Latest / REL Freedom Podcast / Spencer Hilligoss - From Golden Handcuffs to 20,000 Units

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Spencer Hilligoss - From Golden Handcuffs to 20,000 Units · REL Freedom Podcast

• 0:00
  Speaker 1: We just got back from about six weeks in living in another country for the first time with our kids.
• 0:05
  Speaker 1: This is like a whole new experiment that we had dreamt of like a decade ago, and I'm just bringing it up because it's very tangible for us.
• 0:13
  Speaker 1: It's still pretty fresh for us.
• 0:15
  Speaker 1: It was this summer, you know.
• 0:16
  Speaker 1: I was just looking at the pictures from that trip and it's it's a thing that would have blown my mind If I tried to wrap my head around it, when I was working 80 hours a week, you know, building big sales operations groups for tech companies, which is what I did for 13 years.
• 0:37
  Speaker 2: Welcome to the real freedom show, where we inspire you to pursue your passion to gain time and financial freedom through opportunities and real estate.
• 0:43
  Speaker 2: I'm your host, mike Swenson.
• 0:45
  Speaker 2: Let's get some real freedom together.
• 0:46
  Speaker 2: Hello everybody, welcome to real freedom.
• 0:55
  Speaker 2: Talking about real estate, leveraged freedom and building time and financial freedom Through different opportunities in real estate, I love highlighting different stories, different people, how they made decisions, why they made the decisions that they did to find what real estate is going to accomplish for them.
• 1:12
  Speaker 2: And so today's guest we are going to talk probably a lot about multifamily investing and investing in syndications.
• 1:19
  Speaker 2: It's a great opportunity for people, especially if you want to be passive, and we've got Spencer Hilo gas here and Spencer is the CEO of Madison investing.
• 1:29
  Speaker 2: So you, believe it or not, did not start in real estate but had a background in sales, did that for a long time until you came over and now work with investors and invest full-time yourself, and so we'll we'll get a little bit more into your background.
• 1:43
  Speaker 2: But thanks so much, spencer, for being on the show.
• 1:45
  Speaker 2: We're excited to have you.
• 1:47
  Speaker 1: Yeah, mike, honored to be here.
• 1:48
  Speaker 1: I mean, this is a topic that's near and dear to my heart.
• 1:50
  Speaker 1: It's fundamentally changed our lives for myself, my wife and our family and our kids.
• 1:54
  Speaker 1: So, you know, happy to share whatever learnings are useful for your audience.
• 1:57
  Speaker 2: Well, and that is the key, I just got off of a Conversation that I had with real estate agents talking about how to invest themselves, and you know a couple, a couple interesting things.
• 2:08
  Speaker 2: One is real estate agents often, you know, residential agents don't think they can invest in real estate, even though they're already in the industry.
• 2:15
  Speaker 2: So that's one interesting thing.
• 2:16
  Speaker 2: But number two, realizing how these little slivers of time that you can dedicate to finding great investment opportunities will change your life, and would love To highlight how your life has changed as a result of real estate.
• 2:28
  Speaker 2: Because a lot of people it's just opening up what's possible, like if I knew that I was gonna make a million dollars a year 15 years from now, who wouldn't be on board with that?
• 2:38
  Speaker 2: Well, probably most people would like that, and then it's just okay, follow this plan.
• 2:43
  Speaker 2: And so I think for a lot of people, they don't realize what's out there, they don't realize what's possible, and then they kind of just get stuck in their life today Versus making that sacrifice, dedicate their time to learning or finding other investors to partner with to achieve those financial goals.
• 2:58
  Speaker 1: Man, you covered so many topics there that I want to bite on Mike, but I think, right out the gates I got to say that, like to your, to the first topic that led into it, like how has life changed?
• 3:07
  Speaker 1: You know, kind of like the why, you know why?
• 3:09
  Speaker 1: Why did we go do this?
• 3:10
  Speaker 1: And so, as a quick anecdote, my whole family miss.
• 3:14
  Speaker 1: So Jennifer, jennifer Marmono, is my wife and the co-founder of our investing club.
• 3:18
  Speaker 1: You know, she and I had our own separate careers, you know, for 13 years, totally different from what we do now In running Madison investing, which is like an investing club for other LPs, other passive investors like us.
• 3:29
  Speaker 1: But we just got back from about six weeks Living in another country for the first time with our kids.
• 3:37
  Speaker 1: This is like a whole new experiment that we had dreamt of like a decade ago and I'm just bringing it up because it's very tangible for us.
• 3:45
  Speaker 1: It's still pretty fresh for us.
• 3:46
  Speaker 1: It was this summer.
• 3:46
  Speaker 1: You know I was just looking at the pictures from that trip and it's it's a, it's a thing that would have blown my mind If I tried to wrap my head around it when I was working 80 hours a week.
• 3:57
  Speaker 1: You know, building big sales Operations groups for tech companies, which is what I did for 13 years.
• 4:02
  Speaker 1: I was grinding it out, you know, a doing 80 hours a week plus across five different financial tech companies.
• 4:09
  Speaker 1: You know that career was very different and the amount of time that I could spend on things such as, you know, bonding with my kids, you know you're building memories of my wife.
• 4:21
  Speaker 1: It's just a different way of living, different way of looking at what's possible, and so I bring that up because this is very real.
• 4:28
  Speaker 1: This is not an ethereal thing, it's not something that we're, like you know, doing figuratively.
