you to know that I am going to take care of your investment as far and as much as I can. Those are some of the things that I want you to chew on as I’m going through my story.

I’ll save you me growing up in Hawaii and all that stuff for a later date. Maybe we can have tea one day and talk about that. My real estate journey has honestly been one of complete growth and change. We talked about this a little bit in the last episode that I had with you. I might have been pregnant with one of my children. I’ve been either pregnant without or with a small child for this entire growth period.

Jason and I got together at the end of 2012 into 2013. We decided we wanted a family. We had our first child in 2014. We also got into real estate in 2013, flipping and wholesaling homes. We started doing small rentals and had a construction company. He still had his brewery and I was a real estate agent so a lot was going on plus growing our family.

When multifamily syndication hit us, it hit Jason first. I remember him talking to me about it. I was pregnant with our second child. We still had all these businesses. We were growing. We were prospering but we had so much to juggle. I told him no. It goes back to what you were saying. You and a lot of your ladies haven’t taken the jump into real estate syndication. I said no. I was like, “We have so much going on. Why would we start another business?” We were talking about getting into the active side.

That’s key. There’s the active side and then there’s the passive side. You were looking at going into the active side.

I wasn’t educated enough to even understand that there was a passive side. I didn’t even know this at that time. I was like, “I am pregnant. We have all these things happening.” It was what I said before. It was education that got me there. We jumped in with a mentor instead of how we jumped into flipping and wholesaling, which was like, “Let’s watch HGTV. We have a construction company so we can flip a house.” That is another story for another day.

For multifamily, we got a mentor. We educated ourselves. We ended up taking down our first multifamily at the beginning of 2017. It was a 94-unit in Kentucky. Let’s flash forward a couple of years to 2013. We’re at $200 million and 2,000 units. My biggest concern is to educate. It’s not small amounts of money. It’s not $1,000 or $5,000. Most minimums start at $50,000. Some are $25,000 but most are at $50,000. That’s not something most people have in their back pockets. I want you to be comfortable. I need you to be comfortable. If you’re not comfortable jumping into the syndication, then don’t. Don’t jump into one until you feel comfortable enough.

Don't jump into a syndication until you feel comfortable enough. Share on X

We talked a little bit about real estate in general. I believe real estate is the best asset to jump into. I’m going to come back to what I said in the beginning. As far as much as you know the person that’s running it, do they have a background of success? Do they have other investors that you can talk to? Do you have their cell phone number? Can you get a hold of them if you need to? If you don’t understand them or understand something, can you get a hold of them?

It comes down to being comfortable in what you’re investing in because this is your hard-earned money. We like to talk about passive investing. You want to make money with your money but first, you’ve worked hard for that money. Let’s make sure that the people that you’re investing with are also going to work hard to make money with your money.

I’ll be honest. I have invested with a few of the different syndicators that, over time, I’ve gotten to know. They’ve been on the show a few times. You’ve sent me a few things. You know this because my answer to you was, “I am finishing up a construction project. I need to stay liquid.” This has been my story for the last couple of years and it’s very frustrating.

When you’re in construction, you do need to have quite a bit of liquidity. This is our first project in this company. We started the company together. This is my first project together with my partner. Liquidity was a hugely important deal for me and continues to be. I was talking to my partner. I probably shouldn’t say this here but we’re all friends. My partner and I were saying, “How much are we in cash?” Over 10 years, because it’s been a 10-year project from when we bought the property to when we got the permits to when we’re finishing the build, we are in for $1 million. That’s personal cash for each of us.

I’ve sold properties. I’ve had to make things happen. That’s in addition to the loan that we owe. In the end, we are going to do fine but we’re not going to make a killing. One year’s income is what we’re making on the back end of this. We missed the boat as far as when we’re selling. We didn’t get rich on this project but I learned a lot. One of the things that I learned was liquidity was key. If we had not finished it, we would’ve ended up with a lot of builders, especially during COVID. For me, there was a liquidity thing.

I will say that it’s a bit of a shield because I don’t feel yet that I’m educated well enough to make those decisions about what kind of syndications I want to go into. Some things came up so we did end up putting it into three. I’ve diversified. I’ve got 1 mobile home park, 1 multifamily and 1 storage thing that I’ve invested in. That was early on. That was before I met you. I then stopped.

I made good decisions. The people that I’m investing with are good and it is because I know them. I trusted them with my money. As I look, “What am I going to do when liquidity isn’t this big deal to me? I want to invest. Where am I going to go? How am I going to go do this?” We’ve had some people come on the show to educate us but for some reason, I’m feeling like it’s not deep enough. Talk to me a little bit about the kind of education that you share with your people to make them comfortable with taking that leap. You’re right. $50,000 and $100,000 is a lot of money.

We educate on a couple of different levels. 7 Figure Multifamily is our active program. I have some investors that have jumped into that program with the sole purpose of learning how to do it from an asset manager’s side or a capital raiser’s side. They’re learning how to do it from that side so they understand where they can put their capital and how it’s being put to use.

As an active investor, this is what I do day in and day out. This is my job. I’ve created a job. I also passively invest but this is my work. This is what I love to do. As a passive investor, you could go that deep. As you continue your journey, you can learn over time by talking to the syndicators that you talk with. We should be open books. There’s that level.

We also educate on the level of a passive investor. People and other syndicators have come on here to discuss basic syndication techniques but to honestly go deeper, it’s the phone call. It’s finding a syndicator that will talk you through the process and understand your needs and talk you through them. For instance, if one of you came to me and started talking to me about what you needed and I figured out that it wasn’t syndication, I’m going to tell you that.

 

If you tell me that you want a quick return on your money, I am not your lady. I don’t do quick returns on your money but I’m not going to force you or help you to understand that this is the way to go. I’ll probably introduce you to a house flipper or private money lending. That’s also good. It comes to being comfortable. You want to be comfortable. You don’t want to make a mistake. Unfortunately, it’s investing.

You’ve run through the gamut of your project. In this ten-year project, you’re not going to make a killing. A lot of it’s based on timing. Jason and I could slap ourselves. We wish we got in in 2013. We got in in 2017, a few years later. We’ve still done well. We’ve had ten successful exits. We’ve had dozens of investors who are happy with how we’ve performed. Can I promise that in the future? Historically, Jason and I have done well. I don’t have a crystal ball but we are educated and open.

Most of my investors, if not all, because I call them with my cell phone, have my cell phone number. They can call me if they need to. They can let me know what troubles they’re having or if they have a question about something that’s on their K-1 or if they have a question about what we’re doing or if they want to go deeper. They deserve to. Their $50,000 tells me that they deserve to have my cell phone number and to call me if needed.

I’m not sure how other syndicators run their businesses but that’s how we run ours. I’m not going to say you because I don’t want to talk to everyone but for me, being comfortable and educated was the key to my growth. When you started talking about the old episode we did together, you mentioned all these books that I had quoted and the things that I was studying. Those were the foundations of the woman that I am.

You mentioned the book, 12 Week Year and Miracle Morning. I haven’t read those books for a while. I should probably revisit them. Those are my foundation. Those are part of why I succeed. The reason I’m so good at what I do is because of the foundation and the education I laid down for myself. With investing in any real estate, you should educate yourself. That’s what may be holding some people back. It’s true education. It’s that comfortable I know what I’m getting into education, not I’m pressing a button on my Robinhood app and hoping for the best.

Hope is not a good investing strategy. There are a couple of things that come up for me as you were talking. I love that we can have a real conversation live. Thank you. You’re warming my heart. I love this.

Thank you.

Two things come up for me. The first one is I’m so afraid of calling you and saying, “Give me some information.” I get that information and then I’m sleeping on it and I’ve got another question. I’m one of those people that will ask you questions until you feel like you’ve been buried. I will keep asking questions. I will also say this. I have never in my entire life lost a dime in real estate. Every single deal has been successful but I will ask into the ground. Yay for me on one level but people that do business with me are like, “Another question?”

Even I’ll say it on this show. You have to take action. I’m fully aware of that. Business people who know me know have seen my portfolio and my life. They know that I’m an action taker but I will not take action until I feel safe and comfortable. If you got a phone call from me every day for ten days, wouldn’t that be frustrating for you? I know my ladies are thinking the same things.

I’m going to give you a quote from Tony Robbins. “Success leaves clues.” There’s a reason why you’re so successful. It is because you ask the right questions. The other thing I’m going to say is that’s why we have email. You don’t have to call me. You can email me all your questions. I’m going to go back to the price point. $50,000 is the minimum. I have people who invest upwards of $500,000. I have one investor that brought all the capital to one of my deals. That was upwards of $1 million. They will ask questions.

Whether or not I am nose deep in kiddo stuff and my kiddos deserve all my time too but if you have a question for me, you are the most important person. Your capital is your life. You worked hard for that. Who am I to get irritated because you want to know what a K-1 is, what this line means on that K-1 or why I am painting the wall gray instead of white? Who knows what your question is going to be?

This is not said any place in the SEC but once upon a time, I was a real estate agent. I am inbred with this idea of fiduciary duty. I have a fiduciary duty towards you even though it’s not set in stone and it’s not written anywhere. I can’t promise you profit. I can’t promise you that I’m going to be there for you every waking hour but if you have a question, let’s get it answered.

I’m going to go back to there’s a reason why you’re successful. It’s because you asked the right questions. You mentioned taking action. There is taking action but we should rephrase that into taking mindful action or educated action. It’s the uneducated action that gets us into trouble. That split-second moment of putting all your money into one pot sometimes works and people make millions of dollars.

 

There are those times and it happens more often than not that they don’t because they invested in the wrong thing or with the wrong person or at the wrong time. It’s taking mindful action and making sure you’re pressing the buttons for investments that make sense for you and the numbers make sense. I believe in investing in people, number one.

You said a couple of things that I want to go back to. I love this idea of mindful action. The action does not necessarily mean jumping in. Doing your education is also action. Reading this show is also action. Taking action towards your goals does not mean immediately jumping into something without feeling enough confidence around it to experience success.

You know this at the end of the show. I say, “Goals without action are just dreams.” It’s true but there are lots of different ways that you can take action. I love the way that you reframe that because that’s exactly what I mean. We do need to take action but it needs to be mindful action. That starting action can be education as long as you don’t get into analysis paralysis, which is a fine line.

There is a fine line there. You should know better that action does not necessarily mean taking that jump. Although so much of social media and everything that’s on there is like “Go. Do. Hustle.” It’s taking that time to analyze not only the deal. The deal needs to work and the numbers have to be beautiful but you need to know all the different ways that the deal might not work.

This is more important. Analyzing the person that you’re investing in and with is of the utmost importance. You can go analysis paralysis on this as much as you want or maybe not that much but enough. You should have a good relationship with the people that you are investing with. That’s why I love working with new investors. I want to make sure that if a new investor’s going to invest, they invest with me. I know that I can do it. I have that confidence.

You should have a good relationship with the people you are investing with. Share on X

I know I’m a good fiduciary. I will make sure that you know me and my husband. If you have questions, you’re not going to feel bad. If you’re reading this and you want to jump into syndication and ask a million questions, I am not going to make you feel bad. Ask all of the questions. That is what I’m here for.

One of the things that you said that I want to also highlight a little bit is, “You’ve had success because you asked the right questions.” I didn’t ask the right questions in the beginning. That’s the other piece. I know a lot. I’ve been very blessed with this show. This show has educated me probably more than it’s educated any of you because I’m having every single conversation. I’m studying every single guest. It has been phenomenal for me. I’ve got a lot of education that way.

Over time, there’s been an evolution of, “This question matters and this one doesn’t.” I still ask goofy questions. I understand that it’s okay because you don’t get to the right questions until you start asking. Don’t ever feel, “Since I don’t know what the right questions are, I’m going to sound stupid. I don’t know.” It’s okay because you got to start somewhere. If you never start, you’re never going to reach success. That’s the truth. You have to take the first step. The first step is to start asking questions. Would you agree with me on that?

I agree. That’s why your ladies are with you. Ladies, that’s why you trust and you are with Moneeka. It’s because you know that she’ll help guide you through some of these questions. This is why you go with indicators that you trust because they’ll help guide you through this time and the questions that you have. With our first multifamily mentor, we still ask him questions because he continues to level himself up to a level that we’re reaching for. We can ask those questions that he is dealing with at that level when we get there.

When we took down our first building, we could not figure out how to do this one thing. We went to him. It was one question to him that would’ve taken us a week to figure out on our own asking different types of questions. This is why you go to those who know those things that you need to know. That’s why you listen to podcasts.

We probably created our podcast for similar reasons. I’ve learned so much from having a podcast and from other people that I’ve brought on. It’s been phenomenal. It’s listening to podcasts, talking to other women and talking to other people in the industry. Reach out to them. The reason why people go on podcasts is to have people reach out to them. To anyone who’s reading this, reach out to me. Let me know if you have any questions. I will answer any of them to the best of my abilities.

 

What a great reminder. People don’t come to my show because they like having conversations with me.

I do.

There are a lot of people with whom we become friends because of this show. We’re like, “That was a great conversation,” and we stay in touch, like us. Some people do come back because they want to talk to me and I want to talk to them. The reality is that the reason that people come on these shows is that they want you to reach out to them. You’re not imposing by emailing them, calling them or telling them you’re interested. Even if you decide at that moment that it’s not the right time to invest with them, they are happy for the opportunity to have the conversation. I had a conversation with another friend of mine, Maureen McCann. Do you know Maureen?

I know of her.

She’s a turnkey person. She’s been on this show about five times. We did a whole session because she talks about 52% returns and some cool stuff.

That’s how we got into multifamily. It was turnkey. That is a whole other story.

At one point, I was calling her and was like, “Are you seeing results? Are my ladies calling you?” I trust her so much. I was like, “I want my ladies to connect with her because she would educate them.” She’s a lot like you in that way. She’s education first. She said, “Don’t be so concerned with what I’m getting out of this show. The reality is as I build these relationships, it may be ten years down the line when someone finally thinks, “I’m ready for that.” I loved that Maureen supported me in this way. Maybe I’ll connect with her again.

You don’t have to invest right away. Don’t feel any pressure that if you’re calling somebody that it’s like, “I feel committed, obligated and all of that stuff.” They would hope that if you connect with them that you would consider them when you’re investing but it’s not an obligatory thing. You get to ask questions. They’re in the business and on this show because they want to connect with you. That means emails and phone calls. All of those things are good. They’re not just okay. They’re good. You are not imposing yourself on them by making those connections.

If this is on video, I’m bouncing on my seat. I’m so excited because what your friend Maureen said is so true. I want to have a conversation with you not just for the now. If it’s for the now, then that is great but I’m talking future. The shortest time we’ve had an investment was 18 months to 7 years. Our investments are long-term investments and so are my relationships. I want them to be long-term. Since our investments are so long-term, I want to have a relationship with you. I need to because we’re going to be in this for the long run.

You are going to be a passive investor but it doesn’t stop there. You don’t get the mailbox money or you do but I expect you as one of my passive investors to read my emails. I want you to know what’s happening. I want you to be educated on what’s happening within the market. I want you to know all the things that I know and everything that I’m sharing with you.

If you go onto my website, you’re going to get my information on how to invest. We call it Becoming Independently Wealthy With Apartment Buildings. It is a very long title. I might shorten it. That’s going to be some emails that you’re going to get and some more education coming from myself and my husband. The great thing is you’re going to be invited to go into my investor portal. You have no obligation to do so but that’s more information. You get to see what an investor portal looks like. You’ll get to schedule a 50-minute call with me.

This is usually what scares people the most and why they don’t call. It is because you think when I pick up the phone, I’m going to be like, “Give me your money.” If I even talk about money, it’s probably going to be because you mentioned it first. I don’t want to know about money. I don’t even want to know how much money you make. I want to know you because I don’t know what’s going to happen for you and with you tomorrow, 5 years from now or 10 years from now when something good happens or if you have something great financially happen to you or you get into a new job and grow.

I’m working with someone who has $10,000 in savings sitting there. He’s growing his wealth. I’m working with him and helping him to grow that financial stability. I help him create a budget and create a system or a foundation. I give him books to read to grow from. I still want to know him 10 or 20 years from now when he’s invested in syndications and invested in other investments to create legacy wealth. I want to have these legacy relationships. It’s not a one-time phone call. This is me wanting to get to know you. I will never ever talk money unless you want to.

I have one other question and I’ve never asked a syndicator this. Let’s talk a little bit about exits. When you’re in syndications, some of the things that happen is they have this plan. They’re going to do a value add, a new build or whatever it is. They give you all the numbers of what this is going to work out and then what are they going to rent it at.

If they’re doing a value add, they’re having to cycle people out as leases come up. There’s a whole process. They’ll say, “When the project is done, we’ll refinance it. We’ll pay off your thing. You make a certain amount of money. Either you’ll make income on the rents over the long-term or if or when we sell it, then you make that capital.” There are lots of different ways that you earn money, which is how they come up with their final IRR, Internal Rate Revenue.

These are the exit strategies or the possible exit strategies that we hear a lot about. What if things go bad? Let’s talk a little bit about how that works. One of the things that I want to preface this with is one of the things that I know. If you’re with a good syndicator with a good project in a good location, as long as you can get the time to be right, the project will recover even through a bad time or a slump. You have to be okay with, “The timeline on this project is 2 to 7 years.”

Maybe they said 2 years, 3 years or 5 years. You got to understand that their biggest obligation to you is to make money for you. If that means that it’s going to take a little bit longer than the 2 years, 5 years or whatever it is, then sometimes, they need to do that to hold it long enough so that they don’t see a loss.

You’re still going to make money on the rent but it may not be the payoff as fast as you would want. That’s the one thing that I have always had in the back of my mind when I go into syndication. This is what we’re shooting for. It’s not the best case. It’s also not the worst case. It’s to allow for the time to be right. I’d like you to talk about the way that you look at exits and what happens if things go bad.

It all starts with underwriting. You already said it too. It’s best case, worst case and base case. The numbers that we put out to our investors are usually very much the base case. We normally don’t even put out the best-case scenario because we never want to overpromise. There are ways that we can make more money on the property. There are ways that we know how to advance the property further than how we put it out there. We normally don’t put it all out there because a lot of the time, when we exit a property, we still want to leave meat on the bone for the next owner. We can take it to those places.

What happens when a property goes sour? This hasn’t happened to us yet. It goes back to underwriting. You have to make sure that the numbers are solid. There are a lot of things that we can’t control but we want to control them as much as possible. You said our number one goal is to make money for our investors. That is true but there are numbers 1.2 and 1.3.

