August 2020 Market Update Investor - Investor Letter #16

All right, everybody, this is the August 2021 fi market update. I'm your host Lane Kawaoka. But before we get started the free easter egg giveaway, and we are going to be giving away a buy and hold analyzer for rentals. This is you can use it in Google and Excel for explanation of all expenses for you to make your own performance and vet your own rental properties. For check performance given to you performer means means toilet paper, French, just get rid of it, analyze it yourself, run your numbers yourself and allows you to perform some sensitivity analysis on your own You can get access to that by going to a group putting in the numbers on the Facebook posts, or you can shoot me an email at Lane at simple passive cash flow calm. And, you know, I'll send it over to you. If you guys want to check out more content on our Facebook group and listen to my podcasts, which has been going on since 2016. found on Google music, Spotify, e to YouTube channel is getting pretty big and robust now. We're also on iTunes and iHeartRadio. Alright, so first things first, a little bit of teaching points for everybody had demick proof investing. How do you invest in stuff that won't get destroyed in a pandemic? Well, things that are probably going to remain strong, as we've seen through the last few months, do my 3500 units that I own workforce housing. These guys still PE so Class C and maybe try and stay away from class C stuff but definitely the class VNA tenants, their paint, garden style apartments so a garden style apartments are these are the two story or 123 story apartments where it's sort of think of it like a motel where you drive up to, it is not a high rise apartment. It is sort of medium to light density. And for those people who are unable to afford a house, everybody says they want to you know, get away from other people and have their own house but very little people in America can afford houses to live in. garden style apartments are the best of all worlds you have your space. It's pretty affordable for them and this is why I choose to invest in these type of card itself apartments and other medium dead suburban locations that would be not in the urban sprawl, urban area, the downtown area but mostly in the suburbs. Areas maybe right near the loop track you know 20 to 30 minutes outside the city center things that I stay away from our elevators you just can't socially distance in an elevator that's urban areas of things with no cash flow right because they think you've seen an epidemic that things that aren't producing income to pay his expenses are going to get hurt a lower end tenants and this is where I said you know, maybe stay away from class C tenants definitely Class D and worse. That's always been a fundamental that we followed a short term rentals are getting killed. Although I hear a little bit of resurgence and some of the some areas of Florida as people there's some pent up demand coming back online but you know, if you live in Hawaii, you're getting killed with these short term rentals and and that's why I told you not to do them in the first place. Pro tenant states. So these are like the California these other places love blue states where there's more tutorials on no evictions offered A space you know, a lot of tech workers and a lot of them are just told that they may not even come back to the BDM next year if if ever, a lot of people have just told their employees just to work remotely from now on San Francisco Bay Area's getting killed. Again, this is why we chose not to invest in these type of primary markets. JOHN burns came up with a report and the question is, are you or do you know anybody else living with their parents? Well, they came up with this little stat that for those adults ages 23 to 30 living at home what's your mom and dad has drastic be bingo going up 30,000 people in March, and then in April a million people and then may another million 1.1 folks moved in with the parents so that is on the rise. And that leads us to a read cafe article or the takeaway here was a quarter of renters now say they will never buy a home. So if you're looking at This in the YouTube channel you're seeing and that cool little chart where they surveyed about 7000 renters in May, you know a lot of people just don't plan to buy a house, you know, I don't, I don't buy a house to live in. And if you're living in a rent to value ratio under 1%, I would urge you to do not buy a place to live in, but instead, invest that money. Check out my article, simple passive cash flow, calm slash home talking all about this very controversial topic, but look at it this way, right? You don't spend money on a big down payment, and you go out and invest that money and you make cash flow. And it's basically an arbitrage and I know everybody teaches you otherwise. And I would say for most people, it makes