• 4:31
  Speaker 1: This has been a hard-fought journey over the course of years and so, with all that diatribe stated, you know, right now I Look back to where did this start?
• 4:41
  Speaker 1: Right and full disclosure.
• 4:43
  Speaker 1: I know you said that, like I didn't have any experience in real estate technically, my dad was a broker.
• 4:48
  Speaker 1: He was, he was an agent, you know, for 30 years.
• 4:51
  Speaker 1: So he was selling residential.
• 4:52
  Speaker 1: He made me work open houses when I was a kid, all the way up through being a teenager.
• 4:56
  Speaker 1: So that was Real exposure, real early doing showings.
• 5:02
  Speaker 1: You know I just trying to look good in a tie, you know, when I was like an early teen cleaning out fridges for properties he wanted to sell and that's kind of what scared me into tech.
• 5:11
  Speaker 1: So you know, when I look back at where did all this things start for investing passively?
• 5:20
  Speaker 1: Jennifer and I, when we were in our careers, we sat down this is around like 20, 2015, 2016 we took a whole weekend, got a, got a sitter for the kids and we sat down and said like, hey, something's got to give.
• 5:33
  Speaker 1: You know, we were bringing in good W2 income to income streams in our household living in the Bay Area, california, here Not not cheap.
• 5:41
  Speaker 1: You know these are pricing markets so we're just trying to make things work at this stage.
• 5:45
  Speaker 1: This is back, you know, a few years now.
• 5:47
  Speaker 1: But we sat down and took the whole weekend and we mapped out numbers.
• 5:50
  Speaker 1: Like we got real specific and we said what is the dollar amount we need to have coming in every month To cover all of our needs?
• 5:58
  Speaker 1: And like we had no idea what, how we were gonna get there.
• 6:01
  Speaker 1: Like at that time it was a lot of sticky notes on the walls, like Somewhat structured of an exercise.
• 6:07
  Speaker 1: But man, there was, there was like tears that weekend.
• 6:10
  Speaker 1: We reconciliation, there was laughter.
• 6:12
  Speaker 1: These were hardcore conversations, you know, like between us two people to love each other.
• 6:16
  Speaker 1: But we had to go through that and we walked out with with like a singular number that was like our freedom number, like our, this is how much money we needed per month.
• 6:26
  Speaker 1: And then we had to say, well, how much time are we gonna give ourselves to get to that number?
• 6:31
  Speaker 1: By years, because, like, time Constraint is great but it's also the ultimate excuse.
• 6:37
  Speaker 1: So we said we'll give ourselves literally 15 years to get to this number, which sounds absurd, right?
• 6:42
  Speaker 1: And we're like well, the next weekend we chopped it down to, I think, seven, seven years.
• 6:46
  Speaker 1: We're like, let's just make it a little faster.
• 6:48
  Speaker 1: They cut it right in half, right, it's just like it's just too long.
• 6:51
  Speaker 1: So we did all that and we got down to to a number and there was a lot of other work that happened, planning wise, just to really think through it from there.
• 6:59
  Speaker 1: But then we just started taking action, like we went through and you know, went through what we looked.
• 7:02
  Speaker 1: Look back now and say Three phases of we bought a local duplex, then we got comfortable buying side unseen for phase two, bought a portfolio single family rentals in the Midwest.
• 7:13
  Speaker 1: So we bought rentals and then learned they play a really important role in wealth building but they're not fully passive.
• 7:20
  Speaker 1: There was still some active management, even with a property manager, and eventually we got to like a phase three of sorts where we invested, as LP is, in our first military family syndication deal and now we've done many LP investments.
• 7:32
  Speaker 1: We've also done some active partnerships on the GP side and that was probably more detailed than you wanted, but at least wanted to kind of give some context for folks.
• 7:41
  Speaker 2: I no, that's great, because I think you know, for a lot of people, when they haven't yet started to invest in real estate, sometimes they think the path they pick is the path they have to end on Right.
• 7:52
  Speaker 2: That's like, well, if I start by flipping homes now, I'm going to flip homes the rest of my life, but it's also a journey, and so what you're doing is you're learning about the type of things you're going to invest in, maybe identifying a good deal, building relationships with people, and so all that stuff takes time as well, and so don't be afraid to pick a path, even though you're not yet sure if that's your future path, Because I think so many people and that's where, kind of going back to my conversation with real estate agents, I just had so many people that are in real estate full time don't invest because they somehow think I don't know enough, I don't know enough people, I don't know what properties to do, what investing style to do, and so all that leads to inaction, and I'd rather you take action on maybe not I wouldn't say necessarily the wrong thing, because we're not going to just make a decision kind of willy-nilly, but even taking an action, you're going to get education from that You're going to learn either I liked that or I didn't like that.
• 8:54
  Speaker 2: We flipped a house a few years back and I learned I don't ever want to flip a house again because it was a lot of time away from my wife and kids.
• 9:02
  Speaker 2: I'm doing this to help my wife and kids, but what ended up happening is I'm at the property working on it late nights and weekends and my wife is left holding the bag taking care of our three kids on her own.
• 9:13
  Speaker 2: That's not what I want to do, so it's okay, that strategy didn't work.
• 9:17
  Speaker 2: Let me find a different strategy that is going to work and fit with my family.
• 9:20
  Speaker 2: And so people just tend to not take action, versus trying to take some action and maybe then just change their path as they go.
