Journey from Active to Passive Investor With Whitney Elkins-Hutten

This is the Invest Like a Billionaire podcast, where we uncover the alternative investments and strategies that billionaires use to grow wealth. The tools and tactics you'll learn from this podcast will make you a better investor and help you build legacy wealth. Join us as we dive into the world of alternative investments, uncover strategies of the ultra-wealthy, discuss economics, and and interview successful investors. Welcome to the Invest Like a Billionaire podcast. I am your co-host Ben Fraser, joined by fellow co-host Jim Maffuccio. Jim, you over there?

I am here.

Awesome. Welcome. We are joined by a very special guest today, Whitney Hutton, and we're really excited to have her on. She is a really great educator in this space of passive investing. You've probably seen her around before. She has really kind of been around with several different groups educating investors on passive investments and especially multifamily as well as other asset classes. And we're really excited to get her on this podcast and just share her story a little bit. So she started as an active investor just with the first rental, you know, many years ago and has kind of transitioned and grown substantially from there and is now working with passiveinvesting.com, who some of you may know that, that name, doing large Class A multifamily syndications, and is now recently the director of, I think, investor education, if that's the right title. And, um, just wanted to bring her on because she's just such a wealth of knowledge. Um, just some real quick, you know, tidbits of, um you know, what she's done, what Passive Investing has done. They— Passive Investing has acquired over 4,000 units with a value of close to 3/4 of a billion, with about 1,400 investors that are active in those assets. And she's going to share some of her journey, but she's a partner personally in over $700 million of real estate, over 5,000 residential units including multifamily, mobile home parks, single-family, assisted living, in more than 1,400 self-storage units across 7 states. So those are some very big numbers, Whitney, but it didn't start that way, right? You started just kind of like a lot of people start in real estate of just starting with rentals.

Started entirely by accident, actually. I was just buying a house with the significant other and the relationship completely fell apart. And I had a house and I was scared, like, what do I do with this thing? I had no idea. I mean, Financial independence, learning how to manage money. Like this was back in 2002, wild, wild west of lending. I was 103% financed on the property. I shoved it full of roommates and it needed, it was in dire need of a rehab and spent the next year bringing the property up to snuff. And I sold it, probably shouldn't have done that. I was probably the one person who read Rich Dad Poor Dad and got it wrong. He says, hold on to the real estate. I sold it and just I had walked away with more money in that, with that one sale than I had been making my day job that whole year. And I was like, I'm hooked. Like how many more of these projects can I do? But I continued doing that, brought my husband in on a few projects afterwards. And we realized that we were really good at building equity, but we weren't good at building cash flow and really unlocking the golden handcuffs, right? You know, that's why a lot of people really love their day job is because they get a regular stable income coming in, benefits as well. And it took us a few years to realize that we needed to take that equity and put it into rentals. It was like a slap on the head, like, oh, that's how they do it. They get rentals, passive income. Got it. Um, so we scaled up a portfolio of single-family properties, um, both in Colorado, but we quickly transitioned to out-of-state when we realized we could get better cash flow. And then it was off to the races from there. But we hit an inflection point where we, you know, I wanted more of my time back to spend with our family. And I had done that, but we hadn't figured it out, like what it took to get my husband out of his job. And then he said he wanted that too. And I'm like, oh man, we got to go bigger. We got to level up our mindset. We got to go into multifamily. And that's where I both got started in both active and passive investing within multifamily. Fast forward several years later, here I am now, Director of Investor Education and passiveinvesting.com.

