Stories and Strategies from Successful Professionals with Allen Lomax - REIA 490

Welcome to Streams to Impact, the podcast where busy professionals are empowered to develop multiple streams of passive income built on solid, secure, hands-off commercial real estate investments. This show is not just about wealth development. Every episode, we dive deep into inspiring conversations with professionals who are living life to its fullest while making significant and meaningful impacts on a world in great need. Engage with us each week and discover how you can thrive and flourish abundantly in all areas of your life. Now, here is your host, Dr. Allen.

Welcome to Streams to Impact, the podcast where busy professionals are empowered to develop multiple streams of passive income built on solid, secure, hands-off commercial real estate investments. This show is not just about wealth development. Every episode, we will dive deep into inspiring conversations with professionals who are living life to its fullest while making significant and meaningful impact on a world in great need. Engage with us each week and discover how you can thrive and flourish abundantly in all areas of life. Thank you so much for being with us today in our initial launch of Streams to Impact. Streams to Impact is a show about and for professionals. It is about professionals who are wanting to develop their wealth through hands-off commercial real estate investing, as well as a show That inspires professionals to delve into the work of their calling more passionately than ever to bring about the dream of making a significant and meaningful impact on this old world. I believe that all of us want to leave this world in a better place than where we found it. And this show is about people who are doing exactly that. In each interview, we will be interviewing fulfilled, successful professionals and entrepreneurs who are not only using the work of their calling to make significant difference in this world, but they're also looking to develop their wealth to even enhance that impact further than what they could do without that wealth. Wealth is just the means to an end. It isn't a journey to an end in and of itself. If you've been tuning into Real Estate Investing Abundance, you know that it is basically a show based upon interviews, and Streams to Impact will continue being that kind of show. But today I just wanted to share with you a little bit about what the show is going to be in the future and a little bit about myself and why I do these podcasts. So my story began— well, of course, it began at birth, just like everybody's story does. But there was one particular milestone of major significance for me in my life. This was in the 7th grade, and I and my family were sitting around the family black-and-white television that Certainly ages me, as first of all, it's black and white, and secondly, the whole family was sitting around one screen. That doesn't happen very often these days. Well, we were sitting around watching this, and an unbelievable special came on the boob tube. And it was a special about homosexuality, of all things. A topic almost unheard of in those days. But as we were sitting there watching it, I discovered something. I had never heard the word homosexual before, but as the people who were being interviewed had their faces smudged out and their identities concealed, and as they shared their stories, an awareness came to me. They were talking about me. Just to set any side— anything aside in terms of, well, I guess they were recruiting you and other young men and women your age who didn't know any better, but I can assure you that I knew of my tendencies long, long before the show was out there. This was just the first time that I knew there were other people out there like myself. Well, this realization of knowing that there were other people out there was not at all helpful because clearly they were not being portrayed in the best light, their faces smudged out, their identities concealed. Well, that was happening for a reason. And it was, of course, because they were social outcasts. And I knew that that was my destiny and my journey. And not only— were there issues of social outcast. I was— my family and I were part of a very conservative religious organization, and there certainly was no aspect of welcoming homosexuals into that enclave. So many things fell upon me at that particular time, and it was a very, very dark time In my life. There was no one in my circle of friends and acquaintances with which I could share that secret, and so it became deeply, deeply buried within me, and I carried that burden alone and by myself. On top of that, that wasn't really the only issue that I was dealing with because I have dyslexia, a condition that, that was not even recognized as a condition at that point in time. And yet I had been dealing with it since before, of course, beginning even, even elementary school. But going into elementary school, I was, of course, labeled as not very bright, not very intelligent, because I was certainly having a great deal of problems with reading and writing and—

And math.

