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Monick Halm On Building A Strong Passive Income

REW 35 | Passive Income

 

Building your finances is mostly dependent on your day job or business, but having a strong source of passive income is always a welcome addition to your books. Nothing beats having your money work for you, even if you are sleeping or relaxing at home. Moneeka Sawyer is joined once more by the Founder of Real Estate Investor Goddesses, Monick Halm, in dissecting how to make money through real estate syndication. Monick explains how this industry works, how to choose the people to collaborate with, the risks every realtor must be wary of, and how it can help lower tax bills.

Listen to the podcast here:

Monick Halm On Building A Strong Passive Income

Real Estate Investing For Women

We are going to do things a little bit differently. I am bringing back to the show, Monick Halm. We’ve had her on the show before. I had an interesting conversation with one of you guys. The question was, “I have money in my retirement program. I cannot afford to lose it, but I want to have high returns because you’re 65 and you want to retire soon. You can’t afford to lose the money, but you want to get high returns with very low risk and you want to be very hands-off.” That was a tall order and I had no idea how to answer you, but I do have resources. Monick is the resource that I reached out to because I know that she talks about ways to invest with high returns, low risk, and hands-off.

I wanted her to share her expertise with you ladies. It was very funny because I got that one question and then in the same week, I got a very similar question from somebody else. It’s funny how things come in groupings. This is the topic that people want to hear about. I’m excited to present this to you. I’m going to have her introduce herself. I know you ladies have met her before because she’s been on the show.

I’ve also asked her to do a full presentation because I want to make sure that I’m not interrupting and she captures everything important for you ladies to know. It’s going to be a little different than normal. She’s doing a presentation and I will interrupt with some questions. The other thing is she is doing a slide show. If you’re a visual person and you want to see the slides, you can go to YouTube and look at Moneeka Sawyer or Real Estate Investing For Women, and then you’ll be able to find this. You can also go to Roku with Real Estate Investing 4 Women. Monick, welcome back to the show.

Thanks for having me back to talk about one of my favorite things. I love to invest in real estate. I found it a little bit by accident, which I’ll talk about that. I’m going to be talking about real estate syndication, how to passively invest in real estate, earn double-digit returns, and not have to deal with the 3Ts. The three are tenants, toilets and termites. This is a way of possibly investing in real estate that is high return and lower risk. Nothing is risk-free, I want to start by saying that. I can’t guarantee you returns. If anybody says that they will guarantee you a return, then run in the opposite direction and we will guarantee it. This is a relatively lower risk investment and I will share why.

Before we get going, I’m going to briefly introduce myself and why I talk about this. I am a real estate investor and a syndicator. Syndication is crowdfunding real estate. I bring groups of investors together to purchase real estate. I’ve been in real estate for many years. I have a little over 1,300 rental doors in seven states. I’ve raised over $35 million with my partners since 2016 for a real estate portfolio worth over $220 million. I’ve written the book, The Real Estate Investor Goddess Handbook, Wealth for Women: Conversations with the Team That Creates the Dream and Investing in Real Estate from $1 to $1 Million, which is available as a digital download for free on my website, REIGoddesses.com. I also have a podcast, Real Estate Investor Goddesses Podcast. I’m a real estate investment mentor, educator and coach. That’s me in a nutshell and a little bit of my background for why I’m talking about this.

First, let me briefly describe what is real estate syndication. In the simplest term, syndication is a structure or relationship between multiple investors pool money together to fund a project, real estate or otherwise. Investing in real estate syndication is investing in a real estate enterprise as a passive investor alongside multiple other investors. We crowdfund or bring together a group of investors that will passively invest. We’ll talk a little bit more about what all of those different roles are.

First, is syndication something for you? Maybe you can relate. If your real estate vision is big but you’re not sure if your bank account balance is big enough to fund it, then you might be interested in syndication. If you have some money set aside but you’d like to be able to leverage it and spread the risk, you don’t want all your eggs in one basket, then syndication might be a good fit for you. If your life is full and you’re not sure if you will have the time or other resources necessary to successfully invest, syndication could be a fit for you.

REW 35 | Passive Income

The Real Estate Investor Goddess Handbook: Everything You Need To Know To Invest In Real Estate Like A Goddess

If you fit any of those things, I understand because that’s where I was. I wanted to share my story, which you may relate to. Like Moneeka, I’m a first-generation American. My parents are from Haiti and I have super supportive parents who are always like, “You can be anything you want (as long as you’re a doctor, lawyer, professor, engineer).” I wasn’t into Maths and Sciences. I went to law school. I ended up at Columbia Law. On my slide, I have a picture of me in Japan, walking to my firm there. I was working for a big international law firm, partnership track, six-figure income. I checked all the happy immigrant parent boxes. I’ve done everything right.

I was miserable that at one point, I found myself in the emergency room. I remember the Tuesday morning when the doctor told me that my appendix had ruptured. I had to spend several days in the hospital. I ended up spending nine days in the hospital. He said I’d have at least 30 days afterward to recover. My first thought when he said that was, “Thank God, I don’t have to go to work for at least 30 days.” I had this incredible sense of relief.

It didn’t hit me until that second how unhappy and miserable I was. I couldn’t take it for granted that I was meant to be that unhappy, but it took that moment to give me clarity that it’s not normal, not good and not okay. I had done exactly what I was told. I had followed the path exactly and I was miserable and unhappy. I knew I had to find a different way. They don’t know what causes appendicitis, but I was sure it was stress from my job. That job was killing me and I had to find a different path. That was not an easy thing to do because I did the path that I was told would lead to success.

I did the path that my parents believed would lead to success. They didn’t know better. They taught me what they knew. I fell into real estate completely by accident. The only thing they had ever taught me was to buy my own home. That was what they knew about real estate. Moneeka, you were lucky because your parents knew about real estate investing. You were born into it but I was not. All my parents knew was get a job, trade your time for money, and buy a house that you live in but it gives you no money.

At least they said, “Buy a house.” I don’t know how many people whose parents didn’t even know that much. You had so much. It sounds like your parents adored you and wanted the best for you.

They’re great parents. I love my parents. They did the best they knew to do. They taught me the best they knew and were they very supportive.

I wanted to highlight something that you said which I think is valuable. Ladies, this is something to think about. We’re talking about real estate, but one of the things that Monick found in that hospital, and I know I’ve been here too, is how do we define success? She did everything right. I did the same thing. I did everything right. Our parents told us what success was going to look like and how we were going to get there because that’s the best that they could do. That’s what they knew. The way that they define success is different than how we define success. We have had to create a new life based on our vision of success. That’s an important key for you ladies to keep in mind. How are you defining success? I love that Monick was talking about, “This might be for you if.” If that is you, how are you defining success and what are the next steps? I want to highlight that success looks different for everybody.

[bctt tweet=”Success is doing what you love, with whom you love, and when you want to do it.” via=”no”]

For me, success is being able to do what you love with who you love when you want to do it. After having spent lots of time doing things that were killing my soul, that was what it felt like being a lawyer, and it’s killing my body too. After having spent that much time being miserable, having now the freedom to do work that I love and I’m passionate about. I have passive income streams and I don’t have to work if I don’t want to do. I get to make a difference, spend time on vacation, and do all of those things that I want to do when we’re allowed to leave the country, then I have freedom. That is success, but I didn’t start there. I got there by a series of happy accidents.

I was sharing that when I went to go buy my home. This was in 2005 towards the top of the last bubble. I live in Los Angeles, a very expensive market. You understand being in an inexpensive market. Those of you out there in the much cheaper markets can conceive of the prices that we have to pay. Even back in 2005, a starter home in a semi-decent neighborhood was upwards of $600,000 to $700,000. I had a low six-figure income. That was challenging for me. A friend of mine who was in a similar boat suggest that we buy a duplex together. He would live on one side, I’d live on the other side. The original plan was to get a property with two equal sides. We ended up finding this old craftsman that had a larger downstairs unit, a two-bedroom unit upstairs. It had a converted garage in the back with a one-bedroom. We ended up each taking a bedroom in the bigger unit. We’re renting out upstairs, our back house and even our basement. We started the house hack before I knew that was a thing. I went, “This is awesome.” People are paying our mortgage and I got tax benefits.

I met my husband. He had a duplex and we got a single-family rental together. After the market crash, we started to flip houses when houses were on sale. Houses are bound to be on sale again, so get ready. It’s going to be a very good time to be a real estate investor. By 2015, houses were not on sale. It was getting frustrating. Flipping houses is a short-term job. It’s like a short-term contract. You do it, fix it up, sell it at a profit, and then you have to start over. I wanted something more passive. I started to look for a fourplex, which at that time was the largest thing I could think of. In LA, you cannot find anything that cashflows. It was impossible because it was going to cost a fortune, and there was no money coming back from that. I ended up being introduced to this man that would become my mentor, Robert Helms, who is the host of the Real Estate Guys Radio podcast.

He’s done over a billion dollars’ worth of transactions and we had a mutual friend. When I was telling our mutual friend, Kyle, how frustrated I was. He said, “My friend Robert Helms is going to be in LA tomorrow. You should come and meet him.” I met him and he’s the one that changed everything. It’s one ten-minute conversation and it’s why I’m here talking to you. He is super nice. He asked what I was doing. I told him about the flipping and how that was getting challenging, and that I’m looking for fourplex in LA that would not cashflow. He said, “LA is a tough market. Live where you want to live, but invest where the numbers make sense.” That makes total sense after you hear it.

I always thought you had to invest where you could drive to your property, touch it, self-manage it. It never crossed my mind that I could invest outside of where I lived. That opened up the world to me. The other thing he said was, “You can buy that fourplex by yourself, but you’re limited to your own capital credit. Alternatively, you could bring a group of investors together and you get 100 or 200 units.” He started telling me about the benefits of that. My brain exploded right there. I was like, “That’s a thing? You could do that?” Everything in my body got chills. I’m like, “I want to do that.” That was very exciting for me to find out. I went home and told my husband that night, “There’s a thing called syndication. We need to learn how to do that.”

The Real Estate Guys, Robert Helms and Russell Gray were teaching a seminar on it in January 2016. We went to that seminar and signed up with their program. We met Brad Sumrok who was our apartment syndication mentor. We signed up with him. We went to tons of different events throughout that year and since to learn how to do that. I invest over $60,000 just to hear that education but it paid off. We ended up syndicating and getting into a 109-unit mobile home park in North Carolina. We did 318 units in Dallas, 514 units in Atlanta, and then 50 to 51-unit townhome community, and then 77-unit apartment community in Albuquerque all in that first year. Over 1,000 units in that first year through syndication, through bringing investors together.

You take things slowly, don’t you? Are you saying only two of those were passive?

REW 35 | Passive Income

Passive Income: Syndication allows you to spread the risk because money is not all unused.

 

We syndicated the mobile home park and the two in Albuquerque. We still passively invest in things as well as actively invest. There are benefits to both which we’ll talk about. Other than the mobile home park, all of those things have been sold. We have new ones. We have a little over 1,300 in different asset classes, different states. It’s allowed us to diversify, to scale and grow in a quantum leap and ways that I had never imagined possible. I’m very passionate about it. I have a picture of a slide. I’m wearing a Tiara, but I’m surrounded by a bunch of men, which was the mastermind that I was in.

Being surrounded by many men in that field. First of all, 90% of our investors were men. I had been working with women, but it came as this divine download to bring women into this game, especially invite them into syndication. I created Real Estate Investor Goddesses to bring women into this game. My mission of helping one million women create financial freedom through real estate investing came as this divine download, not the how of it. I’m still figuring out the how. I’m ways from that, but the what of it has come. It’s been great. Little words have been going out. I’m very passionate about getting more women into this wealth-building lucrative game.

One of the ways that’s great for women with syndication is because a lot of us are busy. We have jobs where we have to homeschool. We have parents to take care of, kids to take care of, and all of this stuff. This is a way of being able to get into real estate that is passive, that doesn’t take time past vetting. Some of you might be interested in being on the other side of it too, where you get to bring groups of investors together. You can benefit a lot by being on the active side, which is the side I mostly play on. Either way, there are a lot of benefits. Why would you want to do that?

It allows you to buy more than what you can afford by yourself. As a passive investor, you get to leverage OPM, Other People’s Money. It’s not just your money, it’s the money of all the other investors, and often a bank too. We usually get financing, as well as all of these investors that come in. You’re able to leverage OPM to get something much bigger than what you could afford by yourself. You also get to leverage OPT, Other People’s Time because somebody else is going off, finding the deal, putting it together, and bringing all the investors together. You have to vet the deal and then send in your money and wait for it to come back with friends. It allows you to spread the risk because it’s not all on you.