That is, that is awesome. And there's so many nuggets there. I'd love to unpack a little bit of that. But one of the things you, you said stood out to me where I think a lot of our listeners are at as well, where it's, you've been intrigued by real estate, right? You've gotten bit by the bug somehow, whether it's yourself or from someone that you know. And, you know, the natural assumption is just jump right into rentals and single-family rentals, but it's also the lowest barrier to entry. And it doesn't always translate to cash flow, to your point. And that's a whole, you know, unique skill set of finding those right properties. And it's difficult in this market as well to find, you know, deals that cash flow, especially in a market like you're in, like Boulder. And, um, you know, then kind of making that transition, like, what was the light bulb moment for you? Because I know you, you obviously are still active investing a lot of these deals, but you're also passively investing and partnering with, you know, top-tier operators in these asset classes that you're you really like. And talk a little bit about that, that kind of lightbulb moment as well, kind of, you know, moving more towards passive investing.

Yeah. So, you know, I think a lot of people, I mean, I'm, you know, you and I are very active on BiggerPockets. And a lot of people come to BiggerPockets, and they're just like, so enamored with real estate. And they're like, yeah, I gotta go get my first rental, passive income, mailbox money. And it's, I like to think of it more as leveraged money, because you're still trading an immense amount of time You, um, for money to come in, but, and it's incremental, like, you know, $150 a month or $200 a month, maybe $300 if you're lucky, you can get beyond that. We, we scaled our single-family portfolio through what we call the BRRRR model. So we were recycling our capital over and over again by buying properties that needed to be fixed up. That was tiring because I was getting 2 loans for every property. And then, you know, I had property management. I was coordinating the property management. I had some pretty good systems in place, but even then, somewhere between being self-employed and a business owner. And our dreams were beyond having just $5,000 or $10,000 a month coming in. I want $35,000, $40,000, $50,000, $100,000.

So for the sake of the listeners, you said the BRRRR method, and I think that's buy, rehab, rent, and then refinance.

And repeat. Yep.

And repeat. Add another R at the end. So, that's where a lot of people are and it is a great place to start. But obviously, your aspirations, dreams, and, you know, moving more towards a scalable model with, you know, less of your brainpower per door. Yeah. So, that's what kind of led you. So, go ahead.

Yeah. And I think the natural progression there is like, okay, I figured out how to get I have the 1, 2, 5 units under my belt. Can I do more in one transaction? Can I get a 5-unit property? Can I get 10? Can I get 20? But I think you have to understand what your goals are. Like some people love, that's what they do. They want to live and breathe real estate. For me, I love real estate, but real estate is a tool for me to achieve my end. My end is This is not my house. I wish it were. I mean, I'm in Sedona right now. You know, we're, we're— I'm not taking the month off, but we're in Sedona hanging out as a family, you know, working and playing from here. And, you know, that's what I want to do is travel and experience life and then create the experiences not only for myself and my family. Managing, actively managing a property was not going to get me there. So I had to rethink what my goals were and then pick an investment strategy that aligned better with those goals. So I was, you know, had this bitten by the bug of real estate and I was trying to, you know, solve all these challenges that I think a lot of people get sucked into as far as scaling and acquiring, you know, maybe the acquisition fees and, you know, all these sort of, you know, things that you can build through actively managing multifamily. For me, I wanted my time back and the biggest return on my time was to invest passively. And that could be in multifamily, it can be in self-storage, Ben, as you know, it can be through notes. So, that it's when I actually aligned my investing with my true goals in life, then that's really where our portfolio started to take off. And we just doubled down on passive investing and never looked back.

I love that.

So, you must have heard somebody either at a conference or online or a webinar that kind of opened your eyes to the world of multifamily investing. How, where, you know, when and who and how did that happen?