Our other goal is to make the best place possible for our tenants to live. I know that has nothing to do with your question but we are education first and tenant first. If we have happy tenants in a good community, then our investors thrive too. If our tenants are thriving, our investors are thriving. Number three is communication. A syndicator needs to communicate with you when things are going bad and good so that when things are starting to go south, it’s not a surprise. This is why multifamily is such a great investment. It’s a span of 2, 5 or 7.

If we have happy tenants in a good community, then our investors thrive, too. If our tenants are thriving, our investors are thriving. Share on X

I used to tell people we stop at 7 but we do underwrite for 10 years. This is why multifamily is such a great asset. It is because it’s supposed to stand the test of time. Maybe rents go down. Maybe we have a fire. Maybe something happens that is out of our control. That’s key. When something like that happens, that’s why we’re given this time to figure it out and bring it back up. We figure out how to rectify the situation and bring it back out but it’s those things that we can’t control.

It is the things that we can control that you want to make sure that the syndicator has a handle on. They can control the numbers that they enter into their property. That’s why we underwrite and keep on underwriting. That’s why we do worst case, best case and base case because we want to make sure that we are not surprised by the numbers.

If the worst-case situation should happen, we want to already know ahead of it. If we get the best case, that’s great. We already know ahead of it. We want to make sure we have a handle on all of these things. It’s your property management team. We do not actively property manage the asset. We manage the property managers. We are the asset managers. We look over everything and make sure everything works.

You want to make sure that you know who the asset manager is on the syndication. Don’t just invest or talk to the syndicator. The asset manager is your key person on the deal. You want to make sure you have his number if something goes wrong. You want to make sure that you know that he or she is doing the right thing. That is the person that is the puppeteer for the entire deal.

Once you go through acquisitions, you have people that come in. Maybe they’re part of the asset management team or acquisitions. Maybe they helped underwrite. Maybe they did due diligence on the deal. These are various ways you can get into a deal and they brought capital to a deal. Whoever is the asset manager, once the acquisition happens and the sale happens, that person or that team takes it over. That is the person or team that is making you money.

Is that you with your projects?

That’s me and my husband. My husband is the key asset manager in our team.

You are the asset manager as well as the syndicator. Is that true?

Yes. Syndication 101 is the pooling of investors’ funds. I am a syndicator because that is what I’m doing within the asset. That is how I’m funding the asset. It’s with the syndication. The asset manager is part of the syndication. He or she isn’t even part of the syndication. She’s part of the business plan. When you take over a multifamily building, you’re creating a business. It’s business within itself.

The main manager is the asset manager. That is your key person. That is the person you want to talk to. This is the person that you want to make sure you know, like and trust with your $50,000, $500,000 or whatever it is because this is the person that’s going to be managing those funds and all the other managers.

 

I hadn’t heard that distinction before so thank you.

You’re welcome. There are two ways I could take this conversation. One of the reasons why you might not hear that term before is that a lot of syndicators out there don’t do the asset management part. They raise the funds. They’re part of the business plan but they don’t have the decision-making. You want to make sure that you know the prime decision-makers in the deal.

When a deal goes sour and I’ve heard of a few, all I can say is the things that go wrong are usually because they didn’t have their numbers right in the beginning and they weren’t communicating with everyone. There’s that saying, “Do and ask forgiveness later.” It’s the opposite with syndication. You want to make sure that the people that you are working with because limited partners are still partners. They know what’s happening with their money and what’s happening with the asset in good times and in bad.

I haven’t heard of anything that’s fallen apart but those that I have heard that have gone slightly more toward the sour end could be solved with communication and making sure that you have your numbers right from the beginning. That’s why each building that we’ve gone into has had its business plan. We follow that business plan and pivot when needed. That’s why we’ve had ten successful exits. It is because we have a foundation of education of people first that the numbers have to work. That’s always the caveat. We invest in people but the numbers have to work. We run the numbers religiously. We keep on running the numbers inside of the deal because markets fluctuate.

Pandemics happen.

Craziness happens. The thing is multifamily has pulled through the entire time. Will it go down? Will it go up? I don’t have a crystal ball. That’s why education is necessary so that if you are investing your $50,000 into, let’s say, syndication, you know that that money has the possibility of making money but also has the possibility of not. One of our biggest concerns is the return on capital. We want to make sure that we make money on your money but we want to also make sure we return that capital. You don’t want to lose money. That should be the number one rule in syndication school.

You don't want to lose money. That should be the number one rule in syndication school. Share on X

One of the things you said also highlights the value I have when looking at a syndicator. Do they have mentors themselves? Your syndicator has the experience and work ethic. They’ve got all their resources. One of those things that are going to ensure success is that they’ve got people that they can go to when they have a question because they’re at their level. Maybe they’ve been in it for 5 years, 10 years or 20 years. Other syndicators have been in there longer. There are always new adventures that happen in real estate. Hopefully, it’s not too many adventures. You don’t like adventures in real estate but they happen.

They do happen even though you don’t want them to.

That’s right. We don’t want adventurous investing. It’s good to have people that you can go to. You’re going to the syndicator and the syndicator should have someone to go to that has been through the cycles that can then mentor them if they hit bumps in the road.

We have our mentors. We also have a group. Within 7 Figure Multifamily, this came out of a group that I was originally with, 7 Figure Flipping. Those were my mentors in the flipping and wholesaling industry. When Jason and I broke off and did multifamily, I kept in contact with those mentors. Every so often, I would let them know about a deal that I had. I would let them know, “We should partner up.” Jason and I had already created our mentorship program at that time but I saw this way to uplift everyone.

The great thing is having this amazing relationship not only with my mentors in multifamily but I get to also watch and be a part of this family within 7 Figures and get to ask them questions. They’re other investors who either have gone through the things that I’m going through or are going through it. I can talk with them and learn from them.

It’s also learning from your peers, not only from those that have come before you but from those who are going through it. They might have answers to the questions that you don’t know even to ask. That’s what good mentorship provides for you. It provides someone to go to whom you can ask them any question and they will answer with no ifs and buts because they’re there for you. They’re there to mentor you and help guide you as you step up into your future.

As always, we could talk forever but I want to be respectful of your time. Before we end this show, could you tell everybody how they can reach you? Ladies, take notes.

The best place to get to go to is my website, www.YarusiHoldings.com. It’s easy. When you open up the email, there’s going to be a button you can click to get more educated. You can click on the button and learn more about me and my team.

She’s also got that free report there for you. You can download that to get a little bit more education. This conversation has, as always with you, been so yummy. Thank you.

This has been amazing. It was great to catch up. I cannot wait to have you on my podcast. We will extend this conversation into more of what you’re doing.

That sounds awesome. Thank you so much. Ladies, thank you so much for joining Pili and me for this show. Wasn’t it awesome? I love it when you get to overhear a couple of girls chatting. It’s so important to me that you feel comfortable and blissful in making your choices. That’s what this show is all about. I feel like Pili modeled that in so many ways. Thank you for joining the two of us. Until then, remember, goals without action are just dreams, so get out there, take mindful action, and create the life that your heart most deeply desires. I’ll talk to you soon. Bye.

 

Important Links

• Yarusi Holdings LLC
• Multifamily Live
• The Jason and Pili Project – Instagram
• Last Episode – Create a Strong Foundation with Pilialoha “Pili” Yarusi
• 7 Figure Multifamily
• 12 Week Year
• Miracle Morning

 

About Pili Yarusi

Pili Yarusi loves to help people and “Lead with Aloha”.

She is a founder and Investor Education and Relations Director for Yarusi Holdings, a multifamily investment firm that has acquired over 2000 units valued at $180 Million since 2016. The firm repositions properties through operational efficiencies, moderate to extensive renovations, and complete rebranding.

Pili is a co-founder and coach at 7 Figure Multifamily – focusing on Real Estate Syndication and Multifamily Investing and trains others on the success formula for buying apartment buildings at www.7FigureMultifamily.com.

Pili is a co-host of The Multifamily Live Podcast providing actionable content and tools to build and strengthen your multifamily business.

She is also the co-host of The Jason and Pili Guide to Real Estate Investing – a fun and interactive YouTube channel that features all the great things that she and Jason are working on.

She and her husband Jason have three awesome children, Luke, Lily, and Leo, and an English Bulldog, Jill.

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

Learn how to create a consistent income stream by only working 5 hours a month the Blissful Investor Way.

Grab my FREE guide at http://www.BlissfulInvestor.com

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REI Tax Strategies: How To Cut Your Taxes By 50%, Keep Your Earned Money, And More With Lorraine And Jim Conaway

 

Taxes are inevitable, especially as an entrepreneur and investor. But it doesn’t have to be so difficult and painful to deal with; with the right strategies, you can even cut your taxes by up to 50%. Today we have Lorraine and Jim Conaway to share with us the different REI strategies for reducing your taxable income, keeping the money you earn, and more. Lorraine and Jim share their financial experience and how they have helped many clients with their tax strategies and saved them a lot of pain. They also share their journey in the industry—the ups and downs—and how, through the years, they have discovered what really matters to them. Don’t miss the opportunity to start controlling your finances smartly. Tune in now!

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Watch the episode here

 

Listen to the podcast here

 

REI Tax Strategies: How To Cut Your Taxes By 50%, Keep Your Earned Money, And More With Lorraine And Jim Conaway

Real Estate Investing For Women

Using their extensive experience, knowledge, and success in the world of tech strategies, real estate investing, and other wealth vehicles, Jim and Lorraine used their straightforward, big-hearted style to guide thousands to ignite their unique wealth formula. With decades of success, in designing and implementing customized wealth solutions, they appreciate that success is truly about education support and the art of supercharging your unique style of wealth accumulation. —Jim and Lorraine, welcome to the show again. How are you?We’re doing great. How are you, Moneeka?

I’m so glad to have you guys here.

Moneeka, you were doing such a great thing for your entire community. I tuned in to a couple of your shows, and they’re so informative. They’re very educational and they’re there to help your community. That’s just really good that you’re doing that for women. I love it.

Thank you, Lorraine. Every once in a while, I’ll be like, “I don’t feel like recording now.” Recording is my favorite thing to do, just so you know. When I have those moments, I’m like, “I want to see my ladies,” so I get out there and I do it. It really is fun for me. Thank you for that. Lorraine. You and Jim are two of my favorite people in the world, but Jim, I do like Lorraine better. I want you to know that.

I’m used to people feeling me that way.

You probably feel that way, too. I think so.

When somebody likes the bad dad joke-type approach, then I become the favorite.

I think my husband prefers you, but I’m a fan of Lorraine. Lorraine is a friend of mine. I feel like we’re really close friends. I love you, guys. I recommend you frequently to my ladies. One of the things that have come back several times is, did you know they’re being sued or did you know they’re being investigated? My ladies, through my direction, have been taught you have to do your due diligence. I can only recommend so much, and then you have to do your due diligence. I have to confess, I’m proud of them for coming back to me with that. They helped me to find other people that I might have on my show who do have issues that I didn’t know about.

It’s a great community thing that we all keep our eyes on the ball for each other and people keep me informed. The issue here for me is that I know you and your integrity. I personally do business with you and I love you, guys, personally. I know that in this particular case, interesting, bad things happen to really good people. I would like you to help us to understand what happened so my ladies know the story the same way that I do.

I wanted to share the story because it is the actual of what happened. Jim and I were very excited to be faculty for a New York Bestselling Author way back in ‘08. We still have that amazing relationship now. What happened is we were financial planners at that time, and we personally have been real estate investors. In 2023, we will be 29 years that we’ve been real estate investors. Back then, we were real estate investors and we were financial planners, and we came across turnkey real estate. We went out and visited these turnkey providers, and they said, “If you allocate part of the portfolio to real estate, which we love real estate, and I’m sure your community does, too, you can also get a referral fee and expand our business model.”

We said yes. We had so many people that the vendors couldn’t keep up, so we expanded to new vendors providing turnkey real estate. One vendor couldn’t scale up, even though he said, “I can do it.” We flooded him with clients. It took one client, a niece from Germany who visited her aunt, and said, “What? Your property is not rehabbed. It’s not finished. We are going to sue the vendor.” They sued the real estate developer. What was really sad is they sued title, escrow, us, and everybody. It was like, “We got included in that, and we didn’t get paid. We weren’t the developer.”

It came out because we were securities licensed at that time. It triggered an examination from FINRA. That’s how this whole bad news came on the internet because we were securities licensed. It did get closed and the developer had to buy the properties back. It’s all public record. Jim, do you want to explain what FINRA is and that whole sanction?

FINRA stands for Financial Industry Regulatory Authority. I’m going to read this quick little paragraph from the document, the final agreement that we came to.

It’s from our attorney, FINRA, and us, where we all signed.

James and Lorraine Conaway failed to timely and completely disclose the scope of the real estate related outside business activities. In other words, outside business activity is that activity, which is not directly regulated by FINRA or any securities real estate, to their FINRA-registered firm. They also provided their firm with inaccurate information about the outside business activities in response to an investigation of them. As a result, they violated FINRA rules 3270 and 2010. Now, if that doesn’t sound a little innocuous, I don’t know what does. Basically, what they’re saying is that, not that we didn’t disclose things, but we didn’t disclose them adequately enough.

The issue boils down to, further in the letter, the Conaways at the Conways’ direction, Tycon, the company that we used to be associated with. It attempted on an ongoing basis to track the progress of rehab on the client’s properties and coordinate with GK to confirm the scheduled rehab work was being done as agreed. It monitors the client’s rental properties that were not performing or underperforming and directs GK to address client grievances. As you can tell, we were accused of having done a good thing.

When you Google our name, there are lots of attorneys who would love to be able to sue us for all kinds of strange things, so they exaggerate these things or word them in very aggressive fashions. The sanctions boiled down to a nine-month suspension of our securities licensure after we had already surrendered our license, and a $10,000 penalty or fine if we chose to reenter the securities industry. That’s it.

The bad thing that we did was try to help clients who were delayed in the rehab of their property. I have to tell you that’s very heartbreaking for us being in the financial industry for over a quarter of a century and having a sterling record. Even multiple decades of having audits and coming out spectacular on our audits and then having this one incident with this one client on this property triggered this whole thing. That’s what happened.

It's heartbreaking to be in the financial industry for over a quarter of a century and have a sterling record, only to have one incident with one client destroy your reputation. Share on X

By the way, further into the document, they actually identified five transactions that were inadequately disclosed. One of those transactions was with a principal of our own firm. With that said, the lesson that I would like for people to take from this is when you are an entrepreneur and you have any level of success, you get a target painted on your back.

Jim, please complete the thought and I’ve got something to contribute there.

Once you’re under pressure and have an issue arise, you’ve got to be resilient and figure out how to pivot. That’s where the tax thing came from.

The one thing that I want to contribute quickly here is I love what you said there, Jim, about success breeds success. It also breeds jealousy and many other things that are not as awesome as we would like. We’ve had people on my show several times talking about protecting yourself, creating entities, and doing all of those things because these things happen. My outlook on life is bliss. I like to believe that everybody’s got the best intention in mind.

Some people, for whatever reason, either they’re desperate or something happens, they express their anger in this way. I know a lot of people that have really good business practices, and this happens, too. That’s why we recommend, ladies, that you protect yourself. This happened to you, guys. Thank you so much for being so transparent about exactly what happened.

It is what it is. People who do business with us should know we don’t handle and touch people’s money. We never have and never will. That’s not us. Just a fun little factoid, if anybody wants to know. One of the people who used to sit on the board of directors for FINRA was a guy by the name of Madoff. Do you remember him? Just saying. These guys are not perfect by any stretch of the imagination.

 

The other thing is that in the financial industry regulated by FINRA, they are not under the Constitution of the United States. The Constitution says you are innocent until you are proven guilty. In this format, you are guilty until you are proven innocent. It’s a different world.

It is so different. Please understand that if somebody is securities licensed, every email they send is read by Big Brother. They have to get permission to do things like that. When Lorraine and I were confronted with this whole issue back in 2015 and 2016, we really sat down and took a look at it and said, “This is a set of headaches we don’t need and want.” It has been an absolute shift. We now have constitutional rights. What an amazing experience that is.

You guys know that I released all of my licenses. I had a life insurance license and a real estate license. I was regulated by everybody, too. I just let them go because it turned out to be too many more disclosures, especially in California. I was having to sign over my left arm to talk to anybody about a property. I really do get it. I’ve let go of all of mine, too. It’s released so much pressure from my life, too. Not because I want to be dishonest, none of us want to be dishonest, but I do want to have some rights and be treated with respect.

What’s interesting I want to say and share with whoever’s reading this is that Jim and I have been very blessed. We have been asked to be on several stages, continue to be faculty, and speak in many different places. With these joint venture relationships, we have disclosed what we have done here now. The response is, “I know you, guys. The person who referred you to me, I’ve known them forever. I am so grateful that you were honest in sharing with me the disclosure that in itself is all I need.” We just keep having doors open to us, and we’re grateful for that.

I am, too, because otherwise, I wouldn’t have met you.

That’s true.

Why don’t you talk about what happened that allowed us to pivot to where we are now?

Jim and I were real estate investors and business owners. We have had employees ever since the mid-’90s, and we are taxpayers as well. First of all, when we first went independent in the ‘90s, we worked like this with the CPA for ten years, and our eyes were like, “There’s so much money in the tax return.” In our own situation, we were learning, “If you have your entity structuring, you do this and that. There are all these opportunities.” We then got certified in charitable planning back in 2001.

 

It just goes to show that you were right. I’m certifiable.

It’s one of your better qualities.

We started back in 2001 focusing on the tax strategy. In 2016, we purchased a tax firm coincidentally before this whole thing happened. It was the end of 2015 when we were in negotiations. We closed escrow in 2016 in the first quarter, and then in the second quarter, this FINRA thing happened. What was interesting is that whenever people have challenges, you have a lot of real estate investors and you have entrepreneurs. When you have challenges, it really tests you. You find out a lot about yourself. Our income was, at that time, seven figures, and it got cut off in one day.

The broker-dealer said, “No, because you’re suspended.” When you have that kind of income and you have a whole staff of over a dozen people working for you, and there’s zero income coming in, you learn so much. At that time, we had bought a tax firm, and it was a small little one. Our clients were so faithful to us. They said, “Are you okay?”

That was very touching the way the clients reacted to us. The vast majority of our clients were more concerned about our welfare than their own business because they knew their business was in good shape.