sense because most people aren't finance financially responsible. So home is sort of a forced savings account for them because if they didn't put the money into a mortgage that got locked up, they probably spend it but you know, those of us who kind of follow our group are of our tribe, simple passive cash flow, folks, and we're pretty responsible for our money. We don't spend our money frivolously. So for those of us it probably makes sense to rent our primary residence, use that equity to go and buy assets and then you know, we don't have that big mortgage payment, and then we can go out and buy more properties or syndications quicker. You can also probably live in a nicer place to the whole thing of homeownership, I think is a little overrated, but just to just hear giving ideas right, full map of estimated net worth of everybody who every person, each state who is the richest person, so Mark Zuckerberg is at 1 million billion dollars in California. Washington have just Jeff Bezos hundred 17 billion boy is pero dahmer. I don't even know who that is. A Alice Walton 51 billion. We have a lot of Texas people. Some no We have with some people in Maryland in DC, Ted Lerner family. Ray Dalio is up there in Connecticut at 18 billion. Yeah, a lot of us in our group are California, Oregon and a lot of people in Oregon Phil Knight, and family 40 billion other folks on the west coast. It's kind of a fun, a fun article. They're most and least affordable cities from home ownership. It's kind of a no brainer here but in graphical representation from NAR realty data, the West Coast is probably some of the most unaffordable areas but in there The worst is San Jose, California. And one of the better areas is Spokane, Washington. And I think we have actually a participant from the area of Spokane Washington, shout out to FM is listening. So we like to invest in the south and south east. Phoenix is one of the least affordable places in the south south Phoenix is actually pretty good market, in my opinion, and it's not too expensive. A lot of people from California move out there. But in terms of the South, it's one of the more expensive places. Amarillo, Texas is one of the most affordable ones. Kind of a nice little, little fun map to see where's the nice places to live. And I took a screenshot of some of the chatter that's been happening in our private Facebook group, or I'm seeing people move out of San Francisco Bay Area lower cost areas in Campbell, California since COVID has enabled them to work remotely. Real Estate seems to be picking up in those areas of Sacramento or El Dorado County, is you don't get much more for your money while still being you get a little bit more for your money while still being relatively close to the epicenter that is San Francisco and San Jose. Another person commented rents on average in San Francisco are down 12% Because as much as 20% in some areas now, that's just one person from the UI. But to be honest, I go, I use my network a lot. I mean, a lot of you folks are my eyes and ears out there. And hearing stuff like that is a lot more reliable than what you can find in the news a lot of times and you know, nothing beats going into Facebook marketplace and seeing what the rents are doing, especially for someone who's been following up on it, and kind of watching it watching the needle. Like a lot of you guys have this data that we read from these news article, there's quite a bit of lag, typically, where saving for a down payment is the slowest, Hawaii, District of Columbia and California. These are three places where the median home values in DC and Hawaii are a little over $700,000 That sounds about right. I mean, you can't pick up a house here, away. I mean, yeah, you could pick up a house but it's gonna be kind of crummy for 600 grand Hello. Foreigners just under $600,000 median home value, if you working with a down payment of 20% time to save for a down payment is 9.1 years for Hawaii, 8.7 years in DC and 7.8 years in California. So if you can save up enough money to buy a house, well, there's only 3030 or 20 more years you have to work more than likely. So I asked the question why buy in these kind of places to be honest, this invests, but I've been told I need to be a little bit more less controversial. You know, if you can't save your money, then please buy. If you can invest, I think I think you're going to end up better off than the most. Both day housing news reports such senior housing occupancy slips to an all time low. Now a lot of you guys have mentioned to me that, you know, you see senior housing, the trends, they call it the silver wave. I totally agree with you guys. So, senior housing is going to be in a huge demand assisted living. But I don't think the silver wave is quite here yet. And it's a very hard operational asset class. And to me, it shouldn't really be in the real estate category. I mean, it's an