Yeah, I can't remember the specific inflection time on, you know, multifamily as an asset, you know, probably it was along the lines of listening to something with Robert Kiyosaki. I can tell you exactly what happened when it dawned on me that passive investment is probably a very strong way that I wanted to scale. And I had actually joined an investment group, I no longer work with them, but I joined them to be on the active side of real estate because I thought that's where I wanted to be. Happy, you know. I'm a very driven person. I can do it. I can figure it out. I'll figure out how to balance life later, right? That was always kind of my MO. And when I saw these powerhouse women balancing life first through passive investing, I was just like, oh, wait a second, this is like— this, this is the investment strategy. Is how do you build the business or participate in a business as an investor, not so much as the active business owner. And everybody is gonna have their different skillsets they bring. And, you know, like I said, there are people out there that want to actively invest. And I seek those people out to invest alongside them because it's a win-win. They have the time, knowledge, expertise, the hustle, the credit and lending, the access to the markets, access to the deals. And so much so that they need additional capital in order to take all these deals down. I have the capital. I figured out ways to create that capital. And we can talk about that journey as well. And it's a win-win. I take a limited partner position and I get an ROT, a return on my time. And I do get to share in the cash flow of the deal. I look for deals that have a preferred return where I'm getting an X percentage of the first parts of the return. I also look for splits in equity. And I also look for, you know, deal, the business plan to return my money as quickly as possible so I can continue to create velocity with my money and go into more deals at the same time.

Yeah, love that. And if someone's considering, you know, the active versus passive approach, you know, I kind of view an active investor, there's really maybe two primary motivations. One would be you want to create income, you know, and you don't have a lot of income or wealth yet to deploy passively, and you want to do it more as a business. Or you just have a passion for it and you love real estate, you have deal flow, you, you want to do it as a business. But as someone who maybe enjoys their 9-to-5, you know, who has a great job or a great profession that they love, you know, it's really not the best option for the most part. And if you have other ways to generate wealth, generate income, put that income away into these deals. And a lot of times, a lot of the deals that you guys are putting out and other sponsors, you're going to be making more money, at least the same passively without doing much of the work, if any, than you would if you're trying to buy a rental or something on your own and then having the headaches that go along with that.

Yeah, definitely. What's the highest and best use of your time? I've seen passive investors kind of struggle with it because they're like, "I want to take my money and I want to get the highest return on it." And I'm like, Yeah, but you know, what's the cost of that? Like, sure. I mean, active investors, they, you know, if the deal goes well, they make a pretty hefty profit on the deal as they should, right? Because my most important non-renewable resource isn't my money. It's my time. Once I spend it, it's gone. I can't get it back. And they're giving me a precious gift. By allowing me to keep my time and we split in the profits.

Yeah, love that. So talk a little bit about kind of the syndication model. And a lot of our, you know, listeners are familiar with that. But just for those that are maybe newer to what real estate syndication is, you know, break that down and, you know, what the— what part the limited partner plays. And then I'd love for you to kind of dive into your role as the director of investor education. What does that mean? What do you— what do you do?

Yeah. So a syndication is group investing. So you're bringing a group of investors together to take down a larger deal that they probably individually didn't have access to on their own. In a syndication, there's going to be a general partnership and a limited partnership. In the general partnership, you may think about it, it's, it's a business, it's an operating business. And I think this is really where I spend a lot of time with investors helping them reset and recalibrate their expectations. Because maybe they're scaling up from, you know, holding their own small multifamily or single-family properties. They were the operator. And they've been, you know, they're very drawn to the deal, right? So they're, they're looking for returns. When we get into syndication investing, you're investing in operating business. So we have to flip that model on its head. The deal is important, the returns are important, we want to make sure they're aligned. But What you need to look for first is the operator, the operating team, the general partnership, you know, who are they? Vet them first. Do you know, love, and trust them? Do you have a— do you know their track record? What are their exits? What are the markets that they're in? What are their investment strategies? I mean, are they doing development or are they doing core properties with no value add to them? Are they somewhere in between? Right? So we're going to vet the operator first. And once we have found those operators that align with the investment strategy that you want, okay, then we're going to vet the markets they're in. Okay? I like growth markets. I'm looking for operators that are investing in high-growth markets, you know, where the jobs are growing, the population is growing, crime is trending down, tax laws are favorable. You know, if you're talking about multifamily, landlord-tenant laws are favorable. And then we're going to stack all those investing cards in your favor with the market. Now, where's the part where we start looking at individual deals, right? You have to know the operator, you have to know your goals, you have to then find the operator that can help you meet those goals, double-check everything about the markets that you're going to be invested in, then is the time to start looking at deal. And that's what I help people do here at passiveinvesting.com as the Director of Investor Education.