The risk is spread. Also as a passive investor, you have very little to no liability. You spread the wealth. As a syndicator, I get to create an opportunity for many people to benefit. As a passive investor, you get all the benefits of being a real estate investor like the tax benefits and otherwise without the work. With a real estate syndication, there are a lot of benefits. It gives you the benefits of passive cashflow. You get a share of the monthly cashflow. You get a share of equity at the end when we sell. You get federal tax benefits. A lot of people don’t realize that. You have the assumption that the more you make, the more you pay in taxes. That’s what we’re told.

Higher-income, more taxes except when it comes to real estate investing because of the way it’s structured in the tax code. You often end up paying less. A lot of people will get into real estate, especially when they have businesses and they’re successful. A good stabby CPA will say, “You should start investing in real estate because you’re paying too much in taxes.” Even though you’re making money with your real estate, because of the way real estate looks like a loss for tax purposes, you’ll pay less.

I have a very good friend. He’s a successful businessman. He found himself one year owing $500,000 to the IRS. He had always assumed, “The more you make, the more you pay in taxes.” He was very successful with multimillion-dollar businesses. He found out about real estate. He bought an apartment building in Memphis. It was an apartment that he was making six figures a year of income, but it brought his tax bill from $500,000 to $0. He was making more money. Not only did he make money, but he saved on the money that did not have to go to Uncle Sam. It’s not just what you make, it’s what’s you get to keep. In real estate investing, even as passive investors, you get to keep more.

[bctt tweet=”Live where you want to live; invest where the numbers make sense.” via=”no”]

I’ve said on this show many times that no matter how someone became rich, the rich always invest in real estate. That’s where they make the majority of their money. They make a huge amount of money in real estate. They also save a lot of money in real estate, which they can then grow in other ways, whether it’s in their business or real estate. Monick has given you a cool breakdown of why the rich invest in real estate. What’s cool about real estate is that you don’t have to be rich. This is available to everybody, especially here in the United States. This is the most amazing country that way because this is not through elsewhere. The government supports everybody from a single mom, all the way to the richest person on the planet and investing in real estate. We’re supported to do that. It helps us to grow well, and it helps to lower our tax bill. There are many good reasons to invest in real estate.

The government wants you to invest in real estate. That’s why they give these incentives in the Tax Code. It’s to get more people to invest in real estate. There’s a book called The Color Of Law. It started in the 1940s after World War II. They thought that if people owned real estate, they would be capitalists but they would not be communists. It was a way of helping stop communism. Whatever the reason, it’s a good thing if you’re a real estate investor. It helps you out. People who have a lot of money shift from being about income to being about wealth preservation. Real estate helps you preserve wealth, not just because it appreciates some of these other benefits, but because of the enormous tax benefits that help you not just save money off of your real estate income, but it helps you pay less on more of your income. It is beneficial tax-wise.

I was talking about you can leverage OPM, Other People’s Money and Other People’s Time. When you’re in syndication, you’re able to do much bigger properties in their economies of scale and leverage in that way. Retirement savings came up because people are saying, “I have this money in my retirement account. I’d like to be able to find investments that make sense, that are lucrative, that are relatively safe, and with self-directed retirement accounts.” Not the account that your work’s going to put you in normally, which gives you a very limited menu of things that you can invest in some mutual funds and bonds.

It’s like this little menu, but if you can self-direct your money, then you can put it into real estate and get better returns. Also, with appreciation. I start with real estate. You get appreciation over time. Properties tend to go up in value, but you can also force appreciation by doing targeted rehab, which is what we do with syndication. We have a business plan and we buy property. We have a plan to add value to that property and appreciate the value. It’s worth more generally after a certain number of years. We’ll sell and be able to recapture that. Even on paper, as the value of the building grows so does your net worth. It allows you to leave a legacy, which I know for many of us, one of the main reasons why we want to do this. Real estate since time immemorial has been the main way that people have built, preserved and passed down wealth.

It remains the same way. That’s one of the best ways to build and leave a legacy, and it’s a feel-good business. It’s a win-win. I only invest in ways in which I can leave a property in a community better than we found it. Our syndication is a focus and it feels good. It’s a wealth-building opportunity for everyone touched by our deals. That’s why I love it. Those are the benefits. Think about what are the benefits for you? What’s your why behind real estate investing and syndication? Depending on what are the whys that are important to you, there are certain deals that will give you more of those benefits or less. Tap into your why behind them.

What types of properties can be syndicated? Anything can be syndicated. You can syndicate debt. Sometimes, it’ll be a fixed return. It’s debt and a loan that we’re syndicating. You can syndicate equity. Ownership’s take in a property. You can syndicate raw land, single-family, residential properties. Syndication is for larger commercial projects. There are a lot of expensive legal works that has to be done. I’ll talk a little bit more later about the legal ramifications of this. It’s not something that I would recommend you to go out and ask a bunch of people to give you money for a deal.

It’s governed under the Securities and Exchange Commission and it can be pricey to put one of these together. The deal has to be large enough to justify the legal costs of putting together syndication. You won’t find a single-family residential property syndicated usually unless it’s going to be used for something like a residential assisted living facility. A facility where people are paying upwards of $4,000 a bed to be there and it’s a very high cashflowing business. You’d see those get syndicated, otherwise, it’s just a house to flip. You normally won’t see that, but they could be if somebody wanted to do that. Multifamily apartment complexes are common, office space, retail and industrial can be syndicated.

REW 35 | Passive Income

Passive Income: As a passive investor, you get all the benefits of being a real estate investor without doing all the work.

 

Who’s involved in the syndication? You’re going to hear the terms syndicator sponsor, active investor, general partner. Those are all used interchangeably. That is to describe the individual, company or team that’s finding, acquiring and managing the real estate. They’re going to have a history of real estate experience. They should. If they don’t, do not do this with them. They have to have extreme real estate experience, and the ability to underwrite and do due diligence on the properties. The active investors are the ones doing the work. There are joint venture equity partners. Sometimes that’s my role in deals. We have a group of investors and we’re not on the operation side, but are bringing in funds for the investment. We’re connecting our investors to operators that were part of the sponsorship team. With JV or equity partners, it might help with financing, reporting communications and tax documentation.

Last but not least, there are passive investors, sometimes called limited partners. Those are individuals who will invest in the syndication. They own a percentage of the real estate as a result. If it’s an equity deal, they’ll have a percentage. They’ll be part of the loan if it’s debt. You get all the benefits of property ownership, not involved with acquiring the property, arranging to finance or doing any of the day-to-day management. They cannot be. Think of it more like if you’re buying stock in Apple. You own a piece of Apple when you have a piece of their stock. If they do dividends, then you would get your dividends. Otherwise, you have that ownership stake, but you’re not going to call the company and say, “I want you to change this feature on the iPhone.”

You could just like our passive investors can call us and tell us what they’d like to change, but in terms of like, who’s managing it, who gets to decide, when to sell, what to do, who’s the team, that’s on the active investor side. I’m going to share a typical example of a 100-unit apartment building. I’m going to round out the numbers to make this easier to understand. This is not a guarantee of results, but this is not atypical for syndication. It’s fairly typical in terms of returns.

This one was a deal that was a $5 million purchase price. The rehab budget was $500,000. We were buying this apartment building. We’re fixing up the units and getting them nicer so we could raise the rents to market rates because it was underperforming. We got a loan, 75%, $4.1 million to $5 million. The interest rate was 5% at that time. It’s lower now. We had a down payment of 1.375%, closing costs of $200,000 and the cash starts with the $75,000. We were raising $1.6 million to $5 million. Rounded at 33 investors at $50,000 each.

I won’t go through all of the various numbers. I’ll highlight the end result for the readers. After the total cashflow, the whole profit was $51,575 after five years. More or less doubled the money of the investor after five years. About $23,500 was in cashflow. Sales proceeds were close to $78,000. That was the profit. Not bad for something that is passive. That is not atypical for these types of syndications. On the active investor side, that also invest $50,000, the same deals as an active investor that you get a share of the cashflow and the acquisition fee. There’s also an asset management fee, and you get a share of the equity and cashflow for putting together the deal, and then there are fees for managing it.

In this case, as an active investor, we’ll also put in $50,000, which had the same profit that the other equity investors did, $51,575. There’s a 3% acquisition fee of $49,500, 1.5% asset management fee, $60,257, 15% deal sponsor equity share of $116,700. The total sponsorship return was $287,032 on a $50,000 and sweat equity. There’s a lot of sweat equity in that, but that’s the return. If there was a team doing it, then all the acquisition fee has some management deal sponsor equity. It would be split amongst the team members. You can get three times or more of the returns by being on the active side and doing the deal. It can be very profitable either way. Does this sound like something you might like to try?

One of the nice things about it as a passive investor, you have to vet the deal and then wait for it to come back with friends. For those of you who are interested in being on the active side, do not try to do syndication without a qualified securities attorney. You could win yourself a hefty penalty, an orange jumpsuit, and some jail time. You want free housing but not that way. Make sure you know what you were doing when you take on other people’s money. You can’t advertise an opportunity there. It’s very regulated in terms of who can invest with you and how. Generally, it’s going to be people with whom you have a substantial pre-existing relationship, and they have to be sophisticated enough to understand the deal, or you’re only dealing with accredited investors.

[bctt tweet=”Only invest in ways in which you can leave a property in a community better than you found it.” via=”no”]

For those of you who don’t know what an accredited investor is, some people think it’s like, “I’m not accredited. I haven’t taken the test. I don’t have a certificate.” There’s no certificate nor test. You qualify either through your income or through your net worth. If you have an income as an individual of $200,000, or as a married couple of $300,000 per year, you’ve had it for at least two years with a reasonable expectation that you will in the subsequent year, you are an accredited investor. If you have a net worth of $1 million or more, not including your primary residence, then you are an accredited investor. You are part of the 8% only of the population who are. Most people do not fall under that. If you do, you’re an accredited investor. That will allow you to take advantage of more of these types of opportunities.

Some of them are for accredited investors only. Some are for both, but you do have to have a preexisting relationship with the person bringing the deal. If you are trying to syndicate, then you need to understand when you can do and take accredited investors or when and how you can take people. If somebody is talking about this on Facebook, unless it’s accredited investors only, they could do that. You can’t just take anyone’s money, even if they want to invest it with you. I’ve had certain deals where we had to have that pre-existing relationship. They come and I’ve met them after I have already the deal. They’re like, “I’ve wanted to put money into it.” I’m like, “I wish I could take your money but I can’t. We’re going to get to know each other now. Next time you could if you feel like it, but I can’t now.”

If you want to find out more about these passive investing strategies, we have an investor club at Real Estate Investor Goddesses. I created this club because I wanted to get more women in knowing about these types of opportunities. The investor club doesn’t cost anything to be part of it, and you’re not obligated to do anything, but it allows us to get into that pre-existing relationship, and you then get access. A lot of people are like, “How do you find out about this? How do you get access?” You have to get into a relationship with a syndicator. I deliberately set out to get more women into this game because when I started, 90% of our investors were men. Now, I’m happy to say 90%-plus of our investors are women. I love being able to get more women into this because they’re great investments. I’ve done better on my passive investments than I ever could have done investing in LA or these expensive markets where I was doing all the work. They can be lucrative.

Let me talk a little bit about the risk for a minute because there is a risk. Here’s where the biggest risks are and how to mitigate the risk. They can be great opportunities. It’s important that you invest with the right people because a team is everything with real estate. There are three things to look at in order of importance. First is the team, next is the market, and next is the property and the plan. It’s in that order of importance. Your team is very important. You want a team that has a good track record and trustworthy. A good track record does not mean they’ve never lost money. Robert Helms would say that he would not invest with anyone who had not lost money before. He wanted to invest with somebody who had lost money and stayed in the game. He wanted to know, what happened when it went bad? How do they deal with it? Are they still playing in the game?

Things happen like in 2008. It was very bad for lots of people. There might be some deals that people bought, but not quite as right in 2019. It might not be doing so well right now. How are they handling it? How are they going to get through it? That tells a lot about somebody. It’s not necessarily that people have a perfect as they’ve never had a miss. That’s not a bad thing, but you want to know that they’ve been able to handle it. They have a long track record. They know what they’re doing. They’re trustworthy, following the rules and doing it right.

The team is important, then the market. Where are they investing? You start to look at their business plan. What is the property they’re looking at, and some of the assumptions they’re making? Some people make some assumptions like I like to be underpromised and overdelivered, but not everyone has that. How are they underwriting? Those are the things. You’re going to want to be able to vet the people or get the deals. Make sure it makes sense for you. If it does, then you raise your hand and say, “I’m in.” You invest and wait for your money to come back with friends. That’s how you do it. It’s a good deal. A lot of these deals are because we tend to buy properties that are ready cashflowing. They’re already stabilized. They’ll plan to increase cashflow, but when things tend to go bad, you may not meet the mark that you wanted to, but it’s unlikely that you’ll lose your money. That’s why they’re great investments.

Are most of your projects five years?

REW 35 | Passive Income

Passive Income: Realtors save a lot of money in real estate, which they can grow again in other ways, whether in their business or more real estate.