• 9:29
  Speaker 1: Oh, my goodness, do I agree with that?
• 9:31
  Speaker 1: Yeah, it just quickly I want to mention briefly as well, because you made me think of the experience of being raised in the household by a broker family, single stream of income, high quality life.
• 9:44
  Speaker 1: My dad was a broker, very successful in the 90s, and we had that primary one source of income.
• 9:50
  Speaker 1: And everyone, at least probably you and I, both read the cashflow books by Robert Kiyosaki.
• 9:56
  Speaker 1: So, rich Dad, poor Dad, the Purple Book.
• 9:58
  Speaker 1: We all think about the buckets analogy versus the pipeline.
• 10:01
  Speaker 1: The buckets physically carry up that bucket of money from working your hard job, dumping on the table but then you got to go back and do it again versus a pipeline.
• 10:10
  Speaker 1: And that's in effect what I saw and lived through, grateful for the lifestyle that my dad's brokerage business built for us.
• 10:17
  Speaker 1: But we went through a really hard decade.
• 10:19
  Speaker 1: We kind of refer to it in our family as a dark decade and I'll keep this brief.
• 10:22
  Speaker 1: I don't want to scare people with too much information, but I lost a younger brother to cancer and a bunch of other folks in our family for different reasons, all within a very brief period of time and around that time.
• 10:33
  Speaker 1: That dark decade was painful for a brokerage business for my dad.
• 10:36
  Speaker 1: So I got to see what happened when our family downsized significantly and that left a resounding impact on me.
• 10:43
  Speaker 1: It really showed me like, hey, when you're building a moat financially for your family, you don't know what's coming.
• 10:51
  Speaker 1: You don't know if, god forbid, you get hit by a bus.
• 10:54
  Speaker 1: You don't know what's going to happen in the world macro event-wise.
• 10:56
  Speaker 1: But now, as a dad myself, when I was working full time, great salary, coming from W to employment, working my butt off, building big teams doing satisfying work I did that for over a decade before it really clicked Like wait a sec, this income stops when I stop working.
• 11:16
  Speaker 1: And it sounds so basic.
• 11:17
  Speaker 1: I know there's people way smarter than me that figured that out years ago.
• 11:20
  Speaker 1: But that was eye-opening to me to really think about.
• 11:23
  Speaker 1: Because then I was like, wait, I'm in setting this up the same way that it would have impacted my dad's business back in the day and he pulled his closure.
• 11:29
  Speaker 1: My dad built his business back up and it massive heights after that, years later.
• 11:35
  Speaker 1: But that was a really painful period of time and I take those learnings and apply it now with a sense of financial offense, like financial offense is like what are the steps I could take?
• 11:44
  Speaker 1: Now to your exact point, mike, like really well stated, which is we didn't know.
• 11:50
  Speaker 1: I didn't know what we would ultimately end up doing in terms of investing strategy, and every day I learned more.
• 11:56
  Speaker 1: Now, like when we go out and talk to other people in the business, I deploy a five or six-digit number of my own money into a deal and we're going to learn a lot about how that's going to go.
• 12:06
  Speaker 1: A lot of the times it goes well.
• 12:08
  Speaker 1: Sometimes it doesn't go well.
• 12:10
  Speaker 1: That's also part of investing and you get information, you get data from those things and it feeds in for how you refine your strategy further.
• 12:19
  Speaker 1: And that's all we can really do in working toward what's our freedom number Like.
• 12:23
  Speaker 1: We really want to get a new version of lifestyle If we really want to get all of our expenses covered.
• 12:28
  Speaker 1: It's monitoring where you're at, taking a pulse.
• 12:31
  Speaker 1: So we try to really keep an eye on what's that freedom number that we need monthly, while keeping close the idea that what can I do to keep maintaining that moat around my family and the people that I care about by adding more income streams and pipelines, not just relying on active income buckets, because, yeah, I'm a slow learner.
• 12:51
  Speaker 1: I wish I had gotten that earlier from going through those experiences just in my family and watching my dad's brokerage business.
• 12:57
  Speaker 2: Yeah, I talk a lot about running into the wind versus running with the wind at your back.
• 13:00
  Speaker 2: Out of people starting out, it's going to feel like you're running into the wind because you're learning so much, you're doing so many things the first time, but eventually that'll switch where the wind's going to get at your back and then you're going to be able to move faster and it's not going to feel so hard.
• 13:13
  Speaker 2: And so how do you just plant those little seeds to where you can run, where eventually the wind gets at your back and you build and grow your momentum?
• 13:21
  Speaker 1: The decisions that we make at least this is a way that we think about framework and our decisions right now for investing, or if we're doing anything on the active front for real estate.
• 13:30
  Speaker 1: There's a push and a pull through every decision in life and business and investing everything and this is something I can't take credit for.
• 13:38
  Speaker 1: This is a constructive former mentor of mine imparted on me and it sticks with me for years is you're going to be pulled towards something that inspires.
• 13:47
  Speaker 1: You're going to be pulled toward investing in something that looks appealing.
• 13:49
  Speaker 1: Maybe you like the returns on it, but there's also the push like what are you trying to get away from?
• 13:54
  Speaker 1: Perhaps right.
• 13:56
  Speaker 1: And I think that when I ultimately decided to take this learning journey seriously about investing passively, it was a strong push at first, meaning I knew something had to change.
• 14:08
  Speaker 1: Like, I think, back to 2016-ish, when we were setting those goals I mentioned earlier, I hadn't seen our oldest son.