operational business to me, definitely not for mom and pop investor to operate in a mom and pop operator could possibly invest in apartments and be okay, but definitely not senior housing. The occupancy fell 2.8 percentage points in the second quarter dropping to 87% to 84%. So yeah, this I mean, this is some of the fallout from Colvin, senior housing, I wouldn't want the liability of that right now. Commercial Property executive reports that the top five secondary markets for self storage default, I've been looking into Self Storage lately. I haven't jumped in quite yet. I originally, you know, one of my things I don't quite like about self storage is to have You can develop this stuff so quickly and typically you don't compete directly with what you're doing. Yeah, there's not really any class B or C till storage out there like how you buy Class B and C apartments and then when a Class A apartment or a house, a self storage company comes online, it'll compete directly with you whereas like, you know, we're buying Class B apartments and in a class A apartment gets split across the street. Well kind of competes with us but not really we're you know, you're in a different category for customers. But on this some of the top five secondary markets for self storage development, Augusta, Providence, Knoxville, Rochester, Rochester, Springville, self storage, I think the appeal there is you have no tenants in you know, they have no right it's just stuff that you're not going to have any it's going to take a lot for there to be some laws against no evictions or kicking you out on the street for that. So that's, that's why it's very in favor of the landlord or the operator. Not all markets have come down a little bit since COVID kind of cooled off the market and temporarily, co stars reporting the Huntsville apartment market rising remains resilient and dynamic. But little graph of the same store asking rent just keeps going up through what was called Mr. March in March. That went up from 93 cents to 95 cents or in that market. So I can fully attest to that, because it just keeps going up in the stronger markets. I think part of that is just job growth. On the contrary, Jacksonville found the multifamily Market Report is seeing a little bit of a slide 30 basis points in rents in the last three months. Well, some people you know, some of my peers that have deals in Jacksonville saying that their deals or aren't seen this, but you know, this is just big data, right? We're trying to share On a market, commercial property executive also reports construction costs decreased for the first time in a decade, the covid 19 pandemic, and increased competition among contractors are key factors behind the client. So you know, as, as a lot of operators are, are on contractors or developers builders are kind of taking their foot off the gas pedal in terms of future deals, they might also slow down into existing ones too, and, you know, less competition coming online and generally kind of slows down the pace of construction and that ultimately impacts the contractors I think you would have asked this about six months ago you know, one of another reasons why I don't like doing that silly first strategy, which is too much effort at too much risk is because much of the last few years has been a contractors market, right contractors, any if you're not a contractor and you're not working, something's wrong with you. It's hard to find contractors up to this point because everybody to work in. It's really hard for unsophisticated new investor, especially when you're trying to do it remotely, to find people good people to work with. You know, you got a question, why is this person not working and want to work with me? Well, maybe you're paying a stupid price to that could be another thing that's very typical revolt. Investors. Now, now, it's kind of a good news, right, generally, you know, things are kind of cooling off less competition. So now's the time to go and build right. I think a lot of newer investors are scared, right? This is the time where you can go in and you can do get this work done a lot cheaper. You know, overall, unemployment is higher. Now these construction guys, the jobs have been absorbed. yardie came up with a report on multifamily and I'm just going to read some of the key findings here. The US multifamily rents decrease by $2 in June, you know, not that much falling to an average of four 1300 $57 and this is all inclusive of you know, ABC class average rents just continuing the four month trend of declines which makes a lot of sense right? I mean went to dang pandemic, you're expected you know rents to retrace a little bit. Average us rents declined by point 8% in the first half of 2020. And then point 4% in the second quarter. This is a stark contrast from 2.6% rent growth in the first half of 2009 and 1.2. A most people will argue that on average 3% is annual rent