Financial Advisor turned Passive Investing Pioneer with Jim Pfeifer
In this interview, Jim Pfeifer recounts his winding career path—from teaching and financial advising to active real‑estate ownership, accidental landlordship, and finally passive syndication investing. He explains how early frustrations with property management led him to syndications, where he could delegate asset‑management to professionals while focusing on deal qualification. Recognizing a lack of education and community, Jim co‑founded Left Field Investors, later merged with BiggerPockets to become PassivePockets, creating a forum for limited‑partner investors to share operators, due‑diligence practices, and market insights. He contrasts "paper assets" (stocks, bonds) as speculative with real‑estate assets that provide immediate cash‑flow, arguing that true diversification and liquidity management are essential. Jim shares concrete lessons from recent market cycles: the importance of liquidity, avoiding over‑concentration with a single operator, using the "Shirky rule" (invest with an operator only after a full year of performance), scrutinizing capital calls, and setting realistic return expectations (1.5‑2x over 5‑7 years). He also outlines his portfolio allocation—10‑20% liquid assets in index funds, the remainder in diversified real‑estate syndications, with a small speculative slice in Bitcoin. Throughout, he emphasizes community‑driven learning, disciplined diversification, and the need to treat investing as a boring, reliable income generator rather than a speculative gamble.
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And I came to believe that paper assets are speculation, right? Because you don't have a current benefit. You buy something, a stock or whatever, you hold it until you can sell it to somebody else, right? For more than you bought it.
Jim Pfeiffer used to be a financial advisor helping his clients invest in traditional stocks and bonds, and then he started investing in real estate. And since then, he totally has changed course. He's really become a pioneer in the passive investing space and he's built a hugely diversified passive portfolio that's brought him financial freedom. And he has built a community of others that he's helping to do the same. Enjoy this episode. Jim, thanks for coming on, man.
Hey, thanks, Ben. I'm super happy to be here. And thanks for that introduction. You and Aspen have been around for most of the LFI journey that we'll, I'm sure we'll talk about and talk about lessons learned because boy, there's a lot of them.
Yeah. Yeah. I want to get to some of those. That would be really, really fun to just talk through it. Maybe not so fun in some instances, but you know, what led you into this passive investing world?
Yeah. I think I'm on career number 6. So, you know, I did business, then I was a teacher for a while. I was a financial advisor, then I was an active real estate investor. And then I finally found syndications. And the way I started as an active real estate investor was accidental landlord. You know, we were talking offline, my son is about to graduate high school, or he did. And when he was born, we built a new house because we had a growing family, needed a bigger house, couldn't sell our old house because it was 2008, right? That tells you when this was. And so we became accidental landlords, rented out the property. I hated it. Had a great tenant, but I just didn't like, you know, he'd call and say, hey, come fix the bathroom and make me take off my shoes to walk into my own house, which meant he took good care of it, but it's just, Little stuff like that drove me crazy, but then I recognized what it was doing to us financially, which was a big positive. And so I finally found a guy to manage the rental property manager and just started buying more investments. And what I found is none of them cash flowed like I expected, right? I was an active real estate person, but I was a terrible asset manager. So I was lucky because I was doing this in, you know, 2008, 9, 10, and beyond. So everything was just going up. Right when I was buying, but nothing was cash flowing. And so I realized that my weakness was I was an asset manager, but not good at it. And then I found this thing, syndications, where I could hire an asset manager and they know what they're doing. And so I started tiptoeing in and made a few investments, and I realized that my returns were actually better than the, uh, active real estate. Certainly the cash flow was right, but also on the backend, it was equal or better on the appreciation side, and it was passive. So all I had to do, and it's a big all, I had to qualify operators, evaluate deals, all the stuff that I felt like I was okay at or good at, but I didn't have to do any of the stuff I was bad at, which was managing the property. So I became a full-time passive investor, sold all my active stuff, and just started investing passively. And that's when I realized it's really hard to do this on your own. So I started a 12-person dinner club and the, uh, first meeting was gonna be March 18th, 2020. So, that never happened because of the pandemic. So, we went online and we went to this new technology called Zoom. And we started meeting every month. And it was the only good thing I think that came out of the pandemic for me is everyone was at home. So, people were coming to these meetings excited about it. I kept trying to limit the number of people and make it small, but we had so much demand. So, we spent the first year kind of trying to keep it small. And then we realized, oh my gosh, there's so many people want to learn how to invest this way in syndications, right? Real assets to produce cash flow. So we got a brand, we called it Left Field Investors. We got a website, just off we went. And, uh, it was fantastic. We grew over 4 or 5 years to several thousand members. And eventually, you know, we realized that the resources we had weren't able to service the community that we had created. And that's when we teamed up with BiggerPockets to create PassivePockets, which is now the same community. You know, we're all about helping investors learn how to invest in syndications. But now we have more resources with BiggerPockets supporting us. The mission is the same, to support limited partner investors on their journey to financial freedom.