That's awesome. Yeah, I love the kind of framework of, you know, when you're investing in a syndication, you got to look at the jockey, the horse, and the track that they're on, right? So the jockey is the operator, the horse is the deal, and the track is the industry or the asset class that it's in. And, you know, ideally all three of those are in a really positive direction. And, you know, arguably, and you probably would agree, the jockey is the most important of those three, you know. So what do you tell passive investors that are kind of newer to this? And, you know, It's a lot of investors that are kind of getting into this mix. There's not a shortage of deal flow. You can go to the crowdfunding websites like CrowdStreet, RealtyMogul, maybe get on some, some, some lists of other syndicators. And it's, you know, once you kind of get in the mix, it feels almost overwhelming, right? The amount of deals that are out there. And so, you know, kind of break down your framework for, for a passive investor because you are one and now you actually work for an operator, you know, and Talk about what are the kind of keys to finding the best operators?

Well, first of all, I love your jockey and your horse analogy because that says entirely what my experience working with investors in this space. They're betting on the horse rather than understanding like who was training the horse and who's driving the horse, right? Or riding the horse. I guess you don't drive a horse. But yeah, when you're making that transition into passive investing, you need to understand, first of all, Do you believe in real estate as an investment vehicle? That would be the number one thing that I would check. Okay. And I, you know, I'm, you know, I'm very focused, you know, my work with passiveinvesting.com in real estate, multifamily, self-storage, you know, real estate-backed notes. So, but passive investing can apply to a wealth of, you know, it can be, I mean, you can go into multitude of industries here. But for me with real estate, I want, do you believe in the investment vehicle, whatever that investment vehicle is? Do you want to be active or passive? Passive, right? Okay. Some people have a challenge of letting go from their passive portfolio. They feel like they're providing more value if they're actively involved. Yeah, in the project. I throw that on its head because I'm like, if you're passive, you can actually create a larger impact by diversifying your capital over multiple markets and multiple deals than you could if you just took down one house in one market or duplex. Or a quad. So once you've answered that question for yourself, do you want to be active or passive? Now we need to understand what is it that you need out of your passive investment. Do you need cash flow? Do you need or want appreciation? Or do you need some sort of balanced blend of both? For me as a passive investor, I always look for deals that have cash flow and some sort of equity growth. You know, built into them. The reason why I am, and this is a struggle too, that some are an obstacle sometimes I hit with passive investors. They'll be like, "I don't need the income now. So I don't need cash flow. Just give me the appreciation." That may not align with the business plan and the deal. And for me, I look for deals that have cash flow because that means they're profitable now. I don't have to wait for them to be profitable later. And that generally gives a little bit of hint the risk of the business plan of the asset, like if it doesn't cash flow well now. Once you kind of answer that question, for me, I like assets that have both cash flow and appreciation. I want the bump on the back end too. Now, I'm starting to get into like, okay, how— who are the operators that are doing passive investing cash flow deals in whatever asset class I've chosen, multifamily, self-storage. So that can help really narrow down your focus. On what investors to look, or passive operators to look for. You can also talk to other investors that you know in your circle. What are they doing? Who do they know, love, and trust? There's several online forums that you can go on. There's several conferences, amazing conferences. I mean, we're going to be at Intelligent Investor Conference in January and also the Best Ever Conference in February. Those are two amazing conferences to attend for passive investors. Not only the knowledge and education that you can acquire there, but man, if you just want to be in a concentrated room with top-notch operators, there you go.