increase per year. That's kind of just follows a pace of inflation. If a market is super hot, like how Dallas was in 2013 and 14 or how Phoenix has been lately, you can see a big pop you know, a market you know, Mark get more of like a MSC, of like a spectral Five to 7% a year. So to see a rec growth of almost zero, that makes sense when this is going to happen from time to time. And this is why on those annual rent escalators, you don't want to see something too high. I don't be underwrite more than 2%. Typically when I'm looking at deals, you know, I'm assuming it's going to go up a little bit, but I want to under pace inflation, which is typically thought of as 3%, where the losers will, it's the West Coast and tech home markets, as we were saying, hit the hardest in the first half of 2020. That's the beginning of the year, rents are down 4.6% in San Jose and 3.8%. In San Francisco. Our business online reports that us multifamily originations to decline 20 to 41% in 2020, says Freddie Mac, so all this is is less people are doing deals and yeah, I mean, the last three, four months haven't really seen that. Very much come through the inbox, probably I would say, unscientifically, I would say maybe a 10th or, you know, 20% of what kind of volume of syndicated deals I see has been coming through. Part of that are that they think most, most investors are just freaked out and scared and people can't raise the money for it. Part of another part is that, you know, Fannie Mae, Freddie Mac, and they kind of lead a lot of lenders. They've kind of restricted a lot of the exemptions they will give that makes these loans extra extra sweet for syndicators and investors. We are at all time, interest rate lows. If you haven't been seeing this, probably been living under a rock. But yeah, we're seeing in the multifamily space like 2.9% interest rate is obscene. It almost makes sense for people to buy lukewarm deals, right. I mean, Think about it like this, it's not going to be a sub 3% forever. If your cash flying like you want to lock up all this good debt now, I mean, there's all signs point to inflation, how else are you going to pay for this three, four or five $7 trillion of stimulus that's coming. If you have a primary residence, you might be looking at refinancing your home, but I would be careful, right? Because these lenders are really tricky. They love to get these origination fees typically 1%. So they're always trying to trick you guys into refinancing. I'd say be careful, right? If you already have a low percent mortgage under 4%, I mean, it may not make sense. Remember, like if you had a 30 year mortgage and you know a few years went by you have 27 years left by them refinancing you again, they put you into a new mortgage. So what you really want to do to compare apples to apples is to say, hey, run my run my numbers, I want to put it as a 27 year mortgage. So I can Compare it to the monthly payments, and I want you to make it a no Fee Loan. Now you these guys can play around with the points and fees. And a lot of times they'll make it a no Fee Loan sitting. So yeah, see it's no fees, but then what they're doing is they're increasing the percentage slightly. So if the base would be was like three and a half percent, they might increase it to 3.75 to make it to take out their fees there so they could get paid. These buggers are tricky. So do the math for yourself. And if you can't do the math, find a network and you know, we talked about this stuff in our mastermind all the time. I would say if you're looking to stay in your home for a long time, more than five or 10 years it might be make sense to refinance it but yeah, if you're not make sense to just sell the asset now if it's not a good rental property or and get the equity out now, or just let the mortgage ride for the time being and and I'm avoid pain those friction costs which are those loan origination fees

been investing with hp since 2017. By distressed mortgages and discounts to offer struggling families sustainable solutions to stay in their homes or homes were vacant. HP recognized that lenders frequently struggled as they tried to limit their losses. That's why owner George Dewberry founded pre aureo, a platform that gets these vacant properties into the hands of local investors like us during the foreclosure process, which mitigates losses to lenders and accelerates returns for investors. Winwin I'm very excited about this platform that connects local investors with board appointed receivers in their area to cost effectively repair, lease and maintain and rent vacant homes during the foreclosure process and ultimately make a profit. I've been checking out local properties here in Hawaii and I think it's a great way finally pick up my home to live in. Even though I think home's the buyer on all the best you can live with About pre Rio by going to simple passive cash flow calm slash v. Rio.

