PassivePockets: The Passive Real Estate Investing Show

Wondering why you should avoid investing in D-class properties? Charles Carillo explains the challenges and risks associated with these properties. From ongoing tenant issues to higher maintenance costs, D-class properties require intensive management. Plus, Charles explains why you need to prioritize cash flowing properties that maintain their value even during market fluctuations. It's all about weathering the storm!About Charles CarilloCharles Carillo, the managing partner of Harborside Partners, is an experienced real estate investor with a $200 million investment track record. Inspired by his father's involvement in multifamily properties, Charles began investing himself in 2006 and has since grown his portfolio with multifamily and mixed-use properties. He also hosts The Global Investors podcast, where he interviews other real estate professionals. Here are some power takeaways from today’s conversation:[04:17] Charles’ real estate investing journey[07:36] What you need to know when dealing with D-class properties[11:00] Real estate investing strategies and dealing with market changes[16:39] Adapting debt structures[20:01] What makes cash flow in real estate so desirable[32:41] Capital calls in real estate investing[35:42] Evaluating real estate syndicatorsEpisode Highlights:[07:36] Why Avoid Investing in D-Class PropertiesWhen dealing with D-class properties, expect ongoing tenant issues, higher maintenance costs, and declining neighborhoods. Financing can be difficult, and intensive management is required. Long-term appreciation may be limited in these areas. To mitigate potential risks, it is crucial to invest in higher-quality properties and adopt a conservative approach to financing. By doing so, investors can navigate these challenges and make sound investment decisions.[20:01] The Power of Cash Flow From Real EstateCash flow from real estate is highly desirable for several reasons. Firstly, it ensures the self-sufficiency and resilience of properties, enabling them to withstand economic downturns. Additionally, cash flow provides a consistent income stream, appealing to investors seeking reliable returns. Furthermore, properties with positive cash flow can be held long-term, benefiting from appreciation over time and generating capital gains. Moreover, cash flowing deals are less risky than those relying solely on appreciation, as tenant income provides greater security. Lastly, cash flow affords operators the flexibility to sell based on market conditions, maximizing sale proceeds. This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.Resources Mentioned:Harborside PartnersGlobal Investors podcastLinkedIn: @charlescarilloUse this for book links: https://www.leftfieldinvestors.com/books/ Podcast Recommendations:Macro Voices PodcastAdvertising Partners:Left Field Investors - BECTribevestGSP REISpartan Investment GroupRise48Aspen Funds

If you're interested in learning from experienced operators, this is an episode you'll want to listen to. Multifamily syndicator Gary Lipsky provides a lot of practical advice for both passive investors and those looking to syndicate deals. Having done over $250 million in real estate deals, Gary shares great insights into asset management, a critical but often overlooked part of deal performance. Gary discusses how he actively manages his properties to hit financial targets and extract maximum value.About Gary LipskyGary Lipsky, president of Break of Day Capital, has successfully completed over $250 million in real estate transactions as a multifamily syndicator. Starting in 2002 with his family's first house, which he turned into a rental property when they moved, Gary gradually ventured into single-family rentals before transitioning to real estate full-time in 2016. With a focus on value-add multifamily deals in Phoenix and Tucson, he averages around four deals per year, including his first syndicated deal, a 42-unit apartment complex in Tucson, Arizona. Here are some power takeaways from today’s conversation:[06:54] Gary’s real estate investing journey[11:03] Defining roles: asset managers versus operators[15:55] The challenges of asset management[18:56] How LPs (Limited partners) should evaluate their asset management approach[33:42] How strategic investments in Tucson yielded remarkable returns[40:33] Real estate investing with a focus on asset managementEpisode Highlights:[15:55] The Challenges of Asset ManagementIn the realm of asset management, the landscape has become increasingly challenging. With loan covenants becoming stricter than ever, it is crucial to have a comprehensive understanding of aspects like earnouts and penalties. The reporting process for loan covenants has also become more time-consuming, demanding significant resources. Failing to execute the business plan can lead to complications such as cash calls or capital calls, putting the overall performance at risk. It is crucial to allocate resources effectively and ensure adherence to loan covenants to maintain a high level of success in asset management.[19:04] How LPs Should Evaluate DealsHere are some key things Limited Partners (LPs) should do to properly evaluate deals: Ask who specifically is the asset manager and if they can be part of the interview process. The asset manager is critical for deal performance. Inquire about the asset manager's typical day-to-day responsibilities and the number of properties they oversee. Fewer is better. Request to see the dashboard of Key Performance Indicators (KPIs) that are tracked and how often the sponsor checks in on them. Find out how frequently the asset manager communicates with property management and visits each property in person. More contact is better. Ask what questions the sponsor asks property management during check-ins to ensure they are executing the business plan. Determine how transparent the sponsor is about sharing actual property performance versus budgets. Any variations should be explained. Thoroughly vet the sponsor's communication approach, especially during challenges, to ensure they are responsive. This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.Resources Mentioned: Break of Day Capital Real Estate Investor PodcastPodcast Recommendations:Driven By InsightAvoiding Rookie Errors as a Left Field Investor: 20 Lessons Learned From 14 Years of Passive Investing in Private Syndications by Steve SuhAdvertising Partners:TribevestRise48Aspen FundsGSP REIVyzer