Yeah. How do you overlay, obviously when you're thinking about personal goals and personal investing strategy of income versus growth versus a hybrid, also risk tolerance, how do you overlay that framework on there? For yourself?

Yeah, that's a great question. Because that is something that I think a lot of people don't really, especially when they're getting into the world of passive investing, don't actually interrogate enough about a deal. There's several different points. Like for one, I look at the business plan. What type of business plan is it? Are you ground-up construction? Carries a different risk than a stabilized A property. Which carries a different risk than a stabilized or than a Luxury A property in urban infill, right? Those are all different, you know, they align on a continuum. Now, there are ways— I'm not knocking development deals at all. It's just you have to understand they carry a different risk profile. And typically, they will have a different reward profile as well from something that's more like, you know, suburban A-class property. Really helping the investor understand what the business plan is, is number one. Number two, helping them understand the loan. Like if the property is using leverage, what is the lending structure on that? Because that can be— you can have an amazing stabilized A-class property in an amazing area. And if they're using, for whatever reason, a construction loan to like purchase it, like Yikes. You know, we have some interest rate risk there to mitigate. But I think that's where the operations team, you know, a vetted operations team, you're going to kind of mitigate a lot of those risks inherently upfront, you know, with the business plan.

Yeah. So talk a little bit about the deals you guys are doing at Passive Investing. So I know you focus primarily on Class A multifamily, as well as self-storage. And I believe you guys have a lending fund, but I know kind of the Class A is kind of the bread and butter, you know, multifamily deals are what you guys are doing. So talk a little bit about just kind of the investment thesis behind that and, you know, why you like, like those deals.

Yeah, so, you know, we started off with a value-add B-class strategy, you know. We've, you know, pivoted, you know, we've moved upwards toward that B+ and the A-class asset in suburban areas. These are not your luxury infill, you know, downtown type properties. These are very affordable. I mean, I think the average rent on our Class A properties are $1,500 a door. So you can multiply that gross rent times 3. The household income needs to be about $45,000. And majority of our— the markets that we're in, the household income is $100,000 or more. So these are very affordable properties. But think about it.

If this is a Class A— Wait, so pause right there because that was a nice little hack right there that you just used that some people may not know. So kind of the Gross rent times 3, what does that even mean?

So if the gross rent on the property is $1,500, you're going to multiply that by 3. So to get to qualify the tenant for the property. So $1,500 by 3, I think I was a little off on my math.

No, you did it right.

Okay. And then so we're at $4,500 a month, right? So as long as the household that's going to be living in that unit makes $4,500 a month or more, we are probably not— they're going to qualify for the unit they're technically according to US standards, not putting themselves upside down to acquire, to live in the property, right? They're not spending more than they should, they're going to qualify for the unit. And if the household, like I said, the household incomes in the areas that we invest in are typically $100,000 or more.

Right, which, which is evidence of affordability for the rents that you guys are looking at.

And you're probably not going to have as much economic vacancy, you know, in those areas.

Explain economic vacancy a little bit.

Yeah. So vacancy is whether— well, you can think of it in two different terms, physical vacancy or economic vacancy. And I think this is where a lot of C-class properties got hammered during COVID right? So you have, you know, I think we all can understand vacancy is the property is occupied or it's not. The tenant's there or they're not. But what if the tenant can't leave doesn't want to leave, but they're not paying rent. That is economic vacancy. And we saw that during COVID when there was eviction moratoriums, and we couldn't move the tenant out. Then, you know, these, you know, C-class units, you know, while they were— had a higher physical occupancy, their economic occupancy were lower, because they tend to be the service workers, they were losing their jobs. And they just couldn't pay the rent.

So basically Class A properties as a whole performed well from a rent collection standpoint because the underlying tenants had jobs that were not more at risk during COVID and were able to maintain employment.