 

Five years is a fairly typical polled plan period. For the past few years, we were getting out more quickly because of the way the market was going. We’re paying more money for the same amount of income. It became a very good time to be a seller. I liked to be a seller when it’s a seller’s market and a buyer when it’s a buyer’s market. We started to sell because we could hit our returns more quickly. If you hit your number quickly, it’s better if I could get somebody 100% return in 2.5 years versus 5. We were selling more quickly when it made sense.

Now, looking at where the market is going, it might be closer to our five-year period or it might not make sense to sell in five years, and we may hold on for 1 or 2 years. As the sponsors, we’re going to do what’s best for our investors and we’ll sell when it makes the most sense. If it doesn’t make sense to sell it, we’re going to sell it down at a loss, then we hold off because we’re always cashflowing. That five-year plan might become a seven-year plan depending on what’s happening in the economy. Sometimes it’s a 2 or 3-year plan if that makes sense.

Is there a particular class that you invest in?

Most of our investments are in class-B multifamily. We’re also doing a lot of industrial. We’re doing more industrial right now. There’s a lot of uncertainty in the rental market because more people are losing jobs and not able to work. That’s harder, but industrial is one asset class that has been least affected by what’s going on. One of the things that we’re doing a lot of are types of deals called Sale-Leaseback. It’s a company that has a facility. In 2020, we did a frozen pie company and we ended up getting a baby food company. We have a couple of others. They are business that are doing super well in this crazy economy. They have these facilities that they had built and they wanted to get equity out of them.

They couldn’t refinance to get the equity that they needed. They’re selling it, but then they lease it right back as our tenants with these triple net leases. What’s great about triple net lease is they tend to be very long. These are twenty-year leases that we have with our sellers/new tenants. Not only do they pay rent, but they also pay property taxes, insurance, and all of the maintenance. They take care of all of the expenses with the exception of any debt service. If we have loans on the properties, they’re not going to pay for that, but all other expenses they cover. There are no surprises.

We have built-in rent increases in the leases as well year over year. You know what the income’s going to be, what the expenses are going to be. The plan is we sell them to institutional buyers after 3 to 5 years, and very similar returns to multifamily, cash-on-cash returns in 8% to 10% range with cumulative annualized returns in the high teens, low twenties. They liked them. They feel safer and more stable, especially in this type of climate. We’ve been doing these.

How do you find those?

We have partners that have been doing this for close to two decades. They’re one of few people who do this. It’s a very niche segment of the market, which is great. I don’t like going where the herds go. I try to look away from where the herds go, into places that are a little more open pasture. These companies will contact our partners. The big part of the due diligence on these is on the company to make sure that it’s a company that’s going to last a long time. The good thing about these long triple net leases is you have a tenant in there and it’s super easy. There is almost no property management and very little to do. If you do lose a tenant, it can take a while. Sometimes months or a year or more to find a replacement. The important thing is to have a steady tenant that’s not going to go anywhere. We do a lot of due diligence on those tenants to make sure the seller/tenants, the company is solid, and then we do the deal.

How big is a deal like this usually? How many investors are you looking for and how often do you do these?

They will vary. We’ve done syndications where we’ve raised as little as $500,000 and as high as $8 million. It’ll depend on the raise. A fairly typical minimum investment is $50,000. We have had somewhere that was $100,000 minimum, and we’ve had a couple where it was a $25,000 minimum. Generally, $50,000 is a fairly typical minimum.

How many of these do you do per year? How often can someone get into this?

[bctt tweet=”Always know what your resources are, what you can invest in, and where your funds are.” via=”no”]

Our goal in 2020 has been to do two a quarter, but because of COVID, we’re about to do our fourth one for the year.

At least, they’re coming through. That was amazing. There’s so much information. That was super helpful. If you had one tip to give my ladies about investing in syndication, what would you say?

If you want to do this, then you need to get on the list of people who do syndications. Connect with people. We have our women’s intuition. Tap into that as well as you’re learning. Find people that you think you know. Get to know them who you can like, trust and can do a good job with syndication. If you’re passively investing, that’s the only way you’re going to get access is to get into relationship with people who have these types of deals. This is part of the conversation I have when people apply to get into the investor club. We can help them over the phone.

I get clarity on their why. Why do they want to do this? Depending on their why, different investments will be a better fit for them or not. It’s important to tap into your why. It’s important to know what your resources are, what you can invest, where your funds are, and have that clarity about where your money is, and when you need it. If it’s money that you’re going to need in 1 or 2 years, if you’re 65 and you want your money in two years, a deal where your mind’s going to be locked up for five years is probably not the best fit for you.

If you’re going to need it that quickly, there will be cash. If you’re okay with the cashflow or something happens, then that’s fine. It could be 5 or 7 years, depending on what’s going on. It could be less, but it could be more. You need to get a sense of when you’re going to need the principal back and make sure that it all makes sense for you. We would have that conversation on our call so I could get clarity and make sure that you’re getting into deals that make sense for you.

REW 35 | Passive Income

Passive Income: You can’t just take anyone’s money when syndicating, even if they really want to invest it with you.

 

Why don’t you tell everybody how they can get in touch with you?

To join the investor club and get into a one-on-one passive investing strategy session with me, ladies can go to REIGoddesses.com, and gents go to Vip-Assets.com. When you go on there, you’ll understand.

That’s helpful. Thank you for coming back to the show and sharing all this information with us. It’s valuable as always.

It was my pleasure. Thank you for having me.

Ladies, thank you for joining Monick and I for this conversation. I hope it was helpful. I know we did a little bit of a different format, but I hope you got a lot of great information. Contact Monick if this is a strategy that you’re interested in. I look forward to seeing you next episode. 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.

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About Monick Halm

Monick Halm is an expert, educator and advocate for women real estate investors, with a personal mission to help 1 million women create financial freedom through real estate.

She is herself a real estate investor, syndicator, and developer with over 15 years of real estate investing experience in single-family rentals, multi-family residential, mobile home parks, and flipping. Her current investment focus is on syndicating under-performing residential multi-family apartment buildings and mobile home parks. She delights in adding value for her investors and tenants through improved management and the targeted remodeling and rehabbing of properties. Together with her investors, she owns over 1300 rental doors.

She is also the founder of Real Estate Investor Goddesses, an online community and educational platform for women real estate investors. She is the #1 bestselling author of The Real Estate Investor Goddesses Handbook and the host of the Real Estate Investor Goddesses Podcast.

Prior to becoming a real estate investor, Monick Halm practiced corporate litigation at Morrison & Foerster, LLP and Gibson, Dunn & Crutcher, LLP in Los Angeles. She earned her Juris Doctorate degree from Columbia Law School in New York. She is also a certified interior designer, feng shui expert, #1 bestselling author, keynote speaker, certified NLP and Money Mastery coach, and former co-owner and Chief Creative Officer of the Checklist Parent, mobile app and parent community. She is passionate about real estate, design, and helping women to thrive.

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How To Get Started Investing In Real Estate Intelligently With Anmol Singh – Real Estate For Women

 

There are so many deals you can find out there. You just have to know how to invest in them intelligently, so you become a real estate success. In this episode, Moneeka Sawyer interviews Anmol Singh, considered as the leading trade psychology expert and founder of Live Traders, which is now voted as the number one trading educating firm for three years in a row. Anmol shares his expertise to guide us on how we can invest in real estate intelligently where deals are brought to you rather than you hunting for them. How can we obtain the capital to invest? How do you trade stock to invest in real estate? What are the different areas to invest in, and what are their pros and cons? How do you get started in this industry? Anmol answers all of these and more, so tune in to this episode to not miss out!

Listen to the podcast here

How To Get Started Investing In Real Estate Intelligently With Anmol Singh – Real Estate For Women

Real Estate Investing For Women

I am excited to welcome to the show Anmol Singh. Anmol made his name as a high paid consultant in the trading and investing industry. He launched Live Traders in 2015, which is now voted as the number one trading education firm for three years in a row. He has coached and trained over 1,000-plus traders and investors, some of whom have now gone on to run their own hedge funds. He is considered the leading expert in the trading psychology space. Having helped thousands of traders all over the world, dealing with psychological and behavioral issues that arise when high stakes are on the line. He remains an avid stock market and Forex trader, and spends his day working with students of his trading firm, Live Traders and continues to financially back them. He also is involved with other entrepreneurial ventures and franchise stores in addition to maintaining an international real estate portfolio. Anmol, welcome to the show.

Thanks for having me. I’m looking forward to chatting with you.

I went on my world trip in ’99. About a few years before that, I was a day trader with options. I loved it. That’s how we paid for our trip around the world. We packed up everything, put some backpacks on our backs, and for six months we headed out into the world. The stock market paid for that. While doing that, my other side hustle was in real estate. It’s interesting how the two can play together. In my household, the way things work is my husband handles a stock portfolio. I’m not an active trader anymore, but I manage all of the real estate. The two can go hand in hand. They don’t have to, but I’m excited about having this conversation with you because I haven’t met anybody else that does this trading and real estate thing, and making it both successful. They do take a level of focus, both of them. Could you tell us a little bit of your story and how you got to where you are?

I started trading in college. I went to Brunel University in London so I was in my college, and then it came a year where you have to start applying for internships. I was like, “I’ve got a great Business degree. I’m going to get a job easily.” I started applying everywhere, but I wasn’t able to get a job for some reason. I got a bunch of interviews but never secured a job. I was like, “I need to start to probably look elsewhere and maybe make my own career.” That’s how I was introduced to trading. By being online and searching about it. I started learning. I found one of my mentors, Jared Wesley, who taught me how to trade. He was trading already for fifteen years.

He took me under his wings and mentored me. Three years down the line, now he’s my business partner with our venture at Live Traders. I was like, “I’m your case study right here. We already did it. You already taught me and I’m making money now as a trader. Clearly your education is working. How about we team up? You can do the education side. I can handle the business side of things.” That’s how Live Traders was born. We’ve been now educating and teaching other people using the same model that he used to teach me. I have been trading for several years now. I’ve been trading all my life.

You’ve been trading for several years. You’ve been through serious downturns too?

Yeah. The first year of trading was all downturns. Nobody made it in the first year.

It’s interesting because if you know stock, you know that you can make a lot of money on the downturns. It’s much more fluid than real estate. Real estate is my foundation. It’s like the brick wall. We keep adding bricks. It keeps going up. The stock market is much more fluid, much more liquid, much more volatile. It depends on how you want to look at it. I do love the stock market also. From your perspective, tell us how to find a good deal. Let’s focus on real estate.

In real estate, the thing with good deals is that people have a misconception that they can just go online and they can find a great deal, which you can sometimes. There are a lot of good deals online available. You just have to be willing to search. You have to have the mindset of not what the property looks like right now, but what it’s potential could be. Maybe there’s more square footage. Maybe I can add something here. That’s how you look for good deals. You have to have that vision of what it could look like. There are a lot of properties that I’ve had that were maybe $1,000 a month rent properties. We took those. We changed the whole layout. We changed the kitchen. We made it a luxury apartment that you can now get maybe $6,000 to $7,000 or even getting $1,000 for.

[bctt tweet=”If you know stock, you know that you can make a lot of money on the downturns.” via=”no”]

You have to look for what added value can you make to the property. That’s how you could find a good deal. The other thing which we can talk about down the road is building a network so the deals are brought to you rather than you hunting for deals online. If something is online, my guess is people have already contacted the property owners. Other people already looked at it because you can see the website traffic, X number of people have already looked at the property. Is that a good deal? Maybe not. You have to build a network and you have to start throwing out fillers and have these people who are looking out for the deals for you and bringing them to you for a percentage of something. You have to build a dream team, which we can touch upon later down the segment.

In EXTRA, we’ll do a deep dive on how to build a dream team so the deals come to you rather than you chasing them. I love that idea. Let’s talk a little bit about obtaining the capital to invest in real estate.

Obtaining the capital, there are many different ways to do that. When I started trading, the capital for investing in real estate for me came from trading. I was making money as a trader. I was having those profits, which it didn’t make any sense to me to keep it in the bank account, which is producing nothing for you. It didn’t even make sense to add to my stock portfolio because I already had a good amount of money in there. What I did is I took my income from my trading and park it into real estate properties. What people can do for capital is think about what you can do 1, 2 or 5 years from now. Start saving a portion of your salary or your income that you’re getting, so that in 1, 3 or 5 years’ time, you’re in a position to invest in something.

In the meantime, you can hone your skills. You can get good at it. You can study. You can get to your knowledge so that when you do have the capital, you’re able to invest. The other way you can do that is through a network. You have to be willing to network. You have to be willing to go to these real estate meetups or your local real estate organization. I know people don’t like going out of their house for something physical. It’s a lot of people. I don’t know what to say. You might feel anxious, but you have to be willing to put yourself out there. That’s how you build connections with people.

