Latest / REL Freedom Podcast / Kevin Shtofman - How AI Is Powering the One-Person Real Estate Business

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Kevin Shtofman - How AI Is Powering the One-Person Real Estate Business · REL Freedom Podcast

• 0:00
  SPEAKER_01: Anytime a new deal comes from a broker, it gets fed into this AI model and AI ranks it for us.
• 0:07
  SPEAKER_01: And anything below a, in our mind, it's on a 10-point scale.
• 0:12
  SPEAKER_01: Anything below a seven out of 10 automatically gets eliminated, and we just tell the group it got eliminated.
• 0:17
  SPEAKER_01: Anything uh between a seven and an eight and a half, um, a group of people come together and have a meeting on it and look at some of the check boxes.
• 0:25
  SPEAKER_01: Anything above an eight and a half gets presented to the group.
• 0:28
  Mike Swenson: Welcome to the Real Freedom Show.
• 0:30
  Mike Swenson: We inspire you to pursue your passion to gain time and financial freedom through opportunities and real estate.
• 0:35
  Mike Swenson: I'm your host, Mike Swenson.
• 0:37
  Mike Swenson: Let's get some real freedom together.
• 0:46
  Mike Swenson: Hello, everybody, welcome to Real Freedom Real Estate Leverage Freedom, where we talk about how you can build time and financial freedom through opportunities and real estate.
• 0:55
  Mike Swenson: I'm your host, Mike Swenson.
• 0:57
  Mike Swenson: If you want to get started on your real estate investing journey or get into real estate, check out our website, freedom throughrealestate.com.
• 1:04
  Mike Swenson: We've got all of our content here, all of our episodes, blog articles to help you figure out where you want to get going in real estate.
• 1:11
  Mike Swenson: I always describe it as an entrepreneurial playground.
• 1:14
  Mike Swenson: So there's a lot of things you can do, doesn't matter where you start or where you finish.
• 1:17
  Mike Swenson: And there's so many different things that you can do inside of real estate.
• 1:20
  Mike Swenson: And so we want to help you.
• 1:21
  Mike Swenson: And also just the the point of the podcast is just interview great people that will hopefully inspire you to think differently, or maybe you resonate with a story that works well with you, somebody's background, and encourages you to get in.
• 1:34
  Mike Swenson: So it's all about taking action to build the life that you want to live.
• 1:37
  Mike Swenson: And so today, super excited.
• 1:38
  Mike Swenson: We've got Kevin Staffman here, a lot of background for you in terms of data management, AI tools.
• 1:45
  Mike Swenson: You used to work as a consultant for Morgan Stanley, Deloitte, a bunch of others, C level executive.
• 1:50
  Mike Swenson: So you've got a ton of background, which I'm sure you can get into and explain a little bit more about.
• 1:54
  Mike Swenson: But we're gonna kind of take this in the in the realm of how can you do more with less in real estate and really being a tried and true real estate investor, somebody who's been around the block, done a lot, sharing your best tips and wisdom.
• 2:06
  Mike Swenson: So, Kevin, we're so excited uh to have you on the show.
• 2:09
  SPEAKER_01: Thanks for having me on.
• 2:10
  SPEAKER_01: It's it's 21 years in real estate, but it feels like the blink of an eye.
• 2:13
  Mike Swenson: For the folks at home, share kind of a little bit about your background, kind of leading up to where you're at today, and we'll take it from there.
• 2:18
  SPEAKER_01: Got out of UT Austin in 04, uh, went into finance.
• 2:23
  Mike Swenson: I'm sorry, I I always joke I have to have a list on the side of my wall.
• 2:27
  Mike Swenson: Everybody that's got a connection to Austin, Texas, because I swear half of my guests either live in Austin, have been to Austin, attend school in Austin, whatever it is.
• 2:36
  Mike Swenson: So there's there's the check mark.
• 2:37
  Mike Swenson: You already got it right off the gate.
• 2:38
  SPEAKER_01: It's a it's a great place.
• 2:39
  SPEAKER_01: It's a very different place from 21 years ago and I left.
• 2:42
  SPEAKER_01: It's a more vertical place, it's a more crowded place.
• 2:47
  SPEAKER_01: Um, but I have a lot of fond memories of it.