Sam Zell, this is a smart guy. If you haven't heard of him, you should probably Google him. But he's kind of like a czar of investing. He's less known than Warren Buffett. But he's, he probably invests in more like more trends. So I think he's one that a lot of people like to follow. But he's kind of predicting a U shaped recovery likely beginning in the fall, saying we basically improve someone I think that we're going to have some kind of slow period improving toward the end of the year. That's very different from a radical Vshape. Again, he's he's kind of thing it's going to be more of a U shape. So Sam cells, you know, he's invested in I think he was one of the first guys to jump on the mobile home park bandwagon. But yeah, smart guy and a good person to kind of follow see what he's doing. And, you know, I think a lot of people will say, Well, yeah, Sam's They'll says in the fall, start investing in the fall or shortly after like, no, that's not, you can't do that, like you kind of miss out on some of the best bull market. And that's all I got to say about that. This take a little break here for another giveaway. The other second easter egg here is amortized mortgages suck. You want to use your key lock, if you're looking to pay off your mortgage a fraction of the time do you want access to this shoemoney McClendon simple passive cash flow after joining the club, if you have not a part of our investor club, go and join that simple passive cash flow calm slash club, but this is the mortgage rate arbitration game where you're using your healer and you're paying, you're paying down your amortized loan with simple interest. And trust me this works. You would say I read a little process here. You can probably read this on the YouTube channel or on the video version, but If you guys are listening in the podcast form, just go ahead and shoot me an email Lane at simple passive cash flow. I can give you all the tutorials and videos on this, but it works. You, you pay off your he lock, you replenish it with your cash flow, and then you magically your mortgages gone in like five to seven years. Sounds cool. But I would caution a lot of people like the strategy is not for everyone. And it is nothing compared to actually investing in good hard assets that pay cash flow. And I think this is where a lot of people get confused, right? They're like, well, I want to pay off my debt. Well, paying off your debt is not aligned with financial freedom. In many respects, debt is the best part of this whole thing. Like I said earlier, inflation is going to be going up because we have all this free created money, especially in the last few months. What the government is going to do is just inflate the money supply to make their deaths. smaller portion. So what you want to be doing is grabbing as much hard assets that have good debt associated with them. So you can pay it off with future money, whether that is buying a rental property or going into a large syndicated deal at 2.9%. I mean, it's a no brainer. Don't take your money. Well, I'm not saying don't. But if you want to be smart about it, and you want to do the best strategy, in my opinion, don't take your money that you have in a HELOC and put it to pay off your debt. Again, the debt is is you want that you want to lock up but you don't want to go pay it off. Instead, take that keylock money and go buy rental properties or go into leverage deals with that. I talk a lot about this in the tutorial. It's somewhere on my YouTube channel. But if you guys can google it on there too. And a lot of people just don't understand it. The thing they want to be debt free, which is you know, I guess that's that's One thing I think they're getting it confused with consumer debt, right? Like, you definitely don't want to be leveraged on your credit cards at 20%. But when you have to read a 5% interest rate on assets that produce income that's you want to load up on that stuff as much as you can get. I wrote an article on Forbes on this, you can check out at simple passive cash flow calm slash debt. So it's a very big paradigm shift. Of course, if you haven't checked out we created a new spin off group for new investors looking to pick up their first few rental properties or remote rentals. turnkeys. We are starting that on August 15. Two if you want to join, go to simple passive cash flow.com slash incubator. If you've got any friends who've been bugging you, about how you've been investing in real estate, and tired of bugging you, and you just want them to work under our umbrella with the people that we've worked with in the past, they don't have to go around and blind date a whole bunch of providers. brokers, this is the group for you. But if you're more of an accredited investor looking to get associated with our, our close knit inner circle, check out the simple passive cash flow, passive investor etc and master mastermind simple passive cash flow calm slash journey to learn more about that we're transitioning over into my personal section of the monthly report. And for those of you guys have are on watching, if you guys have any questions, feel free to type it into the question answer box and we'll kind of get to at the end. But these are the six tenants that I kind of rolled through every month. First one is growth. I'll