And spelling. So on top of all of this comes this issue of homosexuality. Well, some way, shape, or form, I survived high school. I even managed to get a grade point average high enough that I was actually able to find a university that accepted me, and I went on to, to college. As lackluster as my high school performance was, my lackluster performance continued on into college. I eventually did graduate and then also I got married. So continued with this shadow over my head and bringing that into a marriage. And it wasn't really until about 14 years after graduating from college and being married for 14 years that my dear ne'er-do-well existence came face to face with one of my darkest moments. And that was my wife coming to the realization that this relationship was not working. And so she ended that relationship. And that was my rock bottom. Moment. And today I look back on that very dark moment as one of the best moments in my life. It was like a light switch had gone on because for the first time in my life I went into psychotherapy and counseling, and I began to realize that many of the aspects of myself, my personality, that I disowned as being weak and embarrassed about, for instance, my ability to empathize with others and to understand others' situation, I discovered that that was a major strength. And discovering that led me back into college, to graduate school, and I got my graduate degree in counseling, secured a university counseling position and then acquired my PhD in organizational systems psychology and discovered a passion for working with individuals in higher education situations, both individually and with organizations, and had a wonderful and fulfilling career. Along the way, I began to realize that, yeah, I would like to develop some wealth and, and my position as enjoyable and as well-paid as it essentially was, was not a road to the development of wealth. And so I looked into real estate investing, and like many people, I launched my real estate investing career in single-family homes, fixing and preparing them for rentals. And I held several rental properties over the years and also did some fix and flip along the way. And that was great and wonderful, and it was astounding to me at how much that was able to contribute to my wealth development in many different ways that I never really had anticipated. Well, in 2008, we all know what happened in 2008. There was a major financial crisis, and on top of the financial crisis, I lost my job, and that was of course due to the financial financial situations of the time. And because of that, and because of the constraints on the real estate market, I found myself in a very unfortunate and unhappy situation. It was the second very, very dark moment in my life. And from that very dark moment, I learned some really critical lessons. One is, is that I can transform and I can change and I can move forward. And in spite of the challenges and the difficulties of that particular time, I was able to pull a financial situation back into place, and I even started investing in spec home development, which was Another major mistake because I didn't really know what I was doing. And so for the second time, I lost everything that I had developed in terms of my wealth. Well, from that point on, I realized that real estate investing can be a wonderful vehicle for developing wealth beyond a whole lot of people's expectations and imaginations. But you have to do it and you have to do it right and correctly. And so I began my educational process in real estate investing. And not only did I begin the educational process, I began to develop a network of other successful professional real estate investors. And over the last 4 years, I have developed a very extensive network. Of successful and well-vetted commercial real estate syndicators who deliver and almost always deliver beyond their projected expectations. That's important because it takes me to where I actually am to— am at today in my journey of wealth development. So I know from experiences that we can develop wealth through commercial real estate investing. And so I also realize that there are other, many other professionals out there like myself who would like very much to develop their own wealth and are no better educated at how to go about doing that than what I was 4 to 5 and 6 years ago. So I have put together a program that is here, and its primary focus is actually focused upon empowering professionals and entrepreneurs to develop their wealth through multiple streams of passive income built upon secure and solid real estate investments. So I tell you my story because I think it's important for people to know a little bit more about who I am and where I am. And I think it's important because it is a story of transformation. It's a story of personal transformation from a ne'er-do-well existence, hiding my true and authentic self and separating who I am internally from how I was trying to behave externally. Well, bringing those 2 things together and really living an authentic life has made a tremendous difference in my life. I found my passion. I found my passion for working with and helping people by becoming authentic. And once finding my authentic self, then I found an avenue where I could realistically build Wealth that is sustainable and that will be here not only for me throughout my golden years, but will be here as a legacy for those who follow me. I think those are important points, and Streams to Impact, the podcast, is built upon those principles of transformation and education. And the possibilities of developing sustainable wealth while following our callings and making a profound impact upon this old world. So why real estate investing? Well, Forbes has stated many times that the majority of self-made millionaires in the United States have used real estate as the vehicle to develop their wealth. And a 150-year longitudinal study conducted by the Federal Reserve Bank of San Francisco that investigated all investment vehicles found that real estate investing provided the highest returns more consistently with less volatility than any other investment vehicle out there. Well, this isn't an accident that real estate investing is one of the best wealth development vehicles out there. There are several things that contribute to real estate being the IDEAL investment vehicle, and IDEAL actually is a mnemonic for the 5 components of real estate investing that really separate it from most other investment opportunities out there. So IDEALS— the I stands for income, D is for depreciation, E is for equity, and A is for appreciation, and the L is for leverage. All 5 of those things combined together make real estate a very substantial and an ideal vehicle for investing. Just briefly, income is of course generated by the rents that tenants pay, and those rents— the income comes from the fact that those rents are distributed generally on a quarterly basis, sometimes on a monthly basis, to our passive investors. So not only is there a nice and large payoff at At the end of these projects, whether we resell the property or whether we refinance, all of the cash that our investors put into the property is returned to them, plus the profits that come from the work that we do on these properties. Depreciation is a tool that Congress has instituted to actually Write off the expenses, both real expenses and depreciable expenses. And we'll go more into that in, in our course and explain what that is and how that happens. But essentially, it is a major tax reduction process that makes real estate investing so profitable because much of our income— Much of our wealth is taken from us by taxes. Well, if the more we can reduce those taxes and do it legitimately and legally, the more money that we can put into our pockets to put into assets that will then further generate income for us. So equity is the difference between the liabilities on the property and the actual value of the property. Those of you who own your homes understand what equity is. The liability is the mortgage on the home, and the equity is all of the value that you have in that home above and beyond that mortgage. Appreciation is actually the process of developing equity, and in real estate investments, there are actually 2 very important components to appreciation. One is what we call natural appreciation, and we know that over— well over the last 100 years that real estate properties Over any 10-year period of time have appreciated year over year at about 4%. So that is the natural built-in appreciation, but all of the commercial projects that we invest in, we have what we call forced appreciation. And so we are forcing an increased value in the property in 2 different ways. One is that we— Are making management improvements that are reducing Our costs and our expenditures, and the other way is by improving oftentimes derelict properties. We're improving the rents on those properties. And whereas in residential real estate, the value is based upon comps and, and what other properties are selling in the neighborhood, in commercial real estate, the value of a property is based solely upon—