• 2:49
  SPEAKER_01: Uh, and I wish I'd bought real estate in that place because um man, values have gone uh mainly one direction, unless you bought apartment communities in 2022, then you're you're you're you're taking a bath because the market works how the market is supposed to work.
• 3:06
  SPEAKER_01: Uh when a lot of new supply gets built, um, you know, competitive supply equals lower prices for and better results for tenants.
• 3:13
  SPEAKER_01: Well, but I'll I'll leave the politics out of it at least for now.
• 3:16
  SPEAKER_01: Uh so I I worked mostly for big companies, um, Morgan Stanley to start, then got an MBA, then did nine years in management consulting, uh Deloitte and EY amongst them.
• 3:27
  SPEAKER_01: And all of my clients were big real estate companies.
• 3:30
  SPEAKER_01: So, but before I began building my own portfolio, I was advising real estate companies, whether that was publicly traded REITs or pension funds or insurance companies that had real estate as investments, where they should be deploying capital and how they should be thinking about the technology they use to report on how they're doing.
• 3:50
  SPEAKER_01: Right.
• 3:50
  SPEAKER_01: Because at the end of the day, um the more efficiently you can find deals, and then once you find them, the more efficiently you can maximize income to you know maximize the value of your buildings, um, the better results you can report out, and then people will give you more money to do it all over again.
• 4:07
  SPEAKER_01: Uh so that that was my job for a long, long time.
• 4:10
  SPEAKER_01: And then once I had uh our first daughter uh in 2018, I realized being on an airplane every single week, 52 weeks a year was probably not going to be uh conducive to a long and fruitful marriage.
• 4:24
  SPEAKER_01: So uh we joined a startup.
• 4:27
  SPEAKER_01: I was employee number nine.
• 4:28
  SPEAKER_01: Uh it was a different, different muscle to build.
• 4:31
  SPEAKER_01: But being there made me realize that without a big support network, although it's a scary leap to make, uh anybody can do it.
• 4:41
  SPEAKER_01: Uh you know, now I'm I'm I'm an executive at a fairly large software company.
• 4:47
  SPEAKER_01: And uh around that same time I started investing some of the extra money that I had into real estate, thinking that with 15 years of experience, I knew all I needed to know.
• 4:56
  SPEAKER_01: I learned quickly that was not the case, and I made all of the probably normal mistakes you have covered with many of your podcast guests over time about glossing over uh what you thought were unimportant details about a deal, buying at the wrong time, selling at the wrong time, working with vendors you didn't trust, all that stuff.
• 5:18
  SPEAKER_01: And now uh, fast forward to today, uh, I've got a portfolio of five different properties, some of which I GP, some of which I'm an LP investor in.
• 5:28
  SPEAKER_01: Part of my day job as an executive with this data management company, I get access to information and trends that the the wider market probably does not.
• 5:38
  SPEAKER_01: So sales comps, lease comps, foot traffic data, spending data, demographic information, things that give me a point of view on where the wider market is headed, and locally in my market of Dallas Fort Worth, where I think there are going to be opportunities.
• 5:54
  SPEAKER_01: That's the long story short.
• 5:55
  Mike Swenson: In terms of, you know, getting started, right?
• 5:58
  Mike Swenson: Everybody, you know, I say it's it's a big leap.
• 6:01
  Mike Swenson: It's a reason why kind of our logo is this guy jumping off of a house because it's like you've got to make the leap at some point, right?
• 6:07
  Mike Swenson: You're an armchair quarterback, you're consuming the podcast, you're consuming the information, reading the books, whatever it is.
• 6:13
  Mike Swenson: And then at some point you got to put your money where your mouth is and get in the game.
• 6:16
  Mike Swenson: So for you, obviously, like you said, you've got a big background.
• 6:19
  Mike Swenson: So you you feel comfortable and confident with what the the leg you were standing on.
• 6:24
  Mike Swenson: What was that initial leap for you in terms of what you did to get into the game on the real estate side personally?
• 6:30
  SPEAKER_01: Yeah.
• 6:30
  SPEAKER_01: So the first thing, uh, early days, I was just inv investing in publicly traded REITs.
• 6:37
  SPEAKER_01: So, like for a couple of years, I was just Boston properties, Simon Properties, and I was I was getting all their normal public data that were people talking.