be honest, I hadn't really done much part of this month was me stuck at home because I had gone to Birmingham, Cleveland and Dallas. And boy still has this two week quarantine rule where they actually did text me to see if I was at home. So I got this basketball that's connected I don't know how it's done as some kind of electrode in it, but it's connected to this app. So I'm trying to get better at dribbling the basketball. sounds silly, but trying to play out these things. It's fun to me trying to get some hobbies. How did I get a little bit of contribution to my life? Well, if you missed it last Saturday, I spent six and a half hours and I drank two coffees to educate a lot of investors who are looking to pick up their first few rental properties. Who is a no BS, no frills, all education, training. If you guys would like to get access that shoot me an email, I might package it up into the E course. Or actually we'll go into the E course for remote investors. So if you guys want access to that, go to simple passive cash flow.com slash incubator two, you can just buy the course right there, or we'll probably do as a package up these videos hopefully in a smaller product. Yeah, probably sell it for like 20 bucks or 50 bucks just enough for you guys to not just think it's worth nothing and it's free. Significant. So we closed 179 unit deal. Yeah, the second one this year not too many deals this year with all that's going to be going on but we got 3.1% Freddie Mac non recourse debt. Amazing, amazing 3.1% this deal was more of a yield deal. Not too much value add, but in a great area of Irving, Texas. I mean you can't go wrong with this thing. I mean, you know, again, it's a yield play. So your plays are not a heavy value add. It's just, it's cash flying day one. And you know, it's 97% occupied. Yet To me, this is kind of like blue chip stock in your stock portfolio, except I have no stock. So for me with my 100% alternative asset portfolio, this is some of my very conservative side of my portfolio. How did I create it? uncertainty in my life. Well, I don't know, if we're going to be doing a 2021 we mastermind in Hawaii. I still think we're going to do it. But you know, with the whole second wave going on and everything, you know, we don't know I'll probably decide here in the next couple months. But uh, yeah, I mean, check out the video we did on the last year's one simple passive cash flow calm slash, who we three if you guys have any feedback, you guys really want to have it? Let me know. Maybe we might even do like a smaller one. Maybe that's a safer way of doing things. Just keep it small hundred I have searched at my life will workforce housing works. It works. I gotta admit, through April and May I was a little worried that people weren't going to pay the rent, but Dang it, they paid they paid and now I'm even more like confident in this overall strategy of investing in workforce housing. What is workforce housing? Well, that's Most of America, right? Dang it like doesn't that makes total sense to invest in something where the majority of people in America need that product. So yeah, workforce housing, we're pretty confident that and i'm actually going after more higher risk projects these days, because I'm pretty confident in the backbone of my portfolio. Again, I've talked a lot about this, you know, these days, you can either be in a more cash flow play and maybe see an equity multiple, two times your money in five to six years with cash flow with, you know, cash flow is great, but you know, it's, it's kind of slower, right? Cash Flow is cool, especially when you have a day job to leave your day job. But, you know, legacy wealth is created with no more risks for exponentially more return. Right? So that's the, that's where you take nothing, a raw piece of land, and you put a building on it, and you rent it up. These development plays and you know, this is where I'm learning that these accredited families. This is where they live. This is this is where they create that legacy wealth. They don't need the cash flow, they could care less if they invest 50 or $100,000. And they got a couple grand every quarter. They don't care, don't care. In fact, it's kind of a burden for them. They're coming in wondering like, what's this? So my direct deposit statement? And I think the reason why they like development deals is because it's a shorter time horizon to they get sort of instant feedback, good or bad. Right, and then they can move the money into the next project very quickly. But yeah, I mean, as investors, you have choices, and you have to set a line with your investment philosophy, but me personally, I'll probably still do a majority of my stuff in cash flowing plays workforce housing again, but trying to go after some nice home runs here and there. How do I get a little love and connection in my life? Well, last weekend we celebrated here in Hawaii. We did a little get together with a few of us here in Hawaii and celebrated the closing of the last deal. At some wine has Some food it's nice to get around real people not that hang out with my wife every night wasn't getting boring, but it's nice to get some different players in the mix. People is all what makes a difference. And relationships is the currency of the rich, I would argue have the