That's awesome. Yeah, you get— you gave the full rundown there. I love it.
Yeah.
I'd like to go back a little bit because I think this is an interesting point of your story that I'd love to zone in on a little bit because you were a financial advisor, right?
Yeah.
And in my experience, I work with financial advisors, but these are kind of two totally separate worlds, right? Real estate and the public markets. Absolutely. And they don't jive well together for a whole host of reasons. And so I'm just really curious for you what your journey was like and what was maybe some lightbulb moments that you had that made you want to go the real estate route?
Yeah, that's a great question because as a financial advisor, you know, you want to do the best you can for your clients. And when they bring up real estate or they think of real estate as a financial advisor, I'm like, oh, that's the scary bad stuff, right? Cause I'm not trained on that at all. I'm not licensed for it. I'm not compensated for it. So a typical financial advisor is going to tell you to steer away from that, which is the wrong answer. And so you're right, I had a lot of conflict because I took pride that I invested in the same things as my clients, right? And so the more real estate I invested in, the more I was doing something different than them. And that was difficult. That was hard for me. And I slowly realized— it's funny because when you become a financial advisor, they pretend like you don't know anything about finance and teach you from the ground up, which is great. But everything they were teaching me, I was like, wait, this is better for real estate. This works better in real assets than paper assets. And I came to believe that paper assets are speculation, right? Because you don't have a current benefit. You're, you buy something, a stock or whatever, you hold it until you could sell it to somebody else, right? For more than you bought it. But there's no current benefit, maybe a little bit of dividend or something, but real estate, you buy it, there is a current benefit in cash flow. And then the rest of it, the upside is just the bonus. So once I kind of realized that, I couldn't remain as a financial advisor. And now what I recommend to people is when you find a financial advisor in and they're very rare, who is willing to help you with your real estate, meaning modeling and stuff like that. And also doesn't get upset or tell you no when you want to move money over to real estate, because that's taking money out of your financial advisor's pocket, right? Because every time you don't give them money to invest and put it somewhere else, they lose, right? And it doesn't make them bad. It just means you got to find a financial advisor that understands all the stuff you're doing in your financial world.
Yeah. You know, there's not a conspiracy around it. It's just the way things are set up and they don't have the right incentives to make recommendations for this.
Right.
Not only that, they actually take on more risk because they're fiduciaries and there's not training around real estate, not training how to do due diligence on it. And so in their minds, it's just quote unquote risky, right? Everything is risky if they don't understand it.
Yeah.
I think we can talk about that maybe in a little bit on, you know, how do you find an advisor or a team around you to help you find the right people that can be in your corner and not have these conflicts?
I could say real quick something about that. Yeah, I look at it the same way I find an operator for a syndication, an attorney, a financial advisor, a tax person, my IRA custodian. I want to find people who they have to be involved in real estate, either investors or have clients that are investors. And so that's where a community comes in, right? Because I go to my community, and if I need a new professional, I ask them for recommendations. And that's how I find all of these professionals in my life. And it's important to me, especially for a financial advisor and a tax CPA, those are two at the top of the list. They absolutely have to be real estate investors or understand what you're doing, right? Not ones who look at you and say, no, no, that's scary. Well, yeah, it's scary because you don't know what it is. That doesn't mean it's bad. It's just scary. And you know, how do you get rid of fear? You educate yourself and then it's gone.
Yeah. No, I think it's a great point. Yeah. A good question for financial advisors. How much real estate do you own? Right.
Exactly. Yeah.