• 6:45
  SPEAKER_01: They were and I was learning what they thought was important in a real estate investment.
• 6:50
  SPEAKER_01: So tenant mix, uh, amenity mix, stuff like that.
• 6:54
  SPEAKER_01: Then once I thought it was time to get a little closer to home, I joined a small group of investors and we invested in an apartment complex here in Dallas.
• 7:04
  SPEAKER_01: So instead of investing in a big company with a portfolio of properties, we invested in one property, but I wasn't managing it.
• 7:12
  SPEAKER_01: Right.
• 7:13
  SPEAKER_01: Just I wrote a check and I was getting quarterly updates on how it was doing.
• 7:17
  SPEAKER_01: But because I was part of a small investor group and I knew the the managers directly, I was able to ask a lot more pointed questions without being the manager myself and putting a lot of my own capital at risk, other than the small check that I wrote around property management and work orders and parking infrastructure and stuff that, like, those questions would have never been answered by a public company.
• 7:42
  SPEAKER_01: They would have been like, Yeah, send the email to this email inbox, right?
• 7:46
  SPEAKER_01: But because this owner wanted more of my money for other investments, they spent time with me and I learned a lot of the pitfalls.
• 7:54
  SPEAKER_01: And then after about a year of that, I decided uh with three other people to buy a different asset.
• 8:02
  SPEAKER_01: We bought a self-storage property, and uh thinking that it was the most plain vanilla property we could buy and just get in there, and you know, these folks they they lease a storage unit and they plan on putting their stuff in there for three months, and then three years later they're still paying the bill, which is actually pretty close to accurate.
• 8:21
  SPEAKER_01: Most people do not leave storage units, it's a fantastic business.
• 8:26
  SPEAKER_01: But we learned a lot about um land security, zoning, um, squatters and vagrants, uh, stuff that like just affects uh your cost model that you weren't thinking about before.
• 8:40
  SPEAKER_01: Um and you learn a lot, and what I learned was you learn a lot by being the property manager, by being the general partner more than you do the investor.
• 8:51
  SPEAKER_01: And we started working with some vendors.
• 8:54
  SPEAKER_01: Uh we thought we had handshake agreements, that wasn't the case.
• 8:58
  SPEAKER_01: We had to double pay, we had to do double work, we had to spend double money, it lowered our returns, it sucked.
• 9:05
  SPEAKER_01: But I'm glad we went through that exercise because you only have to learn that mistake one time.
• 9:10
  SPEAKER_01: And if you do it on a small scale with one property with not a whole lot of money, um, by the time you have real money to buy real property, you're thinking about all those things up front.
• 9:21
  SPEAKER_01: So that's like the the best advice I can give is just get started now with a small amount of money and get your hands dirty and learn all of the things you just have to learn when you're managing a property.
• 9:31
  Mike Swenson: Kind of to your point here about, you know, investing in the apartment complex and talking to the property managers.
• 9:36
  Mike Swenson: I mean, I've heard people say, like, instead of trying to do your first property on your own, just go partner with somebody that already has a bigger ego than you and could use a little bit of money and then essentially just use it as an education expense, right?
• 9:48
  Mike Swenson: Like I'm investing in this deal and I'm gonna pick your brain.
• 9:51
  Mike Swenson: But if you go to somebody and say, can I just pick your brain?
• 9:53
  Mike Swenson: You're probably not gonna get too far.
• 9:55
  Mike Swenson: But if you throw a few thousand dollars at it and say, Hey, I want to invest in your property, you're gonna get all those life learning lessons that you don't have to go through on your own as if you were carrying the the bulk of the work yourself or the bulk of the finances yourself.
• 10:08
  Mike Swenson: You're just kind of coming in as a small partner and learning it all.
• 10:11
  SPEAKER_01: And any real GP, they want consistent partners and investors.
• 10:17
  SPEAKER_01: So they will give you the time and answer all of your questions because ideally they want you to write them checks again and again in future investments.
• 10:24
  SPEAKER_01: So you do it with a small amount of money to build that relationship and get an audience with them.
• 10:30
  SPEAKER_01: And then eventually you'll learn enough, at least you you think you learn enough initially, to then start doing it yourself.
• 10:36
  SPEAKER_01: And then you really learn enough.