right people write some new podcasts and articles that I released this month we talked with mythic markets.com who allows you to invest in geek stuff like Spider Man comics magic cards. I'm waiting for Thor's hammer to come out. Actually, I mean, like look like a lot of people say that when I bring out something on the podcast. I'm immediately vouching for them. I am not doing that. Just because I bring someone on the process does not mean i think that they are safe to work with. HP is different, right? HMP is a sponsor of the podcast and they brought out number two right here. The person reo service. I definitely believe in hp. You know, personally knowing the owner George Newbery there, if you guys want to, you haven't got a copy of his book, let me know. I think you guys can get that. It's simple passive cash flow, calm slash hp. And you can also learn about pre reo there at simple passive cash flow.com slash pre reo, but p o is kind of a cool thing I've been looking at there every month or so see what's around my local area here in Hawaii that I can pick up pre reo, REO properties, if you don't know our properties that someone has run in tough times and are in foreclosure. The pre reo are the properties that are owned on the bank that are typically in judicial states where it's harder to collect in general. So the bank is just like Screw it, we'll just sell it pre reo. So by going through the service, you're able to jump over a lot of mom and pop investors and they have like a nice little feel There. So check it out, you know might not be for you, you might be a passive that actually you might be a passive investor. But this might be appealing because you wouldn't buy something that you don't live near that you can't check that you don't have a competitive advantage. So I would say it's a great way to find a primary residence, political prop bets. predicted.org did a little review on that. This is a cool website. It's kind of for fun, you can bet on the election. And I think you can only bet up to 1000 bucks. So it's kind of play money. But I use this as a means to figure out who's actually winning in the polls. Because the people it's a very small sample size, but the people who are voting on you know, who they think is going to win is actually putting up money so it's not like, you know, most office bets or opinions where Yeah, people have an opinion, but very few people put their money behind that. Check out the website, not saying that it's safe or anything like that, but it's a cool place to To see, you know, different election how things are tracking in one place. Number four here investing in fine wine so very much like the mythic markets.com company these guys invest in real lots of wine. Actually, this one's more appealing to me. I think, to me, that's kind of cool. Owning a winery or investing in fine wine. And it seems more cool to me. You think? I mean, whatever floats your boat, right? So people, it's like sports cards that has been kind of on the uptick this past year, especially with the land stance and everybody's stuck at home. I also wrote a article on due diligence again, you can get that at simple passive cash flow, calm due diligence, which is just a sample what's in the passive investor accelerator. And we're also putting together a lp guide syndication course. So we've collected all the notes over the past couple years, I've taught people and putting it all into Nice ecourse so if you've checked out the new remote investor ecourse that we launched last month, this is going to be in the very similar format. We also had a live coaching call with another credit investor lawyer. So if you're a lawyer or you're another credit investor, check that out. People like those. If you go to the YouTube channel, there's a section there with all the past live webinars, a live coaching calls, that you can vicariously live through other investors in Hawaii, and self directed IRAs to invest your retirement funds. We kind of talked about, you know, when is it not good to use an IRA or a QR p? I'm not a big fan of retirement funds. I don't have any. I work with clients that we kind of strategically withdraw to retirement accounts so that we're keep one eye on our AGI level. So we don't pay too much taxes because when you take out the money out of your retirement accounts, you it comes up as a active income generating They're some of the issues I've been running into is not enough reading time. I'd like to read more books. Some cool doodads I've been buying I bought this like stream deck is a total geek item. But if you're at your computer for more than six hours a day, you might want to think about getting this. So what it is you can it's it goes next to your keyboard and it's a hotkey pad. So you can program each of these buttons and each of these buttons is not just like I thought it was like a little sticker you put on there but it's like an LED screen and each of these buttons you can program it based on what program you're and and it's pretty amazing. It's pretty cool. Like I mean mines is super basic. I just have cut paste copy, reply to email, archive email, TV, email, close the window, trash this thing go to this website, play my music, undo but you know, time is money and this is really cool. This this got created by a bunch of