• 14:14
  Speaker 1: He was very young at the time and it's something like two weeks, because I was going into work so early, it was still dark outside, I was coming home late, I was grinding it out, and this is pushing me away from like that lifestyle is firmly pushing me into something different, but I hadn't really clarified the pull Like what's gonna pull me towards something new?
• 14:31
  Speaker 1: How do I'm gonna invest differently?
• 14:32
  Speaker 1: So I had to go educate.
• 14:34
  Speaker 1: You know experience as the ultimate educator, as you kind of alluded to earlier, which is go out in the world and try something new for your investing strategy.
• 14:43
  Speaker 1: You're gonna learn some stuff.
• 14:44
  Speaker 1: It may not be perfect, but I still went out of my way to go educate.
• 14:48
  Speaker 1: With 24 books, I think I read in an 18 month period, 400 podcasts I think I listened to it in an 18 month period and that was on, in addition to going and leading teams of people during the day and further.
• 15:02
  Speaker 1: I was lucky to have been nudged into my final W2 job, which I left in 2019, that was inside the guts of a fixed and flipped lender that was also a tech company, so like I also got to see at least more from a distance why I didn't wanna be a flipper myself, because I can barely swing a hammer, but I found it inspiring, like looking at the people who were doing that and saying I mean the fact that they're able to go and produce these numbers, because I could see the economics on their deals and I was like they're pulling this off.
• 15:37
  Speaker 1: This is something real people do, everyday people are doing.
• 15:40
  Speaker 1: They're able to accomplish these things.
• 15:43
  Speaker 1: I don't necessarily wanna go do a flip because I can't do it myself, but it really lit the spark.
• 15:50
  Speaker 1: It helped pull me toward a strategy that I ultimately found the hard way with education, driving markets in my local area, eventually looking more broadly across places that we start to go and invest in now which are outside of California.
• 16:04
  Speaker 1: We look in places like the Sun Belt, like love markets such as Dallas, texas, places that are great, great job friendly, regulation friendly, for a little more for landlords, places you can go and invest that are outside of this very pricey market that I live in right here in California, which are not as landlord friendly.
• 16:21
  Speaker 1: Never would have found all these things without being able to kind of look beyond and be inspired by strategies that I may not end up using myself, like flipping.
• 16:30
  Speaker 2: Yeah, I think for a lot of people they think if I want something good, I then have to sacrifice something.
• 16:36
  Speaker 2: And so it's like if I wanna make money, I have to hustle and grind and give up my time and it has to be difficult.
• 16:43
  Speaker 2: But it's like what if you could make money in real estate and it didn't have to be that way, you know, like you don't have to swing the hammer, you don't have to spend the time away from your family, but what if you could pick great investments that you didn't have to be involved in as much or manage and still be able to make money?
• 17:02
  Speaker 2: It's kind of this idea of have your cake and eat it too, and it doesn't have to mean to get the thing that I want I have to give up something or I have to sacrifice something.
• 17:10
  Speaker 2: And so that's a message that I talk with investors about is look, you don't have to do that if you don't want to just pick something that matches with where you're at and what you're looking to do.
• 17:21
  Speaker 2: So let's just kind of follow your journey quick.
• 17:25
  Speaker 2: When you first started investing in real estate, you had mentioned like doing duplexes and then eventually moving to properties out of state, like kind of talk about that evolution for you, your thought process.
• 17:36
  Speaker 2: Why did you choose that to begin with, and then why did that start to shift?
• 17:40
  Speaker 1: Yeah, so in hindsight, like everything else in life, right, mike?
• 17:44
  Speaker 1: I mean, things are clear.
• 17:45
  Speaker 1: It sounds like, oh, how did this journey go for us?
• 17:49
  Speaker 1: It went in three phases.
• 17:51
  Speaker 1: It did not feel this clear cut at the time.
• 17:53
  Speaker 1: None of this felt clear at the time.
• 17:55
  Speaker 1: You know, we were learning as we went.
• 17:56
  Speaker 1: But there were three phases in hindsight, the first one being we didn't want to get comfortable.
• 18:02
  Speaker 1: We couldn't get comfortable with, like, buying something we couldn't see extremely common, right?
• 18:07
  Speaker 1: I mean, so many folks go through this.
• 18:09
  Speaker 1: Where we bought local, we overpaid, we didn't know how to cash flow goal set.
• 18:14
  Speaker 1: You know, as I mentioned earlier, we knew we wanted an income number on a monthly basis, passive.
• 18:18
  Speaker 1: So why did we go in phase one and buy, you know, a $430,000 duplex in Vallejo, california that produces $200 a month in cash flow, requiring $100,000 down?
• 18:30
  Speaker 1: Well, I don't know, I don't have a good answer for you on that one.
• 18:33
  Speaker 1: It's a learning, it's a tuition.
• 18:36
  Speaker 1: I mean, in all fairness, that was, that is a property we still have now, grateful that it's gone up in hundreds of thousands of dollars in value.
• 18:43
  Speaker 1: It was an appreciation play, but we didn't get that.
• 18:46
  Speaker 1: You know, we didn't get that at the time.
• 18:47
  Speaker 1: So that was phase one and that took a whole summer of driving around to find that damn property too.
• 18:52
  Speaker 1: You know, $200 a month in cash flow is a huge win for cash flow investors in California, by the way.