We started rebuilding. We have always helped people but it was more targeted in tax strategy because that’s where we had a lot of pain personally. A lot of our clients had a lot of pain because they were way overpaying taxes. Nothing bad about accountants and CPAs and enrolled agents, they’re taught, “Let’s prepare taxes.” They get very busy with, “Give me the documents in February and March. Let me prepare the return and here is what you owe.”

 

For us, we have a team of tax preparers, and it’s a great marriage between the tax preparer and us who focus on the tax strategy. In addition to that, the implementation is heavy. You see those dollars and it’s exciting for us to see people save. Jim was working with somebody, and the actual savings is $148,000. Guess what he is doing with the money?

Investing.

Buying real estate.

Here’s the fun part, not only is he buying real estate, but he’s getting additional tax reductions for the real estate he’s buying from with the tax savings he’s got. He’s getting additional tax savings.

It compounds. We talked about compounding and making interest. We also talk about compounding this way. One of our favorite words.

One of the analogies I like to give people is I don’t want people to think that their tax guy is doing a bad job just because they don’t have a strategy. We have to understand that most tax people are defense players. Think soccer analogy. Your tax preparer is the goalie. Think about their language. “I need to be able to defend this. Can we justify that tax deduction?” They think very defensively. Our job is to come up with those strategies to score goals on the other end of the field and work together as Loraine suggested. That’s where the magic happens.

None of these strategies are illegal. It’s all written in the IRS code. I think people get scared, too. Why doesn’t my CPA know about this? It’s because they’re not spending their time studying all those things. The IRS code is huge. It’s enough to keep up with what’s changed each year. There’s trust code, corporate code, and real estate code. There’s so much code. Most of them will specialize, which is why usually I’ll recommend go to somebody that understands real estate. A strategist can be a little broader and look at all of those things because they’re not actually preparing the taxes.

The one thing that you should know is that back in the day, we used to do things longhand. Now, we have software systems because one of the things that you said is brilliant. Everything we do is ultimately put into a written document. In that written document, we have the description of what the tax deduction is. We have the rules of what you have to do to justify it and we have the code sections so that the people who do business with us get a very robust document showing them exactly how it all works.

Mine was 97 pages long.

Sorry about that.

No. It’s true. It’s so deep, which is why you got buy-in from my husband because he wants to know all of it.

It does give people peace of mind that included in the strategy is the IRS code. All of that is wonderful, and it all looks great on paper but it is the implementation. One strategy may be putting your kids on payroll if you have a business or you have a real estate business. You have to know what is the job description, how much are they getting paid, how many hours, and what’s realistic. Having all of those details is so important. Those are the things that we work with people on, updating their minutes, making sure the resolution is completed in their corporate documents, those type of things.

A plan may look great on paper, but it’s the implementation of the strategy that determines if it’s actually effective. All those little details are important. Share on X

That’s pretty comprehensive. Who else does that? That’s amazing.

One of the things that’s exciting for us is being able to say the phrase tax-free. It truly is. One of the things that we’ve learned is there are several different techniques for people to get profits tax-free, and we mean without tax.

Is this the piece that you were talking about, Jim, getting tax-free money in your business?

Yes.

Thank you for the tease. We’re going to talk about that in EXTRA.

That’s good.

It’s part of the conversation for sure. The thing that’s really amazing to me, and one of my deep motivations in life is the enlightenment that people have once they understand what can be done. It’s like being set free. It’s like, “I can earn the money and keep it legally?” Yes. You don’t have to feel like you’re paying for that next destroyer all by yourself. It’s true.

There is hope for people to be enlightened about what can be done with taxes and banks and that they can earn the money and keep it legally, too. Share on X

Is that your outside voice?

That’s why a lot of taxpayers feel this. A lot of taxpayers feel like, “If I could just tell the government what to do with the money, I’d be happy to send it to them.” You can’t do that.

That’s right. One of the things that have been a theme of conversation that I’ve been having on this show is this idea. We just had Chris Larsen. I just did a webinar with him.

I saw it.

It was so nice to have you there, Lorraine. Thank you. He does this whole concept of make, keep, and grow. A lot of people focus on the make and the grow. The thing that they don’t really get their heads around or understand the importance of is that keep piece allows the grow piece to happen so much faster. There are a few reasons for that. First of all, compounding. The more that you keep earlier in life, the faster it’ll compound and become more later in life or in a couple of years. There’s also the compounding factor of what you guys were talking about where you’ve got $128,000 savings in your taxes. Instead of spending that on a boat, car, fun, or vacation, they bought another piece of investment property. That compounds it.

Keeping piece, which is what we’re talking about here, is critical to fast growth. You’re going to grow if you’re doing the right things, but fast growth happens when you focus on that middle piece. We all love it. It’s sexy to talk about making. It’s sexier to talk about growing. We love money. Keeping piece is not as sexy, but I would say it’s even more vital than the growth piece.

As a matter of fact, in part of the report that we produce, we do the projection of what the tax savings is worth, we use a really low number. We only use 6% compounding. The gentleman that she was referring to had a goal of being independent in ten years.

One of the things that I noticed from his chart, which I thought was great, is he showed the sale after 6 years of the syndication on the properties putting in $100,000. Chris Larsen, right?

In my webinar, that’s right.

What happened is that doing the investing and then having the growth and net positive cashflow being reinvested. One of the components that were missing on that spreadsheet was the tax savings. I understand that’s not his line of work.

I also think that he doesn’t want to keep it so complicated that people’s eyes glaze over. There were already some concepts in there that people were like, “Huh?” There’s definitely a learning curve on some of this stuff, but you’re right. I know that Chris knows about it. He talks about tax savings all the time.

He mentioned it. It can get too complicated. If you’re not used to looking at spreadsheets like that, it’s overwhelming. I get it.

Did you read what he said, though? He said, “What if you’re making $500,000 a year and pay $100,000 in tax?” How many people that make $500,000 a year only pay 20%?

Most entrepreneurs should. Our rule of thumb is 15% state and federal tax combined if they’re self-employed.

The rule of thumb for entrepreneurs on taxes is 15% state and federal taxes combined. Share on X

That is the huge tax benefit of working with a strategist because most people who make $500,000 a year, especially in W-2, which is what he was talking about, he does recommend starting a real estate investing business or something so that we can take more benefits. If you make $500,000 a year in California, I don’t know the rest of the country, you’re paying close to 50%.

Thirteen percent income tax rate in the state of California. We are now number one highest to income tax state in the union.

Congratulations to us. David and I are in there, but we never want to get there. I’m just saying. It was so interesting as Chris was talking. I was like, “What? $100,000 in taxes? I know what you mean.” I don’t know if people catch this. He’s talking about a 20% rate. You’re talking about a 15% rate state and federal. What a savings that is. People don’t know how to get there, and they don’t think it’s legal.

Here’s what they say. They say, “Isn’t that a red flag or an audit?” If you’ve got the documentation and homework, and everything is ready to go, and the IRS comes knocking, you show it to them. That’s like, “Next.”

You have a lot of real estate investors. I don’t care if they’re W-2 or if they’re not. Real estate is such a beautiful investment because the income from real estate isn’t subject to FUTA and FICA. No self-employment tax. It’s federal and state. There’s this beautiful thing called depreciation on investment real estate. If your cashflow is $50,000 a year and your depreciation is $30,000 a year, then you’re only paying tax on $20,000. Thirty thousand dollars of it is tax-free. You have the opportunity of having tax-free income on real estate regardless of your status. That’s a good thing. That’s just the IRS that came up with the rules.

There are a couple of different types of tax that people should be aware of. There’s income tax, like W-2 type income tax. There’s investment income tax. There’s capital gains tax. There’s also estate tax. Our practice is primarily on income tax related, so your tax returns stuff. That comes into those three categories. Knowing how to move the investments around so that taxable income falls into various categories is very important. That’s part of the skillset. In other words, it’s not just some tax thing investment. It’s how you report your income. How you play the game can have a huge impact.

You were going to say something, Moneeka?

I was going to give you guys a recommendation, but I don’t want to cut off this conversation. I will do it at the end. People are thinking about their 2022 taxes. It’s tax season. Is there anything you want to share about what’s coming up for us?

Here’s what I would tell people to do. Sit down with a pad of paper. If you spent money and you could remember it now, it was a significant enough amount of money that you should be able to write it out. When you go to do your taxes, you should be asking not, “Is it tax deductible,” but, “How can I make it tax deductible?” It’s a different mindset. If your mindset is to spend money tax deductible before you do your tax calculations, that in and of itself could be a huge boon.

I love that mindset piece, Jim. I have to tell you a funny joke. My organizer was sitting and doing my filing. She’s looking at all my real estate stuff and says, “I’m learning so much just from doing your paperwork.” My organizer in San Jose did the same thing. She started investing in real estate because she was doing my filing. It was interesting. I love that. She’s like, “I’m learning so much. I heard this joke and I didn’t know anything about what it meant until I met you. There was a teacher and she’s doing tutoring. She bought sticky pads, and she used the sticky pad. She only used 50% of the sticky pad for her students. Can I write this off? I used 50% for personal. I don’t know. Should I write this off? Is that legal? There’s a rich billionaire who’s got his yacht and he tells his tax consultant, ‘Write off the ocean. It’s part of my business.’” I don’t think the billionaire should be writing off the ocean just for clarity, but it’s such a different mindset. How can I write this off? How can I make it write-offable as opposed to, “Should I do that?” 

I do have something to share with you. This is a fun conversation I get to have. Now, please understand, I have had 100% agreement on this factoid. I’ve talked with absolute liberals, conservatives, and teachers. You name the political spectrum, I talked to them about our favorite ex-president with the comeover. Donald Trump reportedly spends $60,000 a year for that hairstyle. Let me ask you a question. Do you think there’s any way in God’s creation he’s not taking tax deductions for that $60,000 to a person? Everybody absolutely trusts Donald Trump to know the tax code and know how to get that tax deductively. If he takes a tax deduction for a bad hairstyle, what can you take a tax deduction for? Just saying.

That’s really something to think about. I’m thinking, “I’m on TV. Should I write off my hairstylist?” I don’t know. I won’t do it. There are a lot of these things that come up that we don’t know we can take unless you are one of those privileged people that lives and goes socializes in a community where these things are talked about like it doesn’t matter. It’s a regular conversation like the rest of us might talk about the weather. There are people that live with that kind of privilege. Donald Trump is one of them. The rest of us, not so much. We’ve got to be in on these kinds of conversations and seek them out.

One of the things I wanted to let everybody know is that we do have a process where we can help people do an assessment. What we do is we get a secure Dropbox. We send people a secure Dropbox, a simple questionnaire, and we take the last year tax return, put it into our software, and then we look and analyze on what are the things that they’re doing and what are they missing, and then we create that report. We did that for you, Moneeka.

There’s not a charge to go through that process. We create the report, and then we look at, “Here are some opportunities that you may be missing, and here’s an estimate of what tax could be saved.” At that point, if people want to move forward, then we’ll discuss how we can implement and help them. If not, that’s okay. At least they got an idea of where they are.

 

Lorraine and Jim did that whole breakdown for me, too. I sent my stuff in. It was really informative and saved us quite a lot of money on our own tax returns. We still have lots of questions, but they’re always so patient with us on that stuff. Thank you guys for that. I want my ladies to be able to take advantage of this, too. Ladies, all you need to do is go to BlissfulInvestor.com/TaxStrategy. There, you’ll get to sign up for this strategy session. Jim and Lorraine normally charge $497 for this because it takes their time and all of that stuff, but because you ladies are all blissful investors, you can get it for $297. Go to that link to get the discount. Does that make sense?

Yeah. I love it.

We are going to be talking about how to get free money on your taxes or free income from your business. That’s going to be in EXTRA. I’m super excited about that. Did you guys want to say anything else before we close?

We are so much looking forward to dealing with some of your lucky ladies and getting them to their lowest possible tax. I love the financial freedom that paying the right amount of tax provides for people.

I want to say thank you, Moneeka, for having us on your show, taking the time, and having us explain what’s on the internet because our heart is really in helping people. When I heard your last speaker speak, Chris, he made a comment about asking, “Are the people that you work with, what is their net worth? Are they seven-figure? Are they eight-figure? Are they successful? Where are they?” I thought, “Thank goodness he asked that.” I was so happy he did because that’s an important question, and that’s where Jim and I are. We do practice what we preach. This is our ministry. We’re financially independent, and we choose to do our calling to help and educate people.

I know that about you guys, and I’m so glad. The other thing is my people will find it on the internet and they don’t want to talk about it. They’re skittish about it. They’re embarrassed about it. I just love that you guys are so willing to share the real story. To me, part of integrity is being transparent. I really appreciate that about you guys. Before we sign off, I want to say one of the big reasons why I first got connected with these amazing people years ago was I was at a seminar, and someone said that she retired.

She had some assets and didn’t know what she was going to do. She put together a plan with her strategist and retired in five years. I was like, “Who was your strategist?” She did not have the equity that I did. She hadn’t been spending that much time. She’s like, “You’ve got to meet Lorraine and Jim.” I was like, “I love them.” I know I hear it over and over again. Part of what I love about you guys is you look at the strategy, but you are not like most financial strategists that only look at stocks, bonds, life insurance, or whatever it is that people are talking about. You include in the strategy, real estate and tax.

I said this to Lorraine, “Where have you been all of my life? I needed you.” That’s why I’ve been referring and referring. I hope that people feel much more comfortable now with that referral, and will start moving towards working with you guys because I know you guys have done magic for so many people. I’m so very grateful that you’re out there doing this even though you don’t have to.

Thank you and thank you for educating all of your people and all the work that you do. It really is such a great community and education, and you do it from your heart. I can see that.

Thanks, guys. Ladies, stay tuned. This has been amazing, hasn’t it? I need that more. We’re going to be talking about it in EXTRA. If you’re subscribed to EXTRA, please stay tuned, there’s more. If you’re not, but would like to be, go to RealEstateInvestingForWomenExtra.com, and you can sign up there. For those of you that are leaving Jim, Lorraine, and I now, thank you so much for joining us for this portion of the show. We appreciate you, and I can’t wait to see you next time. Until then, remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon. Bye.

 

Important Links

• Jim and Lorraine Conaway – LinkedIn
• Chris Larsen – Previous Episode
• BlissfulInvestor.com/TaxStrategy
• RealEstateInvestingForWomenExtra.com

 

About Lorraine & Jim Conaway

C&C Wealth Strategies is an income and wealth preservation firm that uses a systematic approach teamed with tax and legal advisors* to work toward customized results. Jim and Lorraine Conaway established Conaway & Conaway in 1996 to plan for better futures. C&C focuses on offering ROTH conversions, rollovers, pension maximization, income and portfolio analysis. Jim and Lorraine guide C&C by their moral obligations which suite to always put their clients’ financial lives in as the forefront of the business. Jim, Lorraine, the advisors, and the staff are continuously educating themselves on different ways to help clients work toward their financial goals. It is through a cognizant design of support and education where we establish lifelong relationships with clients and their families.

 

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Taking Your Syndication Deals To The Next Level With Chris Larsen

 

You need to take into account a lot of different things when doing syndication deals. As an investor, you must understand every single detail of the property before closing a deal. At the end of the day, real estate and syndication are team games. You won’t go far in your deals if you aren’t transparent enough or communicating clearly.

Join Moneeka Sawyer as she chats with Chris Larsen, the Founder and Principal of Next-Level Income, all about evaluating syndication deals. Chris breaks down a deal in real time to highlight the most crucial parts of the process and the essential lessons to remember. Be sure to take notes because you wouldn’t want to miss this episode! And if you love to learn more about this topic, check out Chris’ book, Next-Level Income.

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Watch the episode here

 

Listen to the podcast here

 

Taking Your Syndication Deals To The Next Level With Chris Larsen

We have a webinar with Chris Larsen. We’ll be talking live about the biggest topic you ladies have questions about regarding syndications and how to evaluate syndication. It’s going to be a great conversation, so come and ask all of your questions. We’ll stay live as long as you need us to. To sign up, go to BlissfulInvestor.com/SyndicationWebinar. Also, what you might not remember is we held a webinar in 2022 with Chris where he did a complete detailed breakdown of a deal, he was real-time raising funds for.

It was one of the most interesting conversations I’ve ever had about syndications, which is why I wanted to bring Chris back for another webinar. He is so good at explaining how things work and is patient and thorough in answering questions. Join us for our upcoming webinar. Go to BlissfulInvestor.com/SyndicationWebinar. In the meantime, since many of you didn’t get to hear the webinar in 2022, here is a replay of it. Read it. You will learn a lot.

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Chris, I know you have a new deal that just went live. I want to hear all about that. One of the best ways to get to learn about these deals is to walk through one. This is super exciting. Do you want to share that with us?

Absolutely. I’ll share my screen here and I got a ton of stuff. If you were new to the syndication space and if you’re reading, first off, I’d recommend going to the website NextLevelIncome.com. I wrote a book about why I feel multifamily real estate is the Holy Grail of investing. To be clear, I was an investor before I started syndicating deals. I was buying properties. You and I talked about this when we were together on the show.

Multi-family real estate is the Holy Grail of investing. Share on X

I managed my own portfolio of real estate for 15 years, and then I was working 60, 80, and 100-hour weeks. I was on call twelve years out of my career and it didn’t interest me in doing that. Also, I’m an engineer by training, so I want to figure out the best way to do things. I’m always looking for a better way to do things and I was introduced to multifamily. After having this conversation many times, I decided to write a book about it. You can go to the website NextLevelIncome.com/book, and get a free copy of the book here.

Go to NextLevelIncome.com/bliss. We’ve got our page for my ladies. There’s a bunch of other things that are on there, ladies. Go to that website.

This is what we’re going to be talking about. We have even more stuff that we’ve added. You can always email me. We added five ways you can set your kids up for a lifetime of financial success. These are some tools you can use for five different things. Start a bank account, pay your children, teach them about investing, start a business, and teach them about the value and cost of college. I’m big on the why. As we get into tonight, it’s like, “Why do we do this? Why do you invest?” You invest for time, you invest for freedom, and you invest for the ability to do different things.

I’d like to talk a little bit more about the deal. Before I get into this, Moneeka, I want to talk about the process. If you’re new to syndication like, “How would I look at a deal?” If you sent me a deal and said, “Chris, what do you think about this?” By the way, this happens to me at least once a week. I had one of my fellow mastermind members set it up. He sends me this deal, and it was in this little town in Alabama, and he’s like, “What do you think about this deal?”