The rents.

The net operating income, or the income that is generated from that property. And so as expenses go down and income goes up, the value on that property increases, and that is how we force appreciation. So natural appreciation and forced appreciation increase the value on the property. And then the The fifth is the L, is the leverage. And that is that we're essentially utilizing other people's money to generate profits and income for us. So for instance, on most commercial properties, we're leveraging those, or we're getting loans from institutions— insurance companies, banks, other financial institutions— lend to us about 70% of the value of that property. And so we go into these properties with 30% equity. And of course increase that equity through the whole period of that time. But while we're only putting in 30% of our own funds and investor funds, we're reaping the income, the depreciation, and the equity, and the appreciation aspects of that investment at 100% of that property. And so that leverage is one of the major factors that make real estate one of those ideal— make it the ideal investment. As far as I know, there's no other investment vehicle out there that provides in one investment vehicle all 5 of those aspects of wealth development. So that's what makes it ideal. That's why I keep coming back to it as an investment vehicle. So all of these things combined give real estate investing the ability to have that hedge against inflation. We'd already talked about appreciation. Well, that 4% appreciation, annual appreciation, is at least Always comparable to the inflation rate and sometimes even higher than inflation rates. And so that gives us that hedge against inflation. So we know that our investment is at least going to stay even with inflation. If we're putting our investments in CDs, bonds, and stocks and other kinds of investments, We don't have that general basic assurance that our investment is even going to be staying even with inflation. CDs almost always lose us money because inflation is almost always growing at a more significant rate than the CD rates are growing. And so we can put our money in CDs, but we're losing Money each and every year because inflation is eating away on the interest that we earn on that. Well, the other aspect that all 5 of these elements come together to help us is it gives us an investment product that is resistant against the recessionary forces. So economies go through cycles, and real estate investing is not immune to those investment cycles. But because of the strength of the asset, and particularly the tangible secure asset of real estate, it is more resistant to those recessionary pressures than most other investments can be out there. Certainly during recessionary times, real estate is going to lose value. But commercial real estate, particularly the commercial units that we invest in, which are multifamily mobile home parks in particular, are more resistant to these recessionary forces than any other investment that you can get out there. Certainly stocks almost always take a deep dive during recessionary periods. Residential real estate generally is going to take a pretty deep dive. Just for instance, in the 2008 recession, where residential real estate was hit really hard, and there were some places in the country where residential real estate lost more than 50%, and on average across the country, There was a loss of about 34%, whereas with multifamily and mobile home park properties, that loss was less than 10%. And so you can see a significant, significant difference between a 10% loss and a 34% loss. And so that's how we can say that commercial real estate investing, particularly multifamily and mobile home parks, They are resistant to those recessionary forces. And notice I didn't say there is no loss there, but they're much more resilient and resistant than other investment processes. So the primary function of Streams to Impact as a podcast, but Streams to Impact is also a product, but as a product and as a business model, our primary function is to empower professionals and entrepreneurs to develop multiple streams of income built upon passive real estate investment. So our product is an educational and coaching product And this product opens the doors for professionals and entrepreneurs to enter into this often mysterious, oftentimes not well-advertised opportunity of investing in commercial real estate offerings. So that is the door that is opened through our product. The avenue to developing wealth actually comes because of the extensive network that we have been developing over the last 4 years with well-vetted syndicators who have a track record of delivering the projections that they project, oftentimes delivering more And better than they actually projected. So it is a product that, that is worth millions because we take individuals who have not invested in, in real estate, or at least not in commercial real estate, not to the extent that we offer them, provide education, provide coaching. But we provide that avenue