• 18:56
  Speaker 1: Yeah, yeah For sure.
• 18:59
  Speaker 1: You know.
• 18:59
  Speaker 1: Phase two, as it were, we got more comfortable, put some frameworks and nerdy processes in place to go and search and vet and find long distance properties like rentals, single family rentals, ultimately networking like crazy with other active players, because we had to understand we're absolutely hiring a property manager to go and manage whatever we buy.
• 19:21
  Speaker 1: I did buy, you know we got up to five properties single family rentals via a very new turnkey provider, but I knew the person.
• 19:30
  Speaker 1: I knew the manager prior so we could back channel reference some stuff.
• 19:33
  Speaker 1: You know if it got comfortable with it and ultimately the economics were just mind blowing for us.
• 19:38
  Speaker 1: I mean, we give $60,000 purchase price on average which was crazy sounding to me because it was so affordable by various standards in California $250 a month in average cash flow per property, which is incredible.
• 19:52
  Speaker 1: At least I know some that I want to go out there in bigger pockets forms and say that because people will probably say it's just okay, but that's pretty damn good to me.
• 20:00
  Speaker 1: Have those for a stretch.
• 20:04
  Speaker 1: We then also learned you pay that 10% a month for your property manager and they'll do the stuff you need them to do.
• 20:10
  Speaker 1: But you're still going to get some work, you're still going to have overhead.
• 20:13
  Speaker 1: You're still going to be getting letters from the county as to a couch that's been placed on the front lawn of one of your rentals hundreds of miles away and you're in charge of removing it, despite the fact that property manager should deal with it.
• 20:24
  Speaker 1: You know just a random, real example.
• 20:26
  Speaker 1: But we ultimately sold them because the overhead was too high for people who want to be fully passive.
• 20:33
  Speaker 1: Right now.
• 20:33
  Speaker 1: We got a full life and also in terms of the economics, when you buy in a C plus maybe C neighborhood, c class neighborhood, you're going to turn over tenants all the time and that one year, once a year turnover of a tenant really makes that $250 a month, an average cash flow, look a lot less attractive by the time you get into a couple of cycles.
• 20:53
  Speaker 1: So we sold those properties eventually.
• 20:56
  Speaker 1: Last but not least, deploys in capital into a multifamily syndication investment fully passive, still had to do work on the front end right and that's absolutely critical.
• 21:09
  Speaker 1: We looked across the markets out there and I thought I'm an operations guy, I'm professionally by trade previously Like I like process, you know I like it.
• 21:19
  Speaker 1: I could read a spreadsheet.
• 21:20
  Speaker 1: I like stuff that's as predictable as can be, as much as you can make it in business.
• 21:24
  Speaker 1: The bigger property has just made sense for me.
• 21:27
  Speaker 1: So we started looking in markets like you know, georgia.
• 21:31
  Speaker 1: We were looking in in Texas, we were looking in Florida, in North Carolina, south Carolina, across the Sunbelt, for all the reasons we said earlier about being more landlord friendly, good, you know, job centers, places where people need housing and ultimately we pulled the trigger on investing in that first deal after lots of due diligence and it went.
• 21:49
  Speaker 1: That deal went full cycle in just around two years.
• 21:51
  Speaker 1: You know more than doubled our money in a two-year period and we invested in a bunch of others from there.
• 21:56
  Speaker 1: But that's, this was a progression, right.
• 21:59
  Speaker 1: I mean it's like you said earlier, like we didn't just get comfortable wiring you know a five-digit number into a deal of our hard-earned money overnight.
• 22:07
  Speaker 1: I mean it took us going through all that work along the way.
• 22:11
  Speaker 1: We could have fully skipped the first two phases.
• 22:14
  Speaker 1: We absolutely could have skipped the first two phases, and this is a common journey that I'll talk through and answer questions about with our members in our passive housing club.
• 22:23
  Speaker 1: Because, like they want it, they're like, why don't you just buy rental?
• 22:27
  Speaker 1: And I'm like well, let me walk you through phases one and two of our journey and hopefully you'll glean the learnings as to why we don't do that anymore right now, but maybe at some point when our kids are grown and we have more time and appetite to do it.
• 22:39
  Speaker 1: But right now it's passive investing or bust for us because it's just worked out that much better.
• 22:44
  Speaker 1: So we've done multifamily.
• 22:45
  Speaker 1: So to date, asset-wise invested in multifamily apartments, self-storage facilities, medical offices, mobile home parks, some really weird niche other things like ATM machines.
• 22:58
  Speaker 1: You know crypto, which is not as fun to talk about these days it used to be but then a handful of other asset classes.
• 23:06
  Speaker 1: But the asset classes that I still lean into now heavily are multifamily and self-storage, because, done correctly, they are the best kind of boring, in my opinion, and you can still get cashflow.
• 23:21
  Speaker 1: You can get monthly cashflow or quarterly cashflow and get some great upside on top of it without having to lift a finger if you bet on the right teams to manage it.
• 23:29
  Speaker 2: You know, kind of going back to that previous point, sometimes people feel like there has to be difficulty with it, right, like it sounds too easy, like, wait a second, I can just like put my money into this asset class that can make money, and I don't have to do a lot of the work.
• 23:43
  Speaker 2: It almost is like it sounds too good to be true, right.
• 23:46
  Speaker 2: And so people feel like, well, I've got to go through the struggle first and it's like, okay, you certainly can do that.