Trust me, people are out there looking for deals. They want good deals. They want somewhere to put their money in. If you can be the guy or girl who could find them the good deal, raising money is easier than what people think it is. You just have to find a good deal. It all starts through the deal. If you have a good deal, the money will come, but you have to be willing to go out there and go to these meetups, go to these REO meetings and all of that.

Both of those are good tips. The one thing that you said that I want to highlight is it’s okay to take the time to build the capital. People are eager to, “I want to get in right now.” Yes, I will say it’s always a good idea financially to get in. If you don’t have the capital to do it, you don’t want to lose hope because you can’t do it right now. You can plan for your future and that’s a good way to go. You’re planning and saving to build that capital to do an investment. Learn along the way so that when you’ve got the money, you’re ready to hit the ground running. If you’ve got a side hustle, you can use all of that money for the side hustle to save and then you get there a lot faster. We’ve talked about networking a lot in the past, so that’s a great way to find capital. Thank you for that. Give us your perspective cashflow with real estate.

Every real estate investor’s dream is to get a property that’s cashflowing. There are also realities within different markets. If you’re in California, New York or the high-income state, it’s possible but it’s hard to come by. There are certain states where cashflow is 1, 2, 3. You go somewhere in Arizona, which is becoming hard now as well. You go to Texas. There are certain places you can get cashflow. Cashflow is important but if you’re in New York like me, cashflow is not the primary goal. The primary goal is to get the income to pay off the property for you. The approach that a lot of investors use here is that all they need is the downpayment.

They’re building a portfolio for real estate. They have the money for the down payment and have enough rent that’s covering your taxes and your mortgage. If it’s covering your taxes and mortgage, it’s not technically producing cashflow, but somebody is paying off the property for you. If you’ve got a 10-year lease, 15-year lease after which a property is being paid off, all you put in was that downpayment and somebody just paid off the property for you. In my books, it’s a win if you think long-term. Even if you build a portfolio of 10, 15 properties that people are paying for. You only put in one property’s worth of money in different down payments. In 10, 15 years’ time, once all those properties are paid off, look what happens to your net worth.

Suddenly from putting in a $20,000, $30,000 down payment to now having a portfolio of ten properties that’s increasing your net worth overnight, but it takes about ten years. That’s the approach I would use if you’re in New York or California or somewhere in those areas. For other areas, it’s the same thing. Look for, “Here are my expenses. Here’s what I’m paying for mortgage. Here’s what I’m paying for insurance and taxes.” As long as you’re getting more than that. You can list it for much higher than that as a rent, if the area warrants it for. Don’t lose hope if you’re not getting that rent, just get them to pay the property off. In ten years’ time, you’ll have a good portfolio that everybody else paid for.

REW 29 | Investing In Real Estate

Investing In Real Estate: Sometimes, there’s a lot of good deals online available. You just have to be willing to search and think not of what the property looks like right now but what its potential could be.

 

Also, you get cashflow on it then.

That’s when the game gets fun because now everything is paid off and you’re getting good cashflow from different properties.

Could you tell us a little bit about where your properties are?

I have the least amount of investments in New York, mostly it’s commercial real estate. I’m in the process of negotiating a lease. Hopefully, it should be signed. That property will produce cashflow. It’s going to make about over 8% cash-on-cash return. For example, my mortgage on that would be $5,200. I paid taxes $3,000 or $4,000, but the rent I’m probably going to get is going to be $12,000 or $13,000. That property is producing cashflow. How did I get there to make that cashflow is I added some value to the building. It was an automotive company that wanted to use that as a repair shop. I installed the lifts already in there. For everybody coming in who wants to run that business, it’s a gold mine. I don’t have to install all this equipment. It’s already installed for me. I’ll pay you extra. That’s how you get the cashflow. That’s one of the properties. Most of the portfolio is in India. My family and me were big into real estate in India. We have commercial real estate where we rent out to Microsoft office space, State Bank of India. That’s all commercial real estate. We have a lot of residential.

All the new developments that come in, we try and acquire at least a couple of properties on those developments. In London, we have small flats near the airport, which are handy because they always rent. We’d never had a tenant leave and weren’t able to fill it because it’s near the airport. Even airlines want their staff to stay somewhere. It’s easy to lease that out. That’s where we primarily have our investments, in India, in the developing areas, the capital states. In London, we have a few flats around the Heathrow Airport. In New York, we have the commercial automotive service station.

Which part of India are you in?

In Delhi.

We have a lot in Pune. The thing that I wanted to point out here and what I thought was interesting about that is he is in very expensive markets. India is a little bit more affordable for us Americans, but you wouldn’t believe the way that property is skyrocketing there. We sold something over there. These are high-cost markets. This is a different strategy than most people talk about. It’s a strategy that I’ve also followed, which is buy something. Don’t take a negative cashflow on it. Don’t worry too much about cashflow. Make sure that it’s getting paid down. Eventually, you benefit from the cashflow. It’s a little bit of a longer-term strategy, 10, 15, maybe even 20 years.

On the back end of that, you’re in markets where the rents are high that with just a few doors, you can make a retirement level cashflow. This is something that I love. I don’t like managing a lot of doors. Doors meaning houses or apartments or whatever. I don’t like managing a lot of properties. For me, I like the idea of I’ve got a few high-end so I do all executive properties. I do high-end properties so that they’ll start to cashflow, and I’m doing business with people that are going to stick around. They’re going to keep the house well. It’s going to be easy for me to manage. I don’t have too many of them, but I’m making a retirement cashflow.

[bctt tweet=”To find a good deal, you have to look for what added value you can make to the property. ” via=”no”]

It’s low maintenance. You get better clients. They are going to take care of the property. There are other markets too. This is not to say that there are other markets people can play in. There are people playing in other markets. For me, the type of tenant is important because they’re going to take care of the property. That means fewer expenses for you over time to maintain the property. Whereas you could play in the high-volume market, but then with a high-volume market comes more work. It comes more maintenance. It gets a different quality of tenant. You have to take care of the property. I’m in the same boat as you are. I would much rather have fewer doors but have high-quality tenants that they know they’re going to be there for a while.

Talk to us about the way that you’ve done this. How did you trade stock to invest in real estate? How can other people do the same?

I started with my partner, Jared Wesley, the guy who taught me how to trade. He did the same thing. When I started, I was pretty young in trading. I’m like 19, 20 years old. I was looking up to him. He was trading in the markets for many years and he did the same thing. He has a lot of real estate investments. He was taking his 10%, 20% of whatever he’s making from trading and putting it in a rainy-day investment account. He kept building that by adding 10%, 20% every month. Once he had a good sum, he’ll say, “Let me buy that property.” That’s how he was investing. I learned that same methodology to do that.

For example, he has a lot of industrial real estate, which is a market that I haven’t gone in. It’s great because in industrial real estate, you’ve got clients like FedEx that have the whole lot that they’re using. They’re not going anywhere. They’ve been with him for many years. If anything bad happens even to the roof, which he has to technically replace, he could still have leverage. He’s like, “I don’t want to replace it. Are you going to leave?” They are not going to leave. They’re going to replace it. They’re going to work with you, “It’s okay. We’ll pay half. Let’s fix it.” It’s more costly for them to move and leave. I’ve learned in that market. I follow his footsteps.

I didn’t do industrial real estate, but I did more commercial and residential because that’s what I understood. That’s another thing. People should invest in what they understand. Industrial might sound good or mobile homes might sound good to you. If you don’t know the market, don’t invest in it. That’s why, even though New York is a high-income or high-maintenance market, I would rather invest here because I know the market and I know that it’s not going to be ups and downs. It’s going to be stable. Your money is secure. Whereas in a high-risk market, you can get a better reward for your money, but in the downturns, it’s also going to be much faster. It’s a trade-off that people have to make a decision for themselves as to what fits their investment criteria.

Do you think the risk is more based on market or investment class?

Both market and class. If it’s an upcoming market and Amazon is opening a new office space there, the market is going to go higher. What if there’s temporary space that they’ll leave? Suddenly all those jobs get pulled out of the rug and then that affects the whole area. For New York, there are many businesses, many jobs that few companies leave. It’s not going to affect the market. New York is crowded. In certain markets, let’s say you invest in a suburb where there’s one big factory, one big company. You’ve got a risk. If that company leaves, a lot of jobs in that area leave with it. That causes the rents to go down. Subsequently, your cashflow would go down.

They’re much more prone to economic downturns. It’s something that I think is going to happen in the next few years. Those high-risk areas are going to be the first ones where people are going to pull their money out. They’re going to be like, “I’ll take 0.5% return in New York. At least my money is safe rather than looking for 10%, but potentially losing 20%.” High-risk markets, you get a high reward, but you’re taking high risk for the high reward.

How about classes like industrial, commercial, residential?

REW 29 | Investing In Real Estate

Investing In Real Estate: One super tip to get started in investing is to be an active searcher for deals.

 

Going forward, residential, industrial is the way to go. Commercial is going to be the next one that’s going to get caught up in what’s going to happen. That’s primarily because retail companies are declaring bankruptcy all over the place. Even Hertz Car Rental, Victoria’s Secret, and Nordstrom are declaring bankruptcy. All these retail strip malls are going to be affected down the line. More importantly, what people aren’t thinking in commercial, office space is going to be heavily affected. People are getting the sense like, “Zoom is not that bad. We could do this.” We’ve been doing it for a few months now. People are now used to it. They’re like, “We can do that. We could cut our overheads. I don’t think we need that much office space. I don’t think we need to have these big office spaces. Tuesdays are work from home days.”

A lot of that is going to happen, which is going to mean that people are going to need less and less office space. People are going to feel more and more comfortable working from home. That’s the trend that it’s going. There is no doubt about that. That’s going to be heavily affected. For me, I’m not investing anything to do with retail or anything to do with office space. Those are going to be hurt the most. It’s already starting with ripple effects.

Even in India, certain tenants would be like, “We can’t pay rent this month because of COVID-19.” They quote an act of God law. All this stuff happens. You’d have to go through all of that. There are ripple effects for that. If people don’t pay rent, those people won’t be able to pay their mortgage. That’s what happens. The bank is going to take the property. It’s a ripple effect, which usually takes a few years to kick in. What’s happening now, people will start feeling it a few years from now when the ripple effects take place.

I had a friend that was like, “Moneeka, what do you think about commercial?” I’m like, “I’m going to stay far away from that.” Commercial as in multiunit residential, I’m okay with, but anything to do with retail, I’m watching them on the sidelines. I haven’t looked at industrial. That’s an interesting thing. Did you want to expand a little bit on that?

Industrial would mean, let’s say you have warehouses that Amazon can use, which is a great investment for a lot of my friends. They had these warehouses for a long time. Nobody wanted it. Now Amazon is offering crazy amounts for those warehouse space because their goal is to have same-day deliveries everywhere. For them to have the goal of same-day delivery, they need to have warehouses in different locations that can deliver. Warehouses or truck spaces where people can park their vans and trucks, fleets can be parked. Those kinds of industrial real estate are what my circle has seen the best investments in. It’s something you can find, which is a nice space for a warehouse that could be used or something where a lot of fleets of vans and trucks and all that could be parked like FedEx. That would be what I mean when I say industrial real estate.

Do you mean storage?

Storage is good too, but I like relying on businesses more than people. Stale storage and all that, I’m not a big fan of. I don’t like relying on people. I like relying on businesses like FedEx or Amazon or something like that that I know are good. They’re public companies. They don’t want any of these issues. They’re going to be okay. I would focus on that.

Do you mind me asking, Anmol? This may be a personal question and you can say, “No, I’m not going to say this here.” How much did you start when you were trading?

I started with $10,000 that I borrowed from my father, which I lost most of it in a few months.

[bctt tweet=”Raising money is easier than what people think. You just have to find a good deal.” via=”no”]

Tell us a little bit more about that story and the journey to get to where you can start investing in real estate.

I left India. I went to London. I was studying my college degree over there. In the second year of university, I came back. I’m like, “I know what I want to do. I want to trade the stock market.” I’m like, “I’m serious.” They’re like, “Why don’t you get a job? You’re getting the degree. You’re on the path. Why don’t you apply internship?” I’m like, “I did but I didn’t get anywhere. I’m going to try this.” My dad probably thought it was going to be a good lesson for me to learn how not to mess with money. He’s like, “I’ll give you $10,000 to try it out.” I’m like, “Thank you.” Six months later, I had maybe $2,000 or $3,000 left out of those $10,000.

That was a learning lesson, but I built it back up and how I build backup is I started writing articles because I was good with research. I wasn’t good with a mindset. I was researching and writing articles for Yahoo! Finance and they were paying $150 an article. I was in my dorm room in college. It was $150 an article. I write ten of these a week. I started writing them almost in college in my dorm room. They were paying $2,000, $3,000 a month. I built my capital back up and then I was like, “I’m going to do it properly this time.”

How long did it take you before you had built up enough that you could start investing in real estate?