As investors, we look at the numbers. We’re like, “What are the returns going to be on this deal?” I looked at the deal and my first question to him was, “Why do you like this town?” His response was, “I don’t know if I like this town.” I searched for this town. It was 18,000 people. 11,000 of those 18,000 people in the population were students. If you look, you’d be like, “This town’s growing like crazy.” If you’re in a decent-sized city or town, 18,000 people is a small concert in some towns. That can blow that out.

One of the things you need to be conscious of is, “Why are you investing in a specific area? Why multifamily?” That’s what I talk about in my book. I’ll talk about that here in a minute but, “Why a certain geography of a country are you going to invest in?” I’m going to walk through a lot of that as I unfold this deal here. The first thing I’m going to talk about is why multifamily real estate. Why do I call it the Holy Grail of real estate? The reason is multifamily is very stable. People always need a place to live, and it waxes and wanes. It’s hot. It’s lukewarm at times but multifamily real estate apartments never seem to be cold because people always need a place to live.

 

We have a few trends as well, and I talk about these in my book. One of the big trends and problems we have this decade, 2020 onward, is that we have not built enough housing. If you’re anywhere in the country that’s even remotely desirable, you can’t get a house. It’s hard to find a place to rent and we haven’t built enough apartments. We haven’t built enough homes. The question is, “Why would we not do that? Isn’t this a capitalistic society? Wouldn’t money flow into that area?”

The problem is we didn’t build at all coming out of the Great Recession and the banks tightened up lending. My wife and I started building spec homes in 2012 and 2013. We called over 30 banks and there was one in the town of Asheville, North Carolina, which isn’t huge. Out of almost three dozen banks, there was only one bank that would lend to us to build a house and this was in 2012.

In 2013, 5 years after the Great Recession started, you almost couldn’t get money to buy or build a house. If you think about that, we have to make up for that law, and then you have the Millennials. You have 20 million potential households or more living with their parents still. They’re all moving out and looking for houses. They’re looking for places to live. Guess who else is looking for places to live? Their parents because they’re downsizing. They’re moving to better areas of the country.

If you find an area of the country that is desirable, there’s a housing shortage already. We don’t have enough homes. Millennials, Baby Boomers, and Gen Z, 36% were the article I read that about a third of Gen Z say they want to own a home. It’s only a third. 75% of immigrants rent. You have all these trends that are pushing the multifamily market. That’s number one, the multifamily market.

Only 36% or a third of Generation Z want to own a home. Share on X

Number two, what areas of the country do you want to invest in? I’m going to show you this deal in Florida. It’s probably no surprise. Moneeka, I know you’re in California. I’m sure you don’t love the state tax rate as my guess. I have friends in other areas of California, and they don’t like the local policies. There have been stories in San Francisco about stores getting looted and these problems. There are people that say, “I don’t want to pay the tax and I don’t want to deal with this. By the way, I’m remote now. I can live wherever I want.”

They move to places like Idaho, Colorado, Oregon, Texas, Florida, and the Carolinas. All these states are in the top ten of the country. I can dive deep. I don’t want to get too into this. I’m an engineer. I can get nerdy about all this stuff but I can go through all the statistics of how you look at this. If you listen to those states and most people nod their heads and say, “I’d rather live in an area with a lower cost of living in a better quality of life,” although I do love California.

I love California, too. You’re right. In every place that you live, build or grow a business, there are advantages and disadvantages. I still love being in California but I know there are things that are not working here. We’ve never had someone do a deep dive on those numbers. Would you mind maybe going a little bit more high level? I would love to hear some of that.

I can do this probably in a pretty succinct way without getting too crazy here. The easiest thing to do is look at census data. You don’t have to go and look through all the US census data, although that’s where this comes from. I was doing a presentation, as I mentioned, and showed this slide. These are the fastest-growing states in 2021.

I searched and looked for the fastest-growing states in the United States. Again, I’m not saying I like or don’t like states. This is just data from where people are moving. The darker the states, the more people are moving to these states. On the West Coast people are moving typically out of California to states like Idaho, Nevada, Utah, Arizona, and Colorado.

Texas, I joke around and call Austin the least expensive city in California, and then also the Southeast. The Southeast is so dark here and that’s because people are moving out of the Northeast. This goes down here, talking about the fastest-growing states in the United States. This is with a little bit of a grain of salt. Idaho has a population of less than two million. If you’re going to be buying properties like big apartments or multifamily, you want to be buying in areas where there are a lot of transactions. We like cities that are typically 250,000 or above.

Even a million are nice-sized cities because a lot of transactions occur there. A state like Idaho, maybe that’s not a good fit for us. Arizona, for instance, has over 7 million. Nevada, Utah, Texas, and South and North Carolina, I’ll show you down in there. Montana and Delaware are other one that is fairly small states. If you look down here, you see those states I mentioned, North and South Carolina, Florida, Colorado, and Washington. Washington State is growing but there are some issues with some of the cities in Washington that make me shy away from it. Also, Texas, Utah, Arizona, Nevada, and Idaho all are great states to look into.

What is it that about Washington, for instance?

You know this because you’re a landlord. When you’re looking at states to invest in, you want to be in states that have landlord-friendly laws and also are business-friendly. I ran into a neighbor down the road and his business. He lives in Asheville, North Carolina. They’re based in Seattle. He was like, “I got back. I was in Seattle for three months.” I said, “What were you doing there?” “I’m shutting down our office.”

 

I said, “Why are you shutting down your office in Seattle?” He goes, “They drove us out of the city. They don’t want businesses there. They didn’t force us to leave but it doesn’t make sense for us to do business in Seattle anymore.” Amazon is divesting from cities like Seattle as well. You also have to be considerate of that, and you have to look at what the businesses and the trends are doing. When we look at crime, when it comes to neighborhoods, it’s okay if the crime is within a certain range but you don’t want crime to be rising.

You don’t want state taxes to be rising. You don’t want businesses to be leaving. A state that has less businesses but has more businesses moving in, is better than a state that has more businesses but businesses moving out and taxes rising because what you want is growth in an area. What we’re looking for is growth in an area and a state like Washington State may be growing but it’s very rural in some different areas. You have to be conscious of that as well.

You want to know that there are more businesses coming in. You want to know that crime isn’t going up, that it’s maybe stable or going down. Is that the stuff you can find out online also?

Absolutely. Again, this is a whole hour and an hour half.

It’s its own thing.

Given it a level but if you’re an investor, I don’t think you have to go and pull all this data. I would be conscious of you can go and search like, “Chris has shown me this deal in Fort Myers. Let’s look up our businesses growing there.” You can search and see that, and I can show you some stats on Fort Myers. Even more importantly, when we get into the analysis of a deal at a high level, you ask the operator, the syndicator or the general partner and say, “Chris, tell me about the situation in Florida with businesses or what this city is doing to draw in businesses.” You don’t have to have the answers as an investor but certainly, whoever you’re investing with, if we’re talking about syndication, that person should have the answers for you.

My husband is an engineer like you. We had a deal come across our desk and the numbers that were put in the deck were wrong. He was saying things like, “These numbers are a little bit misleading. I still like this deal because of this. They have a lot of business but businesses are going down that’s not stated.” For him, he was able to go do that deep dive and the syndicator was not forthright, forthcoming on that stuff. Maybe they found their numbers a different way but we lost our trust in that dealer or syndicator.

Details are important in this business because the math and the multipliers are big in the multifamily space. This is another article I pulled up talking about the two generations that are clashing. They’re both battling over gaining housing in these different markets. I’ll talk a little bit more about that. I’m going to show you this deal in Fort Myers. You’re an investor and you search and you’re like, “Why should I be interested in Fort Myers?” It’s the number one, fastest-growing city in the US. This is one of the reasons that we were interested in this market.

Now, it’s a smaller market. In a market that’s less than 1 million people, I’m wanting to see a lot larger growth rates than a market like Orlando, where we bought two properties. I don’t expect for Orlando to grow as fast because it’s a much larger market. It’s going to take a lot more to move the needle. I’m going to want to see faster growth rates there. I was talking about that deal in an 18,000-person pound. You might see some impressive growth numbers but 1,000 people one way or the other are going to move that fast and that’s almost too small.

I’m going to get into all those different subjects as we get in here and stop me and we can discuss this. First things first, when you’re an investor and you look at a deal, don’t get distracted by the pretty pictures. We like pretty pictures. Investors like pretty pictures. It’s appealing. The property should look nice but you want to look at the meat of the presentation. You want to look at what’s inside the presentation. That being said, I mentioned details matter. I’m not going to say we’ve never had a typo in our presentation.

When looking at deals, investors must not get distracted by pretty pictures. They must always look at the meat of the presentation. Share on X

We’ve transposed some numbers and done different things but you want to make sure that your operator or your syndicator in a deal like this is buttoned up. I said a big word, syndication. If that intimidates you, if you’re reading this, syndication is simply finding a deal. My partners and I go out and find a deal and we partner with investors and bring those investors together.

To purchase a deal together as a team is syndication. It’s buying a property as a team. Like on a baseball team, you have management, the pitcher, the catcher, and people in the bullpen. Although I heard, we can’t say bullpen anymore. Somebody got upset about that during the World Series. I’m not even kidding. You have people that don’t even play. You have the staff, the assistant coaches, and those things.

Syndication is a team sport. I talk about how real estate’s a team sport in my book. That’s a great way to think about syndication. It’s a team coming together to buy a deal and everybody has their place. Investors like the players on the field are important, even though they may not be the management staff. This picture driving into the property here in Fort Myers. Let’s talk about some of the high-level points here. We are buying this property in Fort Myers, Florida, and a lot of these numbers, if you haven’t seen these before, can be intimidating like, “What’s a cap rate?” We can talk about that.

Expense ratios, occupancy, and this occupancy number are not even correct because when we put this together, it’s 67% almost a few weeks ago. Now it’s about 75%. We’re leasing up very rapidly. It’s 100% leased and it’s 75% occupied the day we’re having this interview here and the day we take ownership of it. This is a $109 million deal that we’re raising $38 million. I can talk about the structure. One of the things that are unique about our group is that some other groups have been doing it as well.

We have a two-tiered structure. We have what’s called a Class A structure, which is a fixed return. Those Class A investors get a fixed return. They get paid first. It’s a very secure position. It’s not guaranteed but very secure. The Class B investors, get the actual cashflow from the property, which is typically less than the Class A investors get from a cashflow perspective. The Class A investors don’t get any upside. The Class B investors get all the upside on the deal. If you see this here, that’s why we have the two-tiered structure there.

I want to comment on that. That’s the way Chris does it, which is very interesting. It’s also different than the way many other syndicators do it. A lot of other syndicators that I’ve looked at are Class A. The first people who come in, they’ve only got a few units or this many units at Class A because they commit sooner. That’s often for the purchase of the property. They’re trying to get into the deal. They’ll offer a sweeter deal. They still get some of the upside and stuff like that but in a situation like what Chris is talking about, he’s giving everybody the same opportunity so you can choose Class A or Class B. It’s not a limited time only. There are benefits to both of those.

There are, and it depends. A lot of people are like, “If you’re retired, you’re on a fixed income.” I’m in my early 40s. I have a good friend, a former business partner. We’re the same age. We’re two months apart, and he called me a few months back. He sold the business and said, “I have $1 million. My goal is to generate $100,000 a year in passive income. Do you have anything that can help me achieve that?” I said, “You’re looking for a 10% return. We have a 9% fixed return.”

I’ve flipped the page here to show this. If you look down here, the Class A partnership structure varies. Sometimes we raise 10%, sometimes we raise 30%. The Class A structure varies based upon the structure of the deal. It does two things. It provides that opportunity for investors because we had investors that wanted a higher cashflow like my friend, and then it also lowers the leverage on the property, so we’re not having to borrow as much because it almost acts like a second loan in effect.

Our loan-to-value ratio goes down, which makes it more secure for all investors, and then also if you’re a Class B investor, it raises your overall return because the Class A investors, while they’re getting higher cashflow, they’re not taking the equity on the backend. In this deal, maybe you’re starting at a 5% or 6% return in the first year or so. If you’re a Class B investor and it goes up in year two. These are all performative projections but on the back end, your returns are higher.

We’re able to provide something for investors that want to hire cashflow upfront that maybe isn’t as concerned with growth. We’re also able to provide higher growth for those investors, even though we’re in an asset class that has had returns that are shrinking to a degree. It’s been a way that we’ve been able to provide something to investors on both ends of the spectrum when it comes to that.

Again, these are projections. This is what we like to gravitate towards as investors. I would say flip through all this, and the first thing you want to look at are the details of the property itself. You want to say, “How many units does the property have? What’s the current occupancy? What’s the rent per square footage? When was it built?” You can then start to get an idea of what the general partners and operators are going to do. I’m going to go out of order here.

 

Why Fort Myers? As I mentioned earlier, we want to be invested in areas of the country that are growing. Fort Myers and the county, it’s in 300,000 workers, 17% job growth since 2014. I like to see a small city and I say a small city with 250,000 roundabouts like that. I like to see 2% per year job growth. If you look at 2014, ‘15, ‘16, ‘17, ‘18, ‘19, ‘20, and ‘21, we’re looking in seven years, I’d like to see about a 14% job growth.

That’s way higher than the national average, by the way. Seeing 17%, which is even higher, that’s 20% higher than 14%. That’s a significant difference. I had a friend, who looked, and he’s like, “There’s not a lot of businesses in Fort Meyers are there. It’s 33,589 total businesses. Now, are they all huge businesses? No, you probably have a lot of small businesses there. 55% population growth in the past decade, and it’s projected to grow almost another 50% as well in the coming years. I got the title Fastest Growing City in America. We know Florida’s growing by about 15%.

If you look at the population growth since 2010, look at Fort Myers. It’s incredible. We bought two properties in Orlando. Orlando is 1 of the top 5 markets in the country, and Fort Myers is totally different. Again, this is what you’re going to see between a smaller market and a larger market. The next question an investor would be asking is, “Chris, why are you guys buying in a smaller market?” There’s been a lot of money flooding into core markets over the years. There are big markets like Austin, New York, San Francisco, Atlanta, and Miami around the country a lot of these big markets.

What we’ve seen over the years, a lot of money’s been flowing into the secondary markets. That’s what we focused on in the past years, markets like Atlanta, Georgia. Raleigh, Charlotte, Greenville, Charleston, South Carolina, and then Orlando. Now, as these secondary markets have gotten more and more investors and money flooding into them, again, a lot of international money is coming overseas as well.

We’ve started to look at opportunities in the tertiary markets. If you think about it, we’re not doing this because we’re running around and seeing what’s going on. This is where the population is flowing. People are moving out of the city centers, moving to the suburbs, and now they’re saying, “I don’t even have to live in suburbs. I can live somewhere that’s even nicer, smaller, a better quality of life, less traffic, and less taxes.” We’re following the population where they’re moving. That’s what we’re doing.

You mentioned something on the last slide where you said you’re in an asset class that’s shrinking a little bit. Could you explain that?

I touched on that. The more money that flows into an asset class, it does a couple of things. It provides a great opportunity for operators like us that are selling deals. We’ve had some tremendous exits here this 2022 in terms of returns but there’s more money chasing these deals. That means, as the demand goes up, the returns go down. If you wanted 20% returns a few years ago, maybe you were okay with 18% returns, and then a couple of years ago, 15% returns. Now, I’ve seen deals with 10% returns.

You have a lot of people that don’t have anywhere else to put all this cash that they have, all this liquidity and you have a lot of big players overseas that are coming. We look for deals that need a little bit more work because we’re okay. We have a team built to put in the work, and I’m going to walk through our strategy on this deal while we’re doing that. We also look for markets that aren’t as exploited yet. We’re looking at the next top market. It’s important to point out our group.

We are a private group but we’re buying institutional quality assets. Group like ours, there are not a lot of groups our size that can go and acquire a $100 million deal like this within two months. We’ve put together a team and a process. We can vet deals, we can have our team on the ground very quickly, and we have the capital to close on a deal like this in a fairly rapid fashion. We’re prepared to get in there and improve the asset. Some might say like, “Chris, this deal was built in the last year. How are you going to improve it?” I’m going to get into some of the ways we do that here in a minute.

It does look gorgeous, by the way. It’s beautiful right up front.

I’ll talk about what that leads to in terms of the quality of residents that we have but real quick, employment drivers. This is the next thing. After you’ve said, “This is the geography. This is the state. This is the city that I’m interested in investing as an investor,” you say, “What is driving this?” You have a diversity of employers. Let me give you an example. Back several years ago, Houston was dominated by oil. Now Houston has a lot more of an employment base. If we look at the Fort Meyers market, what we’re going to see is these employers here, we have healthcare systems with 10,000 plus employees.

We have local as well as state governments here. We have county and local governments that are employed and very stable employers. We also have private. We have a public supermarket, Walmart, and Arthrex, which is a medical company that I’m familiar with. I have a lot of friends that work for them. We have McDonald’s, another city here, US Sugar, Home Depot, Winn-Dixie, and Ritz-Carlton. I look at this list as an investor and I like this because not only do I have a lot of employers on this list but I have a lot of different types of employers on this list that is going to draw in different types of individuals from around there.

You can see the proximity. I have a better picture here of the map. If you look at where these employers are, you can see this property has easy access up to 75 to all these employers here that you can get around. I’ve worked for a six-month period down in this area. It’s very easy to get up and down. Number two here is Southwest Florida International Airport. It’s the fastest-growing airport in the country in terms of seats added. When an airport’s growing that fast, it means that there’s demand, and there’s a lot of travel in and out of the airport. People are traveling to and from that area.

Another thing you want to look at is the proximity to the employers that you have here. Forgive me for flipping back and forth through all this stuff but I told you I’d go out of order. I mentioned you have employers. Look at the average income. Now you’re in California, you’re a little spoiled out there, Moneeka, I got to tell you. Around the country, if you’re looking at $50,000 or $60,000 of average income in a property, that’s pretty good. We’re at $172,000 per unit. That’s literally off the charts. This area is very affluent area, $2.5 million net worth. 88% of the residents in this area have white-collar jobs. 79%, almost 80% are college graduates.

Those that are living in the homes, in the area locally are making almost $200,000 a year. These are strong numbers. It begs the question, “Why rent? Why not buy a home?” Homes in this area are $800,000 or $900,000 starting. 20% some of the residents that are here have relocated, and they might not have the savings built up yet.