That's what we actually found as COVID unfolded for us is that these Class A properties, these are where your upper-level management, your advisor, or excuse me, supervisors, your directors are living in these type apartments, and they were able to work from home. And, you know, they were— the job risk just wasn't there for them. They didn't lose their job. They generally weren't suspended. Whereas, you know, in, you know, areas that were more service industry focused, you know, we saw a lot of economic vacancy in those units.

Yeah. Yeah. You know, it's interesting. I've heard lots of different arguments about all the different kind of Class A, B, and C, and, you know, pros and cons and benefits, drawbacks. And, you know, one of the things that a lot of people say about Class A is, you know, if there's an economic downturn, you know, a lot of the tenants will trade down to a Class B property. So it can be more susceptible to, you know, bigger hits in the economy. But I mean, what you just said kind of goes against that, at least in the COVID era, which was maybe a different economic hit than maybe the Great Recession. Can you talk a little bit about how did Class A perform in the Great Recession, you know, if you have some of that data or insights?

Yeah, I don't have the data directly in front of me, but the Class A luxury— this is a very— we're drawing the distinction between the two classes, the urban and Class A luxury took a beating during COVID both from a physical as well as an economic standpoint. So that is your urban infill downtown. That's still on— is on the recovery. Um, it took a beating during the Great Recession. That is a very— I mean, these are $3,000, $4,000, $5,000 unit properties. You're paying for the location, you know, or high amenities that are on those properties. The Class A that we're talking about here, you know, in our investing thesis is, um, suburban Class A. And so these are the multifamily apartments that are being built. You know, we've all seen them around our metro areas in the past 5 to 10 years. So they're outside the city centers, they're still well located, they're still close to jobs, great schools, great markets. I mean, think about it this way, they're probably like really centered, like, you know, 15 minutes from a Whole Foods or something like that. So one of our founders called it the Whole Foods circle, right? So, you know, the Whole Foods does amazing market research, so does Starbucks. So So, those are kind of great things to piggyback off of. But those are two— so, when we're talking about the Great Recession, you know, I'm wondering if the data actually teased out the suburban A-class property wasn't really a big, you know, hot ticket item at that point in time, right? So, I'm wondering if the data actually teased out the difference in Class A, because I've heard that too, right? Class A goes down and B goes to seeing, where does he go?

The thing of it is, a lot of people were displaced from homeownership during that timeframe. And where are they going to go? They're going to go to the Class A suburban. So, you probably had people infilling those, those units, even as maybe some people had to move out and downgrade, you know. So, that seems like a pretty safe sweet spot. And I can see where the luxury class would be, would get hit, you know, in a situation like that.

Yeah, most people don't give up their economic lifestyle. It's hard. Yeah, that's the last thing they're going to give up. They're going to give up everything else before they give up their economic lifestyle.

Yeah. And right now, like, a lot of the drivers behind multifamily are, you know, one is just lifestyle choices, but, but two, it's also affordability of homeownership is, you know, becoming less affordable. And that's driving more renters and You know, so I really like your thesis there. Talk a little bit, you know, shifting back to, you know, when you're looking at kind of your own personal investing strategy, you know, how do you analyze a deal quickly? How do you, you know, you probably see a ton of deal flow, you know, and I'm sure you're obviously investing in the deals you guys are doing, but, you know, even outside of that, that kind of from a personal standpoint, what are some kind of ways that you've learned to analyze these deals quickly to decide if it's a deal worth looking more into or not?