Brian Davis, founder of SparkRental, shares how living abroad with his family inspired a location-independent lifestyle supported by passive real estate investments. Learn about Brian's process for vetting sponsors and deals as a community, and how syndications have allowed him the freedom to pursue entrepreneurial opportunities while diversifying his portfolio.

Jacob Vanderslice, co-founder of Van West Partners, shares insights into the changing landscape of storage rents, financial considerations when investing, and the benefits of single asset syndication and funds for LPs. Topics include self-storage performance during economic uncertainty, considerations for acquisition or development decisions, financial goals when investing in storage and other fund vehicles, the changing landscape of storage rents, and the pros and cons of funds for LPs.

Real estate investment expert Eric Sussman discusses analyzing deals and business plans during uncertain times. Topics include the current state of the economy, inflation, interest rates, distressed assets, and evaluating sponsors. Valuable lessons on passive investing for new and experienced investors.

There’s a fascinating world out there for self-storage in a changing market. In this episode, Jeremiah Boucher, the founder and CEO of Patriot Holdings, shares his insights on why self-storage will continue to be in demand, despite potential economic downturns. He emphasizes the importance of operational excellence, adapting to market conditions, and careful property management. He also offers a comprehensive guide for LPs (Limited Partners) to understand investments and assess opportunities in the real estate market. About Jeremiah BoucherJeremiah Boucher is the founder and CEO of Patriot Holdings and manages a $350 million portfolio of alternative commercial real estate assets with a focus on self-storage, manufactured housing, and industrial. He is also the author of Finding Your Edge: How to Win at the Game of Commercial Real Estate Investing.Here are some power takeaways from today’s conversation:[03:24] Jeremiah’s real estate journey[09:13] His transition from mobile home parks to self-storage[11:29] Self-storage investment in a changing market[18:01] A comprehensive guide for LPs [20:31] What value add means in self-storage[26:39] Jeremiah’s criteria for choosing where to invest[34:57] Evaluating industrial real estate investments[38:30] Tips for vetting sponsorsEpisode Highlights:[11:29] Self-Storage Investment in a Changing Market​​Jeremiah believes self-storage will continue to be in demand due to demographic trends and the need for space, despite potential economic downturns. However, investors need to be cautious about overpaying for self-storage assets. Jeremiah emphasizes the importance of operational excellence and adapting to changing market conditions. He also warns of market saturation and the need for careful property management. Additionally, while occupancy may grow, revenue might not as customers become more selective when choosing storage units.[18:44]  Key Considerations for LPs: Understanding Investments and Assessing OpportunitiesBy considering these factors, LPs can gain a deeper understanding of their investments and make informed decisions that align with their goals. Communication and Quarterly Reports: LPs should prioritize open communication, including regular feedback and comprehensive quarterly reports that highlight key metrics. Operational Performance and Addressing Issues: LPs need to analyze how assets are performing and whether the company is actively addressing any challenges. Lack of distribution, for example, requires understanding the reasons behind it and the steps being taken to rectify the situation. Importance of Communication: Effective communication is critical for LPs to assess a team's ability to navigate difficult times. A history of transparent communication demonstrates the team's experience in overcoming challenges and ensures alignment with investors. Team Evaluation: LPs should not rely solely on one person's presentation skills but also seek to engage with other team members. A single-person operation increases vulnerability to personal circumstances that can impact investments. Value-Add Opportunities: LPs interested in value-add investments should focus on mismanaged assets. Typically, these assets require different capex. Additionally, prioritizing quality locations with good visibility and markets that have sufficient demand but limited supply is crucial. Barriers to Entry: Evaluating barriers to entry in the storage market helps determine the long-term viability of an investment. A market with limited supply per capita and obstacles for new entrants provides greater potential for success. [20:31] What Value Add Means in Self-StorageValue add refers to existing, mismanaged self-storage assets that typically have deferred capital expenditures. For a value add opportunity, the asset needs to have good quality "bones" like a decent existing storage business already in place that is conducive to tenants getting in and out easily. The highest value-add for his company is if an acquisition can get additional land on top of the existing storage, as this allows for expansion of the number of units once occupancy is high. Value-add involves making property improvements like lighting, fencing, paving, cameras, and signage to create a better product and command higher rents. But marketing is also important to fill the new units.This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.Resources Mentioned:www.patriotholdings.com  Jeremy’s book: Finding Your Edge: How to Win at the Game of Commercial Real Estate Investing Advertising Partners:Avoiding Rookie Errors as a Left Field Investor: 20 Lessons Learned From 14 Years of Passive Investing in Private Syndications by Steve SuhTribevestRise48Aspen FundsVyzer