That probably I would say is year four when it started to kick in. I still had money before, but I didn’t have confidence to put it in real estate. Year four is when I was speaking to a lot of people, then I got the confidence, seeing other people invest in those properties. New York, the first investment I made was in 2015, which is the commercial property that I ran a business on it as a franchise business. I ran that business for a few years and I was like, “I can make more money renting it.” I close that business and now I’m renting it and hopefully, the lease will be signed.

You took $10,000, got it down to $2,000 or $3,000 and then you grew it back up. When did you start investing again with how much?

In the same year. I was just a beast. Yahoo! Finance didn’t care how many articles I write. I’m going to write all of them. I went back in exactly with $10,000, but I spent $6,000 to purchase some courses and stuff like that. I still played with $4,000, but the good part was when I connected with my partner. They had a firm where they were backing the traders that graduate from their program. I spent $6,000 and graduated from their program, and then the firm hired me as a trader. They gave me $50,000 of their capital to trade in exchange or like 70/30. We used to split the profits. They had levels that you have to go through, level 1, 2, 7, all the way to level 10, where they were giving you $10 million. I went from level 1 to 7 in a year’s time. In level 7, I was trading $3 million off their capital and we were splitting profits 70/30. That’s when I was making some good money. I was trading with their money for a long time. One or two years I’ve traded with their capital.

Is that the structure that you offer in your own trading company now?

Yeah. We offer that when people graduate and we see that they can do it, then maybe I can put some of my money behind him. If they’re trading similar to me, they’re trading my strategies, I know they’re going to eventually do well. If they do everything correctly. I do the same model. I’ll take 30% of your profits in exchange for providing you the funds.

REW 29 | Investing In Real Estate

Investing In Real Estate: One strategy to be successful in real estate investing is actually doing it. The way to do that is to start making phone calls.

 

I haven’t had anybody like this on this show. Thank you.

Thank you.

Anmol is Indian as am I. You come from this entrepreneurial background. Our parents all say, “You have a good degree. Why not get a good job?” We have this entrepreneurial spirit. It’s fun to talk to somebody else like that. Thank you.

The feeling is mutual.

Anmol is going to be sharing with us how to build a dream team in EXTRA so that you can have deals coming to you rather than you having to hunt for them. I’m excited about that conversation. Could you tell people how they can get in touch with you?

The best way to get in touch with me would be through my social media channels, Instagram or Twitter. My username on both of them is the same, which is @DeltaNinety. It’s a trading terminology for options traders. Go to PreppingForSuccess.com/book, where there are some free guides and things for you.

He is giving away a free chapter of his book with 60-second success show videos every alternate week. He’s got some videos and a free chapter of his book. He also wanted to offer you something regarding trading. Do you want to talk a little bit about that?

If you feel interested in trading and you’re like, “Maybe this could be something that I might be interested in,” and you want to learn more about trading or get started in the financial markets, the best way to go would be to LiveTraders.com. You’d be able to download a free eBook on our website along with some more information. If that’s something that interests you, you could even call the office and have a fifteen-minute strategy session with someone from our team. They can tell you if it’s even right for you or not right for you because it’s not right for everybody. They might say, “Maybe come back later,” or they might say, “This is where you can start.” That would be the place to go.

Thank you for that. Are you ready for our three rapid-fire questions?

[bctt tweet=”If you don’t believe in you, then how do you expect others to believe in you  ” via=”no”]

Yes.

Anmol, tell us one super tip on getting started in real estate investing.

One super tip to get started is to be an active searcher for deals. Always be searching. If you’re bored at night, you’re sitting, you’re having a glass of wine, it’s morning having coffee, look for deals. Look for what the fluctuations in prices have been. In the beginning, it good to get a sense of pricing. Search around for deals, look at what the market area prices are around you, and keep looking every week and you’ll see the trend.

What is one strategy on being successful in real estate investing?

One strategy to be successful in real estate investing is doing it. The way to do that is start making phone calls, start calling brokers, and putting the fillers out there. That way you’re also telling the brokers, “There’s this guy who was maybe interested in investing.” You want to introduce yourself to different brokers. Call ten brokers and introduce yourself, “I’m a local investor in this area. My name is this. This is the type of properties I look for. I would love to get a deal done in the future. Nice talking to you.” As simple as that. Start putting out fillers out there and start somewhere.

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

Daily practice is being your word. Be a person of integrity. That means do what you said you were going to do and then do it when you said you were going to do it. Not like, “I want to start this thing on Monday.” Monday comes and you’re like, “Let me start on Wednesday. I’ll start tomorrow.” Do it when you said you were going to do it and watch out how things will change. Be a person of your word. If you don’t believe in you, then how do you expect others to believe in you?

Anmol, this has been amazing. It was such a great conversation and it expanded my mind. I love talking about the two pieces together. That’s such a big part of the way that I run my life. You’re the first person that’s done this on the show. Thank you for what you’ve offered so far.

Thank you.

Ladies, thank you for joining Anmol and I for this portion of the show. I am excited for what he’s going to be covering in EXTRA, which is all about building the dream team. You can start having deals walking right in your door. That’s going to be fun. If you’re subscribed to EXTRA, please stay tuned. If you’re not, but would like to be, go to RealEstateInvestingForWomenEXTRA.com and you get seven days for free. It will show up right in the same platform that you’re on. You don’t have to go hunting for it. There are lots of good benefits to subscribing. You get a lot of good juicy information. Sign up there. I appreciate you. I’m looking forward to seeing 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.

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About Anmol Singh

REW 29 | Investing In Real Estate

The stock market always goes up. Up and down – but historically, it always goes up.

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How An Aussie Can Move Half Way Across The Globe With Limited Funds with Reed Goossens

REW 22 | Moving Across The Globe

 

Your dream of financial freedom is attainable with the right strategy. In this episode, Reed Goossens, real estate investor, joins Moneeka Sawyer to share his journey moving across the globe from Australia to the United States with limited funds and how he found success and financial freedom. Reed talks about building a holistic long-term business by creating an ecosystem to recession-proof his business. By having diversified multiple streams of income, Reed dives into how you can create your own ecosystem that’s more stable in the long-term on your way to wealth generation and financial freedom.

Listen to the podcast here

How An Aussie Can Move Half Way Across The Globe With Limited Funds with Reed Goossens

Have you been interested in investing in real estate, but nothing you’ve looked at so far looks blissful? If so, I totally understand. That’s why I’d like to introduce you to Maureen McCann at Spartan Invest. At Spartan Invest, they strive to identify real estate assets which will offer viable investment options with exceptional rates of return. They do the work for you. They locate, purchase and rehab the property, then find and manage the tenants. You simply invest in a turnkey property and monitor your investments from the comfort of your own home. What could be more blissful than that? If you would like to find out more, go to www.SpartanInvest.com/Investing4Women, or email Maureen directly at MMcCann@SpartanInvest.com. Let her know I sent you.

I am delighted to welcome to the show, Reed Goossens. Reed is a real estate investor, bestselling author, entrepreneur, podcast host and an all-around good bloke. I love the way he says that. In 2012, Reed quit his job in Australia and moved halfway across the globe to the United States to change his life and to chase a dream. With limited funds, no investing experience and no credit, Reed went from purchasing a small duplex to growing his own real estate investment firm. Reed syndicates large multimillion-dollar deals across the United States. He has also achieved financial freedom and has taken control of his life. If we can move halfway across the world and achieve this success, so can you.

One of the things I want to tell you, ladies, about Reed. I was on his show. I’ve been on a lot of shows and this was probably the best show I have ever been on. Reed is heart-centered in spite of his success. I know many people come on here and want to talk about how amazing they are, but I’m not sure whether it’s in spite of or because of his success. He is so heart-centered. That interview warmed my heart. I was tingling for days remembering the conversation and what I learned from it. I’m delighted to share him with you. Reed, thank you so much for blessing our show by joining us.

That’s a very awesome introduction. Thank you.

Welcome to the show. Could you tell us a little bit about your story, like the two-minute version?

You pretty much summed it up. I moved here in 2012 to chase two loves of my life. One was the love to live in New York City, to be an ex-pat. My background is instructional engineering. The other love was for a girl who is now my wife, Erica. We live in sunny, California. We were in New York for a couple of years and then moved out here. When I first moved out here, it was more to do with the fact that I wanted to live in the United States for a period of time and not have the fear of regret when I’m 60 or 70 years of age. Fast forward many years later, so much stuff has happened and it’s been an incredible journey and I loved every single minute of it. I know the next decade is going to be even better. That’s the two-minute pitch in terms of the coming to America story, wanting to chase a dream, wanting to scratch an itch and opening doors and walking through those doors and throwing away worrying about ten years later what’s going to happen. Enjoy the now, the moment, being in the present.

Where in California are you?

We are in Los Angeles. We are near Culver City if you know where that is.

Reed, I know that you talk about creating a holistic long-term business, which is what I’m all about also. Could you talk to me about creating what you call an ecosystem to recession-proof your business?

[bctt tweet=”Enjoy the now of the moment and being present.” via=”no”]

When you start scratching this itch of how to create financial freedom for yourself, you increase your financial IQ. I’m very much a math nerd being an engineer. I love numbers. When I got into real estate, it is a vehicle to achieve financial freedom. To have a legacy wealth and long-term freedom of having time on your hands, it’s the other ancillary business that you can create from the one vehicle that will feed one another that will ultimately create this system. You could remove yourself from it and continue going without you being in it. What am I talking about? We talk about funnels and there’s the marketing side of it.

I do my own podcast. I have my income streams from the marketing side piece of it. There’s obviously the deal of the acquisition side, which is important. It’s a very massive pillar that supports the foundation, but it’s one pillar. From there, there are other businesses that we can create. In my business, we don’t do it now, but you could do property management, you could bring that in house and you could create fees and income from that. You can also create construction management, which is something we do in house for our deals. We’re not outsourcing it to a third party and giving someone else the profits, but bringing the profits in house and making it more sustainable.

Through doing that, you create this system of one feeds the other and that keeps the profits in house. It creates better returns for our investors. It also helps when you may not be acquiring assets, you still have other income streams coming in through the management of the portfolio that may be in the past, you’ve given it away to a third-party company. Instead, you now brought it in house and creating that ecosystem. For me, long-term wealth is created through creating ecosystems. That’s just one example. There are many different examples of what an ecosystem can look like within any business. It’s understanding the stuff that you may do on a daily basis that you may pay for that you could potentially bring in house over the long-term.

It’s interesting because we hear over and over again that the rich have seven streams of income. A lot of times what people think is that seven different businesses, “I’m going to do this MLM and I’m going to do this job and then I’m going to do this.” What is the mistake in that is that you end up being spread thin between all of those different avenues of creating a stream of income. The rich don’t do it that way. They are not plugged in to every single one of those pieces. What they do is they create passive income and other income streams that are related to their main business or main genre. For instance, our genre is real estate. What you talked about is multiple streams of income within the umbrella of real estate. When we’re creating multiple streams of income, like you say, if you’ve got one that’s not performing but another one is, your business is still fine or another five are. It gives you an opportunity to be successful in different kinds of markets.

Different kinds of markets, but also different kinds of volatility in the markets. When one market may be going better or now in COVID, acquisitions have gone completely to a grinding halt. Having other ancillary fees coming in like asset management fees or construction management fees or property management fees that can keep the business supported and keep the lights on, it’s important to creating that ecosystem that we spoke about, those multiple streams of income.

Could you talk a little bit about if you’re a professional working full-time, how this might fit into your ecosystem investing in real estate?

If you like what you do, and some people do, they don’t want to quit their job and they only want to be passive. That’s the beauty of real estate investing, particularly in the syndication’s world, which is what I am in. I’m in the multifamily, but you could have an ecosystem of diversification. Meaning that you could have your passive dollars invested in different asset classes. There could be some multifamily, it might be some single-family investments. There might be some mobile home parks or some warehouse, some self-storage or some office space. All of that can help you be diversified and have those multiple streams of income. When one asset class is sucking wind like retail right now, you might be more heavily reliant on multifamily or more heavily rely on a warehouse, whatever that might be.

That helps you create the multiple streams of income, which makes your little ecosystem as a passive investor more stable in the long-term. That’s why I think from the passive side is powerful about the vehicles that are now accessible to the average investor. Maybe several years ago, these vehicles went away and weren’t available. The way in which we’ve evolved over time, with the way we’ve invested in people not wanting to invest in the historical traditional ways of investing in the stock market and going investing in hard assets with different operators has become more plentiful in the last 5 to 10 years. That has opened up a Pandora’s box of opportunities for investors to go out and we’re like a kid at a candy store.

I want to give a little bit of clarity on what Reed is talking about here. It’s to invest in other operators. This isn’t you go out and invest in a single or in a multifamily, a mobile home park, a warehouse or whatever. This is finding other operators that you trust that are paying you. Everybody has a different schedule. Some of them will pay interest. Some of them will pay interest plus equity. There are different formulas and you want to find an operator that you trust and then take a look at their formula and see if both of those things work for you. If you’ve got the cash, then you can turn it over and make quite a nice return. It’s easier to diversify that way.

