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Senior Living As An Real Estate Investment With Eng Taing – Real Estate For Women

 

There are a lot of different asset classes available for real estate investors, but there is one asset class that has yet to be tapped fully. That asset is senior living. In this episode, Moneeka Sawyer talks to the founder and CEO of Touzi Capital, Eng Taing and they discuss senior living. Eng also talks about how to keep more of your earnings using the tax code. Listen in and learn more on senior living assets in this episode.

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Senior Living As An Real Estate Investment With Eng Taing

Real Estate Investing For Women

I am so excited to welcome to the show, Eng Taing, CEO and Founder of Touzi Capital and highly experienced real estate investor with $100 million in assets under management. He works hard to help people reach their full potential. He’s an economist by training from the Wharton School of Business. He also experienced leading data science and analytics at Apple, Capital One, and AT&T. He applies that experience when identifying and underwriting investment opportunities and markets. He has presented at companies like Apple, Facebook, and Amazon, where he teaches employees how to minimize their tax burden and keep and invest more of their earnings so they can achieve financial freedom.

Touzi Capital is a real estate investment company focused on investing in Kansas City who believe that your money should work for you. Touzi Capital has been investing in commercial real estate for many years and trust that this is one of the best ways to predictably build wealth through passive income. Touzi Capital focuses on high cashflow investments and providing passive income to investors by acquiring and optimizing multifamily, industrial, and senior living assets. In doing this, they want to make a real estate investing accessible for the everyday investor through a technology and data-driven platform along with our dedicated team that puts you first. Eng, welcome to the show.

What a mouthful. I don’t even know who wrote that.

Talk to us a little bit about your real estate journey. You went to Wharton Business School and then you moved into real estate. Tell me how that worked out for you.

I would love to take a little step back to my formative years and highlight why I got into real estate. It’s probably why it’s more important thing for me. I was born in a refugee camp in Thailand. My parents were Cambodian and we escaped the Khmer Rouge. I have lots of interesting stories of hiding in jungle and laws and out of hiding and keeping out. Those are some pretty terrible stuff. It’s more of my parents’ story. I did grow up in LA and I grew up poor.

I grew up with not having much, but I grow up lucky of having been growing up in America, being fortunate enough to be good at math and to have a family that put a roof over my head to not see what I didn’t have, and to have enough hunger to drive me. It’s been my biggest why and hopefully, that’s a lot of your audiences’ big why to help provide security, financial freedom in whatever form that means to your family. That’s been my biggest driver.

When I started to get good at math, I gravitated towards invest in banking because that was the thing people did in my age group. Everybody said, “Let’s go do get invest in banking. This makes a bunch of money, being a stock trader, whatever it is.” I did all that. I’m pretty good in math, understanding data patterns. What I found about myself is I did not like the volatility, the up and down, the movement, checking the market. I went to the financial crisis. When you book $4 billion losses in subprime assets, but seeing that side of things and seeing the value of these houses go down, that’s how I first got into my first real estate investment at the young age of 23.

I’m lucky enough to have the capital to deploy at the time. I remember very clearly it was $125,000 investment or purchase price, so $30,000 purchase price of investment to get $1,000 a month in net monthly income. I like that feeling of having predictable monthly income. Obviously, I’m hiding a little bit of like all the things I had to do with painting the house, remodeling it, getting tenants, and tenant issues. In general, that’s how when you come from so little you having a little bit of security gets you a lot of confidence. My story isn’t a story of getting into real estate and doing real estate. I started as someone who have always tried to do a lot of things and had a side passion for real estate and now is about to main passion of my full-time job or my business.

In general, when you come from so little, having just a little bit of security gives you a lot of confidence. Share on X

It’s always been a side hustle, and for me, probably like someone else is, you work 9:00 to 5:00 and you buy real estate. For me, having that passive income helped make better decisions. I was able to go to the Peace Corps when everyone in my cohort went to MBA. I met my wife in the Peace Corps. I was able to take bolder career decisions of asking for more, of not having a fear-based life of financial insecurity of saying, “I can’t go for this job or make this offer.”

That helped because I was buying real estate every year and having that little basis of support grow where I know that I didn’t need to have much to survive. Having that on top of everything else I was doing gave me more freedom of choice and urgency. Long story of how all these formative things helped me get into real estate as well as why I’m doing more real estate and why I love preaching the choir of real estate. It’s also very tax advantage. I’ve heard a lot of people invest in real estate and not pay taxes. I love talking about that as well.