They might not know if, “This is where they want to live.” They might have started working for a company. They may be retirees and don’t necessarily have the ability to buy a house in terms of financial means or there might not be a house available for them to buy. They want to live in this area. A portion of this property is townhouses. They’re very nice. It gives you a much more residential feel out there. I mentioned a few minutes ago, how do you improve a brand new property? We have acquired three properties already that are lease-up deals. They’re new properties.

The pandemic has driven a couple of trends that have benefited some of the choices we’ve made in the past couple of years that have also allowed us to utilize different strategies. If you listen to some of my interviews at the end of 2019, I said, “We need to be careful going into 2020 based on some of the research that we’re facing a mid-cycle slowdown.” When you come to this point in the real estate cycle, which typically is 18 or 19 years that’s a whole another episode that we can talk about. It goes back to the 1850s.

When you reach a mid-cycle slowdown in the real estate cycle, you must have higher-quality renters to buffer your downsides. Share on X

Again, I’m a data guy. I’m a nerd. I love this stuff and I can tell you all about it. The thing is when you get to this point, you want to have higher quality renters, higher quality residents that’s going to buffer your downside. My former partner and I were buying in Atlanta. Those properties had about a 90% collections rate of the properties that we bought over the years in these higher B plus. B plus was built in 1990 and after A quality assets were built in the last several years, 98% collections we had in 2021.

Collections, you mean they paid their rent. They’re collecting rent.

They pay the rent. You can be 100% occupied and when there’s an eviction moratorium and people don’t pay your rent, you can still only have 90% collections. We’ve seen a lot of that. That’s a good indicator of the stability and how robust this asset class is. Now the challenge is how do you create value if you have this nice asset?

First off, the new rent. We almost bought another property up the road from this property. I was looking through my notes here. You might have noticed here in one of the prior slides the average rents in this property are about $2,000 a month. That’s market rent. They’re lower than this in this property because they gave away some concessions but for the ones that are renting now, about $2,000 a month, renewals right up the road in a similar property are increased by $300.

People are coming out and they’re increasing rents by $300 a month. We’re going to be able to buy this property and as these leases come up for renewal, over the course of the next year, we’re going to have this organic rent growth that’s coming from the market. We normally underwrite 4% rent growth. In a property like this, it’s 4%.

Being able to get 15% rent growth from the market forces that are coming in because of the scarcity and the demand for this area is incredible. The nice thing for us is that if you’re selling a property, you can’t sell a property based on what it’s going to rent for. You can only sell a property for what it’s renting for, and then somebody might say, “Chris, why would the seller sell this property?” The seller is 1 of the nation’s top 5 builders. Their business is to build, lease-up, and sell the property as fast as possible. That’s their job.

I paid $4,000 to have my condo unit painted. I needed it painted in 48 hours. I could have probably had it painted for $3,000 this weekend but I needed it painted in 48 hours. I was willing to pay that extra money for it because I was going to make a lot more money by getting that renter a month sooner. That’s what’s important to me.

What’s important to the builder is they get out of the property, collect their capital, and can invest and start their next project. That’s how they make money. Sitting in this project for another year and maximizing the rent is going to cost them money because they’re not able to necessarily build another project that they may have.

That’s not their business model.

It’s not their business model. That’s our business model.

You said that you had 100% pre-leased, and 75% already full but you’re counting on this growth of the new rents. As you have renters in, you can’t increase someone who’s already in. You can’t increase their rent to the same level. Usually, with these, it takes some circulation. Some attrition and people moving around to make that happen. How are you addressing that?

We’ve underwritten that. We have the actual rent roll, so we know when all those leases are going to turn over. We’ve baked that in and we don’t assume that we’re going to get that full $300. We underwrite that and have a buffer in. I’ll talk about how our estimates are lower than what we typically actually see. That’s a great question. The new leases will start coming due, and I believe it’s March. That’s when we’ll start seeing these increases. It’s going to take us about eighteen months. If you look at the pro forma, you’ll see it starts to happen in year two.

We’re starting to see the full realization of these increased leases. We assume it’s going to take longer than it probably is in reality. That’s step one. Step two, running the technology package. In a property like this, people like to have Nest or Ecobee. I have a picture of the Ecobee thermostat here. It’s the same one I have right back there. If you’re renting a place of this caliber, we underwrote $1,250 per unit for all 300 units. We have a quote for $800 to do this. We try to be a lot more conservative when it comes to this.

DISH fiber is something that we’ve done over the years in these properties. Everyone is accustomed to having the internet these days. Most people, I don’t know about you, Moneeka, but we haven’t had cable TV in five years. It was the 2016 election. I was like, “I’m done watching the news. Things are crazy. I can’t listen to it anymore,” and I canceled cable but we still pay more for internet and subscription services. Instead of letting Charter, Spectrum, AT&T or one of these other companies come in and sell the internet, we bring in a company.

We’ve been working with a company called GigaFi. Now we work with Dish Network, which people are familiar with. They have a product called DISH Fiber. They come in and install it. We do a profit split on the backend, and the residents get a lower cost for their internet. We charge a technology fee for that. They get the base amount. They can also choose the mid-tier or the higher tier to do that. They get better economies when it comes to that for them.

This is showing increased clashflow of $136,800 per year. If you do the estimate of what we’re collecting per month, it’s going to be significantly higher than that but we don’t expect a full adoption rate. We usually estimate about a 50% adoption rate when it comes to that but we’re seeing 60%, 70% plus adoption, and for a property like this, it’s probably going to be even higher than that.

In private yards, a lot of times, you get less money for first-floor rent. You get more money for the top floor rent. We get more money for first-floor rent because we build little private yards. If you have a kid, you can let your kids play outback without them running away. If you have a dog, you can put your dog out back. Most of the time we use turf instead of grass, and then the dog’s not peeing back there like my dog did in our condo several years ago and killing all the grass in the front yard. We’re getting a significant premium.

This is showing $100 per month. We’re seeing more than $150 per month. These are all “value ads.” If you read my book, you’re going to say, “Chris, how on Earth do you do a value add strategy in a property finished in 2021?” Those are some of the strategies that we use to add value to a property that looks brand new. Most people would assume you can’t do anything to that property. These are some areas in which we’ve been able to find value.

What’s so interesting about this is over the last couple of years, anybody who has been trying to do value add has had all the problems that COVID brought us. Supply chain, lumber, and all sorts of materials are going way up. We’ve seen a lot of projects still be profitable but not have the margins that they have originally planned. This is an interesting way to do the value add without having to deal with a lot of those issues specifically.

There are a couple of things. When you have an older value add property, there are a few factors that you have to take into consideration. One, if you’re investing, say $5,000 to $10,000 per door, which is typical for a medium-value add property, you have to raise that much more capital. You’re raising significantly more capital. You’re not going to get the same quality of loan typically because the banks are going to require you to hold more in reserves. They know that the property and the residents are of less quality. They also know that your turnover is going to be higher. We can install DISH fiber and not kick anybody out.

 

We can install a technology package in a day while somebody’s at work. We can install a private yard outside their home and they’re still living there and paying rent. They don’t have to spend 1 month, 2 months, or 3 months with that unit vacant. We also know just asking the person, “Do they want it? Will they pay for it ahead of time?” and doing it that way. The other thing is with these value add properties, the cap rates are higher. If you invest $1 to get $2 out, if you have a 6% cap, so $1 divided by 6% that’s 16%. I’m trying to remember exactly what that is.

I’ll do the math quick. The multiplier is about 16. A cap rate is simply if you pay $100 for something, the cap rate would be how much you would get in cashflow. A 6% cap on the $100 purchase price would be $6. A 6% cap rate would be $6 of cashflow per $100. It’s a 16.7% multiplier. If you increase the cashflow by $1, you get $16 of value, $16.7. That’s pretty impressive. At a 4.5% cap, we’re buying this property and we’re assuming we could sell it at a 4.5% cap rate, which is a little bit higher than what we’re seeing in the market.

That’s a 22.2% multiplier. It takes us less money, and less time to produce. If you’re looking at this, we’re assuming, say $100, $190, that’s $200 per resident at a 22.22% multiplier. That’s times 200 times 12 months by the way. In this case, we don’t have to invest anything in Dish. They pay for that $2,000, $3,250. and the first year we’re creating $444 in value in doing that. That value persists in perpetuity. That’s blending all those things together. It’s an easy way to create a significant return on your money very quickly in these properties.

That’s some of the high-level stuff. We spent a fair amount of time on this. If you’re an investor and you’re looking at the unit mix, you don’t need to spend a tremendous amount of time on this. You don’t want anything that’s too crazy. If there’s a property, it’s all three bedrooms, is it all townhouses? Why is it all three bedrooms? It’s because three bedrooms, they rent for more but you’re not going to have as much demand for those.

If it’s all one bedroom, why one bedroom? What about people that work from home? What about people that can’t have two roommates in there and do that? If it’s all two-bedroom, maybe that’s okay. We like to see a nice mix of those. You want to see less 3 bedrooms, more 2 bedrooms, you know, more 1 bedrooms. This is a little skewed because this is high for one bedrooms.

A lot of these one bedrooms also have a den. There’s a difference here with that. We have 1 bedrooms, and 1 1/2 baths. Some of these 1 bedrooms, 946 square feet, that’s pretty big for a one-bedroom apartment when it comes to that. Several of these three bedrooms that are down here are townhomes, as you can see. There are 24 townhomes that are associated with this. We have this nice mix in this property of townhomes all the way down to 1 bedrooms, including 1 bedrooms with a den.

You could have a couple where they work out of the house. When my wife and I rented our first apartment, it was a one-bedroom but it had a loft. We were very comfortable in that space. This is a very flexible property that has a lot of diversity when it comes to the different unit mixes. This is a lot of the details of the property here. I mentioned it earlier, the property is one of the top five builders in the country with a terrific reputation. If you’re talking to an operator of the deal when you’re buying a property, you want to say, “Are there any structural issues? Does the roof need to be replaced? Is it slapped together?”

In a new property like this by a builder of this caliber, these properties or apartments are built like condos. They’re phenomenal. When you see the amenities in this property and you see some of the finishes, they’re well done, stainless, you have nice quartz countertops, and nice layouts in here. You see these two-car garages in some of these units. We also have one-car garages and some storage units here that also add additional rental revenue that comes in. These are some of the numbers. When you get into the finances, you want to know, “Does the financing line up with the hold period?”

You can hold a property that takes less work for less time than a property that’s going to take a two-year project to complete. If you’re investing in a property and your operator says, “We’re going to spend two years executing our value add strategy,” and they only have debt on there that lasts for three years, what if something goes wrong at the end of that couple year period?

A property that takes less work can be held for less of a period of time than a property that will take two years to complete. Share on X

It’s going to take two years. You mentioned this earlier, you can’t just move people out right away. It’s going to take a little while before you can start to implement that two-year value add plan. You’re about three years out before you finish it and even start to see that revenue. If you’re done and have to refinance the property at that point, you may be bumping up against the problem.

In those types of projects, we’re putting ten-year debt on those properties. A project like this is different. We have a 1-year loan with two 1-year extensions, and it’s variable but we have an interest rate cap to cap our risk when it comes to interest rate fluctuations. We typically model our hold periods for five years. All of our exits have been significantly less than three years. We’re comfortable with a five-year loan on this type of property.

Our interest rate is 0.35% in the underwrite but we are looking at potentially getting that down to 3%. It’s a very nice property. We also get a nice quality loan when it comes to that. The other reason we’re choosing this is the exit fees on a loan like this are a lot lower. What happens is on some of these agency loans that you get from Fannie Mae, and Freddie Mac, you end up having to pay a significant exit fee that eats away at your profits on the back end. As an operator, we have to balance the loan terms, and the loan duration, along with the fees that we have to pay on the backend.

The other thing is, I wanted to mention it to the ladies because they read all of this. When you’re doing financing, a lot of times what happens is you either have to refinance it, turn it into a regular loan, or they do these rollovers. Every project that I’ve ever looked at, the rollover seems key to me because there’s a rule in real estate and it looks like you do a great job of keeping to your timelines, and doing expense lines. A lot of times they will say, “If you have a project and you have a budget and a timeframe, double the budget and double the up timeframe.”

That’s why our 5-year projects, we have 10-year debt. This project, when we were like, “This project is going to be stabilized in a couple of years, and if we exit it in 3 years, a 5-year loan is ample for that.

I like the rollover opportunity.

As an investor, you want to say, “Does it match up, and is there a buffer?” I’ve seen some projects with two-year bridge loans, and I’m not saying those don’t work but if you have two-year debt on a value add project, it’s worked out well in the past several years for investors certainly but there’s an additional level of risk when it comes there. This slide can take a ton of time. I’m going to point out a couple of things and then we can go into a couple of sections. As an investor, you want to look at the comparable rents that are out there. This doesn’t have the walk on here.

I mentioned that property that’s seeing those $300 rent premiums. We can only fit so many rent caps on this slide but I have a full accomplice on here. If you look at this, there’s something you want to look at as an investor. This property finished in 2021. It came online, average rent per square foot, $1.95. Now our actual rent per square foot is more like $1.75. This is not taking into account some concessions but I would note as an investor if you look at this, where are we in terms of the market? In some markets like California, you might say, “This is low.”

In some markets like the Carolinas, you might say, “This is high.” What you want to know as an investor is, “Where does the property fall on the market, and where there’s definitely room to move in terms of rent per square foot in this market?” Both are in terms of rent per square foot. Also, in terms of rents per unit, there’s only one property here. If you look at average rents per unit, are lower than this but if you look at the average square feet, they’re smaller. You want to know that you have room to move into the market. We also talked earlier in the presentation about the tremendous income levels in this property.

The rent per income was 27%. I believe it’s correct. There are plenty of rooms for residents in this property. Also, there are not a lot of other options to get a lower rent in the market. Now, Moneeka, you were talking about like, “When are you going to see these realized rents?” We are basing this year one rent over in-place leases that are there. People might be like, “63% increase, that’s insane.” That is coming because if you note here, over the past year, this property has been leased up, so there’s been a huge loss that gross potential rent.

This is a lease-up deal. It’s a little different than a stabilized property. That vacancy loss, it’s a fake number because that number’s like, “What if all these units were rented?” It takes a while to rent those up. Also, there are a lot of concessions that were given away. If you notice, we’re going to have to burn through some of those concessions going into our first year but they’re going to come off, and that’s why these concessions are going to drop pretty substantially here as we go into year two.

Year one, it’s not an anomaly but it’s hard to judge anything. This 17% rent growth in year two, that’s where we’re looking at, “What are the comps in the area?” That’s revenue growth. That’s not total growth. That 17% is coming from rent growth. We talked about all the other income that we were bringing in in terms of the technology package and the dog guards. You can see that the other income is going to be growing to $966,000 almost $967,000. That’s not a 17% rent increase that we’re looking at. It’s a combination of burning off the concessions, other income, and rent increases as well. We’re only baking in an organic 4% rent increase into those numbers is what we’re looking at. You can see that in years 3, 4, and 5.

Some people may look at that and say, “17%, that’s insane. You can’t get a 17% rent growth number.” We think that number is quite realistic based upon the fact that that’s coming from three different buckets of income in here. The other thing I would point out, operating expenses. These are our total OpEx budgets for our properties that are older than this which are usually about 36% with our property management company. Seeing OpEx budgets of 39% and 40% for Operating Expenses, that’s pretty high for us. We have two other properties with the same management company in Orlando that are of similar quality.

As you can imagine, the higher the quality of the property, the lower the operating expenses. You’re going to have a lower turnover. You’re going to have less issues going back and forth, and less maintenance. Also, we use a big regional operator. FCA is the management company that we use, and they know this market well.

We are basing our payroll and our numbers on all this. You’ll notice the payroll here. We’re stabilizing this at $398,000. This is a lease-up payroll, so it’s going to be a little bit different. We’re stabilizing this based upon the Florida market numbers that we’ve seen in our markets as well as that FCA is providing us that operates in that market. The other thing of note, if you’re buying a property, if you look at it, there’s a huge jump here in our operating expenses and property taxes. This builder bought a piece of land. They’re paying significantly less taxes. We’re going to be paying more in taxes on a monthly basis than they’re paying on an annual basis.

That’s something you want to know as an investor. Look at the taxes and make sure that they’re adjusted, and ask your operator, “What’s the tax situation and how’d you figure that out?” We know what the tax rate is. We’re assuming it’s going to be 85%, which is the discount rate. 85% of the purchase value going into this market is how we’re calculating that.

Investors who are buying a property should look at the taxes and make sure that they are adjusted. Share on X

We also have some soft insurance quotes that we’re using to get these insurance numbers. That’s also another great question. If you’re looking at a coastal market or Florida, people are like, “Why aren’t you worried about hurricanes?” We’re always worried about natural disasters but we’re not worried to the point where we’re not going to invest. We’re worried to the point of how are we going to ensure ourselves and our investors against those risks.

Like in any market, you’ll be out there. Again, that’s a high-level overview of the pro forma and the numbers there. The questions to recap as investors as you want to ask are, “What are the assumptions you’re using to get your income growth?” If you say, “Chris, it’s not realistic to see rents grow 10% in year one,” I would say, “How did you get that? What are you seeing? If we’re seeing 15% rent growth in the market, then 10% is not unreasonable.” I talked to my partner. He’s down in Atlanta at a conference and he said they did a panel and the rent growth that they all shared on stage was 10% to 20% in the southeast year-over-year.

These are not just very specific markets. These are the actual rent growths we’re seeing in this market. Again, we’re not projecting that out for five years or worse. We’re assuming that they’re going to slow down significantly. These are sales comps, and then we get into the pretty pictures again like we were talking about with Fort Meyers. We covered a lot of this. This is why is it such a great place to live. This goes through a lot of the properties that we’ve had, some of the closings that we’ve had.

That’s the final question, which is should be your first question, which is, “Who are you investing with? Do your operator, your GP, and the partner that you’ve chosen to place your money with have a track record?” I should know this exactly. This is my fifteenth department syndication that I’ve been a GP on. We’re limited partners or owners in twenty different properties currently. We invest in every deal that we present to investors. That’s another great question, “Do you invest in your own deals? Why? Why not? How much?” When we profit from a deal, we roll that into the next deal. We believe in this strategy and like to buy properties that we want to own ourselves, and we see this as a way to share these opportunities with other people.

