REIA 51 Shelon Hutchinson: Learn How to Partner to Scale Our Real Estate Portfolio

Welcome to Real Estate Investing Abundance, the show for busy, fulfilled professionals like you to learn how to develop financial independence built on solid passive real estate investments. Now here is your host, Dr. Alan Lomax.

Enlightened investors, we are going to get off our island comfort zone and learn how to partner So we can scale our real estate portfolio. Shalon Hutchinson, known as Hutch the Marine Investor, is a Master Gunnery Sergeant in the United States Marine Corps. Over the past 22 months, Hutch has co-sponsored over $11 million in multifamily property acquisitions, which includes a 55-unit portfolio in South Carolina and a 167-unit complex in Georgia. Today with his partner, he co-founded H Square Capital, a real estate investment firm that focuses on apartment complexes acquisitions in the Southeast. Hutch, before we go into partnership building for real estate success, share a memorable experience from your formative years that helped you to be the person you are today.

That's right. Now, there's a couple, but one I want to highlight is a lot of times we do not know exactly what brought us to our current location. Right, because in life there's certain things we can control and some things we can't control. For me, one thing I couldn't control is my school path, right? And I can tell you that I'm standing here today because I only spent half a year in first grade. Not because I'm extra smart, it's just the way things work out. I went to first grade in January and then I actually got to transition to second grade in September, unlike others who went to the first grade in September and then leave the other September. So I am in this present moment in America. I was able to graduate the time that I graduate, to get to boot camp the time that I got to boot camp in the Marine Corps, to be able to get stationed in Hawaii, to be able to meet my wife, to have the beautiful children that I have because I was able to graduate half a year early from first grade.

Yeah, that's so true. There are many things in life we cannot control. And we never have a whole lot of idea where it is that we're going to end up, no matter how much planning we may do.

That's right.

Well, how did you get started with real estate investing?

Just like religion, religion, career path, certain beliefs, certain paradigms that we have, right? We get a lot of that from our parents. And for me, I was fortunate to come to America in 1998 with this abundance mindset of possibility. Anything is possible, right? So, fortunately for me, my dad was in real estate. He was listening to those cartoon sheets, cassettes. And, you know, he was talking to me about the possibility of owning real estate. And I call it owning some of America. Now, we're focused on owning more of America with our investors. You know, so, he taught me the information he was learning. He called it sheet tape. He was also a real estate agent, right? Which, as we know, not all real estate agents are investors, right? It's a whole different mindset with being a real estate agent and being a real estate investor. You know, so, he enlightened me to both possibility. And that got my curiosity and it develops over the years.

Well, interesting. Well, where and how did you meet your business partner? Because that was a big part of actually how you actually got started in at least multifamily investing.