• 10:38
  SPEAKER_01: Um and eventually you just the checks get bigger, the risk probably gets bigger, but uh what you know is just such a vast universe more than what when you started.
• 10:52
  SPEAKER_01: You won't you won't realize how much you didn't know until you're you you get into it, but don't let that stop you.
• 10:58
  SPEAKER_01: Um because you just this business is all about making small mistakes and then getting big wins as a result of those learnings.
• 11:07
  Mike Swenson: So you uh had an apartment, you had a self-storage, kind of what uh what took you next after that?
• 11:13
  SPEAKER_01: Yeah, then uh we got a standalone building that was just a single tenant uh triple net lease.
• 11:20
  SPEAKER_01: And for those unfamiliar with that, that property type, it's it's basically you get one tenant.
• 11:26
  SPEAKER_01: It's usually some sort of freestanding business.
• 11:29
  SPEAKER_01: Usually it's a corporation with a brand that you would recognize that has a bunch of different locations around the country, um, and they sign a long-term lease.
• 11:38
  SPEAKER_01: Um, triple net means that they're responsible for basically all the expenses in that asset.
• 11:43
  SPEAKER_01: So the they're paying the utility bills, they're paying for the insurance, right?
• 11:48
  SPEAKER_01: And they're paying you the rent.
• 11:49
  SPEAKER_01: So, like you're you're basically you're you're de-risking um the asset itself because if that is a large brand name tenant uh that has a pretty good history of growth, they sign a long-term lease and they're covering the expenses, it's easy for you to forecast the type of profit you're gonna make on that on that building if it's in a good location.
• 12:10
  SPEAKER_01: So we we bought that asset, and that has been, you know, over the last three years has been nicely profitable.
• 12:18
  SPEAKER_01: Um typically the types of investors you attract in a deal like that are people who want to clip coupons.
• 12:24
  SPEAKER_01: These are folks who want cash flow.
• 12:26
  SPEAKER_01: Uh, that's very different than someone who's writing a check and waiting for you to refurbish the building and do a bunch of value add work and then sell it five years later for a big pop.
• 12:35
  SPEAKER_01: These are very different investments.
• 12:37
  SPEAKER_01: And we wanted to get experience across the board.
• 12:40
  SPEAKER_01: So now we now we have an apartment complex where you're doing value add work and getting new tenants in and raising rents, self-storage where you're just you're not sending anybody any money, but you're just you're cash flowing yourself as GP.
• 12:54
  SPEAKER_01: And then the the triple net building where we attracted investors and we're just sending them dividend checks and riding the equity uh upward.
• 13:04
  SPEAKER_01: Um we have not bought yet any office buildings, but we think that in general, most markets, office has bottomed, and and it's actually a pretty attractive market, although the term flight to quality is a real thing.
• 13:20
  SPEAKER_01: Um, most people are looking for less space, but nicer space.
• 13:25
  SPEAKER_01: So all the folks that had big footprints, maybe they took a whole floor of a building for their company.
• 13:30
  SPEAKER_01: Now maybe they only want half that floor, but they want it to be nice and they want it to be updated and they wanted to have amenities in it, and they want it to be close to uh places that are nice to eat or nice to walk or nice to play.
• 13:40
  Mike Swenson: Yeah, I remember hearing one time uh, you know, talking about as you're looking to invest in real estate.
• 13:45
  Mike Swenson: First of all, everybody wishes they would have bought something 10 years ago.
• 13:48
  Mike Swenson: Everybody wishes they would have bought something 20 years ago, right?
• 13:50
  Mike Swenson: So it's like, you know, in instead of buying now, you're always looking in the past, but you have to have a little bit of sense of as people are running away from the fire, you're running into the fire.
• 14:01
  Mike Swenson: And that's kind of how office is right now.
• 14:03
  Mike Swenson: It's like there's, you know, there's some smoke, there's some fire there, and nobody knows kind of when the right time is to get into it, but you've got to have a little bit in your gut where you're like, yeah, I think, I think now's the time where the opportunity exists.
• 14:15
  Mike Swenson: Because if everybody thought it was a great opportunity, everybody would be doing it, right?
• 14:18
  Mike Swenson: So you've got to have that that sense of balance in terms of risk and reward to be able to have a good, a good handle on when to get into that stuff.