to these private equity investments built upon commercial real estate syndications. These are not publicly offered, and so you just can't go out to the public market like you can with stock markets and purchase these investment opportunities. You have to know who the syndicators are You have to know where they are. And you need to, to have an education in terms of being able to evaluate whether these opportunities are viable and good and whether or not they actually are going to be able to deliver the projections that are stated in the offering memorandums here. So our program offers the education, the coaching, And provides the opportunities for professionals and entrepreneurs. Well, I wish that I could help absolutely everybody to develop their wealth through commercial real estate investing. Unfortunately, that's just not realistic. There are some people out there who we can help, and there are others who we really aren't going to be able to help, at least not at this this point in time in their lives. Well, we don't know who we can help and who we are not able to help until we actually sit down and have a consultation with you as an individual. And through that consultation, we are going to discover whether or not you are compatible with us and whether or not we are compatible with you. With you and where it is that you want to go with your vision. So in the consultation process, we take you through looking at your core values and seeing what your vision is, your most meaningful, most significant vision is, and whether or not your values and your visions are aligning. And we take a look at what are the challenges that you are facing that stand in your way of actually attaining that larger vision and more meaningful and most significant vision in your life. And through that consultation, once we go through what your most meaningful vision is and what some of the challenges are, then we come up with a blueprint and we can determine from that blueprint. whether or not we have something to offer you and whether or not you are compatible with our program. But until we do that consultation, we really do not know. Well, this consultation is worth thousands, if not millions of dollars. But if we look at it just in terms of the time and energy that we put into it, we would probably value that at something like $400 $93 for an hour to an hour and a half session. But we, at this point in time, we are able to offer that as a complimentary consultation. I don't know how long we will be able to offer that as a complimentary consultation, but at this point in time, we are able to make that offering free of charge. And so I encourage you to make an appointment with us and schedule a consultation, and we can determine whether or not we're able to help you or whether you are actually compatible with our program. So I encourage you to make an appointment for that consultation, and you can do that by going to our website steedtucker.com. Steed as in the horse, and those of you who have been following Real Estate Investing Abundance know the importance of horses in my life, and that's where the Steed Tucker has come from. So steedtucker.com/passive will take you to our calendar. Schedule a time to meet with us, and we look forward to meeting you in that consultation on a one-on-one basis, and we can Evaluate whether there is a fit. But whether there is or isn't a fit, I can guarantee you that we will leave that conversation as friends, and you will also leave that conversation with a blueprint that will help you to attain your most meaningful and significant vision. So whether you decide to join Streams to Impact or whether or not we will leave as friends. Thank you so much for being with us today. Please join us each and every week as we interview successful and fulfilled professionals and entrepreneurs who are bringing meaningful and significant impact to this old world.

Thank you.

So, I look forward to seeing you next week. Until then, live abundantly and thrive in all areas of your life.

Thank you for tuning in to Streams to Impact, brought to you by Steedtalker Capital, a company empowering passionate professionals like you to develop multiple streams of passive income built on solid passive real estate investments. As a significant part of our endeavors to make a cosmic and meaningful impact for this world, Steed Talker Capital contributes significant portions of our profits to activities and organizations committed to better understanding the equine. These endeavors attempt to enhance the treatment of horses worldwide. Steed Talker Capital, working for a world where all creatures, great and small, flourish abundantly. If you are ready to learn how our passive investors have earned an average 33% annual return on their investments, schedule your complimentary Passive Income to Prideful Impact consultation. Obviously, we cannot continue indefinitely to offer these valuable consultations for free, so grab your Passive Income to Prideful Impact consultation while you still can. Go to steedtalker.com/passive.