Discover how decentralized technologies are shaping our future! Join Ben Jorgenson, visionary, CEO and founder of Constellation Network, as he explores blockchain, cryptocurrency, and the frontier of Web 3. Ben simplifies complex concepts like decentralized networks, smart contracts, and blockchain's application to challenges like deep-fakes and data governance. Whether new or experienced, gain insights into blockchain's disruptive potential across industries.About Ben JorgensonBen Jorgensen specializes in emerging technologies such as blockchain, cryptocurrency, and Web 3. Contracted by the US Department of Defense, Constellation Network is creating an ecosystem for developers to integrate applications with existing Web 2 infrastructure using blockchain technology. Here are some power takeaways from today’s conversation:[04:05] Ben’s career background and how he found his way into blockchain[09:02] What is disruptive technology?[10:23] Understanding Web 3, blockchain, cryptocurrency, decentralized networking[17:33] Crypto technology and its potential uses[23:44] AI, data ownership, and governance[28:07] Blockchain's potential to validate AI and deep fake images[39:42] The potential of blockchain to simplify digital transactions and revolutionize the real estate industry [45:08] Crypto regulations and fundraising with a crypto company ownerEpisode Highlights:[09:02] What is Disruptive Technology?Disruptive technology refers to anything that challenges societal norms and revolutionizes the way things are done. It breaks open established conventions, offering more efficient, cost-effective, and faster alternatives. Blockchain, for instance, has the potential to disrupt information exchange and validation, particularly in finance. Consider Bitcoin: do we really need multiple layers of institutions to send or receive money from one country to another, like from America to Amsterdam? It's about reimagining traditional processes and embracing innovative solutions that can reshape our world. [10:23] Understanding Web 3, Blockchain, Cryptocurrency, and Decentralized NetworkingWeb 3 encompasses various components, including metaverses - alternative digital worlds for immersive experiences - as recently highlighted by Facebook. Unlike traditional Web 2 technology, Web 3 introduces a more interactive and social aspect to online experiences. At its core is blockchain technology, enabling decentralized entities and transactions using cryptocurrency. This decentralized approach addresses concerns about data governance and control, offering the opportunity to reshape the socio-economic landscape and redefine information governance through Web 3.[39:42] Simplifying Digital Transactions and Revolutionizing The Real Estate Industry Through BlockchainBlockchain removes middlemen in digital transactions, automating processes through code-based trust. This enables seamless execution of contracts and title transfers, transforming the real estate industry. By streamlining the process and reducing human involvement, innovation in buying real estate and creating funds becomes immense. Embracing technology requires a broader perspective, recognizing its disruptive nature and the untapped potential of reducing intermediaries in real estate transactions.This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.Resources Mentioned:Constellation NetworkExponential Organizations by Salim IsmailAvoiding Rookie Errors as a Left Field Investor: 20 Lessons Learned From 14 Years of Passive Investing in Private Syndications by Steve SuhPodcast Recommendations:How Things Work PodcastAdvertising Partners:TribevestSpartan Investment GroupRise48Aspen Funds