• 23:52
  Speaker 2: You know, it's like this idea of like maybe the grass is greener on the other side, but you can just take my word for it.
• 23:58
  Speaker 2: We had to go through those struggles and in that case you did.
• 24:00
  Speaker 2: You know, I've talked about that too with some of the agents on my team.
• 24:04
  Speaker 2: They feel like, well, I've got to flip, because that's, I feel like what the first step is.
• 24:08
  Speaker 2: And it's like, well, you could just skip that and not have to do that work.
• 24:12
  Speaker 2: But they feel like, no, but that's what you're supposed to do.
• 24:14
  Speaker 2: And so, getting over this idea of like there's a path I have to take, or that I have to go through struggle to see the reward, you don't have to do that, you can kind of just push the easy button and skip all of those lessons that other people have learned the hard way, if that's what you want to accomplish.
• 24:30
  Speaker 1: Learning through others, like you know, one of the things that's so helpful I have found.
• 24:35
  Speaker 1: I wish I could do it every time, but I can't.
• 24:37
  Speaker 1: I still learn the hard way sometimes because we have to you said that really well, mike which is like you could skip skip the pain, you know.
• 24:44
  Speaker 1: Skip the suffering, you know.
• 24:45
  Speaker 1: Hit the easy button.
• 24:46
  Speaker 1: And a big piece of that I think done right is by learning from the mistakes of others, right, and but observing them, understanding them like you get that through books, you get that through stories.
• 24:57
  Speaker 1: You get this through awesome podcast content such as yours, right, like you get that.
• 25:01
  Speaker 1: That's how we can learn through the mistakes of others sometimes, so that we don't have to learn just by skinning our own needs ourselves every time and then saying, wow, that hurts.
• 25:08
  Speaker 1: I hope I don't want to go do that again.
• 25:10
  Speaker 1: That is thankfully been helpful for us to not go further down rabbit holes, further down strategies that sometimes I hear these are real stories I hear from our members and from other other LPs passive investors in the markets now who will say man Spencer, I built up to like a hundred plus single family rentals over the course of 15 years, right, and every single one of them, I had to sign the docs, every single one of them.
• 25:36
  Speaker 1: I had to go, and, you know, find them and do all, do the and then do the repairs and manage all those things.
• 25:41
  Speaker 1: But everyone's journey is different, you know, so it's like there is no perfect way to do this.
• 25:47
  Speaker 1: I think, ultimately, it is helpful, though, to know there are fully passive strategies out there and also, you know, they do come with like informed risks that people should know about, because also de-risking them is a huge reason why I'm so passionate about this.
• 26:01
  Speaker 1: You know you can't de-risk any investment fully, of course, when you're trusting another human being, another firm, another team.
• 26:08
  Speaker 1: You know, bet on the jockey.
• 26:10
  Speaker 1: You know, as everyone talks about, for syndications and passive investing, you still got to do diligence and you still got to vet the who, and that is where I lean in so heavily, and I just try to share the learnings that I've gotten along the way as to how you do that.
• 26:25
  Speaker 1: You know how do you vet the who.
• 26:26
  Speaker 1: You know.
• 26:27
  Speaker 1: So we have like a five part vetting framework we use of like looking at, you know, their track record, what have they done, their approach, how do they do what they do?
• 26:36
  Speaker 1: You know, the team are.
• 26:37
  Speaker 1: These are the people managing this.
• 26:39
  Speaker 1: If they're together, are they, did they know their business?
• 26:41
  Speaker 1: Married, you know, like, are they or do they realize they're not dating?
• 26:44
  Speaker 1: Are they gonna stick together for five to ten years?
• 26:46
  Speaker 1: The legal Communications, you know, like, like these are all things that really really matter and we're just talking about who manages these deals.
• 26:53
  Speaker 1: So there is risk, but that's the point is to de-risk as much as you possibly can, because you're trusting your money and I'm trusting my money with people hundreds of miles away, typically in other states, so I can't stop by the property every day, but I will fly out there and take a look at it at least, just to you know, because I'm not kind of nerdy passive investor who likes to go take a look at it too as you kind of evolved you.
• 27:13
  Speaker 2: You mentioned networking like crazy For people that don't necessarily know what they are networking for.
• 27:20
  Speaker 2: You know, let's just say you talk about, you know the, the passive investing strategy, finding these great operators who you know Kind of meet those five conditions that you have.
• 27:31
  Speaker 2: How do I know how to network to get there?
• 27:33
  Speaker 2: What did, what did that look like?
• 27:34
  Speaker 2: For you?
• 27:34
  Speaker 2: That's a good question.
• 27:36
  Speaker 2: Mike.
• 27:36
  Speaker 2: Um, like, how do I know, how do I know a good, a good person, or how do I know it's somebody that I can trust?
• 27:41
  Speaker 2: You know, unless you start to go through that process and probably the easy answers, you just got to jump in.
• 27:47
  Speaker 2: You know, sometimes people are like trying to figure out, like, how do I network?
• 27:51
  Speaker 2: Well, it's like you just got a network, you just got to get out there, start to have some conversations and slowly you'll find where you're looking to go.
• 27:58
  Speaker 2: But I think some people are trying to go well, here's my end point and somehow, how do I take the the straight line path to get there?
• 28:05
  Speaker 2: Well, it's probably taken the curvy path with the forks in the road to get where you want to go.