REW 22 | Moving Across The Globe

10,000 Miles to the American Dream: Our Story of Financial Freedom

Reed, tell me if this analogy works for you or if you’ve got a better one. It is like investing in the stock market where you’re investing in a company that has a series of assets that then will pay you on. The big difference here is that we have hard assets as opposed to paper assets that we have no control over. When you’re investing in a syndication, some have a level of where you can vote or make an impact. The other thing is they are usually smaller operators that do feel very committed to communicate with you. That is different than a lot of the bigger companies that you can get stuck on there. They say they’re committed to their shareholders, but that looks a little bit different to us than we might hope for. You do get a lot more control as a hard asset in a syndicator that is going to be paying you.

That’s where the transparency comes in. You have the element of the hard asset for the depreciation benefits. Also seeing that you’re investing in ABC Smith Street. It’s not just throwing your money into the stock market and hoping that it’s going to do well for you. It’s a physical asset and you can see it. To your point, it’s usually smaller operators like myself who will communicate directly with the investors that can see what’s happening. They can walk the property if they want. We encourage investors to go walk. They’d probably keep an eye on the onsite team, make sure they’re doing their job. That’s your money in that deal. There are a lot of benefits of investing in smaller operators, in physical assets, in syndication that you don’t have to be the expert going out and finding these deals. You can be more of what’s called an armchair investor, passive investor and go along for the ride.

Where do you do most of your syndications?

We do most of them in Austin and San Antonio in Central Texas.

We’ve had several people on the show from different areas. I like people to see that if you like the Texas market, you might call Reed. If you like a different market, you might call one of the other people that have been on the show. That’s a great resource. Thank you for that. Could you talk to me about re-entitling land? This is my personal strategy, so I want someone else to talk about it so I can learn.

You look at it like flipping paper, but to boil it down to its nuts and bolts is highest and best use. What is the highest and best use for a piece of land? I’ll give you an example. You might have a single-family house on a larger lot that you could simply split into two lots and you can sell one of the lots and make a profit. That is a highest and best use because it zoned for two lots. Back in the day, back in the early 1900s or wherever it was when the house was built and zoning laws have changed a ton with density increasing and housing crisis, particularly in places like LA and up in the Bay Area where you are. Zoning always evolves over time.

You can find these gems where you can split the block. You could find with a single-family, but maybe you could build a fourplex on it. It’s a highest and best use. Here’s the rub. You don’t have to go and do the construction. You could go in and get the physical paper or the plans approved for a second edition, or a full unit. You can sell that paper to a developer who wants to build it. There’s profit in that. You can’t go to a broker and be like, “Tell me what all those pieces of paper we’re selling for to those developers.” There’s no actual MLS for that, but you can go and create value out of literally the house that you own, going to the city and saying, “I want to build a granny flat on the back. I know by looking at the zoning laws, I could potentially build a fourplex.” Maybe that’s your exit strategy.

You’ve created value for someone because also you’ve taken risks off the table. If you’ve gone to the city and spent time negotiating with the city and going through planning approval and they get comfortable like, “This is a good idea. Let’s put four units on it.” You can package it up. You can say, “Here, developer, go nuts. Here’s my piece of land. Here’s a single-family house on it. You could build four units on it. You take all the construction risk. I’m going to walk down the road with my profits and go do something else.”

You can find those in the MLS. It will often say, “House for sale, great contractor, special plans already approved by the city.” We will look at those properties myself because every once in a while, I might want to pick something up like that. Everything has gone through the city. I’m not dealing with that piece of the paperwork.

[bctt tweet=”Long term wealth is created by creating ecosystems.” via=”no”]

It’s very bureaucratic. In saying that, once you do get to know the planners and your local municipality, it’s not as hard as people think. It’s a people’s game. You’ve got to make sure you’re on it. Person A is talking to Person B and the right hand is talking to the left hand.

This is my thing. I talk about how to go in and take a look at a property. I’m calling it an underdeveloped property. It’s a property that has something on it, but it has so much more potential. I don’t have very many people that come on the show that talk about that. What I love is your strategy about the value add. You buy the land and then the value add is you go through all the bureaucracy. You upsell it. It’s almost like a wholesale deal, but it takes a little longer.

The people who are out there reading are thinking, “How do I even get started?” There are many municipalities around the country that are very gray. Compared to my home country of Australia, they have incredible systems online that you can go see what the zoning is. What I’m encouraging people to do is educate yourself in your local municipality about what are the zoning laws? Here in LA, there’s R and there’s C. R stands for Residential, C stands for Commercial. There’s more but I’m not going to get any more complicated than that. It starts with R1. That is like a single-family block, you can only build one on it. There’s R2, there are R3 and R4. As you go down the line, what happens is the zoning laws then tell you in plain English, you can have the smallest amount of habitable space, meaning it might be for example an R4 lot.

You can have an R4 lot and the smallest dwelling size on it can be a 450 square feet unit. If you’ve got that in the back of your mind, “I’ve got 10,000 square feet here. I can maybe split this block up into X amount of units.” There are setback issues on the front and the back, and I’m not trying to get too complicated. What I’m getting at is that there is a lot of information readily available at your fingertips. You can find out exactly what zoning you’re sitting on right now, what block you’re looking at to see what’s the highest and best use. An R2 lot is a great example. My wife and I bought an R2. It’s a single-family house, but it’s on an R2 lot, which is a 5,500 square feet lot that I can put another dwelling on the back.

I’m not trying to change the zoning. It’s the highest and best use. It wasn’t built to the highest and best use back in the day. That’s the easiest way to get approved because the city can’t stop you if it is the highest and best use. For example, it’s an R2 lot. You can build two dwellings on it. You’ve only got one. You’re not changing anything. You’re literally going through the process, from A to Z, stock standard stuff to get it approved. It’s not like zoning changes where you need to go in and some developers do that. It’s something that you need to be very educated on to do, but that takes years.

Where something that is buy right, that’s the thing you need to need to understand, “I can buy right to build two dwellings on this block or I can buy right to build four dwellings on this block and it’s only got one.” Know that in the back of your mind that you can find that information online. When you go to the city, they’re not going to put up these red flags. “This is my right to build. I own this land. I can build four units on it and you need to approve plans for me.” You go down that path with the city and it takes a period of time. It won’t happen overnight. Once you do get it, there’s value in that. That value you can sell to some other person or you can build it yourself if you want.

There’s also value in building that relationship with the city like you said. There are a couple of things I want to add here. He talked about rezoning. Also, don’t ask for variances because again variances will slow things down quite a bit. Variance is a fancy word for exceptions. I want to do something a little bit different. It’s only this little thing. If it’s such a little thing, don’t ask for it because it will slow things down quite a lot. The other thing is to take the time to get to know the planners and the engineers in the planning departments of your city, especially when you’re starting. Even though everything is laid out online and with the zoning, you’ll have things come up. One of my favorite questions with my different planners that I go and see in the different cities is, “Is there something I should be asking you that I don’t know to ask?”

For instance, I’ve got a project that I’m interested in Campbell and they’ve got all the electric wires above ground, but they’re trying to change in that particular area to have everything underground. Every single developer that comes in that gets new permits has to go underground. There’s no way we could have known that by looking at it online, but I knew it because I went in and they know me. Everybody in the office was like, “Moneeka, you should be paying attention to this. Moneeka, this is probably going to cost you about another $100,000 on that project.” I was like, “At least now I know what my hard costs are, what my soft costs are and what this is going to take to make it happen.” As you start to open up that conversation and you’re a likable person and they want to help you out, you start to have these conversations where you get so much more information about what’s possible.

I don’t know what it’s called up in the Bay Area, but at least here in LA, it’s called a Q condition. It’s a Q overlay. You might view it online. It’s an R2. This is what it is. When you go into the actual city, there might be what’s called a Q overlay where they may have added something that the website hasn’t picked up yet because it hasn’t kept up in real-time. A bill modeling passed down by the local council to say, “We want all power lines now to go underground.” That might not be online yet because it was only past 6 or 7 months ago. Keeping those relationships up is important.

REW 22 | Moving Across The Globe

Moving Across The Globe: When you start scratching this itch of how to create financial freedom for yourself, you increase your financial IQ.

 

The one thing I’ll also add is how blown away I was when I first moved to this country that pre-COVID, you could walk into most cities and have a chat with someone who is in the city planning department, and they’re willing to do it. You’re taking a ticket at a meat sale line and I call your name out and you go up and say, “I’m looking at this particular piece of land. Is there anything else in this state or county in its Q conditions? Are there any other Q conditions I need to be made aware of to see if I’m doing my due diligence?” You can do that before you even bought the property. In Australia, you can’t do that. The system isn’t set up like that. Realize that the access to information here is so much greater than when you’re trying to develop in other countries, even like in my home country of Australia.

Originally when I started doing this, I was like, “I haven’t made an offer. I don’t know if I’m going to buy this place.” I felt a little bit bad about taking their time, but no, they love it. They love chatting. It’s like a puzzle for them. They’re like, “Yes, we could do this. We could do that.”

The other thing I’ll quickly add in there is for us, we bought this house. It was 1912. They don’t have any plans on record of what the house looks like. They have some very loose papers that it’s a 3-bedroom, 1-bath, but they don’t have physical plans of it. When you’re going in to do these improvements, they love the fact that you’re bringing plans to the city and that goes on file for the next 100 years or whatever it is. The city is incentivized to make sure they’re collecting as much data as they can. When you’re in there, even when you’re prospecting, they’re interested to know what you might want to do with it because that might give them ideas for their planning or urban development committees in their file.

They aren’t having conversations for no reason. They’re having a conversation listening and taking them back to their superiors and giving feedback, “We had someone come in today. They’re looking at doing X, Y, Z. What do you think of that? Does that go with the plans that the mayor wants to do for the downtown urban center or whatever it might be?” Most cities will have that. I bring up another point. Different cities called different things. I know in like the city of Long Beach, they call it the downtown urban development plan. It’s a book. It’s 100 pages of this outline of what they want to invest in the city over the next 20, 25 years. They have different areas they want to inject money into. They want to have certain sidewalk improvements. They want to have more shops and mixed-use areas. You can read that and see if it aligns with what their downtown plan might want to be and look like in the future. Get your hands on that. It’s great nighttime reading if you’re interested.

It’s also impressive because one of the reasons why I get things through is because people know that I’m interested in the community. I’m not some developer coming in and saying, “I want to make $2 billion.” I care about the community, what’s going up, what’s their plan, how to make something beautiful and how to up-level the community in different ways. I’ll often go into what we call redevelopment areas. If you’ve done that reading or at least scanned it, they’re like, “This particular developer is interested in us and our plan and what we think, not just in themselves.” That makes a huge impact on them.

You’re doing a great job. It sounds incredible. I want to come and join you one day.

I would love that, Reed. Let’s do it. I can do something down there with you. That would be fun. We are going to have more of Reed in EXTRA where we’re going to be talking about what he calls his six Ps, which is all about what successful people do to up-level their relationships to increase their business. I’m excited to talk about that in EXTRA. Reed, could you tell everybody how they can get in touch with you?

The simplest and easiest way is to go to ReedGoossens.com. If you go there, you can find my podcast. You can find books. If you are ever coming through LA and you to hit me up, you can send me an email at Info@ReedGoossens.com. Give me a little bit of heads up and we can go out for lunch, coffee or whatever you want. We can talk shop. For those readers, if you are interested, I have a book out and I’ve got a lot of them sitting in my office at home and my wife is nagging me to get rid of them. If you want a free copy of my book called 10,000 Miles to the American Dream: Our Story of Financial Freedom, email me at and I will shoot you a free copy. Just say you read the show and I will shoot you a free copy.

Could you tell everybody what your amazing podcast name is?

[bctt tweet=”You don’t get to deal number ten without doing deal number one.” via=”no”]

It is called Investing in the US. It is a collection of conversations of people coming and creating something from nothing in and around obviously real estate, but overdoing it. We talk a lot more about the journey and creating something from nothing. Check it out.

I was fortunate enough to be invited to be on that show. Go check it out. It’s good. Reed, are you ready for our three rapid-fire questions?

Let’s do it.

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

A quote that my dad always said, and I use this all the time, “A fool and their money are easily parted.” Don’t be a fool when it comes to your money and be educated. Start with education. I’m self-educated. I didn’t go to school for real estate development. I went to school for engineering, and I’m all self-taught about how this business and how to go out and be successful. The same can apply to the readers.

What is one strategy on being successful in real estate investing?