Bronson Hill, a multifaceted professional in real estate, discusses his journey from medical sales to owning over $200M in multifamily units. He shares insights on alternative assets like ATMs, car washes, and oil/gas that generate consistent cash flow. The podcast covers the power of education, the importance of multiple income streams, and due diligence for real estate and oil/gas investments.

In this episode, Andrew Cushman, founder and principal of Vantage Point Acquisitions shares his journey from engineering to house flipping to becoming a successful multifamily syndicator. Learn about lessons from his best and worst deals, strategies for navigating changing economic conditions like rising interest rates, and tips for evaluating investment opportunities. Listen in and gain insights on building a long-term real estate career from someone who has seen market cycles come and go!About Andrew CushmanAndrew Cushman is the founder and principal of Vantage Point Acquisitions, a real estate private equity firm specializing in multifamily apartments, particularly in the southeast region. After leaving his corporate position in 2007, Andrew ventured into real estate investment, initially focusing on flipping single-family properties in Southern California. Over time, he transitioned to multifamily acquisitions and has since syndicated and repositioned over 2,600 multifamily units. A former chemical engineer, Andrew brings a unique perspective to the real estate industry. Here are some power takeaways from today’s conversation:[03:11] Andrew’s real estate investing journey[08:06] Practicing R&D in the real estate world[11:39] How he made the transition from engineering to flipping houses[13:39] The worst syndication he has done[20:56] Most common mistakes LP investors make[24:38] IRR vs. AAR[38:36] Fixed rate debt on the portfolioEpisode Highlights:[08:06] Practicing R&D in the Real Estate WorldIn the world of real estate, there's a beautiful concept called "rip off and duplicate," as Cameron Harold aptly puts it. In the corporate world, that's research and development; in real estate, it's rip-off and duplicate. Find somebody who's already successful at what you want to do, learn and copy what they do, and go execute.  This approach not only provides a blueprint for action but also instills the confidence to persist, knowing that proven methods are at hand. [13:39] Lessons Learned From Buying C-Class PropertiesC-class properties may appear promising on paper, but their true nature often falls short in the real world. Recognizing this, Andrew coined the phrase "the grass is always greener over the septic tank" to highlight the deceptive allure of these properties and the lack of competition surrounding them. During a recession, rough C-class properties suffer the most, experiencing severe delinquency and plummeting value. For Adam, this was the worst deal he and his wife had ever done. Although the returns were not impressive, his experience taught him invaluable lessons, now more knowledgeable about what to do and what not to do.[20:56] Common Mistakes LP Investors Make Shopping deals solely based on projected IRR without considering the different levels of risk involved to achieve those returns. Higher returns do not always mean a better investment if they come with greater risk. Not understanding the relationship between risk and return Failing to evaluate deals based on multiple metrics like IRR, annual cash-on-cash return, equity multiple, and annual average return rather than just one metric. No single number tells the whole story. Viewing the relationship with the sponsor/general partner as adversarial rather than as a partnership. Investors need to ensure their interests are aligned with the experienced sponsors they are entrusting their capital for the holding period. This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.Resources Mentioned:Vantage Point AcquisitionsPodcast Recommendations:Macro Voices Advertising Partners:TribevestAspen FundsViking CapitalRise48

Mauricio Rauld, a lawyer specializing in real estate syndications and compliance with securities laws, talks about issues to look for when investing in syndications, the importance of reading the PPM, things to look for in an operating agreement, punitive consequences of not doing a cash call, thoughts on changes to the accredited investor definition, and the pros and cons of LPs.