I went out to lunch with my mother-in-law and I told her, “I’m not sure what’s going on with me,” but I am getting teary-eyed with everything that’s happening around me. It’s not everything, but things touch me so deeply. I’m not sure what’s going on with that. Hearing your story about being refugee and running to Thailand first and then escaping to the United States. It’s a very similar story of my parents who had to flee from Pakistan during the separation because they were Hindu.

They were being chased with just the clothes on their back. They ran across the border and stayed. They had these big houses in Pakistan and in India, they had 15 or 18 people living in a dirt floor shack. I know the story. I never had to live it. They came to the United States and then had me. When I hear these stories, you realize how insanely lucky we are here in the United States. What I wish is that people understood that luck and that it did not deter from their drive. How old were you when you moved to LA?

Three years old.

You probably don’t remember too much of that struggle. As little people, we still get the subconscious impact of that, but your parents brought you here and they had this drive. They wanted to create safety for you and you got to see that, and then that helped you to build that drive. Sometimes, those of us that come from immigrant families have this huge advantage of understanding what it could be like if we were not here and we didn’t have this opportunity. That touched me and I wanted to say thank you for sharing that story.

That was the purpose of sharing the story. I love to share my story. My story is my parents’ story. My story is a lot of people’s stories, of not just immigrants or refugees, but of people who don’t have much but still, I fully believe it’s a lot of mindsets and having that mindset to be grateful for what you have, for what you can have, for your health, for all the stuff. My son, Aiden, is probably going to grow very spoiled. I’m trying to figure it out. I don’t know how to not spoil him. I want him to have fun, too. I want to buy him a lot of toys, but I have pictures of me at his age chasing chickens in a camp, so different journey.

 

You’re right that mindset is everything. You got a mindset from your parents and you’ve inherited and developed your own mindset. That mindset will then hopefully impact us. It will impact your children, and it impacts the world around you. Everything that we do is done through the filters of our own eyes that are affected by our own mind. If you come from a filter of gratitude, everything that you see will be of gratitude and living that life helps our children to understand it and see it. My parents, even all they went through, we’re so grateful to be here, for their children, and for their opportunities. That’s a big reason why I’m so grateful for everything, too. I totally understand what you’re saying. That mindset piece is huge. I’m sure no matter how spoiled your little one is, he will get that from you, too. He might be chasing chickens, but he might be doing it at the park.

That’s what rich people in San Francisco didn’t know, they just buy a chicken coop. It’s a sign of affluence. I got chickens and fresh grown eggs.

It has come full circle. How interesting is that? It’s not just an immigrant mindset. Thank you for emphasizing that. There are a lot of people that come from a place where they are not very privileged or they had very little, or they were in bad circumstances. Through the change of their mindset through drive, through being able to have a vision of what might be possible, they’re able to overcome that and create a life of freedom and choice. I released my TEDx Talk, which is called, Who is the Boss of You? It’s all about economic freedom to give you choice. We’re on the same way of laying about that. Let’s talk about real estate specifically. Talk to me about your favorite asset class.

I’ve gravitated towards senior living as a great asset class. For those who don’t know, senior living has many varieties to it, nursing homes, independent living, adult 55 plus, and assisted living. I was fairly in the middle of assisted living, where folks, elders, residents, and they had the greatest generation and they contribute so much to this country. They’re 85 plus. I love to invest in places where you have strong fundamentals and asset class is coming from those. That means there’ll be a lot more old people in the future. That’s the demographic shift that is known quantity in America, the silver tsunami, the growth of this aging population that will need more care, that would need more better communities and better facilities to take care of them.

Why I love this asset class, and I’ll compare this to multifamily because I do have both. It’s both business as well as real estate. Real estate has so many great intangibles, renting, we have depreciation, you have to leverage, all these things that real estate gives you. You also have a business which essentially for us is an all-inclusive resort where our rents are typically five times the amount that you would pay for a comparable apartment.

