Long-Term Passive Wealth Creation

My goal always long-term passive wealth creation. I didn't know exactly how I would do that, whether that would be through single families or duplexes or quads. My first commercial deal I always thought would be something in the residential space because we were finding residential deals in our wholesale and flip business. So I thought it would be a natural progression, it wasn't. We started looking at some other mentors of ours that had thousands of units under management into the large commercial space, meaning multifamily, self-storage, and student housing. And so we started doing some study what are the benefits and detriments of both spaces?

Why would we want to do one versus the other? We made the decision in the last 18 months to go full time commercial real estate in those three asset classes that I just mentioned and we did it because of stability. We're looking for that stability, consistency, and safety. My dad passed away about six years ago. He lost a good percentage of his wealth during the downturn and then didn't live long enough to watch it rebound. The money they lost in the stock market, I recognize the volatility in it. I was already in real estate at that time. I also saw the volatility in residential markets as we saw in the downturn. I wanted to explore whether or not there is a safer asset class to be in.

Wall street was out for me. Residential, although it was profitable and it gave us a great earned income wasn't a long-term retirement plan. As we started recognizing that these larger assets were much more stable, that was what we went into.

Our first deal was a $14 million self-storage complex that we built ground up to almost 1200 units and a stabilized value of almost $30 million once it's up and running. We dove right in. When people say, what do you do now? What we do is we try to educate people in the space and try to get them to understand that there is stability, consistency, and safety in these larger assets more so than some of their other investments and can give them the opportunity to partner with us and jump in with those deals.

The real take away from that is that anybody can make a move to a different sector if they want to. This is especially true in the single-family space in my opinion. A lot of people feel limited, “Once I'm in this space, I can't really go and do commercial deals”. That’s so much bigger and much more different. A lot of us get into real estate or investing of any type or starting a business or entrepreneurship so that we can have that financial freedom but when you actually get into it, you've really created yourself a job, this is especially true in the single-family space, the whole ceiling, the flipping space, can get away, you can take some time off, but you're earning income and it's not always stable because there are ups and downs and deals fall through and things happen. And when it, when it happens, it sucks because you thought, “Well, hey, I thought I was going to get that cash-flow that I came in here for and instead I'm just earning money on every deal and I'm not really banking in a way into properties that are paying me off.

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