There was one other thing you said at the very beginning. You are able to do projects that are institutional size rather than the smaller ones. Could you talk a little bit about how that works out for you? Why it’s different for you than for other syndicators? Give me some perspective on that.

There are a few different pieces of the puzzle that you need on the front end. I mentioned I was on the mastermind call and we had two other syndicators. One had a deal that was falling apart. One had a deal that he is putting together. We had a deal that came through and we joked because it’s like a dance, the middle school or the high school dance.

On one wall you have investor capital. On the other wall, you have deal flow and it depends on who is on the floor at the right time. You have to have the right deal at the right time with the right capital coming through. If you have 2 people come off 1 wall and 1 person off the other wall, only 2 of those people can dance together. You could have three people dance together.

That’s where the analogy falls apart.

It depends on which wall they’re coming off of if you ask me but it’s overly simplistic. I crushed my own analogy. You have to have the right deal and the capital comes together at the right time for a long-term partnership. How about that? Maybe we can agree on that. You have to have the right mix on the dance floor at the right time. We have created a deal flow. We have five people on our acquisitions team. We’re constantly looking at deals. My team told me they’re going to underwrite 450 deals this 2022.

This young team is out there my main partner, and then we have the team underneath him. They’re out there. That’s two deals a day on average that they’re underwriting. It’s like looking at the matrix if you look at our spreadsheets. It’s deal after deal but the good thing is because of the number of deals that they’re looking at and I mentioned this deal, they knew. They’re like, “This property up the road that we almost bought is getting rent premiums of $300.” By the way, the reason that the seller didn’t sell was that he decided to hold onto the property and get those rent premiums.

They’re good that seller decided to hold onto that. That broker that was selling us that deal, because that deal fell apart, brought us this deal. We get deals because of our knowledge of the markets, our relationships with brokers, and the frequency with that we’re in there. The big pieces are reputation. We have a 100% track record of closing. We typically close deals the size of a very short timeline of 2 to 3 months because we know so much coming in. We don’t have to spend a month after we get the deal under contract or run through all this process.

This deal was under contract, and we were able to put the package together. Our team’s ready to go, putting everything together. I started reaching out to investors saying, “Heads up, I had some investors on a waitlist. We have a deal coming through. Are you still interested so I know how much capital and what we can move to get a deal done?” We’re always tracking those numbers. It comes down to communication.

It’s sharing information with investors, being transparent, and then also explaining the process so investors know that, “Our deal, our agreement on our end is we’re going to find you this deal. We’re going to share the details of this deal. Your part of the bargain as an investor and as part of the team is that you’re going to get 2 to 4 weeks to look at the deal and fund the deal.” We’re going to close about a month after that. Our last deal was oversubscribed. There are investors that didn’t fund on time and didn’t get into the deal. That’s why we had a waitlist.

 

The big part on our end is I’m sending out investor updates every month. Our investors get distributions every month. They get quarterly updates as far as financials that come in there. We try to be as transparent as possible when it comes to that. We have the deal flow. We have the investor relations and the capital side of things. On the backend, we’ve had four exits with the team this year. They’ve all exceeded our pro forma expectations by a significant margin. Our average returns are well into the twenties or are higher than that.

You can see our projected returns here. I certainly don’t promise those returns on every deal we do. I would look at every deal on a deal-by-deal basis but the bottom line is the 3rd piece of the puzzle or the 3rd leg of the stool, if you will, is the operations side. Our Head Asset Manager, Brian ran a portfolio of $1.5 billion significantly more units than we have now. It’s a factor of three. This is cute for him to run the number of doors that we have at this point.

You need somebody that’s comfortable. That’s the other thing you need to ask the operators that you work with, “What’s your track record? What’s your plan? Can you handle this?” We’re only going to buy 1.6% or 7% of the deals we underwrite this year. It seems like people are like, “You bought 7 or 8 deals. It seems like a lot.” When you have a team built to handle a portfolio three times your size, we’re very comfortable with that. We’re built to scale and grow. We’ve built a team to grow into.

Have you ever had a deal that went south?

It’s yes and no. Personally, I’ve not had a deal in that I’ve been a general partner that has not performed to expectations. That being said, if you asked me in the middle of COVID, “Are your deals performing to pro forma it?” the answer was no. If you look at them overall, I didn’t have any investors. I increased my investor updates to every week because we wanted to tell investors, “Here’s what’s going on.” That’s our pledge. We want to be as transparent as possible.

A lot of deals were gone south in 2021 but they were bobbing. They were bobbing up and down and all of our all-over deals stayed afloat. This is a great question to ask, “What’s the worst-case scenario?” It was one of the first deals I invested in, and it was the group that my original partner and I originally partnered with on our first deal. They bought a deal on Houston. I mentioned that Houston was one of those markets that had a lot of oil industry and they didn’t have a lot of diversity. This was several years ago. The oil was $120 some a barrel and it crashed to $50 a barrel if I recall correctly.

The oil market tanked, and the group I invested with had a third partner. Two of them, a third partner. They split. That third partner went a separate way. They were distracted. They switched the management company. Things were not great, in general. With the group, they weren’t great in general. With the economic market, the management team got switched out. At a local level, it wasn’t great and then the hurricane comes through Houston and blows the roof off about 20 units, out of 200 units. It was this perfect storm of events.

That deal still made money. I averaged about 5% returns on that deal. I didn’t lose capital but we had a capital call because they had made a big distribution early in the whole period, so I had to send a check-in. I’m like, “This isn’t fun. I’m supposed to be making money from this deal.” This is an important thing to ask the operators that you work with and also it’s a good example of one of these stable, high-quality, multifamily deals. They shouldn’t lose money. They might not perform expectations but if you don’t sell in a fire sale, they shouldn’t lose money. That should be your first question, “Am I going to get my capital back and how am I going to get my capital back?”

Stable and high-quality multi-family deals may not exceed expectations, but they shouldn't lose money. Share on X

If you read everything I said, you shook your head and said, “I don’t think that’s true. I don’t think the interest rates are going to be that. I don’t think the rents are going to be that. I don’t think your numbers are correct.” The next question is, “Do you still want to invest?” If you said, “Yes, I don’t agree with you but I still want to invest in this space.”

That’s why we have Class A because you can decrease your risk and say, “I don’t think I’m going to get this return, so I’m going to take a slightly lower return that’s more secure and get more of a bond-like return that’s 9% on a monthly basis was at 0.75% and take that.” I’m not going to argue with an investor that says, “I don’t like where the multifamily market’s going but I want to be invested.” We have an option for that type of investor as well.

Wasn’t one of your personal syndications that did this going south thing that the Houston story?

Not technically, but they’re friends of mine and they were partners in a deal in ours. Again, I have to temper all this with, if you look at the past years, it’s been a fairly easy time to be in multifamily. You’ve had cap rates compressing and if I sit here and I flashed up all of our deals and how great they did, that’s not worth anything. The track record is important comparatively.

Anybody reading this, I can show you all of our distributions to date as well as all of our dispositions so you can see our track record in real-time. We update that on a quarterly basis. That’s important. The past isn’t necessarily predictive of the future when it comes to the actual number. If someone tells you, “You’re going to get a 20% return on this,” run away.

If somebody says, “This is our best guess. This is what we’re striving to do. We strive to get 7% cash and mid-teens return. These are the things that could change that. It might be a little bit worse. it might be a little bit better but this is our plan to do it.” You need to be confident in the plan. If you’re confident in the plan and their numbers make sense, then to me, that’s an operator you can rely on if they have a consistent plan that they’ve executed. Everything that I walk through, we’ve done those yards, the first floor, the private yards.

 

We’ve done the internet service provider. We’ve done the technology package. We’ve hired the property management staff in the area. We know what that’s going to be. We know what the numbers are going to be. We know we can execute that plan. We can’t control the economic environment. We can’t control the cap rates. We can’t control interest rates and all that stuff but we can control the plan that we have and we’re very confident of that.

What is the minimum investment into winning projects?

Our minimum, it’s $50,000, which is on this page, we typically have a $100,000 minimum for the Class A investors because it’s a lot smaller equity slice, so it’s in higher demand but $50,000 is our minimum.

That was a lot of information.

I ran out of water. I should leave with my contact information, of course.

I don’t know if anybody who’s online with us has any questions. If you do, please let us know.

I’ll pop on here. We have a terrific team. This is my contact information here. These are my three main partners that live here right down the road. This is our terrific staff. They do a tremendous job here. If you have any questions, Tracy, I know you’re joining us here, feel free to throw any questions in the chat box or if you want to come on here live and talk. That’s great too.

Tracy came off of something that she was hosting. I’m sure her brain’s a little bit fried but she says, “No questions.” Tracy and anybody else who’s reading this, I will be sending this out. Remember that a lot of talking about a deal, why I wanted Chris to go deep into a deal is, part of the learning curve is to do something real and live. To talk about syndication theoretically, it’s not easy but that’s a lot of what we hear.

Chris, thank you so much for giving us an hour and a half time. When you go deep into the evaluation of the particular property and you get to see what’s going on in the mind of someone who’s good at this, who’s done a lot of this, then you can ask questions and you also learn through that process. This is 1 deal and 1 perspective. Chris has done other deals and we’ll do other deals. Thank you so much for going deep on that.

That was fun. Terrific questions. I’m glad we could go through that because we certainly couldn’t have done all the other presentations as well as that in addition. If you’re reading this either later on, you can reach out. My information’s [email protected]. We can set up a time. On the website, NextLevelIncome.com, you can get ahold of me. I can go through any of this and if you want to see our deals that come through, you can click on the investment link and put your information in there.

There’s a bunch of free gifts at NextLevelIncome.com/bliss, so you can get his book and get to know Chris even deeper and the way that he thinks about this. We got a ton.

I got plenty more. We got all kinds of free books up there. We got our awesome podcasts with you, Moneeka, that was on there. We keep trying to put more and more resources up there to help people out. Our goal, the first two tenets of Next Level Income are making money, keeping money, and then growing your money. We talked about how to grow your money in investment but it’s a great time of the year to figure out how to keep more of your money through tax strategies and those things. We have a ton of stuff as well that can help out with that.

Ladies, you can go to NextLevelIncome.com/bliss to get that book and get more of those freebies that Chris is so generously shared with us. Thank you.

Absolutely. Thank you, Moneeka.

Tracy, so I’m going to assume you don’t have any other questions. Thank you for joining us. Everybody who’s reading later or was here, always remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. We’ll see you soon.

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Wasn’t that an amazing webinar? Chris does a great job, doesn’t he? Don’t forget to join Chris and me this Thursday for our live webinar on how to evaluate syndication. I’m so excited to share this with you. Bring all of your questions and don’t miss it. To sign up. Go to BlissfulInvestor.com/SyndicationWebinar. See you then.

 

Important Links

• BlissfulInvestor.com/SyndicationWebinar
• NextLevelIncome.com
• Show – Past Episode
• NextLevelIncome.com/book
• GigaFi
• Dish Network
• [email protected]
• Moneeka Sawyer – Next Level Income Past Episode

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

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Next-Level Income: How To Get Ahead With Your Real Estate Investment With Chris Larsen

 

Are you ready to take your investing to the next level? In this episode, Chris Larsen, founder of Next-Level Income and author of Next-Level Income, How to Make, Keep, and Grow Your Money Using the ‘Holy Grail of Real Estate’ to Achieve Financial Independence, talks about how you can capitalize on the real estate market. He shares what’s needed to know about investing and how you can get started on your journey.  You’ll learn how to save money on taxes, invest in real estate, and make even more money faster than ever before. Tune in right now and learn what it takes to get ahead!

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Watch the episode here

 

Listen to the podcast here

 

Next-Level Income: How To Get Ahead With Your Real Estate Investment With Chris Larsen

I am so excited to welcome back to the show my friend, Chris Larsen. Hi, Chris.

Moneeka, great to see you again. Happy New Year.

It’s the first show I’m doing in 2023, so I’m so delighted to have Chris here to start my year off with me. You have met Chris before. He talks about syndication. We’ve had a webinar with him before. I wanted to bring him back because his business has greatly expanded, and he’s offering some new things to help you create passive income. I wanted him to come back and talk about all this new exciting stuff. For those of you who have not yet heard of Chris, let me tell you a little bit about him.

Chris Larsen is the Founder and Managing Partner of Next-Level Income. Chris has been investing in and managing real estate for many years. While still at college, he bought his first rental property at age 21. I love that because that’s how I was. From there, Chris expanded into development, private lending, buying distressed debt, commercial offices, and ultimately syndicating multifamily properties. He began syndicating deals in 2016 and has been actively involved in over $1.5 billion in real estate acquisitions. Chris is passionate about helping investors become financially independent. I’m so excited to have you back, Chris.

Thank you so much. It’s great to see you. I love the smile.

In this episode, you’re going to be talking about the Next-Level framework. Chris used to be a coach. Much like me, other parts of his life are now creating changes for him. He’s creating a framework, and he’s going to tell you all about that. Give us a high level of your story.

One thing I love about you, Moneeka, is our stories are very similar in terms of starting with residential, and I was fortunate enough to be introduced to bigger commercial projects later on. My initial passion earlier in life was racing bicycles, and that’s all I wanted to do. I talk about this in my book, which, if you didn’t get it the first time I was on the show, you can get it on our website NextLevelIncome.com/Book. Let me know if you get a copy there that you read me on Moneeka’s show. I talk all about this. That was my love. That was my passion.

My best friend, I met through cycling. I went to college for Biomechanical Engineering, but I just wanted to graduate, turn pro, and race my bike. Along that path, my friend passed away, my best friend, my roommate, and my training partner. It affected me in multiple different ways when you lose somebody. In my case, he was like a brother. After it sunk in, it made me realize something. It made me realize that I didn’t want to have any regrets in life. I wanted to be able to live life to the fullest. I’m a very analytical person.

When I looked at that, I said, “How can you do this? How can you take advantage of opportunities?” The thing is, this is the truth. You have to have money in this world to be able to take advantage of opportunities. Sometimes, that’s spending more time with your family. Sometimes, it’s taking a business risk. Sometimes, it’s spending time to volunteer. Sometimes, it’s actually giving money. Dan Sullivan, who runs Strategic Coach that I was a part of for several years, likes to say, “If you can write a check for it, it’s not a problem.”

You have to have money in this world to be able to take advantage of opportunities. Share on X

After my friend passed away, I quit cycling at the time and racing. I decided I was going to embark on a journey to become financially independent. I read book after book, over 250 books. I was investing in the stock market, but ultimately came upon real estate, as everybody’s figured out by now, I’m sure. After making a lot of mistakes over fifteen years, I ultimately started investing with other operators in commercial real estate, specifically multifamily. That was what gave me my path toward financial independence.

Now, I was making a lot of money. I was working as a medical device rep. It’s all different types of roles in sales in the medical device field. I was on call. I worked a lot of hours. I worked sixteen days. I worked seven months straight one time without a day off. I spent three days straight sleeping in the hospital. I worked really hard in my life, but I had a plan and a path. What I’ve done is I took the framework that I used that I was teaching my coaching clients one-on-one that would pay me $30,000 a year, and I put it into a course. I’m going to give everybody a high-level overview of what we teach in that course, a real CliffNotes version of what you can do to become financially independent in your own life.

I love that. That’s why you’re here. Chris is going to be giving us a high-level on this. We are going to do a deeper dive in a webinar on February 2nd, which is a Thursday. It will be our first webinar of the year with me. I’m so excited about that. Chris is going to be with me on that. It’s going to be Thursday, February 2nd from 1:00 to 2:30 PM Pacific Time. If you’re reading this later, there will be a replay. You can go to the same URL, which is going to be BlissfulInvestor.com/SixFiguresWebinar.

Preemptively, I wanted to tell you about that. As you’re reading this, if you’ve got questions, jot them down. He’s going to be live with us in a couple of weeks, so you could ask all sorts of questions then. Chris, go ahead and take it away. I just want to comment on the Make, Keep, Grow idea that I know you’re going to be introducing to my audience. I love that. It’s such a big piece of how I’ve structured my business, and how most real estate investors who reach a certain level of success start to look at things. Readers, I want you to understand that this is a little bit of an advanced concept, but it’s not only for advanced people. In other words, you can take these concepts right now, even if you’re a beginner, and build your entire business based on this concept of Make, Keep, Grow. Go ahead, Chris.

I have two young boys. I like to be able to teach concepts and talk about concepts that my boys can understand because I was explaining this to my son. We’re going to the bank, and I was depositing a very large check from a deal that I just sold. I explained to him how that large check started at $3,000. If you hear $100,000 or $1 billion in real estate transactions, and your eyes glaze over, or you’re like, “This isn’t for me,” I started with $3,000 for my first property.

These deals are still available nowadays. You can still find good deals. You can still find deals that are going to work for you. Whether you have $3,000 in the bank, $30,000, $300,000, or $3 million in the bank, all these concepts work. I know a lot of you that are reading are very successful. You’re making lots of money. A lot of you have careers that you love. I got to work with a lot of doctors and surgeons in my career, and I have a lot of investors from that. A lot of them say, “If I won the lottery, I would still go to work because I love what I do.”

If you’re a doctor and reading, God bless you because it has to be a passion that you really have to love what you do. It’s such a lifestyle. The first thing, and I talk about in the book and my course, is to find a way to make more money. The reason I say that is because a lot of the best investments out there are reserved for those that are accredited investors. That means you have to make $200,000 or more in annual income as an individual, $300,000 as a couple, or have a net worth of $1 million, excluding your personal residence.

 

There are a couple of little nuances there that you may be able to get in. The bottom line is if you can make more money and you’re accredited, a couple of things happen. 1) You have more money and more capital to invest. 2) You have more opportunities because now you’re accredited. The SEC says, “You’re allowed to invest in some carwash opportunities or the new RV and boat storage opportunity that we just launched that not all investors who are out there get to have access to.” That’s the big thing.

I was successful and I was making money, but I wanted to be more efficient so I could have more time with my loved ones. One of the things we teach in the course is how to set goals, figure out what’s your worth, and delegate or get rid of those little distractions. One of my favorite things is how to create 20 to 40 hours more a week to spend with your family, do things that you love, or start a side hustle.

If you’re reading and saying, “Chris, I’m not at $200,000,” if you’re at $50,000 or $100,000 of annual income, if I could give you 20 or 40 hours more a week, could you make another $50,000 a year? Could you make another $100,000 a year? Could you maybe start a business that creates some passive income for you? Where we start is, “How do you become more efficient with your time, more effective with your time, and ultimately grow your income?” If you’re reading, and you’re making seven figures a year already and you say, “I’m good, Chris,” you can skip right through that section if you want to.

