Profitable Niches – Investing Through Others

As a busy professional, chances are you’ve got people trying to bend your ear constantly about investment opportunities. And sure … some of them sound amazing, but how do you know you’re getting in with the right people? Or maybe real estate investing is what you want to do, but you don’t have the time for it.

That’s where our guest Dr. Buck Joffrey found himself as a busy surgeon. Now, 10 years later, he’s killing it with a successful podcast and real estate syndication organization.

This week, we’re talking about passive real estate investing … passing the heavy lifting to someone else while YOU get the return.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your hands-on host, Robert Helms
  • His second-hand co-host, Russell Gray
  • Guest, Dr. Buck Joffrey, host of the Wealth Formula podcast, real estate syndicator, and board-certified surgeon

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Get returns … without getting your hands dirty

Real estate is a messy, hands-on type of business. And while you can do all kinds of research beforehand, the best learning is on the job.

If you don’t have time to manage your own deals, passive investing could be the right move for you.

Passive investing gives you the benefits and returns of real estate … taxes, income, and diversification as well as the turn-key ease of setting and forgetting your investment.

The appeal of real estate investments is partly because your assets are tangible. You can go visit your building, and it occupies more than just a piece of paper or line on a ledger.

But, real estate takes time to understand the market, vet the deals, go through all the paperwork, and then manage a property afterward. You might be thinking, I don’t have time for that, I’m running my own business, and it’s taking all my time.

Joining up with other investors is how to leverage the expertise of others and even tag along to become a student yourself, all while getting in quickly and easily. It really can be whatever you want to make it be for yourself!

Find your investing tribe

As a busy professional himself, Dr. Buck Joffrey discovered early on in his real estate investing journey that he wanted to find like-minded people to invest with.

“If I got involved with a good syndicator who knew what they were doing, those returns and all those benefits I wanted out of real estate were there anyway,” Buck says.

And, once he found people he knew, liked, and trusted in the real estate space, the hardest part was over.

“What I realized is that if I could invest in such a way that if I did a lot of vetting and due diligence and I knew other people were involved … my chances of success went way up,” Buck says.

It wasn’t long before Buck’s friends started asking what he was doing and how they could get in on it too. All of this relationship building is what Buck calls tribal investing. And this approach is key to his success.

“Your network is your net worth,” Buck says. “I look more at the team than I do the deal. If you know, like, and trust somebody and you know their track record, then you can get to the point and can look at a pro forma.”

The relationship is just the building block to a good deal … Buck also notes that while there are lots of folks who he knows and likes, he may not be excited about the deals they’re doing. Just a little education about the types of investments you’re considering will go a long way.

Condensing your education timeline

As with any investment, you need to know enough to ask the right questions so you don’t get burned. But, as a busy professional, adding in time for that education can be a heavy lift.

That’s why Buck’s networking style translated perfectly into his new course, “Your Roadmap to Real Wealth.” It’s not just Buck teaching the course … he’s tapped into his deep network to bring in experts that share with you what he learned over a decade over a condensed timeline.

“One thing that everyone has in common who is on the show is that I have a relationship with them,” Buck says. “This is my tribe talking to me as a young physician.”

Buck has gathered experts in real estate … INCLUDING yours truly, The Real Estate Guys™ as well as estate planners, and many, many more.

We asked Buck about how passive investing works into the diversification angle. Buck mentioned he was initially interested in apartments as a first investment.

“What I realized was that I was trying to get at scale,” Buck says. “With syndication, you can take the same two or three hundred thousand dollars and now you’re in four, five, six buildings, and you’re in thousands of doors, and you’re across the country!”

Syndication gives you the opportunity to allocate your risk, and use your capital more efficiently. And all of that diversification collapses your time frame and gets you more cash flow sooner!

To learn more about passive investing and Buck’s course, “Your Roadmap to Real Wealth,” send an email to roadmap@realestateguysradio.com. We’ll hook you up with all the details!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Profitable Niches – Commercial Property Investing

There are many ways to invest … and one way isn’t necessarily better than the other. Real estate is nuanced. It’s always a good idea to broaden and expand your expertise into different markets.

That’s why we’re THRILLED to talk to our returning guest, Tom Wilson, about commercial real estate investing. His engineer’s mind can deconstruct this intimidating topic into bite-sized pieces … the perfect size for inspiration!

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your seasoned host, Robert Helms
  • His underseasoned co-host, Russell Gray
  • Tom Wilson, a long-time friend of the show and expert in commercial real estate investing and syndication

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Add more commas and zeros to your thinking

Commercial real estate investing feels more advanced because the deals are bigger. But the truth is that it takes nearly the same amount time to learn how to do big and small deals well.