They're eating their own cooking. Then you have some confidence there. And I think it's a great point, right? We want to, surround ourselves with experts in the fields that we want them to have expertise in.
Right.
And that's how we all grow. That's how we benefit. And then finding the community. That's another point I wanted to hit on in your story is what was that point for you where you realized, okay, I have to do this in community and there isn't one, I got to go create it. What was that signal?
You know, we, we just talked about fear and that's what it was. It was, okay, I just met someone at a conference and they're an operator. And now they sent me a deal and now they're asking me to wire them $100,000.
Yep.
Right? And when was the last time I sent a wire for $100,000, right? You don't, because even in your house you have a loan. And so maybe it's not that large or maybe it is, but you know, so it's super scary. And so you're thinking, okay, how do I get over this fear? Well, Steve Su, who was one of the founders of Left Field Investors, he and I were sitting and having dinner, you know, just meeting for the first time. Maybe it was coffee or whatever. And he's like, yeah, I'm a syndication investor. I'm like, okay, what are some of the operators you're dealing with? And he said one, I'm like, ooh, I invested with them too. And then he said the name of the deal. And I'm like, I'm in that same deal. And it was just this, you know, explosion of confidence really, because here's a smart guy, he's a doctor, he knows what he's doing. And he's investing the same operator in the same deal as I am. Now, I don't remember how that deal performed. Maybe it did well, maybe it didn't. But the point was, it just gave me some confidence like, okay, I'm not here alone. And the difference in syndications from active real estate or paper assets in the market is that it's really hard to find other people that are doing this. If you walk outside your front door and talk to your neighbors, they're going to, what syndications? Are you nuts? That's so weird. They don't understand it. And so finding a community is super important just to, like you said, bounce ideas off of, but also confirm things. And if you think about it, these are long-term investments completely out of your control, right? And they're illiquid. So if you were talking to an operator and you're like, okay, I'll do a small investment with you. Okay. So maybe they let you in for $50 grand, right? So now I'm going to wait. And see how that turns out before I invest again. So 10 years later, I can make my second investment, right? It is not practical. It just doesn't work.
Right.
But what I can do is say, okay, Steve, you've invested with this operator for 3 or 4 years. Maybe a deal hasn't gone full cycle, but you have enough experience with them to give me confidence that they're going to do what they say they're going to do. Reports are going to come on time. Distributions are going to come as they say, and I can use Steve's experience for myself. And that's the power of community, right? That's what kind of levels you up and gives you a little bit more confidence. Because face it, some of these investments can't even be advertised. They're hidden. So, how do you figure all this out? And, you know, I've gotten more from this community than anyone else. I learned about good operators. And more importantly, I learned about the ones to avoid, right? That's why you want community so you can learn how to avoid some bad operators, know who the good ones are, and then work together to figure it all out.
Yeah, I love that so much. I think it's such a helpful perspective for newer investors to realize I don't have to go it alone because that is the fear. And yeah, you don't know what you don't know. And I guarantee you the investments you make initially, if you're doing it yourself by yourself, 5 years later, you look back like, oh, I probably shouldn't have made those investments, right?
Yeah.
Jim, I want to shift a little bit. So we've been through a cycle, right? It's not a huge down cycle, but we've definitely seen some impact in the syndication space. And, you know, I'll go out and say we've been in a little bit of a syndication bubble the past few years. And that's kind of popped a little bit the past, you know, 18 to 24 months as interest rates have risen, as, you know, rent growth has slowed. And hate to use the visual here, but Warren Buffett says, you know, when the tide goes out, you see who's swimming naked, right? And the tide has pulled back a little bit. And yeah, you start to see some of the operators that maybe weren't up to snuff, And that's what a market cycle can do. It has no friends in it. Things can change on a dime. And being able to pivot, being able to react to this is important. But as an LP, I want to get your perspective because you've been investing for many years. You were one of the leading voices earlier on in the syndication space. And I want to hear the good, the bad, the ugly, right? But also give us some perspective on how you see this real estate cycle.