• 14:26
  SPEAKER_01: And that's always my advice to people who are a bit newer into real estate.
• 14:31
  SPEAKER_01: Um the the area you're going to know best is the area closest to where you live.
• 14:39
  SPEAKER_01: And if you're in a particular neighborhood and you're not planning on leaving that neighborhood for quite some time, you know, I'm I I say neighborhood, a full mile radius, which can be a pretty significant amount of real estate, you know that area great.
• 14:53
  SPEAKER_01: And you know which particular spots of that neighborhood are um not actually trafficked as much as people might think, or much more trafficked than people think.
• 15:04
  SPEAKER_01: Um, and you might know which home is on the best corner, or which retailer, which well, they didn't make it because they were the wrong brand, but that's a great shopping center.
• 15:15
  SPEAKER_01: And I would, I would, I would be part of investor group that would buy that.
• 15:18
  SPEAKER_01: Or, oh, um, a bunch of new companies are relocating to near the city.
• 15:25
  SPEAKER_01: So there's gonna be a lot of people coming into this neighborhood in this school district, and therefore home prices are going up, or a lot of people are looking for jobs around here.
• 15:36
  SPEAKER_01: So this office building is gonna get refurbished.
• 15:39
  SPEAKER_01: It's like you're you're gonna know your particular part of the world a lot better.
• 15:45
  SPEAKER_01: And so if you're thinking about dipping your toe into real estate, start in the area you know best because all the little things that that a large institution might overlook, you're not going to overlook because it's where you live, it's near where you work, it's near where you play, it's where you spend your time, and it's the place that you care about.
• 16:03
  SPEAKER_01: So you're gonna pay attention to all the details that others will not.
• 16:06
  Mike Swenson: I remember as we're gaining more traction on apartments.
• 16:09
  Mike Swenson: I mean, you know, I do these podcasts and I interview people and they're all investing in the Southeast and the Bible Belt and Texas and Phoenix and all that, and it's like, or Ohio.
• 16:19
  Mike Swenson: And it's like, well, I live in Minnesota, so uh, if I want to do more of this, like I felt like I've got to go learn about all these other states and everything.
• 16:27
  Mike Swenson: And it's like, no, you know, people make money in real estate investing in Minnesota, so that's where I am, that's where my connections are, that's where I need to grow and build experience to get started, too.
• 16:37
  Mike Swenson: It's um, you know, versus feeling like you have to at some point you can't chase all the shiny pennies at once.
• 16:43
  Mike Swenson: You've got to just put your foot in the ground and and let it harden a little bit.
• 16:47
  SPEAKER_01: Yeah.
• 16:47
  SPEAKER_01: Is there is there an area along, you know, the highway that was overlooked for a while, one neighborhood over from yours, that like that's the next great thing because it's just a little bit closer to the airport.
• 17:02
  SPEAKER_01: Or, oh, so and so's uh football team for this school, they weren't that competitive, but now they just moved up to 5A and a bunch of people are moving to the neighborhood, want to be part of it.
• 17:14
  SPEAKER_01: So now that one corner that wasn't really exciting for retail, now it is.
• 17:19
  SPEAKER_01: Uh like it just knowing all that stuff, like that's where you make real money and you make it on the buy.
• 17:26
  SPEAKER_01: Uh, you can never guarantee what if the market's going to be great when you want to sell, but you can guarantee what your basis is going to be when you buy something.
• 17:36
  SPEAKER_01: And um the more relationships you build in the local community, that also means you might help with permitting, you might help with zoning, or you might you might get tax incentives to to to do work for that um part of the land.
• 17:53
  SPEAKER_01: And because you're near that part of the world, like you have a connection to the community, you have a real reason to ask for those incentives because you want to deliver value to the people around you.
• 18:03
  Mike Swenson: Now you mentioned that you've worked with you know a group of folks.
• 18:07
  Mike Swenson: Curious, out of these, you know, different asset classes that are your you're participating in, is it all the same people?
• 18:13
  Mike Swenson: Is it some different people, some of the same people, or kind of how is your partnership with these folks evolved over your your last few years of purchases here?
• 18:22
  SPEAKER_01: Yeah, so the the group has continued to expand.