One of the beauties of commercial deals is that you’ll get more leverage. And, this will put you on the road to adding commas to your thinking and diversifying your real estate knowledge … a must in dealing with a changing market!

Of course it takes time to get educated on a new market. Many commercial real estate deals are funded through syndication. Jumpstart your education by joining forces with people who know their stuff.

“I think the best thing I’ve done over the years is to adjust to different markets and asset classes as they’ve progressed,” says Tom Wilson, an expert in commercial real estate investing and syndications. “It’s awfully easy to get really comfortable in something that has worked before.”

Since Tom has a background in engineering, he approaches problems from a research and numbers perspective. But even he knows the value of bringing in the experts.

“I got some advice early on: Don’t try to do everything yourself,” Tom says. “You can accomplish more in life if you gather experts around you. I like to constantly be learning from others.”

Understand tenants and leases

One of the things that can initially seem foreign to new commercial real estate investors is what tenants look like in a commercial building.

Just like families live in residential areas, businesses make up your tenants in a commercial real estate deal, but with a few key differences:

  • Leases are longer for commercial deals. It’s not uncommon to see a commercial lease for 15 years or longer on a single-tenant building. You know that businesses are going to stick around in one location for a long time.
  • Maintenance is handled by the tenants. These leases are called triple-net leases, which essentially means that the tenants pay all real estate taxes, building insurance, and maintenance.

“Many of us who have had rental properties understand about turnover, tenants skipping overnight, having to do evictions. These elements are rare in the commercial arena,” Tom says.

With the right expertise, managing commercial can be much easier. The tenants are higher-quality, and you have lower turnover in your buildings. And, you’ll likely know well in advance before a vacancy happens.

When you’re looking for a commercial space, you need to know who your tenants are. This is even more crucial when you have a single-tenant space.

“It’s important to do a deep dive into the tenant’s financials and the market they’re in,” Tom says.

With big-name brands, remember that there may be low risk, but there’s also low returns. However, the tier below that offers a real opportunity for some good deals, as long as you’ve done your homework.

Know the market

Just like there’s diversity in the types of residential properties, the options for commercial real estate are just as rich. And, e-commerce has definitely caused a bit of a shift in the commercial real estate space.

“You still need to get a product to the door,” Tom says. “You’ll need more distribution centers and smarter distribution centers. We need more last-mile distribution centers.”

Not only that, but the increase in demand for these industrial distribution locations have removed some of the supply for other commercial properties, which means the market for industrial and commercial real estate is healthy.

We also know that brick and mortar stores aren’t going away. You can’t get your hair or nails done online. You still drop off and pick up your dry cleaning, and your pets go to the vet!

And, commercial real estate doesn’t stop at brick and mortar stores or even distribution centers. Large manufacturing plants, refrigeration, R&D, and many other options are out there for types of commercial real estate.

No matter where you choose to crack into commercial real estate, here’s a few nuggets of wisdom from Tom’s long resume of commercial real estate deals:

  • Get educated enough to ask tough questions.
  • Surround yourself with people who know more than you do and don’t feel intimidated.
  • Delegate and spread out responsibility so each person has a manageable piece to take on.
  • Stay rational when the stakes are high.

If you’re ready to take on commercial real estate, Tom has prepared a special report packed with important details on how to be successful in this niche. To get your free copy, email us at commercial@realestateguysradio.com.


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Profitable Niches – Lifestyle Investing

You may have heard that it’s bad to mix business with pleasure. But, when it comes to lifestyle investing, part of the fun is owning property in a place you love.

Yes, it is possible to make lifestyle investing make sense for you … as long as you follow some important guidelines to line up the numbers, location, and opportunity.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your vacation ready host, Robert Helms
  • His in dire need of vacation co-host, Russell Gray
  • Guest, Nick Rohrbach, from The Grove Resort and Spa in Orlando, Florida

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Why a lifestyle investment might be a good fit

Life is too short to be involved in an asset class you don’t enjoy. Too many times in real estate, we get hung up on the ROI and let it rule the day. Lifestyle investing spices things up by adding personal enjoyment and personal use into the mix.

With the right strategy, you can tap into a FANTASTIC opportunity for growth. Premium properties fetch a premium price from renters and vacationers. Of course, you’ll also be able to enjoy the property with your family and friends.

We’ve all been on vacation and experienced that “I never want to leave” feeling. But remember, just because a place is nice to visit doesn’t mean it makes sense from an investment point of view. Here are a few recommendations to keep in mind.

 

  • Know the market

 

As with any real estate investment, your research into the market will be worth its weight in gold. This is especially true for lifestyle investing where the durability of rent, the ability to fill occupancy, and the property’s long-term profitability will be the difference between a fun investment and a bust.

With a good location, property, and market your investment has the opportunity to weather downturns. People in higher income brackets can afford to go on vacation even if the economy is down.