Yeah, absolutely. So, look, the greatness we want to achieve in life, a lot of times we can do it by ourselves. We really can. But one of the things that I've learned in the Marine Corps, and even if I should go back to my childhood days in Jamaica, I was a cadet. And we march in formation. We had small fire teams that we do different tasks with in the fields, whether we doing a camping or we doing a drill or we doing a squad competition, right? So early in my life, I learned the importance of having small team, small team that can be combined to make bigger teams and make great things happen. Now, got into my young adult age of 18, I joined the Marine Corps and I embraced the concept of team, but team was more so of fulfilling a higher mission, you know? So, when I got into real estate investing, I started in the single-family space, which, you know, as we know, in the single-family spaces, you get to own a small grape, small grapes at a time, and it's usually you by yourself. Now, when you transition to the multifamily space, you get to surround yourself with a lot of people that have this abundance mindset and everyone wants to share what they have learned, right? They also want to share their resources with you. So, it became very apparent to me when I transitioned from a single-family space, like, look, I need to embrace that team concept that I've been a part of my entire life. You know, so my wife and I, we sat down, we strategized what we believe was our big audacious goal of attaining 100 units or syndicating 100 units in a time span of 12 months. And, you know, as we all know, whenever you establish a goal, one of the things that you need to understand is, you know, what will it take for you to accomplish that goal? What are the skills that you need need to learn, you know, what are the skills you need to have or need to learn? And also, what are the resources you need to accomplish that dream, right? So, we realized that we were on an island and we needed to get off that island. And what I mean by that is, we didn't know what we didn't know. So, we need to populate our island or get off the island and mingle with other folks to ensure that we can get the knowledge and the skills that we need to accomplish this big, what we believe was a big audacious goal of syndicating 100 units in 12 months, right? So, I was some research. One of the things I needed to know was how to properly analyze a property because look, now we're dealing with investors' capital and we have to be the best stewards of those capitals. So, we can't just get up and wing it. There's foundation information or foundation education that has to be learned. And we all know within single-family space or the multifamily space that we make our money on the buy. So, I came across this Michael Blank program. It's called, and he talks about the Syndicated Deal Analyzer which we use and we make some modification to to analyze properties. Then I realized that he identified that he was having an event out in Texas. So, my wife encouraged me. She's like, Shalon, she was committed to something else and she said I should attend that conference. You know, so I was talking to a couple of my friends, my good friend Tim Kelly, to be more specific. And one of the questions he asked me, he said, Hutch, why are you going to this conference? I said, well, I want to get off this island. I want to learn more about multifamily properties so I can be a better steward of investors' capital. You know, he said, Hutch, I'm Understood. But specifically, why are you going there? I say, brother, tell me, tell me more. Tell me what I don't know. I don't know what I don't know. So, you said you're going there to raise capital, to find a deal, or to find a partner. And being that I wanted to get off the island, finding a partner was one of the things that I needed to accomplish. And at that conference, it's the DealMaker Live out in Dallas 2019, DealMaker Live 2019, I found my good friend and business partner, Dr. Heath Jones, an amazing spiritual being. He's the type of guy that have such a presence that you want to wake up out of your bed in the morning and show up for him. So, I'm showing up for him and for myself, you know, to grow this dream that we envision for our future. So, Heath and I, we met at a real estate conference. We started as accountability partners and before we actually partnered to be, to build our business.

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Well, an interesting way to get started in partnership is through an accountability partnership. Sounds like an excellent way to build a rapport and a way to get to know your partner really inside and out there.

Yeah, no doubt. So, one of the things we identify at the conference is that, or even after the conference, is that we both liked the Huntsville, Alabama markets, right? And Heath lived 2 hours northeast of me which was not really the most direct path to get to Huntsville from Pensacola but he lives in Enterprise, Alabama. So, we drive 2 hours to his house and then we'll drive 4 hours to the market. And between October and February, we were in Huntsville, Alabama, you know, at least once a month, sometimes twice. And I think there's one month we traveled 3 times up there, you know. So, we drive 2 hours to his house and then we'll drive 4 hours to the markets. And while we're driving 4 hours to and 4 hours back, we'd be listening to Jim Rohn, we'd be listening to some Les Brown, we listen to some Grant Cardone, the 10X books. And also, you know, just listen to all the podcasts and listen to all the great minds in the industry to learn what we did not know. And in the meantime, we would stop We would pause and we would talk about what we have just learned. How does that resonate with you? What does that mean to you? Right? So, we get to learn each other's character or beliefs and, you know, some different things about each other that we would not normally learn just over a Zoom call, you know. So, we get to learn each other and that was amazing. And that was about 5 months we took to learn each other before we actually formed H Square Capital.

Well, a good way to go about that So, you have decided to host a podcast, The Multifamily Real Estate Experiment Podcast. What was behind the decision to go ahead and launch that podcast?

Yeah. So, in this space, it's really, really important to stay connected. It is such a small community. Even though when you're in the multifamily space, it seems as if everyone is doing it. It's like buying a new Tesla, right? You buy a new Tesla and you see all the Teslas on the road. You buy a new Ford F-150 battery operated, and now you see all the battery operated Ford F-150 on the road, right? I'm not sure if those are released yet, but I'm just saying, right? When you start to integrate yourself in this community, you identify the who's of who's. You realize who has the strengths that you can learn from. See, Warren Buffett says, success leaves clues. And what better way to get 64 hours of mentoring from those guys and gals who are doing great things? We don't have all the time in the world. to absorb this content, but we can do— what we can do is sit down and get some mentoring session from those guys and gals who are doing things because we don't know what we don't know. And the goal is to be the best stewards of our investors' capital, you know. So, it's more of a thought leadership platform. We use it as our education, but we're using it to also bring a ton of knowledge for people who might be one step below us or at our level to ensure that we all can grow as a community and we can share the information. We can network as much as possible. And of course, be the best steward of our investors' capital. You know, we find it to be very beneficial. We've interviewed the likes of the minds of the mad scientists. This guy is Neal Bower, all about the numbers. He's got an entire army of virtual assistants that dissect and parse out information that can be presented to the world to help us to get a better understanding of exactly what is going on in the multifamily space so we can make better decisions in the buying process and also the exit. exit strategy to ensure that whenever we talk to those busy professionals, like your audience that are listening to this podcast, we are able to provide to them real-time information based on verifiable data out there on the internet.