It's been tough and it's been good, both, right? Because I think going forward, the syndication space is going to be a lot healthier and it's going to be a lot easier for LPs to decide which operators you want to invest with, right? Because it was really hard in 2018, '19, '20, '21 when, I mean, anyone could make money in real estate, right? I was a terrible asset manager, then my active stuff did great. I mean, I made a bunch of money and I was terrible at it. When things change, that's when we've seen a lot of, unfortunately, uh, naked people swimming around right there because the tide went out. And I think there's a lot of lessons to learn. And some of them that I've learned, well, one personally is liquidity, right? Liquidity is one of the most important things to manage as an LP. Because when I found syndications, I was so excited. I went all in and then I saw, okay, you, you gimme a deal that pro forma is out 5 years. And I noticed that almost all of those are going full cycle in 2 or 3 years. So I start mentally thinking, okay, 5 years means 2 or 3, right? And so what happens when interest rates go up, insurance costs go up, inflation goes up, and these deals now, they're certainly not turning in 2 or 3 years. Now it might be 5, 7, or 10. And so managing my liquidity to make sure that I don't get stuck was one of the biggest lessons I learned. And one of the other big lessons I learned is when I meet a new operator, And I'd be like, oh man, I've just met these guys. They're awesome. They got this great deal. I invest in it. And then the next month they have another deal and another deal. And I just keep investing because I did my due diligence. I've qualified them. They're great. Let's go. Right? Like we talked about, I can't wait 10 years to do the next deal. Well, that's a mistake to go all in with one operator because one of the biggest benefits of syndication investing over just regular real estate investing is diversification. So you can diversify by asset class, by market, and by operator, right? You don't want all of your deals with one operator. And so now I implement what we call the Shirky rule for this guy, Dave Shirky, who he had this rule before 2020, I think. And, and I, I ignored it then. I don't now, which is he does not invest with a new operator or recommend them to anybody unless he's been invested with them for at least one full year, because then you can see they said they would be quarterly reporting. Is it true? They said we'd get quarterly distributions. Is it true? And if not, why? Because things change. That's okay. But do they communicate? You can kind of see at least a year. And so now I don't invest a second time with an operator until it's been a full year. And the reason is because there's one particular operator who, you know, I met him in person, thought it was great, invested in one of his deals. And he's like, hey, I have another deal from, you know, that I closed 6 months ago that still has some room in it. You want in that one? I'm like, yeah, I'm in that one. And then he bought 2 more and I'm like, let's go. And it turns out that this guy bit off more than he could chew, right? He was multifamily, but he also did office to multifamily conversions. He did triple net leases. He did development, all this stuff, which it's not bad to do all those things. But if you're a multifamily person, you don't have expertise elsewhere, then you get into trouble. Right. And then bad things happen and it spiraled. And so another lesson, not only to not go all in is I don't want to be anybody's guinea pig. Right? So if you're doing office to multifamily conversions, and you're just a multifamily person, you've never done that before, go for it, do it. But I'm not investing in your first deal. I want to see your first deal go, make sure, and maybe your second deal, right? I also want to say, hey, did you hire anybody who has this expertise? Are you just saying, well, because it transfers, I do one thing, I can do another thing. So that's another big lesson is, you know, you don't want to be someone's test case, let them test it with their friends and family first, and then come to the market and say, hey, generally, Here's the deal. And those are some of the 3 big lessons I took out of what's happened. And I think it's going to be a lot easier to vet operators moving forward. In 2019, one of the questions I would ask is kind of a throwaway question. Have you ever had a capital call? Because no one's ever had a capital call, right? And then that would've been an automatic disqualifier. Yes, we had one. I would've hung up the phone without talking anymore because, you know, it is just a huge red flag. But now You ask someone for a capital call if they've had them and they say yes, there's a lot more questions now I can ask. What happened? How did you communicate it? How did it end up? What went on? And based on that, I can say, cuz there's a couple of operators I have that have had capital calls and I will absolutely invest with them again because they handled the capital calls great. They gave me full information, they explained it, they gave me a bunch of lead time knowing it was coming. So I'd invest with them again, but there's others who said, hey, if, you know, we can— you talked about earlier pivoting the plan, right? Well, this was supposed to be a basically apartment flip, but if the market changes, we can pivot and do a hold strategy. Well, it didn't work because they operationally messed up and they didn't communicate ahead of time and all these other things. And so those are ones that I will never invest with again. And so it's, there's a lot to be learned, but it also is going to put, if you're coming into it now, you're in a great spot because now there's a lot more knowledge and information out there.