• 18:26
  SPEAKER_01: Not everybody participates in each deal now that we have five uh properties, um, and and not everyone's required to participate each time.
• 18:36
  SPEAKER_01: But the rule is at least the I don't know, I think we have it in a contract or unwritten rule.
• 18:40
  SPEAKER_01: Yeah, the unwritten rule is if if you say no three times in a row, we're just not gonna invite you to the the next deal.
• 18:48
  SPEAKER_01: Because that means like a these are these we're all a group of people that trust each other.
• 18:52
  SPEAKER_01: We're not writing massive checks, right?
• 18:54
  SPEAKER_01: We're not going and buying a a hundred million dollar uh office building, right?
• 18:59
  SPEAKER_01: These are this is usually you know overall seven-figure checks and less divided amongst a big group of people.
• 19:07
  SPEAKER_01: So our individual checks are typically five figures, sometimes six.
• 19:12
  SPEAKER_01: Um but like you know, these are people that like we all need to trust each other, um, and we need to be fairly active.
• 19:19
  SPEAKER_01: We there's also a lot of qualification that happens so that deals get brought to an individual person.
• 19:27
  SPEAKER_01: We look at the deal, and if it if there's a lot of boxes that don't get checked, we tell the group, hey, we looked at this deal, here's why we didn't bring it to the group.
• 19:35
  SPEAKER_01: So a lot of people are also doing their own qualification before it comes to us, which is great.
• 19:40
  SPEAKER_01: Uh and AI helps with that a lot.
• 19:44
  SPEAKER_01: Um we we've all been putting, we've we've been kind of working together on what our buy boxes look like on you know, cap rates and expected rents and tenant mixes and certain occupancy uh and areas of tenant.
• 20:00
  SPEAKER_01: Town, school districts, demographics, and like the buy box criteria has gotten like fancier.
• 20:06
  SPEAKER_01: And anytime a new deal comes from a broker, it gets fed into this AI model and AI ranks it for us.
• 20:15
  SPEAKER_01: And anything below a, in our mind, it's on a 10-point scale.
• 20:20
  SPEAKER_01: Anything below a seven out of 10 automatically gets eliminated, and we just tell the group it got eliminated.
• 20:25
  SPEAKER_01: Anything uh between a seven and an eight and a half, um, a group of people come together and have a meeting on it and look at some of the check boxes.
• 20:32
  SPEAKER_01: Anything above an eight and a half gets presented to the group.
• 20:35
  Mike Swenson: And I like too about saying no three times you're out because I know as somebody, you know, that I worked with investors on small multifamily, you know, I feel like, you know, I try to pre-vet stuff for them and bring them only the best deals.
• 20:48
  Mike Swenson: And and some people it's like, yeah, you you bring what you feel like is a good deal that checks your boxes, and it's like, well, you know, this doesn't have this or this doesn't have that.
• 20:57
  Mike Swenson: And then you find, okay, fair enough.
• 20:59
  Mike Swenson: And then you bring another one and it's like, well, this doesn't have this.
• 21:02
  Mike Swenson: And it's like, okay, what you're telling me is you're just not motivated enough right now, or you're, you know, still nervous, which is a reasonable expectation, but it's like, I'm not going to continue to spend my time with the group if you're not interested in participating.
• 21:14
  SPEAKER_01: And so there it's and it's not like we're doing we're presenting a deal every month here, right?
• 21:19
  SPEAKER_01: Like it I would understand if like people have certain cash flow situations or life situations and they need to take a break for six months, but we're looking at two to three deals a year.
• 21:29
  SPEAKER_01: So if you're saying no for a full year, like something's up, like let us know if your life changes.
• 21:36
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 21:41
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 21:47
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 21:51
  Mike Swenson: Real estate investing is what we do full time.
• 21:53
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 21:55
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 22:00
  Mike Swenson: We've at large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 22:07
  Mike Swenson: The best thing is it's 100% passive to you for less capital than you put down trying to acquire a property on your own.
• 22:14
  Mike Swenson: Don't let this year go by where you don't make the leap, add to your portfolio, or you just did an analysis by paralysis.
• 22:21
  Mike Swenson: To find out more, visit freedom throughrealestate.com and click on invest.
• 22:26
  Mike Swenson: You can book a call and learn more there.