Yeah. So, you know, I think of it sales funnel, right? You know, I am actually working through that whole funnel by figuring out who my operators are gonna be, my core operators. You know, I work, I'm invested over 10 operators right now. I'm always looking to expand that base. But I generally don't, I don't get on everybody's list. I make sure that I'm very aligned with the operator. Okay? So that's number 1. Number 2, I'll do all this pre-vetting in the market. So I've already vetted the team, I've already vetted the markets they're in, I've already aligned with their strategy before I start getting that deal flow. So a lot of the heavy work is upfront. But once I start getting the deal flow, what am I looking for at that point in time? Am I looking for multifamily, self-storage, residential assisted living, or something else? I sit down once a quarter, Maybe even more often depending on how, you know, July, August, and September were really hot months this year. So I was constantly reevaluating what type of asset I wanted to go into. So knowing what I'm looking for right then, I look at, if I'm looking at multifamily, I'm looking at unit count. I like 100 doors or more. There's just scalability there. You can have full-time employees on the property. I'm looking for that B-class asset and above. Okay, B+ is a huge sweet spot. I'm looking for those, you know, high-growth markets. Then I'm getting down into the actual business plan on the asset. Where we are in the market right now, swinging for the fences on a huge value-add, I think for me is not in my risk tolerance because, you know, because, you know, copper, lumber, all these materials are kind of all over the board right now. So I want to just, I'm kind of like just chilling out right now on the heavy, you know, heavier value-add pieces. I love the additional streams of income part. Like, you know, can you, you know, add fiber internet to a property or valet trash or storage or package lockers to increase the net operating income that way? And then I start getting into the actual return metrics. Like if all the parts checkbox for my business plan are in place, then I start getting into the return metrics. What's the internal rate of return on the property? And James, I need to define that. We need to break out a calculus calculator. What is the equity multiple on the property? How long is my money tied up for? What is the plan for me to get it back as quickly as possible? What is the preferred return on the property? And, you know, really, I'm looking to double my money in about 5 years and with the chance of getting my money returned or all or part of it returned much earlier than that in 2 to 3 years.

Whitney, I love that funnel idea. That's super cool. And just, I think a lot of investors make the mistake of, you know, they do, they jump in, they want to just, I call it over-diversify, right? Where it's like you, you don't want to take too much risk. So you think that if I just diversify across maybe 20 different deals, 20 different operators, then, you know, it's going to reduce my risk. But you made a great point of, you know, you do all the work on the front end of the operators and you decide who, who aligns with my values, who aligns with you know, the strategies that I personally believe in, and you do all the hard work up front, and then it really simplifies the decision-making process, right? Because you're just, you're looking at the deal flow that they're generating, and then kind of, does it meet the other filters? So I love that because it is, I think, especially with crowdfunding platforms, all the things that are available where you can just log in and just invest in a deal right there, you know, at the click of a few buttons. And you don't know much about who's behind it and what is their track record and have you done background checks, those kinds of things. And so I really like that framework. That's really, really cool.

I think crowdfunding has a unique opportunity to serve somebody to, if they just wanted to kind of like kit test real estate with like $10,000 or $5,000, something, some small amount, or if that's the increments of which they can invest in over time, I think that's— That's fine. But at some point in time, somewhere along that continuum, there are going to be larger chunks to invest. I mean, try to manage 50K ones. I mean, the tax forms alone. I remember, like, 2 years ago, I had a really heavy investing year. And when I got to the tax forms at the end of the year, I was kind of crying. I'm like, this is amazing, but oh my God, I got to do all this tax work.

Yeah, no kidding. Yeah. One of our, uh, our COO here at Aspen, we had an interview with him a while back and he, he said at one point he had, I think, 100 K-1s from all of his investments. And he's a CPA by training, so he actually didn't mind it. But I'm like, oh my gosh, that sounds like a nightmare, you know?

But that's great. I mean, there's a lot of diversification, hopefully a lot of depreciation being thrown off there. So it's like, it's, that's a, you know, a healthy problem to have as long as everything is performing.

Yeah. And I doubt his were $5,000 K-1s.

Right.

Yeah.

So, you know, so your point is well taken on that, you know, the over-diversification or spread the risk to, you know, you can end up with a bunch of crummy little deals.

Right.