Yeah, I love you make that point because one of the inherent challenges of investing with someone you don't know in a really good market is it's really hard to detangle what's luck and what's skill, right?
Yes. Yes.
Because, you know, luck, it makes everyone look good. And you also don't get to see the character of an individual or a team until there's challenges that they have to deal with, how they step up to the plate and communicate about hard things. Are they transparent? You don't get that kind of information when everything's just going up and to the right and it's all rosy and it's really hard to detangle that. So I love that point because it's now you have a lot more data, a lot more deeper questions you can ask on the why, and you can actually get to, you know, history is a good representative of what the future could look like, because character is usually a fixed thing. And so seeing how someone reacted in a historical situation can be a great indicator for the future. And we have a lot more data now to ask those, those deeper questions.
Yeah, that's the thing, right? You have the data. So there's 5 or 6 operators that after seeing how they've done over the last few years, I know I will never ever invest with them again. There's 5 or 6 or maybe 10 operators who I've seen who had success and some that didn't, who went through this, and I will absolutely invest with them again, right? And those are the ones that I'm really watching carefully. I am not going all in. I'm also probably going to go in at the minimum on most deals because that's the way to diversify. Now, my accountant might hate me because of all the K-1s, and my initial plan when I first got into this was do all the minimum investments, find the best operators, and then go big with them 5 years later, right? And that plan has changed. Now, I'm just going to go into the minimums for the most part, because I would rather look at a deal that goes 2 or 3x and say, dang it, I wish I'd invested more than the opposite where, you know, I lose all my equity. And then I think, damn, why didn't I invest the minimum? Right. So I think the thing is about, and I forgot who said this on our podcast, so I can't give credit. But what they said is, you know, if you invest in a syndication, you might get a 1.5x, you might get a 2x. Outside chance you get a 3x, right? But you're not getting 5x, 10x. That's not what this is. So we need to understand that if we can get a 1.75x on our investment over 5 or 7 years, that's fantastic. That's a good result, especially with the tax advantages. It's way better than speculating in the stock market. And so we just have to adjust our expectations and think, okay, so 1.75, that's good. So I don't have to when someone shows me a 2.5, and there's two deals that are similar, one's a 2.5 and one's at 1.75, there's no reason to really shoot for the 2.5. You're hitting singles and doubles, and they turn into home runs occasionally, right? So that's just a different perspective. I'm not chasing returns.
I love that. How do you use that perspective to not be burned and just now give up on syndications? Oh, I tried that, a couple deals went bad. And that's the sentiment I feel like a lot of people are in because if they entered in '21, '22, you know, that was the peak of the market and a lot of those deals are struggling. So how do you have perspective to, okay, no, I know this works. There's some challenges, obviously, with the point of the market and the things that have happened with interest rates. But I'm still going in on this and maybe I've changed my— I've pivoted my strategy a little bit. But You know, what would you say to someone that maybe feel like, man, you know, I invested in 5 deals and 4 of them didn't work out?
Yeah, it's really hard, right? Because I'm not in the business of convincing people that this is the way to go, although I 100% believe that it is. You can't convince them. You have to maybe show them and help them understand. And I get it. Let's say you're in 4 deals and you invested $50 grand in each and you lost all of your equity in 3 of them and made a, you know, 1.5 on another, or you're not sure yet because it's going 7 years instead of 3, it's tough, man. It's really tough. But what I would say is, let's look at each one of those investments. What happened, right? Would you now, with the knowledge that you have about the market, about operators, about all this, would you make the same decision? And I can look— I've, I've had capital calls. I've lost all the equity on some of the deals I've invested in. And I can look back at those, and it's been hard. I've had to search on some of them for reasons, right? But But finally, on each one, I found out, oh, okay, this is the mistake I made. And how can I avoid that in the future? I'm investing now with more confidence than I ever have, because I have learned so much. There are operators that I am confident, I know that these people are upstanding people who do the best for me. And that's 80% of the battle, right, is having confidence and knowing that these are good people who, when things go bad, they'll tell you. And so now it's easier to ferret all that out. So I would say, give it another try, even though you've lost some money, you can make it up, but you got to look at each deal and figure out what went wrong and get comfortable with it.