 

  • Bring on a stellar management team

 

The difference between a fun, hands-off lifestyle investment that you’ll love visiting and a drag is a good management team. Property management comes at a higher cost than single-family homes … sometimes upwards of 50 percent … but it gives you peace of mind AND access to amenities that delight and excite high-end vacationers and renters.

Your management team will handle all the bookings, and they have access to wholesale outlets such as Travelocity, Hotwire, Priceline … all the big names people use to get their vacation rentals.

And bonus! When things break, they fix them.

Opportunities abound in Orlando

Orlando, Florida, is the #1 traveled to place in the world. Thanks to Disney World, Universal Studios, and a THRIVING convention market, there’s no end of things to do for business travelers and families. And did we mention it’s a no income tax state?

We could go on and on about the many reasons why Florida is a consistently hot market and one of our favorite places to visit:

  • It’s centrally located to beaches
  • It has access to direct flights out of many places from the beautiful Orlando airport
  • The weather and attractions are top-tier
  • Convention business is strong and growing

Nobody knows this better than Nick Rohrbach, our guest from The Grove Resort and Spa.

Beyond tourism, Florida has a vibrant, booming economy. “There are 19 [amusement or theme] parks in central Florida alone,” Nick says. “Medical City is booming, we have one of the largest universities in the country, University of Central Florida, and over 150 VA hospitals.”

Plus, unlike many destinations, Orlando is not seasonal. The average occupancy is about 75 percent year round. Even during the economic recession in 2009, average occupancy never fell below 60 percent.

All of these elements make Orlando a place you might want to keep your eye on.

Filling a niche in the lifestyle investing market

When you’re looking for a lifestyle investment, one of the important questions you need to answer is how a particular property sets itself apart from competitors.

Florida’s economy is one of the reasons The Grove is such a unique opportunity. Rohrbach explains that the project was originally built in 2007, 2008, and 2009, and all the units were sold to UK investors without closing on a transaction.

While all the units were structurally built, only 184 condos were completed. With some additional cash, amenities, and building out the insides, these units are essentially brand new.

The new ownership at The Grove Resort and Spa has a couple strategies to fill a niche in Orlando:

  • Amazing amenities including restaurants, 800 sq. ft. of convention space, and a newly opened water park.
  • Spacious condos with 2-3 bedrooms perfect for families.
  • Close proximity to Disney World … only 3 miles away!

For potential investors and owners, there are plenty of opportunities as well. The Grove has a stellar management company that keeps the property looking fantastic, takes care of you and any guests, and manages all the bookings, repairs, and maintenance.

“The key is really the management,” Nick says. “When you talk about having everything in place for lifestyle turnkey investing, you need that professional management so you don’t have to deal with anything. The guest experience is very important.”

Not only that, but The Grove is continuing to expand, with 878 total units coming online at completion. Only 450 rooms are available now, and they’re at 100 percent occupancy! As demand goes up, so will rates … and cash flow from a potential investment.

Make sure the deal works for you

Lifestyle investing can sound like a dream come true, but it still has to make financial sense for you.

Look at a market that appeals to you personally, and then start running some numbers.

For instance, syndication might be the right way to go. You could get creative and discover investment opportunities in a few locations so you’ll have access to a bunch of prime vacation spots.

Blurring the line between a pure ROI, detached investment and something you get to enjoy too doesn’t have to be out of reach. If the numbers, market, and property make sense, don’t be afraid to go for it!

Want to know more about turnkey lifestyle in Orlando, Florida, and things to avoid in the marketplace? Send an email to lifestyle@realestateguysradio.com. We’ll hook you up with a special report with all the details. 


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Unleash the Hidden Power of Your Retirement Account

There’s a new drug taking hold of Americans … it’s called “hope-ium.” How does it work? Well, you simply smoke a lot of hope-ium … and hope things will work out.

While being optimistic can help, relying only on hope won’t get you anywhere.

Smart real estate investors take control of their portfolio … from big real estate deals to basics like their retirement accounts.

In this episode of The Real Estate Guys™ we’ll discuss how to unleash hidden power from your retirement accounts … and steer your way to a successful future!

On the show today, you’ll hear from:

  • Your anti-hope-ium host, Robert Helms
  • His hoping-for-a-break co-host, Russell Gray
  • Published author and financial mentor, Damion Lupo

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From newbie to retirement plan expert

Real estate investing is all about the strategic use of debt. We’ve been in the real estate business for years … and in that time, we’ve seen so many people who had heaps of financial power they just didn’t understand.

Even our guest, the brilliant Damion Lupo, didn’t realize certain retirement accounts could be used for investing freely in alternative assets until a friend introduced him to the idea.