You have $500 revenue, but you have three times the costs, and that comes from making sure that you have three meals a day, and all the stuff. It’s by creating community. I love thinking about creating community and how we can give our seniors the best community as these are their retirement years. These are the years that they funded and they will stay for probably their entire lives. What I like to compare to multifamily is that typically, three years is the average length of stay. Once you get somebody in, they’re staying for a while, and because we do private pay, not Medicaid or Medicare, we know that they can afford these things three-ish years, and overall, they are income resistant.

In the pandemic, you can lose job, you might lose your income, you might be on unemployment. Our tenants are, I would like to call, recession resilient. They don’t have an income. They have the money ready. The pipe put that out from the funds. They’re using this for the last remaining years of making sure they’re in a great place. I’ve gotten deep into senior living. The reason why I got into senior living is because I love cashflow. I invest with cashflow and I’ve been investing in California until it didn’t make sense. I’m always a nimble and flexible person. I don’t want to be, “This is what I’m doing. I will only do that. I’m never going to do anything else.”

While you will learn expertise in that thing, but if the market shift, if California gets more expensive, which it had, if it gets more regulated and my control which it has, and if multifamily becomes more expensive, which it has, then I can’t get to think the cashflow that I’m used to. I’m spoiled. I like spoiling myself with double-digit cashflow, and I’ll invest this as well. I will chase after good asset classes that there’s a good moat around.

When you invest for appreciation, it's like you're planting a tree and then it becomes a big tree. Share on X

When I started, I bought something. We’re very approachable to people, because I was like, “I didn’t have any guidance of how to buy real estate.” I said, “Let me look on this site which they didn’t have sites back then, and figure out what to buy, and do the math myself.” I was pretty good at math. I can figure it out. If more people can do what you’re doing, that means the return sounds good. It’s going to be more competitive. What you want to do is get to more uncompetitive areas where you can create a moat of competitive advantage, and senior living is a huge moat. No one’s going to go figure it out like, “I want to invest in senior living nowadays.”

Hopefully after this show, maybe some of your audience will, but it’s a great moat. Lots of people in the space, but not as many as it should be. Lots of communities that are thriving even during COVID. When I think about what I wanted to continue to do from investing overall is I just love investing in cashflow. I say cashflow risk appreciation even though all my LLS is half-appreciated. This is what happens to assets, especially when the government prints a of money.

I like it because I can get that money now and then compound it or invest in many different things. When you invest for appreciation, you’re planting a tree and then it becomes a big tree. That’s very risky if you just have gone through, but when you’re investing for cashflow, I like to think of that you’re planting tree and you got a forest. You can invest all the cashflow into many different things, and having high cashflow, double digit, meaning if you put $100,000, you get $1,000 a month. That gives you freedom to do a lot of different things.

That also gives you a lot of buffers because if you’re just investing for appreciation, I don’t want to say negative, but others have investments because they can do both. That’s money that you got to put into it every month. If you lose your job, you might not have that cashflow from that property to cover the debt. Cashflow investing for me is always a big buffer of safety. I’m always thinking of like, “How conservative, how safe can it be, and how much money can this investment make, so that it pays for itself and pays for all my other investments?”

For senior living, I love the way that you talked about that, and I talk a little bit about California is an appreciation market. Usually, you’re going to have negative cashflow, which is now everybody’s like, “It’s the bad word. Don’t do that.” When you have an appreciation market, you’re usually not going to have any cashflow, sometimes you’ll break even. If you hold for a while maybe, but there are different ways of investing and it is good to consider those different like what are your goals and to pick a strategy accordingly.

I love that you’re so clear on exactly what you were wanting. Talk to me a little bit about with senior living homes, what I have heard, because I’ve looked a little bit into it. I’m very curious about it. I’ve got a lot of elderly family members that have been in homes. I hear a lot about insurance issues, not insurance like medical insurance, but insurance as un insuring the home. It’s its own big thing that none of the other asset classes have. Have you found that to be a particularly big challenge? What do you think about that?

I think of it as an added cost, which baked into the revenue and your NOI and your OPEX expense are baked into it. It has more costs at three times costs. You have licenses you have to get. Oftentimes not medical license, but when you open anything to have a license, make sure that we’re building single-story community where typically, we have 80 to 90 people in the community. We have many different layers of liability protection. Both from having insurance, which can be costly, but speaking to the cost, to also a management company.