Getting started. Everyone asks me, “What’s the best deal you’ve ever done?” I said, “It’s the first one,” because you don’t get to deal number ten without doing deal number one. Getting off the fence, there comes a point in the education piece at the start, and then you get to analysis paralysis where you start spinning your wheels, and then you need to go take action. I vividly remember reading books on the subway in New York City and thinking, “I need to get going. I need to go do my own deals because reading a book isn’t going to do anything for me.” It’s like reading about losing weight. You’ve got to stop reading that and go open the door and go to the gym. It’s the same thing. Take action. Educate yourself first and then go and take some action, and massive amounts of it because it’s going to be needed to get you to that first deal.

The other thing is don’t feel like you need to be so educated that you know everything. Going to the gym, it takes time to build those muscles and you’re going to learn different skills and increase your capacity. All of those things change, but you have to start somewhere. Get enough education to get started and then take action. What would you say is one daily practice that you do that contributes to your personal success?

It was changed over the years. As I become more self-aware of my subconscious, and it sounds like you talk a lot about on this show, which I’m very much a huge believer of. I have changed my mindset around some things that I’ve had hang-ups in the past. Meditation is a big one for me in the morning. Taking some time in the morning to sit with my thoughts before jumping into the day. I’m very much guilty of trying to turn the phone on too quickly or jump into emails and having that quiet time, being prepared, being self-aware, centering yourself, and then not going often in tackling the day. When I don’t do my breathing exercises in the morning, it throws the whole day off. That’s a massive spanner in the works. I don’t feel as productive as what I usually do.

REW 22 | Moving Across The Globe

Moving Across The Globe: Don’t be a fool when it comes to your money. Be educated.

 

Probably that and exercising are the two big things. A lot of people say that a level of mindfulness. It’s counterintuitive. People are like, “I don’t have the time for that. I’m busy. I’ve got a lot to do.” The problem is that if you don’t do it, you need a lot more time to do the things that you need to do. If you do get centered, you do meditate, you do take some time to be very introspective, you are so much more productive during the day.

You stop that chatter of, “I’ve got too much to do,” because all of a sudden, you find time to do those important things, which is working on yourself first and foremost before you can help others.

Reed, thank you so much for all you’ve offered in this portion of the show. I can’t wait until the next portion.

Thank you so much for having me. I hope everyone has learnt a little bit and remember to reach out if you’re ever in LA.

If you are subscribed to EXTRA, we have some awesome stuff. We’re going to be talking about Reed’s six Ps, which will help you to create the relationships that will build your business. I’m excited to learn all about those. If you’re not subscribed to EXTRA but would like to be, go to RealEstateInvestingForWomenExtra.com. You get the first seven days for free, so you can check things out. See if it’s like up your alley. You can binge on a bunch of stuff. The other cool thing is that EXTRA comes down on whatever device or app you’re using. You don’t have to have new technology around that. That’s cool too. Go check it out. If you’re leaving us now, thank you so much for joining us for this portion of the show. You know how much I appreciate you. I look forward to seeing you next time. Until then, remember, goals without action are dreams. Get out there, take action and create the life your heart deeply desires. I’ll see you soon. Bye.

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Deferred Sales Trust is the Debt Free Plan with Brett P. Swarts

REW 16 | Debt Free Plan

 

Are you looking to overcome your capital gains tax deferred limitations? In this episode, Brett P. Swarts, Founder of Capital Gains Tax Solutions, joins Moneeka Sawyer to discuss what a deferred sales trust is and how you can take advantage of this. Brett talks about helping people escape feeling trapped from capital gains tax and to never have to overpay for a property via 1031 exchange. Brett and Moneeka dive into the difference between a deferred sales trust and a 1031 exchange. Brett also gets into detail on how you can sell your property high and take advantage of a deferred sales trust and ultimately defer capital gains tax for your transaction.

Listen to the podcast here:

Deferred Sales Trust is the Debt Free Plan with Brett P. Swarts

I’m excited to welcome to our show our guest, Brett Swarts. He is the Founder of Capital Gains Tax Solutions. Each year, he equips hundreds of business professionals with the Deferred Sales Trust tool to help their high net worth clients solve capital gains tax-deferred limitations when selling their highly appreciated business or real estate. The Deferred Tax Trust offers an exit strategy that helps business owners escape feeling hostage to capital gains tax and venture capital to fund their next business deals by deferring capital gains tax and depreciation recapture of 30% to 50% of the gain on the sale of their businesses. That was a lot of cool words. We are going to go into it. Brett, welcome to the show.

Moneeka, thanks for having me. It’s such a pleasure to be here.

This is such a hot topic. Could you first start by talking a little bit about your story? Tell us where you came from.

Many commercial real estate owners struggle with capital gains tax. I started at a company called Marcus & Millichap back in 2006 where we help people defer capital gains tax using a 1031 exchange. We were focused on helping them create and preserve more wealth in particular through multifamily. It was my specialty here in Northern California. We learned about the 1031 exchange on day three. The 1031 exchange is a way to defer tax when you sell an investment real estate, as long as you buy a like-kind investment real estate.

Something happened during what’s called the 2008 crash where the marketplace shifted and people got hurt quite a bit. I had friends, family and clients, everyone lost something, some lost everything, all of their net worth because, in particular, we found that they were forced to overpay for properties via a 1031 exchange. They felt trapped. They felt pressured in this 180-day window to take on equal or greater debt for an equal or greater property. I set out on a mission saying, “How do we help all my friends, family, and clients to never have to face this again?”

At the right time, my manager brought in a gentleman to speak on this topic called a Deferred Sales Trust. I sat in an office, probably a lot of your readers are sitting somewhere reading for the first time saying, “What is this? You’re telling me you can defer capital gains taxes not using 1031, not have to go back into real estate immediately? You can do it for a business or a primary home. It’s got to be too good to be true,” but I kept digging in. I kept learning and kept being open-minded to what it could be. Fast forward, several years later, after countless deals of 1031 exchanges, Delaware Statutory Trust, Deferred Sales Trust, we’re helping a lot of people escape feeling trapped from capital gains tax and the best part about it is they never have to overpay for a property ever again via a 1031 exchange.

Why don’t you tell us the difference between a 1031 exchange and the DST, which is what you used?

[bctt tweet=”Sell high and buy low, not sell high and buy higher.” username=””]

The premise is this, most business owners or commercial real estate owners are high-end primary homeowners. They struggle with capital gains tax somewhere between 30% and 50% of their gain when they go to sell their highly appreciated assets. We use a Deferred Sales Trust to replace the 1031 exchange to give liquidity, diversification, flexibility and then the ability to go back into real estate at optimal timing. That’s the premise here so that high-net-worth individuals can create and preserve more wealth. Optimal timing is the key here. Most of us know when it’s a seller’s market for real estate and when it’s a buyer’s market. Most would agree, especially here in California and even in most states that prices are through the roof. They’re ultra-high. It’s hard to make sense of any deals right now with cap rates and interest rates being so low. Rents have appreciated such a great deal over the last number of years.

You couple that with, “I’m going to sell high.” That’s great, but our parents taught us to sell high and buy low, not sell high and buy higher, which is not optimal. The 1031 exchange, the first thing is you sell a piece of property. You need to buy something of equal or greater value. You need to identify potential properties within 45 days and then close within 180 days. We call that the sell high, buy higher 180 days later, which is not what you want to do. That’s the first thing. It’s timing. Do you want to buy at an optimal time? Do you want to sell high and buy low? That’s the intention. How could I sell high now, sit on the sidelines, be debt-free and park until I see a deal?

The intent is to have timing. The challenge is the 1031 doesn’t allow you to have that timing. The solution is the Deferred Sales Trust. We can sell high now, sit on the sidelines all tax-deferred, out of debt, and you can wait for a deal. That could be tomorrow, that could be day 181 or that could be five years from now. The key is, what is the best timing for you when you find a deal? I’ll tell you about a quick deal story. I had a gentleman who did this in 2006. He’s one of the top Deferred Sales Trust clients. We called this the Monday morning quarterback. He dropped back and he threw the perfect pass at the perfect time. He sold at the peak, moved all of his funds to the Deferred Sales Trust. This is a large transaction. He was able to defer all the tax.

Five years later, that same property that he sold, the buyer was foreclosed on by the bank. He bought that property back through his trust, all tax-deferred, not using a 1031 at $0.60 on the dollar. We call that buying at an optimal timing, sold high and bought low. That’s the first thing about the 1031 exchange. It doesn’t allow you to do that. The second thing about the 1031 exchange is it forces you to buy equal or greater value, which often means equal or greater debt. Let’s say you sold a $10 million property and you had $4 million in debt. Now, you need to buy equal or greater value, $10 million or more, which most people end up buying more.

Now, you’re not only taking on that $4 million in debt. You’re taking maybe $5 million or $6 million of debt. You couple that with not buying at an optimal time, you’re putting yourself in a risky position. We call that dumb debt, taking on too much debt for a property that doesn’t make sense because you want to defer the tax. That’s where most people live in the commercial real estate world. They buy and sell via 1031 exchanges and overpay, or they get a bit smart. They buy and then they sell and pay the tax. We would say, “No, there’s a better solution. It’s the third one. It’s called the Deferred Sales Trust.” Put it into the trust. You get the best of both worlds.

The next thing to consider is what’s called the depreciation schedules. For any of your readers and have owned for a long time, specifically 27.5 years if you have multifamily or 39 years if it’s commercial, you go to zero depreciation. Depreciation is the number one reason or the top two reasons to own commercial real estate in my book because it offsets the income that’s coming in. The only thing that does this is business or commercial real estate, therefore, you pay less in taxes.

However, if you own long enough, you depreciate out. If you’ve done multiple 1031 exchanges, you also depreciate out. The depreciation schedule travels with a 1031 exchange, which is not good. You want more depreciation. You don’t want the same schedule. The intent is to get more depreciation. The problem is the 1031 exchange travels. It doesn’t give you more unless you buy a bigger property. The solution is the Deferred Sales Trust. You can sell through the funds into the Deferred Sales Trust and then use those funds like a self-directed IRA to go purchase new real estate via a new LLC where you’re the managing member of it. You’re running that deal the same way you would be. Except now, you’ve got a brand-new depreciation schedule, which is powerful for creating and preserving more wealth.

My question is, does the property need to be in the trust when you sell it? I know that’s a little bit technical, but you said that he sold the property and then he moved all that money into the trust. Give me a little bit more clarity on what that cashflow looks like.

REW 16 | Debt Free Plan

Debt Free Plan: A dumb debt is taking on too much debt for a property that doesn’t make sense just because you want to defer the tax.

 

Let’s walk through how this whole thing works. That’s probably what your readers are thinking. How does this thing work? What is this trust? How is this all going down? Where’s the money flowing? Moneeka, we’re going to start with this premise first. It’s the premise of what is the actual receipt or constructive receipt? Actual receipt for your readers is when you receive the cash. If you get paid or you close a real estate deal or whatever, when you receive that cash, the IRS says you owe some tax on that. This is the first concept.

If I come to you and I said, “I want to buy your $10 million apartment complex.” Let’s imagine you own it free and clear. This is a zero basis. You’ve owned it for 27.5 years. You’re fully depreciated. If you were to sell, you owe about $4 million in tax, about 40%. It’s a good number with the depreciation recapture. You’re thinking about a tax deferral strategy. You’re not sure about a 1031, but let’s say you’re considering a traditional seller carryback, which is the foundation of our structure. If I give you a $2 million down payment and you carry a note for $8 million, how much actual receipt did you receive?

$2 million.

The other amount is in a deferral state. You haven’t received it yet. You don’t owe the tax on what you haven’t received. Let’s call it traditional seller carryback. It’s very well-known. Your readers probably know about it. If not, their CPA definitely does and their broker does. It goes back to the 1920s. Let’s adjust that a little bit. Let’s imagine, I came to you with a zero downpayment. I said, “Moneeka, I’m going to buy a property from you. I want to give you a zero downpayment.” Let’s say you did that deal. That scenario, if you took 100% financing and a zero downpayment, how much tax is triggered now? Zero because you haven’t received any funds yet. It’s in a deferral state.

You’ve got a carryback. You could do a 100-year carryback and live off those interest payments for as long as you would want to. In a traditional seller carryback, you would never do that deal for a couple of reasons. One, you’re putting a lot of faith in the buyer. You may have to foreclose. They could run your property into the ground. Most of those deals are structured at 2 to 5 years. Therefore, they’re paid back and the seller owes the tax anyway. They don’t decide to do that. All your eggs are in that one deal. It’s part of why you’re selling your deal is because you’re trying to get away from that but the law works.

Enter the Deferred Sales Trust, this is the difference. We’re going find that cash buyer for $10 million. A broker’s going to find him. You’re going to find him. You’re going to be selling it for $10 million. You’re all ready to go. He’s coming with the full amount of cash at the close of escrow. Instead of doing directly to him, receiving that $10 million and therefore owing all of that tax, you decide you want to use the Deferred Sales Trust. The trust jumps in writing before the close of escrow. It buys your position for the full $10 million, but it gives you a zero downpayment.