And I think it's kind of hard I mean, if you're just investing $5,000 here, $10,000 there, I think it's hard to really gain. I think there's— and I don't have the math to prove it out. I'm going to do the math after the show. I mean, there's probably like a lot of friction in that and you're not able to really take full advantage on underwriting the assets that are probably going to do really well and actually generate a lot of money for you.

You're probably actually, that's probably more of tuition than an investment at that level. You're really still kind of learning and it's a great way to learn. I mean, jump in, nothing like having a little skin in the game to cause you to want to really learn. But you might take some knocks along the way, but if you just kind of view that as, hey, I'm just paying dues, I'm paying tuition until you have the kind of capital base that you can invest passively and it can start becoming a significant part of your income, and then eventually it can become your sole source of income. That's where a lot of people want to get eventually.

So it's just part of the journey. Yeah, I think it's more exciting to get a $30,000 check on a $50,000 investment than, you know, a $3,000 check on a $10,000 investment.

So, yeah, so anyway, where are you like just from a personal investment standpoint? Where are you really thinking about putting your money as you're going into this, you know, new year here, 2022? You know, we're very long in the economic cycle. We've had a long run in real estate. You know, I like your thoughts on, you know, heavier value-add, maybe be a little more cautious on those, make sure it's the right deal. You know, lighter value-add was easy to kind of add ancillary income streams that don't require a lot of construction. You know, you definitely have much lower risk there. But what are some other things, like even other asset classes that you're personally excited about?

You guys are going to laugh because this is going the total opposite direction. But we actually just closed on a short-term rental yesterday.

Nice. Where at?

No laughter here.

Well, so, and, but it actually fits exactly in our investing plan because we're looking for, you know, we're really doubling down on our lifestyle assets. And so we're still looking at all these different passive investing deals. But this particular deal is in— we're looking for some short-term rentals in areas that we visit often and we'll be personally utilizing them. So, and then, you know, not generating— it won't be like our long-term holds where we're just like $150, $200, $300 a door. I mean, we'll be generating a lot more capital and kind of riding that wave for right now. But on the passive side, I'm still a believer in multifamily. I love it. I mean, I come from the world of public health. I mean, and Maslow's Law is like, you know, the basis of all public health. People need food and water and warmth and a roof over their head. So I'm still very much a believer there. And right now with our, you know, the housing being underbuilt by 4— was it 4.5, 5 million? I'm seeing that number like, you know, teeter back and forth in there. You know, self-storage is a hot asset right now. I mean, James, you talked about just like people for either lifestyle reasons or necessity, multifamily is kind of an option for them. You can't pack in everything from a 3,000-square-foot house into that type of unit because most multifamilies don't have garages. So self-storage is kind of like a no-brainer comparison or a companion investment there. I dabble a little bit in ATMs. That is, you know, how can we bank the unbankable? That is an area I come at it from a different thought process than probably most people do. But that is kind of like an area that I've been heavily investing in as well.

Awesome. I think every single one of those asset classes we like and have invested in as well. So that's awesome. Well, Whitney, this is awesome. Super, super great insights. And I know I know you're just getting kind of get started passive investing, but are you going to be doing some of those weekly webinar series that I've seen you do before, like an investor education? Because I just, I love those kind of weekly webinars you used to do. And tell us about what you're going to be doing for investors and ways to get plugged in if investors want to hear more.

Yeah, definitely. So yes, I do a weekly Passive Investing Made Simple masterclass. So, you know, visit passiveinvestingwith whitney.com. And you can get plugged into— I have a free checklist on passive investing made simple there that you can download. You can schedule some time to talk with me. I geek out about passive investing all day long, as you guys can tell. And then also you can get plugged in and learn what our masterclasses are. I'm also going to be putting out some random YouTube videos and just kind of bringing people along for the ride with me.

Awesome. We'll definitely link to that in the show notes on our website. So Guys, go reach out to Whitney. She's a wealth of information. And again, thanks so much for joining us.

Yeah, thank you so much for having me. It's been such a pleasure.