 

We either own or a third party, which would have the liability of all the HR because it’s a people business. It’s having people and taking care of people. You want that liability off your investment. You have three entities when you’re investing in senior living versus when you have multifamily, you might just invest in your own name. You may have a real insurance. You could do an LLC, but in California, it’s $18,000 a year.

It’s a little bit more complicated, but it’s just part of once you get to know that business, you know how to handle those things.

I love complicated things. I love to figure it out and then maybe someone else won’t do it because it’s complicated. If they don’t do it, there’ll be more for me. That’s great.

There are two other questions I wanted to ask you. First of all, I do want to talk about opportunity zones and how that fits into this. I know that we’re going to talk more about that in EXTRA so we will get there. The other question is, do you invest in homes and take other people’s money to invest in them? For instance, if I wanted to invest in senior living but didn’t want to have to learn all that stuff, can I do it through you?

That’s exactly what we do. Thanks for bringing that up because I will say all these complicated things and hopefully you do something. One of the things you could do is at least know that Touzi Capital, I’m here to provide you an option to invest with us and participate in the same cashflow that I’ve been talking about. The same stuff without us having to sign a loan, without having to get an insurance, or having any liability, because you’re not even on any of the paperwork and in the liability business that we take care of everything. That’s all the headaches of hiring people and all that stuff we’re taking care of and we’re doing this at scale so that when you’re doing anything ten times, you get better. It’s something that I appreciate myself. I love to have anyone potentially participate in investing with us and growing with us.

Thank you for that. Ladies, we will be asking him how to get in touch with you with him, that’s one of those things you might want to talk to him about it. If you have an interest in senior living homes instead of learning the whole game, you can have a piece of your investment portfolio with him and make income passively. That’s a possibility, too. Talk to me a little bit about opportunity zones. We’re going to do the deep dive in EXTRA about this, but just give us a little high level, because I know that several of your properties are in opportunity zones. Is that true?

We’re developing two properties in opportunity zones. One is in Jacksonville. We’re breaking ground. I’m going to be flying over soon to the ribbon cutting ceremony, wearing these hard hats, and the state senators and congressmen around finding jobs. I love opportunity zones and what it represents. What it represents is a new law that was passed during the Trump tax cuts, where if you know the letter of the law or the tax code, you can reduce your taxable income.

What that means is you can keep more your earnings. Ladies and gentlemen, you work hard for your money, keep more your money. Use all the things that all the rich, relative people, and investor class use all day. Opportunity zones are great because for my audience, we have a lot of folks who have a lot of stocks. I come from Apple and they make a lot of money from stocks. When you sell stocks, you have to pay capital gains. In fact, we can sell almost any asset for capital gains. That capital gain is taxed, and for opt-ins, it’s the first class of investment that you can essentially say, “I’m not going to pay that, not now.” Pay that later, put that money into an opportunity zone. If you owed $100,000 of taxes on capital gains, don’t pay that, pay that later.

If you know the letter of the law or the tax code, you can reduce your taxable income, which means you can keep more of your earnings Share on X

We defer taxes all the time. That’s a great strategy. That’s all real estate. That’s what people mostly do at real estate. You need the 401(k) because you want to defer taxes in the future. You defer taxes for six years, so not too long, and then you reduce it by 10% and then you hold it for ten years. It’s quite a while for any real estate investment. All future capital gains get eliminated. The $130,000 change, you’re not doing all of that. Compare to a non-optimized investment, and I do have both. If given the same number of returns, say 12% of each annual returns, the options I would give you more than 50% more money at the end, because you would have free money going in and free money going out.

Like a rough of 401(k), I can go into detail on that, too, but if you can, don’t pay taxes. We can do that, even if you’re a W-2 employee, if you’re working hard, there are many ways if you’re investing in money, investing in opportunities and in places that the government is saying, “Invest in this place, you would get a great tax benefit,” and these places sometimes are great places to build senior living communities.

You totally piqued my interest. I would like to do a deep dive on that in EXTRA where you can talk a little bit more about how that works, because you do the high level, like I asked. I want to hear more about that exactly how that works. Ladies, we’ll be talking about that and EXTRA, so stay tuned for that. Before we go to our three Rapid-fire questions, tell everybody how they can reach you.