We start with making money. There are a lot of different ways that we can think about making money, too. The richest people in the world say they have an average of seven streams of income to make that money. I’ve said this on the show before. Because you have seven streams of income does not mean that you’re working seven jobs. It simply means that you have seven different streams coming to you from decisions that you have made. If you have a job that you love, that’s one stream of income. If you are investing in real estate, let’s say you have a portfolio of investment properties, that’s another stream of income.

I can talk to you a little bit right off the top of my head about what they are for me. I am a real estate investor. My rental properties make a particular stream of income. I have a bunch of notes that have brought me a stream of income. My husband invests quite a lot in stocks. That’s the part that he manages for our portfolio. I have a stream of income there. His income is a stream of income. My sponsorships from this show are a stream of income. Notice that I’m not fully involved.

You have a book.

I have a book. That’s a stream of income. The show I consider myself a media personality piece, which includes being an author and speaker, that is that stream of income. This is a secret, and I’m going to talk to you about this later, but I have also gone into high-return investments, which include Forex, crypto, and NFTs. All of that high-return stuff is also a piece of my income, and I’m getting a huge residual on that, too. That’s a very high risk, which is why I don’t normally talk about it because high risk also means high return. High risk, in this case, it’s the same thing, and things can crash and burn.

High risk also means high return. Things can crash and burn. Share on X

As I learn more and experience more, I’ll share that more with you, but that’s my secret adventure. We’ve got all of these different forms of income. Here’s the thing that takes the most time here. I work 5 to 10 hours a month on my rental property. There are other things, but mostly this. The media personality piece takes the most time.

That easily takes twenty hours a week because I’m traveling and other stuff like that. That’s my choice. I also spend time doing charity work. I also spend time on lots of other things. I’m a caretaker for my parent. Because I’ve got seven different ways that I’m making income, I’m not so concerned if one’s not working quite as well as the others. I have an idea monthly of what money is going to be coming in because I’ve diversified my streams of income.

You underscored what I was saying, Moneeka. It’s the same with me. I was always looking for ways. I know we’re going to deep dive into that in the webinar, which is how you evaluate these deals. I’ll give everyone in that webinar how you can figure out in five minutes whether it’s a good deal, and then really have not only a framework but also tools that you can use to say, “How do we figure out how to create these income streams?” Be confident while we’re doing it. I’m an analytical guy, so there’s a spreadsheet involved with that.

There is. I am involved in syndications also. In my real estate portfolio, I’ve got three of those paths of income. I’ve got a fourth because I run a construction company also. That’s more active. Even in the real estate arena, I’ve got several different paths of income that come in. If one of my rentals goes vacant, I’ve still got all my syndications paying quarterly, whatever they’re supposed to be paying. Even in my paths of income, I’ve subdivided. What I’m saying is that you don’t need to work harder to make more money, you need to work smarter.

What I really love about what Chris was talking about is if you can get 20 to 48 hours back a week, what would you do with that? Could you learn more about different ways to make that passive or residual income that you’re looking for to increase that income, so now you’ve got more opportunities, and you can invest in things that people that aren’t making that income can’t?

What happens is it snowballs. You create another income stream or you create more time in your life, and that opens up space. If you have that capital like we talked about before, and you have the time, now, you have the freedom to choose to work with and do the things that you’re really passionate about. That’s where I’ve found your income starts to multiply. We’re going to dive into this a little later. There are three silent killers who are insidious beasts that will come, and they’ll try to attack your income. The second component of the framework is how to keep your money.

I like to say, “Let’s put some more people in the boat and start rowing.” That’s make more money. What if your boat has a bunch of leaks? Working with dozens of coaching clients, some that are making seven figures a year, very successful, I found one thing in common, Moneeka. No one does all of these things properly. Those three things are proper insurance, proper liability protection, and proper tax strategy. What we talk about in the course is how to make sure you have all of these things in place. My father died when I was aged five. A death or major illness can rob you of income, especially if it’s a major source of your family’s income, as it was in my family.

 

Number two, a lawsuit. You own these properties, and I know a lot of high-income earners and probably a lot of readers of the show. I was guilty of this early on as well. You own real estate, you own it in your own name, you don’t have a proper LLC set up, or you may be co-mingling funds. My attorney talks about a story where his friend lost $3 million because he didn’t take a few hours and $1,000 or so to set up a proper entity. These are things that can come and get you.

If you have liability in other areas of your life, you certainly don’t need more liability from our investments. My attorney provided all of his resources inside my course when he found out what we were doing. That comes inside of there. We even have a checklist. It’s the ultimate estate plan checklist. If it’s daunting as it was for me, you can go right through that checklist. You can say, “These are the steps I need to take,” everything from writing down where your passwords are, where your heirs or partner or spouse can find all the information for your properties, and accounts, and do those things to, “What about tax strategy?” This is low-hanging fruit.

Typically, my coaching clients are saving somewhere between 5% and 10% off of their taxes. What I mean is they’re paying 30% which drops to 20%. For most of our coaching clients, we can get them with the tax strategists that we work with. That’s not something that I do specifically, but I’m not an accountant, not a CPA. I don’t do that, but we have vetted CPAs that we work with, but they’re able to get most people’s tax rates, even W-2 income earners, a lot of time below 20%.

If you can save that money, that may be your first $50,000 for passive investment, for instance. That’s why I like to say it’s like a boat. If you can plug all the leaks in your boat, now you start rowing faster. When the money’s coming in, it’s not going out in the form of taxes, it’s not being lost. You can sleep at night because you’re not worried about losing it to one of these other things that are lurking in the shadows out there.

Savings is like a boat. If you can plug all the leaks in your boat, you can start rowing faster. Share on X

I love that. We’ve talked about this before, and I know Chris has said this before. The more that you keep, the more it can compound. People will say, “It’s okay. I’ll deal with this later. I don’t make enough now, so I don’t need to worry about this.” The thing is that the sooner you get a handle on holding onto your money, the more that particular money will compound. Compounding is the magic of finance. The more that you can utilize that money to invest and grow it, the faster it will grow and the faster you get to that place of wealth. Keeping your money is very important.

I had a webinar and show about the Abundance Group Trust. Trust is another way that you can utilize to do these tax strategies, have your legacy things to pass down in case of death or health problems, but also how to mitigate your exposure to lawsuits because it gives you anonymity. I have chosen that route to go through trust. I know that Chris is introducing some other options.

That is a part and should be a part of most people’s estate planning.

Exactly. Chris, I’m going to send that show to you so you can listen to it because I’d love to hear your feedback on that. Readers, go back to that. It was on October 2022. It was Gina. I think you remember that. What I love also is that Chris gives you this checklist of all of these things because sometimes it can feel very daunting, which is why a lot of people don’t do it, but you miss a big opportunity. If you have to work less to get more money, that’s the golden grail. Let’s say you make $1,000 a year and pay 30% in taxes. Now, you’ve made $70,000. If you can cut that to 20% of taxes, you just made $10,000 more without working a single hour or minute more for that money.

Here’s the amazing thing, Moneeka. I’m going to pull my calculator out. If I was making $70,000 and I saved $10,000, I get a 14% raise, essentially. That’s a big difference. This isn’t tax fraud. You’re not evading taxes. You were literally taking the rule book of the IRS, and you’re following the rules that the IRS puts out there. I like the expression when it comes to taxes, “Be aggressive but document thoroughly.” If you have the right structure set up and you do that, that’s fantastic.

 

In the member’s section, I’m also talking about my million-dollar secret. This one secret will literally save you $1 million over your investing career. It’s incredible. If you look at these small numbers and these small amounts that seem small, through compounding and the difference when you go up in terms of how much you can save and keep versus giveaway to the government or other people, these are seven-figure secrets that you’re learning.

It does take some time upfront to do some research and find out what the right structures are for you, what it is you’re trying to achieve, what your assets are, what are your obligations to the family later on, the upside or the downside, my parents versus maybe children, or my nephew or whatever, where you are feeling your obligations are going to be, how you want that legacy to be transferred, and those sorts of things. It does take a little bit of thought. I understand that it can be daunting, but it’s a very important piece of the financial picture.

Don’t just assume that you just have to work harder to make more money. You don’t. You can work a little bit more for a little while, but it’s not a twenty-year commitment. So much of the time, you ask for a raise from your job. Are you going to get 14%? When you get that raise, often, you’re going to have more responsibilities. You’re going to have to work harder, more hours.

Pay more taxes.

My husband will move to another job. Now, he’s got two years in raise like, “I got to prove myself,” to make that extra 5% increase and income that he made. It’s not necessarily what I’m suggesting. It’s a path. That’s great. My husband loves his job, but you can make more income without doing all of those other things.

That’s what we’re trying to do. They’re not secrets. With all this information, I’ll give you all the resources and the path to do it. We do it in about 30 minutes a week. It’s 8 modules, 30 minutes a week. You can knock this thing out. You can do it on a weekend for sure. You can go through it 30 minutes a week for 8 weeks. You’d be done it in two months.

We talked about the make and keep. Let’s talk about the really fun one, grow.

Grow, it’s sexy. This is investing, and we’re talking about it with our friends at our Christmas or holiday parties and cocktail parties and those sorts of things. I’m glad that we started with the other pieces because have you made time for what matters in your life? Have you plugged the holes in your boat? Do you have just an ironclad plan so that you know you’re safe? You can sleep well at night. You don’t have to worry that after you’ve made this money, it’s just going to get sucked away by one of these little silent killers that are lurking out there, or not so silent. If you’re about to get your tax bill, it’s pretty loud when you got to write that check.

You then get to the growth part. We’re going to dive deep into the webinar about how to evaluate passive deals and syndications. Before you do that, there are a lot of active investors I know that are reading. I started as an active investor. I’m still active in investments, but I also have passive investments in about 40 different passive investments. We talked about how to decide, “Do you want to be active or passive in terms of your real estate portfolio?”

Maybe you’re like your husband, Moneeka, and you say, “I love what I do. I make great money.” I would like to know how to be confident in finding passive deals or marry a wonderful person like yourself, and that you handle some of that stuff. That’s a fantastic way. We also give you the tools to figure out when you will become financially independent. We have a beautiful spreadsheet that’s part of this, and it’s going to allow you to plug in your numbers at the end to figure out when you can be financially independent.

This isn’t some magic bullet. I’m not going to wave a wand. I’m not going to make you some promise. If you’re accredited and making a good income, I find that pretty much everybody has a path to become financially independent in about seven years. It can be a little bit less or more than that, depending on where you are in your journey, but I find that to be a very realistic number if you’re out there, and you have a family like I do like most of you do that are reading, going to do that.

The first step is active or passive, then you have to decide, “If I’m going to be active, what strategy am I going to do? Am I going to do fix-and-flips? Am I going to do notes? Am I going to manage my own rental portfolio? Am I going to do short-term rentals?” My wife and I have two short-term rentals here in Asheville, North Carolina. We participate a little bit active, but it works very well because we also have places for our family and friends because people like to come to Asheville, North Carolina, so it works well with us.

We decided we didn’t want to do more short-term rentals. We would rather do stuff that is more scalable. We go through what your right strategy is. A little active, a little passive, maybe none of one, and 100% of the other. Maybe you decide you want to go full-time into real estate, and that’s great. However, even if you say, “I’m going to be full-time in real estate,” that’s not scalable. I talk about everyone should have a strategy for passive income. Once you got those big flywheels turning and all that excess cash that you’re kicking off, where are you going to put it? What type of deals are you going to put it in?

More specifically, what is the framework, both qualitative and quantitative, that you can evaluate those deals so that you can be confident that you’re putting your money in the right place? It can be daunting when you look at something like a $50 million or $100 million apartment complex that you’re investing $50,000 in. Is that just like a house? It’s not just like a house. There are a lot of other different factors. It’s more complicated in some ways. It also can be simpler in some ways. We break down all of those qualitative issues, the right questions to ask, and the data.

If you’re a data person like me, we have stuff that you can go through to learn, “What are the right questions? What is the local population growth?” We talk about sponsorship fees, and you can dive deep into all those different areas. You can go to the high level and figure out, “These are the questions I need to ask. These are the deals that I’m going to be in. This is how much cashflow it’s going to kick off,” and then you can calculate your freedom number. We call it your path to financial independence.

I love that it talks about qualitative as well as quantitative. You have read at least easily 25 syndicators on this show. These are all people that have become fairly good friends of mine. Not all of them, but several of them. Even though I’m close to them and trust them, I get overwhelmed looking at their deals. There’s the piece where how you build trust. I’m very lucky because I have this show, so I get access to a lot of these people. These come across my desk all the time.

For those of you that are not in my situation or a much simpler situation than me, you need to find ways to find the syndicators that you’re going to trust. Hopefully, you’ll investigate the people that I have had on my show, but there’s also really good stuff that you can do on the internet to look up people. That’s qualitative, who are you going to invest with? The quantitative is, what are you going to invest it with? Both of those pieces are really important, and they’re both big pieces of the puzzle. Please go ahead, Chris.

The qualitative comes down to what are the right questions to ask. Anxiety comes from fear of the unknown, and how can we know if we don’t know the right questions to ask? We give you the right questions to ask, so you can have a measure when you talk to other syndicators who know that, just like anybody that goes in, whether it’s a car mechanic or a doctor. A lot of people are overwhelmed when they go to the doctor because they don’t know what questions to ask, especially if there’s an illness or something, and they’re in a very emotional state.

I remember my mom when she had cancer. They’d sit down and record the conversations, but my parents didn’t know what questions to ask because they weren’t medical professionals. They would come out of there, and a lot of times, they were even more confused than when they went in. If you’re confused and are not comfortable, you definitely should not invest. If you don’t feel good about something, don’t invest. If you have the right questions and the right knowledge, if you then say, “I’m confident,” that’s what we want to do. I want to give you confidence, and then you can say, “I’m on the right path.”

That’s why we want to put it also in that quantitative portion, so you can have a score, you can have numbers, and say, “I’m moving towards this.” I tell you what, you make that first investment, you get a check for a few $100, or $500, or $1,000, it’s cool, but that’s not going to move the needle enough. When you can see, “It’s going to start with a few hundred dollars this month,” and then a couple more months down the road, that’s going to grow, and then a deal sells. We were talking about when we started this show. We’re going to the bank with my son, that $3,000 is now hundreds of times larger than that.

That allows me to go and reinvest that money. It takes time, but I knew it would come over time because I knew I could look at my spreadsheet with a degree of confidence, I can go and say, “Now, I know what I can do with that for the future.” That’s what this is all about. Real estate is a get-rich slow game, and we want to give you the framework and the roadmap, which is why we call it the 6 Figures of Passive Income Roadmap, to get you where you want to be, which is on that path to ultimate freedom.

It keeps you focused. So much of the time when you’re in it, you need that focus. I was on a twenty-year plan on how I was going to retire. Every once in a while, I had to remind myself, “Why am I doing this?” You have something that came up with a rental property that made me crazy, “Why am I doing this?” Spreadsheets and numbers really help keep you very focused on why you’re doing what you’re doing and where you’re headed, and why this is a good idea.

“Honey, why are you talking to the real estate agent on our honeymoon?” “This is why, because twenty years from now, sweetheart, we’re going to be financially independent.” True story. Fortunately, it didn’t take twenty more years, but on our honeymoon, I was trying to figure out how to get a place rented out. It was a mess. I will never forget that.

I’m so with you on that. I want to go into our EXTRA portion. Here are a couple of things I want to close the show with. First of all, we are going to be talking in EXTRA all about a deep dive more into the three secret killers of wealth, which are death, health, lawsuits, and taxes. That sounds like four, but I think death and health are the same.

We’re going to be doing more of a deep dive on that in EXTRA because I really want you guys to start thinking about that stuff. They’re not fun and happy and sexy things, but very real. There are things as you’re building your wealth that you need to think about, take into consideration and plan for. We don’t have a lot of people that are talking about that. I trust Chris to give us a lot of really good information. I asked him to do that for us in EXTRA. We’re going to be talking about that there.

If you are really excited about Chris’s course already, and I would be if I were you, you can go get it right now at BlissfulInvestor.com/EvaluationCourse. I know those are long words. I’m sorry. I was trying to think of what I could make this, but it’s the best description that we can get. Here’s the thing. It just released. It’s brand new on the market. He normally charges $1,497 for it, but my audience gets 30% off. Go to that link, and then put in the code BLISS, all in caps, and you get a 30% discount, which is huge. That takes that down to about $1,000.

Yes, it’s right about $1,000.

If you want more information before you invest in the course or if you just want to talk about syndications and ask Chris more questions, because as you can see, he’s an open book, he’s very transparent and loves to talk about this stuff, we are going to be having a webinar. Mark your calendars, Thursday, February 2nd, 2023 from 1:00 to 2:30 PM Pacific Time. For those of you that are reading this later, you can still go to that URL and re-read. The URL to go to sign up or re-read is BlissfulInvestor.com/SixFiguresWebinar. Those of you that can join us, please come and ask lots of questions. I’d love to see you there. I’d love to say Happy New Year.

Happy Groundhog Day on the 2nd, I just noticed.

Is it? We’re going to be celebrating lots of things. Put that all on your calendar and mark down those URLs. Did you want to close with anything, Chris, before we say goodbye and move into EXTRA?

Thank you so much. It’s always good to talk to you here. When we do that course, come ask me anything. As Moneeka said, I’m an open book. Unfortunately, I made a lot of mistakes in my life. I’ve had some unfortunate incidents like losing my father and my friend. I’ve been through these things. Hopefully, I can help you with some of the tools that I’ve put together and the lessons that I’ve learned, so you don’t have to make the same mistakes that I did.

I love that. Thank you. Always remember. Goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.

 

Important Links

• NextLevelIncome.com/Book
• Strategic Coach
• BlissfulInvestor.com/SixFiguresWebinar
• Gina Gaudio-Grace – Previous Episode
• BlissfulInvestor.com/EvaluationCourse

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

Learn how to create a consistent income stream by only working 5 hours a month the Blissful Investor Way.