You took 100% financing. It turns around immediately and sells to this cash buyer for $10 million. The $10 million goes into the trust. This is where the funds flow like your question. The funds are sitting in the trust. If the trust bought it for $10 million and sold it for $10 million, how much gain does the trust have? The trust doesn’t owe any tax. It bought and sold for the same price, no gain. Moneeka, if you took a $10 million note and you carryback a 100% financing, how much tax is triggered now? Zero. The smoke clears. The deal closes. The funds are sitting in the trust. This is the best part about it. You’re not in a 1031 exchange, the whole blue ocean opens up to you rather than the red ocean. The red ocean is where all the sharks are at. It’s where all the 1031 exchange deals. There are people chasing deals overpaying for properties, feeling rushed and forced. It’s a lot of blood in the water.

[bctt tweet=”Find a mentor and/or join an amazing company that can train you.” username=””]

Instead, all of a sudden, you’re in this blue ocean. This blue ocean is wide open. What can you do? You can invest it into stocks, bonds, or mutual funds. How long can the note go? As long as you want, we structure the notes as ten-year notes. At the end of ten years, you can renew for ten. You can put it into investment real estate. You can put it into another business. You can do hard money lending. It’s this big blue ocean also you’re completely out of debt. This scenario, if you owe debt on that property, that debt would be paid off. The difference would go into the trust. That’s also powerful too. A lot of clients, especially Baby Boomers, and this is a stat for maybe some of your readers.

According to the American Bankers Association, there’s about $17 trillion that’s passing from one generation to the next in the next twenty years. This is known as the largest wealth transfer in the history of the planet that we know of. There are about 10,000 Baby Boomers every single day turning 65 in the US alone. There are about 77 million in the US alone. Every day these Baby Boomers are stuck in properties or stuck in businesses or ready to retire or have income needs or different challenges. They’re ready to get some solutions to this. Too often, it’s not to buy another property.

I closed a deal in Sacramento for a gentleman named Peter. He’s a Baby Boomer. He sold eighteen units and he’s been a real estate broker all of his life. He had never heard of the Deferred Sales Trust. He had heard of a Delaware Statutory Trust. He’s done 1031 exchanges but had never heard of the Deferred Sales Trust. He goes, “Brett, I felt trapped before I met you because I had eighteen problems. These are eighteen units.” He was driving every other day to Sacramento to bang on doors, to try to collect rents, to try to get evictions, and do all of this stuff.

He’s looking to retire. He’s going, “Brett, I have eighteen problems right now. I don’t want a 1031 exchange and have 36 problems. I’d rather be out of debt.” He paid off all of his debt. He sold his building for about $1.8 million. He paid off about $500,000 of debt. He also said, “Brett, I remember debt in 2008 before the crash. I got overpaid for properties. I almost lost everything. I held on, but it was very stressful. I don’t want to ever want to go through that again. If I can get out of debt, that’s a beautiful thing. If I can defer all my taxes,” his tax was about $550,000, “That’s a beautiful thing. I can put it into conservative allocations.

I’m not a big stock market guy, but if I can put it in conservative stuff and wait for the market to shift, that’s exactly what I’ve been looking for. Where’s this been all my life?” I go, “I know. I learned about it several years ago. I’ve done more and more deals now.” He’s since become a member with us. He’s out educating his clients too because it works for the primary homes, which has mainly been his focus. That being said, that’s the power of the Deferred Sales Trust.

When the money goes into the trust and you can sit on it, do you have limitations on what you can invest that money in? Does it have to be real estate again or can it be other things?

It can be stocks, bonds, mutual funds. It can be insurance products. It can be an investment real estate of your own or with partners. It can be multiple syndications. That’s part of the beauty of the Deferred Sales Trust especially for me. We talked about diversification as a way to reduce risk, but too often with real estate, you’re trading one asset and one location for another single asset and one other single location. Oftentimes in the same product type and oftentimes in the same geographical location, because let’s face it, if you’re the owner of that property, that’s what you know.

You don’t know anything else. By definition, you’re not diversified. What can you do? You can sell a multifamily property. That’s highly appreciated especially in California. Maybe there are some multifamily properties in other states with some proven track record operators who are doing it for 10, 20, 30 years. You can put a portion of that fund with them. You don’t have to put all of it. In Peter’s example and another client right now, we’re interviewing multiple syndicators. One is a senior housing syndicator. One of them is multifamily. One of them is a mobile home park.

REW 16 | Debt Free Plan

Debt Free Plan: A new depreciation schedule is powerful for creating and preserving more wealth.

 

Think about diversifying not only product types but also geographical locations and also your dollar amount. Here’s the cool part. None of the debt is in our client’s names if they don’t want it to be. It could be in everyone else’s name. You get some diversification there. Let say, “Brett, I want to do it myself.” You can do that too. Up to 80% of the funds is the limitation. Let’s imagine it was $10 million in the trust. $8 million can be used to form to go purchase a new property or go into syndication deals.

We call those alternative investments. The other 20% is going to stay in stocks, bonds, mutual funds. It’s still earning interest. Most of our notes earn around 8% over any ten-year period of time. Net cashflow is around about 6.5% on cashflow to the client. They’re going to pay ordinary income tax on that cashflow that’s coming off the trust. Some of our clients will say, “I don’t need any of the income. Let it compound and let me pull it out on a different date,” which is called the net income tax advantage especially for our very wealthy clients who are still pretty young and still have a big income over here. They can sell an asset and let the interest compound on top of it over here and keep all of that interest also deferred as well as the capital gains tax. There are lots of nuances to this Deferred Sales Trust. The key is creating a plan and getting connected with your trusted advisors, with us so that we can all make sense of what’s best for you.

That was a lot of information. I’m sure my ladies have questions for you. How can they get in touch with you to find out more?

We have a YouTube channel. They can search Capital Gains Tax Solutions, YouTube, LinkedIn, as well as CapitalGainsTaxSolutions.com. We have our podcast, the Capital Gains Tax Solutions Podcast. You’ll search Capital Gains Tax Solutions and that’s the key here. It works for businesses and private practices. We’ve done dentists, veterinarians and optometrists. We’ve done trucking companies, tech companies, you name it. We’re also doing a Bitcoin case right now too, which is interesting because it’s subject to capital gains tax. Unlike a 1031 exchange, we can work with about any asset type, which is powerful. We also did a house in Cupertino. We helped an individual who is selling a high-end primary home. As your readers may know, a primary home qualifies for what’s called the 121 exclusion, where if you lived there for the last five years, you get that $250,000 if you’re single and $500,000 if you’re married. That’s a beautiful structure. I did that for myself, my family already and it’s wonderful.

Above and beyond that, you owe capital gains tax and you cannot do a 1031. We helped her. She sold a $3.1 million house. She’d been there for over twenty years. She is a couple of miles from Apple headquarters. We helped her defer another $350,000 in tax. What’s neat about that is not the external things that we’re solving, but it’s the internal things. I’m able to move from my house. I’m able to relocate. Maybe live near next to my grandkids. I have an income stream from an asset. I paid off all my debt. There is an income stream that’s coming off these different assets versus sitting in a house, the kids are gone and it’s empty where you feel real estate rich and cashflow poor. We escaped the capital gains tax, provided a whole new opportunity for income. It works for the primary home. I would encourage your readers to consider those different avenues too.

You have a webinar that my readers can watch to get a little bit more information, correct?

Yes. You go to my website and request free access to that. We’ll send it to you as well as a free gift of the brochure, an overview. It’s like a five-pager about escape feeling trapped by capital gains tax. That’ll give you a great introduction to what we do and what we’re about.

That’s going to be at CapitalGainsTaxSolutions.com. Thank you.

[bctt tweet=”Dive in and not only consume the information, but then go apply it. ” username=””]

You’re welcome. Thanks for having me.

Are you ready for our three rapid-fire questions?

I am.

Brett, tell us one super tip on getting started investing in real estate.

Find a mentor and/or join an amazing company that can train you. For me, it was Marcus & Millichap. I had multiple mentors and some of the best training on investment real estate. You may not have to be brokerage full-time. There are tons of conferences, tons of podcasts like Moneeka’s podcasts. Dive in and not only consume the information, but then go apply it. You have got to learn, but you’ve got to apply. If you do those two things and you look at it as a long-term game, not a sprint, you’ll do fine.

What would you say is a strategy for being successful in real estate investing?

Once maybe you’ve established the basics and have a good understanding, it’s investing yourself. Putting money into deals, whether you’re buying the deals yourself and/or partnering, figuring out what your strengths are. You might be good at raising money or you may not be good at managing a property. You might be good at finding deals or connecting networks with brokers. Finding your niche within a team. People aren’t good at all five things, but they might be good at 1 or 2. For me, in my strategy right now, I’m married with five kids and have two businesses. I don’t own my own real estate by myself. I go with partners who are operators, senior housing, multifamily, retail, and mixed-use. That’s what they’re doing every single day. They’re the brain surgeons there, but I also raise money for those deals.

REW 16 | Debt Free Plan

Debt Free Plan: The key is creating a plan and getting connected with your trusted advisors.

 

I roll my fees into those deals or I may find a deal, broker the deal and roll my fee into it. The key is to take all of the wealth. For me, it’s completely passive. I put it there and I get the check coming in, which is great. Defining what your strengths are and realize getting into real estate may mean one or two of those things. It’s not all five figuring out what your strengths are, what you most enjoy, and then figure out a way to connect with the team and add value to other people, to help them achieve their goals as well.

It’s all about networking too. It’s finding those people that can fill the holes. What’s blissful for you? What are you good at? Instead of you having to learn every single piece along the way, which can be very unblissful.

We put it like this. Hire the who or find the who instead of being in the how. You have a vision that you set. Too often, we want to try to be the how. We’re entrepreneurs. We’re hard-charging investors. We want to figure this thing out. That’s good to have that fire but too often, we get stuck in the how. We do this circle of procrastination and frustration, to save a buck or to figure it out rather than saying, “Here’s my vision. Let me hire the who or team up with the who and I can achieve that so much faster.” It’s so much more enjoyable because now you’re in your sweet spot. You’re in your strengths. You’re focused on the highest and best use of your energy and your time versus being in the how and getting frustrated or doing it too slow.

Tell us one strategy that you would say you use every day that contributes to your personal success.

I have to continue to remind myself to learn to work harder on myself than I do on my job. This is a quote by Jim Rohn. He says, “If you work hard on your job, you’ll make a living. There’s nothing wrong with it. That’s fine. If you work harder on yourself, you’ll make a fortune.” The first idea we think about is money and that is a part of it, but that’s a small part of it. The real big value to this is who you become along the journey. If I want to become a millionaire, if I want to invest in real estate, if I want to do all of these successful things, what is it going to make of me to become that person? That’s the value to our family, our community, our country, our world, is the people we can become, the character we can grow. The legacy we can leave from that point on is working harder on yourself.

What does that mean? That’s your health. That’s your finances. That’s your personal development, your leadership, your spiritual walk, that’s your relationship with your friends and your family, your intellectual goals. It’s 5, 7, 8 top major things. Learning to major in the majors instead of minoring on the majors. Having those priorities, but it’s a continual learning process. It’s so easy to get caught up in the noise and the distractions. Even the discussion we had before about focusing on our weaknesses or working on things that we’re not naturally gifted at. We’re not all made to be brain surgeons or attorneys or tax people or real estate people or whatever your profession is. Figure out what your strength is, set your vision and then work in your strengths to make that vision work by connecting with people but also growing yourself and your character.

It’s so well said. Thank you so much for that. Brett, this has been truly amazing. I’m looking forward to the EXTRA portion of the show where we’re going to be talking about mitigating estate taxes because a lot of us are fortunate enough to get an estate or be there to inherit but we worry about those taxes. Brett has got an answer for us on that too. I’m so excited to hear that. For those of you, ladies, who are subscribed to EXTRA, stay tuned. We’ve got that coming. If you’re not subscribed to EXTRA, but would like to be, it’s easy. This is what you do. You go to RealEstateInvestingForWomenEXTRA.com. There you can subscribe. You get the first seven days for free so you can test it out and then you subscribe. Once you subscribe, the EXTRA shows will come to the exact same device that you’re listening to your normal podcast on. You don’t have anything extra there. You get extra content. For those of you who are leaving us now, thank you so much for joining Brett and I for this portion of the show. I look forward to seeing 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 next time.

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About Brett Swarts

Brett is a capital gains tax deferral expert, Investment Real Estate Expert, Multifamily Broker, and the Founder of Capital Gains Tax Solutions – a company helping people to defer capital gains tax on the sale of their highly appreciated assets, eliminate the need for a 1031 exchange, and free up their time so they can create & preserve more wealth.

He created ‘Capital Gains Tax Solutions‘  to equip high net worth individuals with the Deferred Sales Trust tool to help them solve capital gains tax deferral limitations. The first step to a great wealth plan is a flexible plan to get out of debt, purchase assets at optimal timing, while having liquidity and diversification all tax-deferred.

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