Damion got involved in real estate when he saw Robert Kiyosaki, first on an infomercial and then in person. Over the next five or six years, he built a $20 million portfolio … and then had quite the shock when he received a $672,000 tax bill.

Damion realized there was a better way to do things. “It was a trial by fire,” he told us. So he educated himself on the tools he had missed as a beginner.

Today, Damion’s such an expert that he’s written a book on the subject of investing with retirement money, called the Total Control Financial Guide to the Qualified Retirement Plan.

Damion’s co-author, John D’Arco, is a qualified tax professional, so we feel confident in saying their book covers the ins-and-outs of retirement plans.

We asked Damion to explain what he’s learned over the years about how to invest with retirement accounts.

To start, Damion shared our frustrations about folks who have power at their hands … but don’t realize it.

With retirement accounts, sometimes equity is right under your nose.

A lot of folks put retirement out of their minds, thinking that their employer’s plan will be good enough and hoping they’ll have enough money to take care of themselves in later stages of their life.

But guess what? You don’t have to rely on your employer’s plan. YOU can take charge of your financial future.

Although many people aren’t aware of the option, a Solo 401(k) offers a high degree of control, allowing the self-employed to build a financial fortress for their future.

With a Solo 401(k), you can’t just throw darts and hope it will work out … but if you’re committed to spending the time to make strategic decisions, that shouldn’t be a problem.

What a Solo 401(k) can do for you

Damion told us you can’t put very much money into an IRA, but a Solo 401(k) plans allow users to deposit over $50,000 a year.

Another plus of the Solo 401(k) is if you use your retirement money to invest, you avoid taxes on debt-financed income you would accrue were you to invest with the money in an IRA.

A great element of the Solo 401(k) is owners can withdraw up to $50,000 at any time, simply by writing themselves a check (unlike other retirement accounts, which normally don’t allow withdrawals until actual retirement).

If you choose, your Solo 401(k) can include a Roth element as well. This is a huge bonus because the money that goes into a Roth account is taxed beforehand, instead of when an asset sells or you withdraw it.

Because no one can predict future tax rates, the Roth component is a great way to opt-out of future taxes and set yourself up for major security and peace in your retirement years.

It’s not the end-all-be-all, and it’s not appropriate for every investor, but the Roth component of the plan can be an amazing tool.

The only catch of the Solo 401(k) plan is you have to be self-employed … and we don’t think that’s a very big catch, because if you invest in real estate seriously, at some point your hobby will become a business.

Solo 401(k) plans are a great option because they offer a high degree of control. They also present more risks because as the account owner, YOU are the sole custodian.

Damion reminded us of the very true fact that “Investing is a team sport.”

To minimize risk, he recommends building a team of advisors and tax professionals who have the expertise to tell you when you’re making a mistake.

Are you interested in the benefits of a qualified retirement plan? Listen in to get access to a premium report Damion compiled for us that contains information about who qualifies, the nuts and bolts of a QRP, and MORE!

What I wish investors knew …

We asked Damion whether there were any frequently made mistakes he’d like new investors to be aware of … and whether there are any facts investors often fail to realize about qualified retirement plans.

He honed in on two major ideas.

First, investors often fail to be careful. Damion warned us that with QRPs, investors can’t play into the gray. With these plans, what you can and can’t do is black and white, and failing to get advice can be a crucial mistake.

When investors realize they can use their retirement account money for almost anything, sometimes they make unwise decisions … investing from their glands.

Damion’s seen people take money out of mutual funds and invest in neighbors’ restaurants or loan money to family members.

That brings us to a very true fact … just because you can do something, doesn’t mean you should.

Damion’s second piece of advice is investors often don’t realize by being smart, they can set their families up to be professional investors using qualified retirement plans.

For example, by “hiring” a parent or grandparent, children can inherit accounts upon the death of those family members, allowing them to use the money in the account AND continue to invest in it.

Another tool in your portfolio-management toolbox

Our crazy-informative session with Damion Lupo is simply evidence of the value of getting out in the real world, meeting interesting people, and staying in touch!

You never know the ideas people you meet will acquire and share with you.

We’re glad we could take what we’ve learned from Damion and pass it on to YOU … and we hope you got some new ideas from this session!

One thing to remember as you take what you’ve learned into the real world is that investors have to think about more than just the deals.

We know, making deals is exciting! The rush of making a good deal is part of the reason every real estate investor is in the game.

Setting up a qualified retirement plan may not be satisfying to a deal junkie, but to a serious investor, it’s a way to increase stability on both the business side and the portfolio-management side.

We’re a big fan of anything that allows you to mitigate risk and create wealth that can sustain you through possibility instability … and smart investing with a QRP definitely fits the bill!

This week, go out and make some equity happen! (And maybe reexamine your retirement accounts!)


 More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.