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Exactly. And every interview that I conduct, I learn something and it's, and I've had all caliber of people on this show and I learn from each and every one of them something new every time I have somebody on as a guest. So I can't agree with you more there. Well, what is your vision for your business and what are you trying to accomplish?

In the real estate space, we all know every investment we do, the jobs that we have, the career field that we committed to, the education that we committed to, we all have a, and for those who are real successful, right? We all have a big audacious goal. We have a vision. We have a why. The why that wake us up out of bed at 4 in the morning or sometimes even earlier. We see people like Marky Mark, as we call him, he wakes up at 3 in the morning And then he has several different things that he do throughout the day to ensure that he can spend time with his kids, with his children. He can drop them off at school, he can pick them up. So we all structure these life experiences, these life decisions around a why that is bigger than just ourself. See, a lot of times it's not all about the money. The money is good and it helps to facilitate all those things that we want to do because look, the bare necessity in this environment sometimes does not cut it. And I believe I come from a background where as a man, I was taught by my uncle Len who provided so much value for me as a young man that, look, in my culture, as a man, it is your duty, your obligation, and your responsibility to provide for your family. So, when I got into real estate, that was my goal. But the more we learn, the more we realize the power and the value that we can bring to other investors. And we just wanna share the knowledge. We wanna share the knowledge. We wanna share the investment opportunities. with these investors, you know? So, at ACE CRE Capital, we're committed to bringing veterans together. It could be retired or those veterans who have served their 4 or 5 years and got out of the military regardless of the branch of service. We want to bring them together with high net worth individuals like your audience to create wealth and get their time back. So, the focus on the veterans is to help them to get their time back because look, I've been in the Marine Corps for over 22 years and a lot of folks who are in my shoes, people who look like me, who have served in the military with whatever branch of service, Air Force, Navy, Coast Guard, Army, and Marine Corps, right? They're committed to learning a certain craft over 20 years. And the idea is to transition those trades, skills and trades out into corporate America and capitalize on that. But what Edgecare Capital wants to do is to minimize the amount of time that they spend in corporate America so they can get their time back so they can spend time with their kids, high school age, or their grandchildren if they chose to have kids early. So that's what we want to do. Additionally, we want to provide those high net worth individuals with— we want to solve the problems that they have. And as you know, for those guys and gals who are listening to this, sometimes you are on a path of creating an additional stream of income. You might be close to retirement or you might've already retired and you want to create that cash flow. You might be a high net worth individual that just wants to get those tax breaks to ensure that you don't have to give most of your capital back to Uncle Sam. So we want to provide the benefits of real estate to both those retired veterans and also those high net worth individuals to get their time back and also enjoy the benefits that comes with owning multifamily real estate.

Well, share with our viewers and listeners how it is that they can connect with you to take advantage of all of this.

Yeah. So, we try to be on social media as much as possible, but the Marine Corps is very demanding. It is very demanding. So, I have to create time for myself. So, we wake up at 4 in the morning. So, I'm on LinkedIn a lot. As Hutch the Marine Investor. I also have an operation manual and it's geared more towards those service members, but it's applicable to anyone who's wanting to get into real estate. So, if you go to h2hcapital.com, you can download your operation manual to get the insight of what it actually means to invest in multifamily and some of the opportunities that it provides for you. You know, as a Hutch the Marine Investor. And also, we host a meetup every Monday at 7:00 PM Central. It's The Southeast Multifamily Investor Meetup, and you can connect with us that way.

Well, let's go into our last segment here. And Hutch, share with us one of your most difficult setbacks and how did you come through that time and what did you learn from that experience?

Yeah, absolutely. So, Doc, I call you Doc or Allen? I call you Doc.

Doc is great.