• 28:10
  Speaker 1: Yeah, I'm laughing because, like you're the visual you're making with your hands, is it remind that that meme that so many folks out there are probably seeing I'm showing?
• 28:18
  Speaker 1: You know, we can all make a linear plan where it shows an arrow, point a, point B, but then there's a reality of what happens and the reality of what happens is spaghetti.
• 28:26
  Speaker 1: You know, just just like you're gesturing, I have to say up front, in case it's not clear for folks like I'm a full-blown introvert.
• 28:34
  Speaker 1: I that doesn't mean I'm shy, clearly it means that I I don't go out, I can't hit the conference room floor for 12 hours and do it all over again the next day.
• 28:44
  Speaker 1: Networking sounds scary to me, do I?
• 28:48
  Speaker 1: Did?
• 28:48
  Speaker 1: I do it anyways?
• 28:49
  Speaker 1: I did because it's worth it to be financially free for the rest of your life, you know.
• 28:53
  Speaker 1: But that I had to sell myself that every single time I went out and did it and sometimes I would drive, you know, an hour, hour and a half within that range, around my local area.
• 29:03
  Speaker 1: Here, as I was getting started going to live meetups, like real estate meetups, I Would go to ones where I didn't really understand what topic they were talking about.
• 29:12
  Speaker 1: I would go online to bigger pockets, calm and not plugging them, are paid to say this is just helpful.
• 29:18
  Speaker 1: Forums you can go on there and just read endlessly.
• 29:21
  Speaker 1: Sometimes it's valuable, sometimes it's distracting, but in there you could just keep pulling that thread of knowledge.
• 29:29
  Speaker 1: And also, if you see, so I would see someone in a forum I'm not just on that website, but I'm, you know, sometimes Facebook groups, you know other places like that and say how that person sounds super knowledgeable.
• 29:39
  Speaker 1: Let me follow them and then eventually work up the courage to actually reach out and say, hey, you know, at first I did it, what I what?
• 29:49
  Speaker 1: I now consider this the rookie way.
• 29:50
  Speaker 1: So I'm not judging people if they do this because I did this to they say hey, can I pick your brain?
• 29:54
  Speaker 1: So I really don't encourage people to do that.
• 29:57
  Speaker 1: You know, although it is the common way people say that, try to find a way to add value to them too.
• 30:01
  Speaker 1: You know, try to find a way to add value to people if you're asking for your time, for their time, but Go into those, put yourself in those situations, get awkward, ask questions you may not even fully understand, like those are always that.
• 30:14
  Speaker 1: I found myself put myself out there Once.
• 30:16
  Speaker 1: The why was compelling enough.
• 30:17
  Speaker 1: And it all started again with that financial freedom monthly number and just realizing that, hey, it's okay to sound stupid, it's.
• 30:26
  Speaker 1: I mean really.
• 30:26
  Speaker 1: What's not okay is to read 24 books in an 18 month period and think that that is progress.
• 30:32
  Speaker 1: I could have read maybe five or six max after that.
• 30:37
  Speaker 1: It was procrastination, but I was trying to delay the networking.
• 30:43
  Speaker 2: I would say I would add in start a podcast about it because it's great.
• 30:48
  Speaker 2: Like you know, I remember when I first started the podcast, I had connected with a gal that I had known for my previous job.
• 30:55
  Speaker 2: You know, it maybe been about 18 months, 24 months, since we last spoke and I could call her up and say, hey, I want to pick your brain about something.
• 31:03
  Speaker 2: You know, do you have time?
• 31:05
  Speaker 2: But she was in a high-level role, she was really busy.
• 31:07
  Speaker 2: I reach out to her and I say, hey, I've got this podcast.
• 31:10
  Speaker 2: Do you want to be on?
• 31:12
  Speaker 2: Yeah, absolutely, she's willing to make time for that.
• 31:15
  Speaker 2: And so for me, you know, I look at we're probably 190 episodes in.
• 31:19
  Speaker 2: I've met a lot of great people, connections that some have worked out and maybe had some fruit early, some maybe five years from now it might be.
• 31:30
  Speaker 2: You know, hey, I'm talking with somebody and they're like, hey, I want to do this.
• 31:33
  Speaker 2: Oh, you should reach out to Spencer.
• 31:35
  Speaker 2: You know Spencer's probably got that, that thing that you need.
• 31:39
  Speaker 2: And so podcasts are a great way to network.
• 31:41
  Speaker 2: It's good for networking and I learn a lot too.
• 31:43
  Speaker 2: You know about different topics you had mentioned.
• 31:46
  Speaker 2: You know Self-storage.
• 31:48
  Speaker 2: Well, I can go reach out to a guest that does self-storage hey, why don't you tell me about your journey?
• 31:53
  Speaker 2: What problems did you have in the meantime?
• 31:56
  Speaker 2: I'm interviewing that person, I'm learning a lot, and so I think that's.
• 31:59
  Speaker 2: Another great way is here's just my journey, learning as I grow in real estate and I'm having great guests on and learning along the way too.
• 32:06
  Speaker 2: So that's a.
• 32:06
  Speaker 2: People are much more willing to say yes to a podcast appearance than a hey, can I pick your brain?
• 32:11
  Speaker 2: You'll probably get further that way.
• 32:13
  Speaker 1: It's just built in right.
• 32:14
  Speaker 2: Yeah, with brilliant totally and I'm adding value here because you're getting an opportunity to share about what you do to Reach an audience that you hadn't met before you know, so you're getting value from being a guest on it.