Grab my FREE guide at http://www.BlissfulInvestor.com

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How To Thrive In A Crowded Market With Airbnb With Rachel Gainsbrugh – Real Estate Women

 

Everyone wants to experience what it feels like to generate income while having plenty of free time to spend on whatever they want with. Many see potential in the real estate industry to make us experience that. But how can someone thrive in a crowded market? In this episode, Rachel Gainsbrugh, the owner of Short Term Gems, shares her secret on how you can thrive in a crowded market with Airbnb. She explains that the Blue Ocean Strategy helps set you apart from this market’s feeding frenzy. So if you want to set yourself apart from the crowded market and save yourself from financial pains, don’t miss this episode. So, choose financial freedom, choose bliss, and hit that play button NOW!

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Watch the episode here

 

Listen to the podcast here

 

How To Thrive In A Crowded Market With Airbnb With Rachel Gainsbrugh – Real Estate Women

Real Estate Investing For Women

I am excited to welcome to the show, Rachel Gainsbrugh. Rachel was born in Haiti with the drive to make a difference and not take her parents’ sacrifices for granted. She was raised in Miami, worked hard, became a doctor, and was left with over $500,000 in student loans. She ground hard to pay off her loans. When she found Airbnb investing, it became a game changer for her. She was able to make fifteen times on short-term real estate rentals over long-term rentals.

Now, she’s a healthcare professional by day and a rental investor by night. She’s the owner and manager of eighteen luxury short-term rentals with a lucrative cashflowing rental portfolio. She’s a mom, wife, and real estate coach that has been featured on Netflix TV, showcasing one of her luxury rentals. Rachel is passionate about helping professionals create a life they don’t need a vacation from through Airbnb investing. I love that. Rachel, welcome to the show.

Thank you so much. Thank you for having me and for taking the time to put out all of this valuable content to the community. I appreciate being here with you.

Thank you so much for that. Rachel, I’ve been waiting for you, and we’ve had to reschedule a couple of times. I do luxury home long-term rentals. I call them Executive Homes, and people do not talk about the luxury rental market often. I feel a bit alone in that industry. It’s so much fun to be having this conversation. I’m excited about it. Could you start by giving us a high-level of your story? I read your bio, but what brought you to real estate, and why short-term rentals?

What brought me to real estate was looking for not necessarily an exit strategy but an additional revenue stream outside of punching a clock and the whole W-2 thing. I love helping patients. That is my passion. Outside of that, I wanted to have savings set aside. We’d overcome a large amount of student loan debt. When I looked around, I looked at all the investing strategies out there. Crypto was making its way to the forefront as well. I just didn’t quite understand it. I said, “Let me just stick to real estate. I can see it. I can touch it. It’s real to me.”

I went to look into real estate investing. I consumed maybe a year and a half of the show and determined that short-term rentals were going to be the right fit for me. I felt that if I could position myself correctly and build a system around it, not only would I generate a significant amount of revenue compared to my counterparts that were investing in long-term rentals or syndications, I felt as though I would be able to do in a fraction of the time that most would be doing investing. Having a bit of a project management background and being able to leverage that, I figured that it was worth a try and the juice is worth the squeeze. It worked in my favor for sure.

Talk to me about short-term rentals versus long-term rentals. How do you see them, and why you chose this particular route?

I even niche further into short-term luxury rentals, but I will talk to you about short-term rentals versus long-term rentals. Fortunately, we live in a lower-cost-of-living area in Georgia, I was looking around at properties that would fit into my budget, and for that first purchase, I was looking at a budget of about $300,000 for a property.

I looked at some long-term rentals in some rural or remote areas in Georgia, and I found a 20-unit for $300,000. I was like, “This is going to be amazing and my research,” and I realized the rent rolls were about $160 a month. I was like, “I want to live there.” The rents were low, and with those lower rents, you are going to have challenges. I had to think about twenty individuals who may be needier than most with these types of rents. Is it worth it for me? Am I leveraging my revenue in a way where I’m not punching a clock or am I buying a whole new job?

For me, at that point in time, even though it was a long-term rental, which is going to be a little less hands-on than short-term rentals, it wasn’t worth it. I looked around at more long-term rental opportunities and I saw an average of anywhere from $300 to $400 a month, net revenue after all expenses were paid, and net operating incomes were not the greatest for long-term rentals.

We’d spent many years paying off student loan debt. I wanted this next opportunity to be the most profitable as I could make it. Short-term rentals were it for sure, and we saw anywhere from $10,000 a month gross revenue to start, and properties that could net about $6,000 a month are one of our first properties. We’re thinking that would be the route to go as compared to long-term rentals.

Is that your profit or is that before management fees?

That’s profit because we self-manage using our own systems, and that was part of the project management I mentioned a little earlier.

In one of the notes you sent me, you mentioned that you could do this even if it’s not like a vacation destination place. Could you talk about how that works for you?

What’s interesting is that it’s a strategy we stumbled across because we have a property that is in a suburban area. It’s on a nice piece of land about two acres or so, which is huge for some areas, and it’s in a better school district, a little bit of higher per capita income in this particular area. We came across families who were displaced from their homes temporarily due to either a natural disaster or some type of mishap.

If there’s a fire, a significant water leak, or a pipe that bursts these are families that fit our demographic. We have larger homes, so we do host larger families. These are families who are going to be placed in a hotel for some time, and they need to be in a home for the next 4 months to 8 months as the supply chain is behind.

Finding a workforce to repair homes is can be a bit delayed, and we’re still encountering that. Those families have been staying with us anywhere from 4 months to 11 months. We just secured a 12-month contract with some of these families, and these are paid to us directly by the insurance company. These are our midterm rentals, but it’s specifically the insurance policyholder strategy that we leverage.

Do you get those people through insurance companies? Is that the channel that you use?

They come to us through a third party. The insurance companies themselves don’t necessarily seek out housing. They work through a third party to find housing for them, almost like a scout to find homes. Once we had one book in our local area, it’s always creating those relationships. We know those relationships are everything. As soon as we start to evaluate the property, give the notice to vacate period and say, “This property’s going to be vacant in a few weeks.” We start reaching back out to those same individuals and we just want to be top of mind.

“Don’t forget, this property’s going to be available on January 2nd, 2023.” We just got an inquiry. We have one that’s available on January 2nd. We said, “January 2nd, we’re going to be open again.” We keep those lines of communication going. It’s not necessarily your insurance, but it is a third party that works with AllState, State Farm, Travelers, or all of those insurance companies.

 

How would you find those people?

The first time honestly, they found our listing through Airbnb. As of this date, they don’t use Airbnb anymore to source properties for their policyholders. However, the policyholders use Airbnb, it’s a two-pronged attack. Say, something happens to your home, unfortunately. The insurance is going to use that third party to start looking for housing.

They may tell you, “You may want to look for an option as well,” and if you determine there is this property that’s an Airbnb that’s within my school district a few roads down, then you can go ahead and let them know that we found a property and then, they’ll work with the host or the homeowner to facilitate that transaction. I do know the insurance policyholders, the insurance at temporary housing agencies is not leveraging Airbnb any longer. Another site that we use to garnish that relationship is a site called CorporateHousingByOwner.com. We list there and they found us there as well.

Do you find that you have much fewer vacancies? What’s your turnover time when someone leaves and then you’re trying to get somebody else in? What does that look like?

For our 5 properties in 1 particular region that do primarily this midterm rental strategy with the insurance policy holder, we’ve had 7 vacancy days over the last several months. If I’m going to do short-term rentals in a vacation market, I prefer a vacancy of 65%. That’s going to be the biggest difference between short-term and long-term. For long-term, you want 100% occupancy. For short-term, you do not want 100% occupancy, especially with the larger homes.

At 65%, it’s my sweet spot. We’re able to go in there and make all of the changes that we need, tweak things if the home needs more TLC, and we have the time in between to adjust. However, with long-term rentals, you’re going to have the same person in the long term. For short-term rentals, there’s more handholding. Our maintenance needs to come in. We press and rush all of those things.

If we drive a vacancy or occupancy with our short-term rentals, the struggle is that the property’s not going to be in tip-top shape for the next guest. If it’s not in tip-top shape for the next, you risk complaints and refunds and you start to lose money at that point, so 65% occupancy is perfect. We’re able to get a higher revenue and get the property in tip-top shape in between. However, for these midterm rentals, we can go all day long 100%.

If we drive up vacancy or occupancy with our short-term rentals, the struggle is that the property will not be in tip-top shape for the next guest. You risk complaints and refunds and start to lose money at that point. Share on X

With your short-term rentals, more like the vacation ones, you like 65% occupancy?

Yes.

How do you manage these properties remotely?

I use a number of technology tools to automate, eliminate, and delegate. As far as remote management, if the property is close to other properties where I want to make sure that the noise levels are kept under wraps. We use tools such as NoiseAware. Inside the properties, we will measure the decibels to make sure that there are no crazy parties happening. Other tools are channel managers that we use online to deconflict our calendars to make sure that we don’t get double bookings and the ring camera keyless door entry, those types of tools as well are primarily the automation or tech tools that we leverage.

Outside of that, our cleaning team, our maintenance, as well as our TaskRabbit runners pretty much run the whole business for us remotely. If there are any types of boots on the ground that are needed, they’re there to support, test this, and bridge any of those gaps. As far as guest communications, once we had our communications dialed in and created our SOPs, we were able to train someone to take over the guest communications. It’s important to have a system.

What do you mean by SOP?

Our Standard Operating Procedures. If a guest asks this question, here’s the answer. If they ask this question, here’s the answer. If something comes up that’s not a part of the script or our SOPs, then they didn’t escalate it to me. The last time I spoke with a guest, I had to intervene. I’m primarily responsible for bookkeeping and making sure the numbers look okay.

Do your cleaning team and your handyman come from TaskRabbit, or do you have people that you call when there’s a need, or how does that work for you?

I have three sets of cleaners. If something goes awry with the first, I have team B and team C. I keep those at bay, and then there’s an app called TurnoverBnB, if something goes wrong with all three. Many of my clients don’t have that to get started. That’s a great place to start. I like that tool as well. The handyman comes from various places.

For instance, Thumbtack is an app that I like to use. Thumbtack, for better or for worse, has some things there that people don’t love. What I do like about it is that it has a reciprocal system where you can rate the handyman or the vendor, and it’s like we all have to be on our best behavior. When you say you’re showing up, you show up so you’re not left high and dry. Also, I use another tool called NextDoor. It’s like a neighborhood tool to see who’s been suggested as a handyman. It’s living like a local. The NextDoor app is pretty cool as well.

Do you keep most of your properties close to you, or are they spread out? How far is the farthest one?

I’m in Georgia. I have some in the Poconos of Pennsylvania, but everything else is Georgia, Florida, and Tennessee.

I like this concept that you talk about, which is less is more, keeping fewer doors, but still making the same income. This is something that I’ve touted a lot. When you’re in the luxury market or the executive home market, you can see it. People have asked me many times if you’ve got a vacancy, it’s a much bigger deal than someone who has a lot more properties, which is true. Like you, I keep my properties in the highest condition. My vacancies are very short. I might have a vacancy of 1 to 4 weeks every 5 to 7 years. It’s very little, but could you talk to me about how you see that and what’s your approach to that?

It’s a very valid point. People want to hedge and make sure that they’re not putting themselves out there. It does require being proactive, especially for short-term rentals and midterm rentals. I mentioned earlier the importance of marketing, and we don’t move forward without collecting at least email addresses from our guests. We have the mechanism by which to do and you want to make sure you’re doing it all in the proper way.

With that being said, we add them to an email campaign, and we’ll send them an email once a month or once a quarter, just reminding them of how they were helped by being at our property if they know someone who can benefit from our property, for those who are staying with us for mid-term rentals.

If it’s short-term rentals, we remind them of what a great time they had at their birthday party at our property. Thus, by collecting information such as the purpose of your visit, as well as who stayed with us, we can then market them as well. It’s important to be more proactive and it’s worth it. You do have that higher touch that can allow you to demand a nightly read that you desire.

 

Talk to me about your Blue Ocean Strategy and how does that differentiate you? I don’t even know what that means. What do those words mean? Can you tell me about that?

The Red Ocean is when you’re in that feeding frenzy with all the other properties, the sharks, and everyone’s going after the thing. The blue ocean is a wide ocean and you’re on your own. You’re like that unicorn. You don’t want to be a Me-Too. We call it like a Me-Too drug when you have another statin. It’s like, “Why do we have an eighth statin on the market?”

You’re like me-too drugs. You don’t want to be me-too, because when you’re me-too, that’s when you face oversaturation and those types of issues. Whereas when you’re unique, when you’re set apart, when you have identified who you are as a host and who the guest avatar is, that’s when you can have them see that you see them. They see your property and you’re marketing to them, and it says, “I see you. I know you.” Whether or not you’re priced a bit higher than what they would expect, they’re going to book with you they know, “Why hedge and stay over here when this particular property has everything that I need?”

That’s the power of operating in the Blue Ocean. You’re going to set yourself apart from the feeding frenzy or from the race to the bottom. When individuals are similar to others, the only differentiator is the price point. I’m going to keep dropping my price until I get there. When you’re operating the luxury and set yourself as a unique provider of hospitality, then you’re not going to be like the others.

For you, you chose to niche into the luxury market. Is that what you did?

Yes.

Knowing what you know now, if you were talking to somebody who was getting started, what would you tell them to do to get the fastest results?

I would say, “Start.” Here’s the deal. You can overanalyze your life away. Surround yourself with the right folks for doing the thing that you’re looking to do who have achieved the goals that you are looking to achieve, and then just start.

What were some of the challenges that you had to overcome in starting this business?

It’s almost like you don’t know what you don’t know. Some of the challenges are being in the right rooms, having those conversations, and group learning. Even listening to other people’s situations, you’re like, “Maybe I’m not going to do that.” You never know what will come out of you hearing what others are saying in a group setting. Also, attending the local REIAs. Had I engaged and gone all in in that group learning, I would’ve probably avoided the HOA situations that we encountered. I would’ve not lost a whole lot of money on a deal due to not understanding things with taxes. I don’t love taxes, I am laser-focused on tax implications and tax opportunities.

That was such an amazing amount of information and so quickly. Thank you.

Thank you so much for having me. This is fun.

It has been fun. Thank you for that. Tell the audience how they can reach you. It sounds like you do coaching and you help people get started in this business. Is that true?

Absolutely. The best way to reach me is to grab my free list. I do have a free gift. For those who are always approaching me about short-term rentals and saying, “Where should I invest?” I have my top 75 cities for the highest profitability for short-term rentals in the US. If you go to 75 Gems, that’s 75Gems.com, you’ll grab my list and I’ll definitely have free training there and how to get in touch with me as well.

Thank you. I’m going to download that. That’s amazing. Rachel have things coming up in EXTRA ladies? I’m excited. Rachel and I are going to be talking about, “Financial Wellness is Wellness, too.” Ladies, you know how much I believe that your financial independence offers you a choice. Choice offers you options. Options allow you to have happiness. It goes both ways.

Your financial independence offers you a choice. Choice offers you options. Options allow you to have happiness. Share on X

Our financial wellness is a big determinant of how much bliss we can feel. I want to qualify that by saying that you can be very blissful even if you’re broke. It’s an inside job. That’s how I teach what I teach and how I believe. Financial freedom makes it easier. Any pain that we experience in life makes it harder for us to focus on being blissful. It creates more challenges for us. Whether it’s physical pain, mental pain, emotional pain, or financial pain, any of those kinds of pain are going to make being blissful harder. You’re going to have to work harder at it.

One of the bliss strategies is to help get past those pains. Self-care is important. You want to take care of yourself. You want to take care of your emotional self. You want to make sure that you’re feeding yourself right, exercising, and all of those things in my book called Choose Bliss. One of the pieces that’s important that people don’t tend to bag and talk about is true. Financial pain needs to be handled.

We get to a point financially where it’s not financial pain anymore, and then we can get to the next point where it can support our bliss by allowing us to do more for our families, more in the world, and live more freely doing the things that we value most. Financial freedom is an important piece of bliss. That’s why I do this show. When Rachel was talking about, “Financial Wellness is Wellness, too,” I was all in. We’re going to be talking about that in EXTRA, and I’m excited about that. Before we do that, Rachel, are you ready for our three rapid-fire questions?

I’m ready.

What is a super tip on getting started investing in real estate?

Surround yourself with those who are doing what you want to do. That comes with everything, not only investing, but health and wellness, and all the things. Be in the right rooms and don’t go at it alone.

Be in the right rooms. Surround yourself with people who are doing what you want to do, and don't go in and don't go at it alone. Share on X

What is one strategy for being successful as a real estate investor?

For me, it’s measuring my goals. You don’t pay attention to what you don’t measure. You pay attention to what you measure. Every month, we’re looking at our portfolio. We’re assessing what we’re doing well and what we’re not doing so well. We make adjustments along the way.

What is a daily practice that you do that you would say contributes to your personal success?

For me, it’s prioritizing. There’s a lot of noise out there. First thing in the morning, I want to write down my top three and make sure that it aligns with my big rocks. If it does, then that’s what I focus on because there’s a lot of noise, emails coming through, alerts on the phone, and all the things. Focusing on my top three and determining what those are ahead of time has been my daily habit that contributes to my success.

I love that. Thank you. This has been so much fun, Rachel. Thank you so much for all you’ve contributed so far.

What an honor. Thank you so much for having me.

Ladies, we have more. In EXTRA, we’re going to be talking about, “Financial Wellness is Wellness too.” If you’re subscribed To EXTRA, please stay tuned. If you’re not, but would like to be, go to RealEstateInvestingforWomenEXTRA.com and you can subscribe there. For those of you that are leaving Rachel and I now, thank you so much for joining us. I love hanging out with you ladies. Thank you so much. I appreciate you, and until I see you next time, always remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.

 

Important Links

• Rachel Gainsbrugh
• CorporateHousingByOwner.com
• TaskRabbit
• TurnoverBnB
• Thumbtack
• NextDoor
• 75Gems.com
• Choose Bliss
• RealEstateInvestingforWomenEXTRA.com

 

About Rachel Gainsbrugh

It was from my earliest real-estate investment, and my mind was BLOWN. At that moment, I realized that if I could make 1 dollar doing this… then I could easily make thousands more. I immediately saw the potential this lucrative industry had for job and income replacement. And that’s how I was able to change the game and get the odds in my favor.

This was huge, especially for a woman like me. Why? I was born in Haiti—the poorest country in the Western Hemisphere. I was driven to make a difference and not take my parents’ sacrifices for granted. I was raised in the inner-city of Miami where I worked hard, got straight A’s and went on to get my doctorate.

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

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