• 22:28
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 22:31
  Mike Swenson: That's freedomthroughrealestate.com and click on investment.
• 22:34
  Mike Swenson: So talk about kind of using AI with that, or at least kind of your your scale of your buy box and putting that together.
• 22:41
  Mike Swenson: We'd love to hear kind of how you guys are crafting that.
• 22:44
  SPEAKER_01: We've tried a lot of different things.
• 22:45
  SPEAKER_01: And you know, uh the good news is a lot of us have other day jobs, and you know, this real estate investment has been more of a side hustle as we've learned.
• 22:55
  SPEAKER_01: And we've used different AI models, we've tried different things, we've bounced ideas off of each other.
• 23:00
  SPEAKER_01: As you can imagine, chat GPT is the most popular model, but it hasn't been good for financial modeling.
• 23:08
  SPEAKER_01: So um ChatGPT has been good for research.
• 23:11
  SPEAKER_01: Um, Gemini has been good for anybody who lives in Google.
• 23:14
  SPEAKER_01: So if you're looking at uh compiling information from emails or documents that sit in Google Drive, Gemini is great.
• 23:21
  SPEAKER_01: But we use Claude uh for financial modeling.
• 23:25
  SPEAKER_01: It's been the best for us.
• 23:27
  SPEAKER_01: Uh it Claude is also great at having a back and forth conversation, and you can do basically group participation.
• 23:35
  SPEAKER_01: So we have a license that gets shared amongst the group, a group of seven people.
• 23:39
  SPEAKER_01: Um, the rest of the group has chosen not to participate in this part of the exercise.
• 23:43
  SPEAKER_01: There's an investor group of 25 people, but seven of us are in this, like basically group where anybody can see the thread of the conversation with the model, and we'll say, look, here's why we don't like this particular metric.
• 23:56
  SPEAKER_01: Here's why we think this is too aggressive.
• 23:59
  SPEAKER_01: What other questions are we not thinking about?
• 24:01
  SPEAKER_01: And then Claude will ask us questions and we'll collectively answer them.
• 24:05
  SPEAKER_01: So it's been an ongoing thread for seven months.
• 24:09
  SPEAKER_01: So it it's gotten very, very smart over time.
• 24:13
  SPEAKER_01: And that's another piece of advice for your initial investors is just start, right?
• 24:18
  SPEAKER_01: Just just if a certain deal comes your way, throw it into the LLM, start having a conversation.
• 24:26
  SPEAKER_01: What deal points should I be thinking about?
• 24:29
  SPEAKER_01: Here are the deal points from this document.
• 24:31
  SPEAKER_01: Where's the risk?
• 24:32
  SPEAKER_01: What am I missing?
• 24:34
  SPEAKER_01: Uh, where's the opportunity?
• 24:36
  SPEAKER_01: Right, just treat it like it's like an analyst that you only have to pay twenty dollars a month for.
• 24:41
  SPEAKER_01: It's a really, really great resource.
• 24:44
  SPEAKER_01: A lot of people are afraid to start because you're afraid of what you don't know, or you're afraid you might have to hire somebody.
• 24:51
  SPEAKER_01: AI is your somebody.
• 24:53
  SPEAKER_01: Uh that being said, don't just get a recommendation and then immediately go write a check for$100,000.
• 24:58
  SPEAKER_01: Like, like be skeptical, but use that as like part of your personal board of directors.
• 25:04
  SPEAKER_01: Right?
• 25:05
  SPEAKER_01: It it really will save you time and it'll save you a lot of money.
• 25:08
  Mike Swenson: How many deals have you put through your your hopper here in the last seven months?
• 25:13
  Mike Swenson: About 40.
• 25:14
  SPEAKER_01: Okay.
• 25:14
  SPEAKER_01: And of those 40, uh, six have uh come to the group and we've invested in two of them.
• 25:21
  SPEAKER_01: So it hasn't been a super high rate of investment, but we feel like because of that, we we get a decent amount of deal flow, and we we when we invest, we have we have high conviction.
• 25:31
  SPEAKER_01: And again, these are deals that a large shop would overlook because they're not they're not big enough to matter to institutional shops.
• 25:41
  SPEAKER_01: Um and we're not at the point where like everyone knows who we are, and so we're gonna get a mass amount of deal flow.