like gamers if you guys haven't heard of Twitch and the eSports revolution This is a byproduct of that. Some of the lessons learned here I be very careful not to offend anybody here. I don't mean to but you know, with all this pandemic going on you were mastered, do not do when the country right, it's very left versus right. And one thing one truth I understand is if you're on the left, you can't see the right if you're on the right you can't see the left. It's It's It's amazing as I travel throughout the country as I go and travel and in Huntsville, and Cleveland, how different people are in places like California or the East Coast or Hawaii. It's It's amazing. People think that America is one united country, we are a country of 50 individual states, some states are very divided amongst themselves. And you know, I think we all see a little bit of like schools opening what do you do, right, I think I think this is the time where we all need to have a little bit more compassion towards everybody. I mean, nobody's gone through a pandemic. I mean, we're all trying our best. And you know, there's no reason to get all emotional on each other. You know, it is what it is trying to be safe and don't take things too personal. Join our book club, simple passive cash flow calm slash lien hack we are reading what would the Rockefellers do, which is an application on how to use infinite banking? If you haven't heard of infinite banking go to simple passive cash flow, calm slash banking, but if anybody doesn't have any questions into the channel, you guys can type it in. So someone asked here on the YouTube How do you invest in these apartments? Well, it's just like buying a single family home rental, but add another couple zeros on to it. But a lot of these apartments are very big right inaccessible, most investors so popular method for purchasing apartments is a syndication model. So the analogy I like to use is an airplane. So in the airplane, you have a cockpit of general partners to operate or sponsors were these are the guys who find the apartment, they find the lending, they put the lending in their name, they operate the deal, they make distributions, they kind of do everything. And so passive investors are able to board the airplane, invest in the deal as a passive investor, LP investor, and typically just invest a small sum of money of anywhere from $25,000 to $100,000. As the minimum investment and buy in as a fractional share of this airplane or apartment building, of course, when that happens, securities laws are triggered. So it's important to have a good lawyer to create documents so that passive investors are protected and general partners are protected to know as soon as you bring on a passive investor, you've triggered these securities laws, because why is the is the federal government involved in sec well You're essentially taking an asset and you're breaking it up into fractional shares at that point. It's not like, you know, you have a property and then you know, you partner with a buddy. And you know, both of you guys have collateral. In this case, you're handing out fractional percentages ownership of an LLC that owns a building. So in the other case, where it might be okay, because you have title to the property, when you do a syndication, passive investors, they don't have title to the property. They own a fractional share of business, again, an LLC, in a lot of cases. So it triggers securities laws. So passive investors are able to invest, you know, typically around $50,000 and invest in a couple few dozen, you know, firstly stuff a few, but then they grow it to a few dozen properties and assets. And this is something that I learned a while back after I had 11 rental properties, you know, I realized that rental properties just aren't scalable. You're going to have a lot evictions, you're gonna have a lot of things that happen, even if you have property management to deal with all your issues. So that this is where I joined different mastermind groups got around higher level and accredited investors. And I realized that this is how the wealthy invest as private equity investors. So they're close. They're, they're aligned with the operator. They're not just, you know, investing in retail investments. I think that's the main thing, getting away from all these like mutual funds and other options that have huge, huge hidden fees involved and getting more closer and cutting out the middleman. And that's what this is all about. But there's no more questions. We'll see you guys next month. And you guys can access all these paths, monthly updates at simple passive cash flow calm slash investor letter, and we'll see you guys next time. Bye.

This website offers very general information concerning real estate for investment purposes every investor situation is unique. Always seek the services of licensed third party appraisers and inspectors to verify the value and condition of any property you intend to purchase. Use the services of professional title and escrow companies and licensed tax investment and or legal advisor before relying on any information contained here. Information is not guaranteed as an every investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end, you're the only person who is going to look out for your best interest