So, in the Marine Corps, Doc is like a good word for us. We have a Navy corpsman that we absolutely love and appreciate because they're the one We're saving our behinds a lot of times, right? You know, so Doc, one of the best moments in my life was what I perceived at the time to be my worst moment. See, I have a different style of leadership. I'm very passionate about helping people, but in order to help people, one of the things that I've learned over the years is that you have to learn how to lead yourself first, right?

Yeah.

So in 2015, I was running this division of close to 80 people. We had some good apples and we had some bad apples. And look, they said that 90% of your time is spent with 10% of those people who need— who are a leadership challenge. You know, so I was committed to ensuring that those Marines that I was entrusted to lead were brought up to what I believe to be the standard. But look, I did not know how to go about it most effectively and it backfired. And I got relieved or I got reassigned from that position. It was not pitched to me as, Hutch, Hutch, you're getting relieved. It was, Hutch, you're getting reassigned to a place that we believe you'll be better suited. So I got reassigned to one of the leadership academies here on the West Coast. What that did for me, that put me in a position with 6 solid NCOs, noncommissioned officers, who did not need a lot of my attention. They needed some guidance with ensuring that policies and procedures were followed, but they were so savvy that they didn't need my direct supervision 100% of the time. So what that provided me with Doc was an opportunity to learn who I was, right? And who I could become. And I see when you master who you are, it helps you to, it builds your curiosity of who you can become. And then being reassigned to that position created the time for me to learn who I am and what I could become. So I went out on this lifelong commitment to learning. The first book I read was The 7 Habits of Highly Effective People by Stephen Covey. And this is one of my most recommended books because look, it is It's life-transforming. It made me a better Marine, a better husband, a better father, a better brother, all around a better individual. And I recommend the book so much, you know. So what I perceived to be my lowest moment, because I believe that I cared so much about these Marines, and then I was getting reassigned, that was not a good feeling for me. But looking back, it was the best decision in my Marine Corps career and as me as a spiritual being.

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That is so true. And as simple as it may sound, it is really a difficult lesson to learn. But we cannot help anyone else until we first help ourselves. Even the airlines know that. That's always— they start off Put your mask on before you take care of the child next to you, because if you're gasping for breath, there's no way you're going to be able to help your child. So true. So true. And it really is a hard lesson to learn though.

It is. So a lot of folks, they can moan and complain about what they believe is happening to them. And see, one of the transforming quotes in that book, 7 Habits of Highly Effective People by Stephen Covey, was a quote by Viktor Frankl. And if anyone knows who Viktor Frankl is, they would know that he was in a concentration concentration camp and was being tortured over and over again. I was in a leadership billet leading some hard-charging Marines. I was not getting tortured. And the quote is, between stimulus and response, there's space. And in that space, you have the freedom to choose your response. In your response lies your happiness and your growth, right? See, I've made it mine. But that was such a life-transforming quote to me that it changed my life. And I've been living my life from that perspective ever since 2015. I tell you, it has been such an amazing life experience since then.

Well, for our last question, imagine that you've come to the end of your life, and as you lay on your deathbed, what do you look back on with your greatest sense of joy, satisfaction, and fulfillment?

Yes, Doc. So we all have this big audacious why, right? And a lot of time it surrounds those children that we've chosen to bring into this world. Because look, everything else can go away. and our commitment will always remain to those spiritual beings that we have chosen to bring into this realm. Les Brown talks about this. He talks about the perfect way to die. And the perfect way to die is to be surrounded by your kids, grandkids, and great-great-great-great-grandchildren, right? Just a whole happy family around you celebrating your life. But imagine, Doc, laying on your deathbed and you're surrounded by the thoughts and ideas, visions, That came to you that only you can give life to. And they tell you that we came to you and you did not brought us to life, right? And that's when a lot of people have regrets. They have regrets about not taking enough actions. See, one of the things that I've learned recently, Doc, is that whenever we think small, it's the people whose life we could be changing or improving will suffer the most when we think small. So when I lay on my deathbed, that at the end of my life, I want to be surrounded with my family with no regrets, knowing that I have made my— I fulfilled my commitment, my obligation, and my duty to my family and to those that I come in contact to improving their life, whether it's financially, motivation, inspiration, a smile to brighten up a bad day, right? I want to look back on life with no regrets.

Wonderful way to live any life. Thank you so much, Hutch, for being on the show. Been a pleasure getting to know you.

Thank you, sir. Appreciate the opportunity.

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