• 32:26
  Speaker 2: I'm getting value from having a great podcast with knowledgeable people like yourself, and I build a great connection along the way too, so there's a lot of cool value there.
• 32:35
  Speaker 2: So that's my little podcast plug for people, because I think a podcast is a great opportunity.
• 32:40
  Speaker 2: We've talked a lot about great foundational topics, but talk a little bit about Madison investing.
• 32:46
  Speaker 2: You had kind of touched on some of the areas what you're looking for but but talk more about what what you're doing.
• 32:52
  Speaker 1: So Madison investing is a club that started super organically.
• 32:56
  Speaker 1: I mean, we were in investing our money, like we talked about earlier, mike, and along the way, ultimately in my own network people, as it tends to go, I guess they asked about it.
• 33:07
  Speaker 1: You know they were like, oh, what are you putting your money into?
• 33:09
  Speaker 1: What are these deals?
• 33:10
  Speaker 1: And it became something where, ultimately, I had developed such expertise, both from my my day job I, you know, I was at that point also working in the guts of a, the biggest fixed and flip lender in the country, so I had education on underwriting from that lens.
• 33:25
  Speaker 1: And then over time, it was like, well, I'm gonna be getting on planes, I'm gonna be betting these assets, meeting with these teams, going out there and doing all this in addition to investing our own money.
• 33:37
  Speaker 1: And it just became very clear very quickly that there's a bunch of that value seen here by my network.
• 33:43
  Speaker 1: And they said, well, I want to invest in the deals of you guys are investing the deals, but also if you're gonna go vet the teams and then go through a lot of stuff.
• 33:49
  Speaker 1: And that's where Madison investing started and the name, just for reference, like that, is literally the, the street that we started the business on startle home and we pulled some equity out of our old home equity line of credit years ago to buy the some of those first rentals for some of that down payment.
• 34:03
  Speaker 1: So that's super meaningful for us.
• 34:06
  Speaker 1: That's where the whole name Madison investing came from.
• 34:08
  Speaker 1: So is a labor of love.
• 34:10
  Speaker 1: Tons of networking over talked about earlier and now we're just grateful, you know, like to two have been able to share over 50 50 opportunities to our investing club over the years now and no signs of slowing.
• 34:23
  Speaker 1: You know we're like.
• 34:23
  Speaker 1: It's a really exciting moment in the market in the sense that there was a ton of good buying opportunities coming and they're already here.
• 34:29
  Speaker 1: You know, like, like.
• 34:30
  Speaker 1: The good news is you're on the buying side of going into an apartment building setting in the middle of a great market and the seller has to sell.
• 34:37
  Speaker 1: That means that assets are on discount and that means that you can get things like monthly cash flow, great upside and some tax depreciation benefits all in one Like a single vehicle, and it's a good moment for that too, you know.
• 34:49
  Speaker 1: So that is what we do in Madison investing, and yep, folks can reach out and, you know, connect with me on our website anytime.
• 34:56
  Speaker 2: Real estate agents, are you tired of letting the busyness of your real estate business get in the way of your real estate investing goals in your financial future?
• 35:03
  Speaker 2: I'm excited to announce that we've created the real freedom investor agent tribe to help you.
• 35:08
  Speaker 2: We've got a ton of content, educational tools, to help accelerate your learning curve and get you on the right path to hit your investing goals.
• 35:16
  Speaker 2: We also have a mastermind tribe of people just like you, agents that want to grow their own portfolio and Encourage you and cheer you on along the way, as well as some private one-on-one coaching.
• 35:27
  Speaker 2: So go to realfreedomcom.
• 35:28
  Speaker 2: Click on the store.
• 35:29
  Speaker 2: You'll see the options there.
• 35:31
  Speaker 2: We're so excited to be able to help you.
• 35:33
  Speaker 2: I've priced it super low, so price can't get in the way, but did want to have some skin in the game for you to help with that accountability.
• 35:39
  Speaker 2: So go check it out.
• 35:41
  Speaker 2: Real freedom calm.
• 35:42
  Speaker 2: Click on the store.
• 35:42
  Speaker 2: We're excited to connect with you and excited for you to connect with your tribe of real estate agents Investing trying to build their financial freedom.
• 35:50
  Speaker 2: Link it below, but for people that may not be at a computer yeah, it's at Madison investing calm.
• 35:55
  Speaker 2: Well, thank you so much for coming on and sharing.
• 35:57
  Speaker 2: It was great to talk about this foundational stuff Because I think these are the key principles that a lot of times people just gloss over, like well, tell me how to analyze a deal or tell me how to do that, but it's you know, you've learned a lot and you've failed forward a lot, and not everybody else has to do the exact same thing.
• 36:12
  Speaker 2: They can kind of meet you where you're at now, skip those headaches and find great investment opportunities that that you've kind of helped and vetted out.
• 36:20
  Speaker 2: So for folks listening, listen to Spencer.
• 36:22
  Speaker 2: He's got a lot of wisdom and you don't have to go through those headaches to do it.
• 36:26
  Speaker 2: You don't have to swing a hammer nights and weekends to make that happen.
• 36:29
  Speaker 2: You can just find great investment opportunities and have a life.
• 36:33
  Speaker 1: Thanks for the kind words, mike.
• 36:34
  Speaker 1: Honor to have come on today.
• 36:35
  Speaker 1: This is a blast.