You can reach me at our website, TouziCapital.com and reach me at my email [email protected]. I am always happy to talk about taxes, real estate, or investing about financial freedom. It’s all the things I’m passionate about. I have YouTube videos and TikTok. I got options. I was viral. I don’t know. It’s a million views viral. I love talking about it. What I love about this space compared to everything else I’ve been doing I’ve done a lot is just talking to people. Seeing people in the journey. I’ve learned so much by talking to people. If you’re trying to do anything, this networking and relationship building is key to success.

Get in touch with him. He’s very generously offering some of his time, which not very many people do. Be respectful and kind, and if you’re interested in this topic, give him a call or send him an email. Eng, are you ready for our three Rapid-fire questions?

Yes. Let’s do it.

Give us one super tip on getting started investing in real estate.

I hate saying it depends, but what I always say is get started. Do it. I know a lot of people would think and I think too much. I think all the time. I’m a very analytic. Getting started is giving you the best way to learn. It’s like a non-answer, but if you’re short of money, find somebody who has money. If you’re short of time, find someone who has time. Partner with somebody. Those two things, time and money, will allow you to get in real estate. There are so many technologies now in space. Use Redfin, Zillow, all these great applications that I didn’t have when I started. That helps to get into it. Get started. You will fail and learn, it’s all the same. It’s going to be a great training.

Tell us one strategy on being successful in real estate.

 

The big strategy that I’ve came to is to value your time. At a certain point, your time is worth more than anything. If you don’t value time, then you can create processes or decisions that is going to keep you down in the weeds of Craig Meyer, figuring out how to evict somebody or do this or that. You have to do that in the beginning. If you’re trying to be successful, that means you try and do this a lot.

Not just trying once and get lucky, you try this ten times. Think about what you want to do 5, 10 times over and figure out how to scale. That’s why for me, it’s always been about going up and scaling and knowing that. Multimillion loans are easier than $100,000 loan. I didn’t need to income for it. I need to have tax clearance. Scaling and thinking about how to do things multiple times is always a great strategy to be successful.

Scaling and systems that conserve your time. What is one daily practice you would say contributes to your personal success?

I do fasting. I’m an intimate faster, so that’s a little bit of me not having time and not eating breakfast. I used to eat a lot when I was working at a corporate job and I love having lunches and all that stuff. What I found is there are some great health benefits of fasting for me. Not for everybody. For me, it was giving me a little focus during the day to have a black cup of coffee and then getting my routine, and that helped me focus on the task at hand every day.

Nobody said that on this show. Thank you for that. Eng, this has been fabulous so far. Thank you so much for joining us for this portion of the show.

Thanks for having me.

Ladies, we’ve got more. We’re going to be talking about opportunity zones and how they can save you in taxes and capital gains and all that cool stuff. I’m super excited about that. Stay tuned for EXTRA, if you are subscribed and if you are not, but would like to be, go to RealEstateInvestingForWomenEXTRA.com. You get the first seven days for free, so you can download this one and whatever ones you want to listen to, and just check it out. It’s RealEstateInvestingForWomenEXTRA.com. For those of you that are leaving us now, thank you for joining Eng and I for this portion of the show. I look forward to seeing you next time. Until then, remember, goals without action are just streams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon. Bye.

 

Important Links

• Touzi Capital
• Peace Corps
• Who is the Boss of You? – YouTube
• [email protected]
• RealEstateInvestingForWomenEXTRA.com

 

About Eng Taing

Eng is an experienced private fund manager with $100M assets under management. He has 12 years of private market and real estate investing experience and has focused on cash flow investing to create significant passive income. Eng is an economist by training, from the Wharton School of Business. He also has experience leading data science and analytics at Apple, Capital One and AT&T. He applies that experience when identifying and underwriting investment opportunities and markets.

Eng is the classic immigrant story that can only happen in America. He was born in refugee camp in Thailand, where his family escaped the Khmer Rogue from Cambodia. Having grown up in Los Angeles, he pursued economics by day trading and playing Poker to pay for his tuition while attending the University of Pennsylvania. There he trained as an economist and afterwards went into Investment banking. Later he would leave the financial world to join the Peace Corps, volunteering in the Republic of Georgia–a year after the Russian invasion. There he met his wife–Jennie, who was also volunteering abroad. They now have one son, with another on the way.

Eng has presented at companies like Apple, Facebook, & Amazon where he teaches employees how to minimize their tax burden and keep and investing more of their earnings so that they can achieve financial freedom.

 

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