• 25:47
  SPEAKER_01: But you once you start doing this, you do get a reputation for giving things a serious look and putting capital to work, and all of a sudden that also feeds on itself.
• 25:56
  SPEAKER_01: And you the more you put capital to work, the more deals you get put in front of you, the more you get to evaluate, the better quality your diligence process becomes.
• 26:04
  SPEAKER_01: And it's like a virtuous circle.
• 26:05
  Mike Swenson: Yeah, you really have to focus on building a good reputation.
• 26:08
  Mike Swenson: Um, I remember we were we're starting to reach out to some brokers here uh maybe about a year ago.
• 26:14
  Mike Swenson: And so some some people sent us some stuff, and you know, we reached back out and we're like, hey, do you have anything?
• 26:21
  Mike Swenson: And they're like, Oh, I stopped sending you stuff because you didn't buy the thing that I sent you.
• 26:24
  Mike Swenson: And it's like, well, hold on a second.
• 26:28
  Mike Swenson: We're not gonna we're not gonna buy everything you sent.
• 26:30
  Mike Swenson: We do have criteria and we do have standards here.
• 26:33
  Mike Swenson: Um, but it is a relationship business.
• 26:35
  Mike Swenson: You've got to show that we're willing to take on deals and close deals to build that reputation where people want to send you stuff too.
• 26:43
  SPEAKER_01: It's a two-way street, but I would say any any serious advisor, uh, whether they're a capital markets broker or a tenant rep person, anyway, they will have a long-term view.
• 26:53
  SPEAKER_01: Uh, anyone's anyone's gonna be successful in the business.
• 26:56
  SPEAKER_01: They're gonna be around a while, they build a big network, they send a lot of people deals, they will provide you time, they'll answer your questions because they don't get paid unless a deal gets done.
• 27:05
  Mike Swenson: What other uh tips or thoughts do you have here in terms of kind of your process and what you guys have put together here that that might be helpful for others listening?
• 27:13
  SPEAKER_01: Yeah, my my my last piece of advice would just be network, network, network become a sponge.
• 27:19
  SPEAKER_01: You'll be surprised at how forthcoming people are with information and and excited they are to share it with with new people newer to the business.
• 27:28
  SPEAKER_01: People like teaching, people like explaining how they're doing.
• 27:33
  SPEAKER_01: Like it's like you doing this podcast.
• 27:35
  SPEAKER_01: Like people like sharing information because everything here is, you know, it's like a virtuous circle.
• 27:43
  SPEAKER_01: Like the the more helpful people are to each other, the more deal flow they might find, the more uh opportunities they they might receive.
• 27:52
  SPEAKER_01: And and as you learn all these tips and you internalize them, find a place to store those ideas.
• 27:57
  SPEAKER_01: Maybe it's with the AI agent, maybe it's I learned something new today, put it in and have that have that thread stored there.
• 28:04
  SPEAKER_01: Because everything's gonna seem great in the moment, but you might forget it when you're a sponge.
• 28:09
  SPEAKER_01: So record that somewhere, like on your phone or with the LLM and take that to heart and revisit it whenever you're you know needing inspiration.
• 28:17
  Mike Swenson: Awesome.
• 28:18
  Mike Swenson: Well, great hearing your story, Kevin, and and your learnings as you've grown.
• 28:21
  Mike Swenson: For people that want to learn more about you, how can they how can they find you?
• 28:25
  SPEAKER_01: Always LinkedIn is the best place to find me.
• 28:28
  SPEAKER_01: Uh only one Kevin Staffman there, so I'm pretty easy to find.
• 28:31
  Mike Swenson: There you go.
• 28:32
  Mike Swenson: Awesome.
• 28:32
  Mike Swenson: I was uh talking in the past while we were talking about AI, and it's like trying to figure out if you've got a common name, it's kind of tough sometimes.
• 28:38
  Mike Swenson: And so fortunately you're you're in a good spot.
• 28:40
  Mike Swenson: So awesome.
• 28:41
  Mike Swenson: Well, thank you, Kevin, so much for coming on, sharing your story, and best of luck to you as you uh continue to grow and invest in more stuff in the future.
• 28:48
  Mike Swenson: Yeah, appreciate you having me out.