Yeah. Get comfortable or reduce your risk is just invest less and spread it out across more. Right. So you're, you're placing smaller bets so that your at-risk capital on every deal is less impactful to the bigger picture, which I want to get into now of like, how do you think about your portfolio? Right. When you're investing, you know, Jim's money, You mentioned diversification a lot. So do you have like a planned strategy of here's how much I want to have in multifamily, here's how much I want to have in storage, here's how much I want to have in debt funds, etc.? Or has it evolved over time by happenstance, you know, or have you thought more about that explicitly?
So my strategy is very general. I'm going to have my favorite operators. I want to do some multifamily, I want to do different asset classes. And so I just try to look at what's comes. And then you also have to Even if you do send me a deal, maybe it's one that I'm not comfortable with.
Yeah.
Maybe I already have too much in Kansas City or whatever market. Right. So there's a lot of things to think about. So even if my favorite operator comes out with a fantastic deal in the asset class that I really want, maybe it's not in the right market for me and I don't want to be overexposed there. So I think it's really hard to come up with a strategy other than I am going to just invest at the minimums and diversify as much as I can. And that's not really a perfect strategy, but that's what I do. So I think the end result is I don't have a target that I'm going to, but each year I try to set very squishy goals about how much capital I might want to allocate and, and to where. But also a lot of these deals, if I don't have the capital, I can't invest obviously, but I don't know when deals are going to go full cycle. So in the middle of the year, I might end up with a lot more capital than I thought, or I might end up with a lot less. So it's really very difficult to get to the correct amount of diversification when you're investing in syndications, because it's nothing's under your control.
It's such a practical, real answer, right? Because it's, it is the truth. Do you have any kind of targets that you're shooting for as far as exposure to real estate as a whole versus non-real estate, private equity versus public markets? Or is it really not so stringent on those targets percentage-wise?
Well, one thing, when I first got into this, you know, it's going to sound funny from a financial advisor. I was like, no paper assets, none of this stock market stuff. That's all for speculation. That's, that's for people that aren't educated, don't know what they're doing. Right. And then, oops, I got in trouble with liquidity. And then I realized there's several places I can store liquidity, right? I store some just cash in the bank. And I also put some in the market because that's where I can get a return and it's super liquid. Right. So in index funds, I don't do anything major, but that, that's where I store. I don't even know what the percentages are, 10 to 20% in those kind of liquid areas. And then the rest really is in real estate, mostly syndications. I still do have a couple of active real estate investments. You know, we also have a home or two that has some equity in it. So really I'm all in on real estate and everything is set up to fund that. But I've learned that you need liquidity and, and the stock market I believe is a good place to store some of your liquidity that has an upside.
Yeah. Do you have any kind of rules of thumb for liquidity now that you're wanting to kind of abide by?
I don't really. I think right now I'm kind of in a place where I'm not real liquid because I did go a little bit all in more than I should have. So I'm in the place where I'm building up liquidity. Um, I still am a little bit nervous about the market because I truly believe it's speculation, but speculation's okay sometimes. I also have some Bitcoin and that's purely speculation, right? So So that's the one thing I try to hold down because I do like to chase the shiny object is I only like to speculate with 5, maybe 8% of my net worth. It's fun, but investing shouldn't be fun. It should be boring and make you money.
Yep. Love that. It's so great to have Jim on again and hear how he's thinking about this moment in time and syndications and passive investing. And the big lessons that I'm leaving with from our chat are: don't be a sponsor's guinea pig. Just because they've nailed one asset class doesn't mean they're going to nail the next one. So just be cautious. Don't double dip with a sponsor for a full year. And if you really like the first deal with a sponsor, try and be disciplined. Wait 12 months before you make another deal with them, then you can go for more. And as always, lean on community, learn from others. You don't have to go at it alone. And on that note, a reminder that the Invest Like a Billionaire book is out on pre-order now. Check it out at thebillionairebook.com. Org. You can hear more from Jim at passivepockets.com or on the Passive Pockets podcast. That's it for this week. Thanks so much for listening, and please share the show with your community. We'll be back more next week.
