Passive Investor Spotlight #2: Using Your Network To Find And Vet Sponsors With Jim Pfeifer

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 interview successful investors. Welcome to the Invest Like a Billionaire podcast. I am your co-host Ben Fraser, joined by co-host Jim Maffuccio, and we're really excited today. We have a really awesome guest, Jim Pfeiffer. Welcome, Jim.

Thank you. I'm glad to be here.

Yeah. So, so Jim Pfeiffer, he is one of the founders of Left Field Investors. and he is a host of the Passive Investing from Left Field podcast. And so he runs this group, Left Field Investors, which is dedicated to educating investors in the nuances of passive investing and just the world of syndication. So there's a lot to unpack there. And Jim is actually a former financial advisor, and he became frustrated with kind of one, one-size-fits-all approach and shifted to concentrate on investing in real assets that produce cash flow. So really excited to dive into that story, Jim, in a little bit. And Jim, he's really practiced what he preaches and he has invested in over 45 passive syndications across a variety of asset classes, including apartments, mobile homes, self-storage, private lending notes, ATMs. The list goes on and on and on. And so, Jim, really excited to have you here. One of the things we like to do in this podcast is we call our Passive Investor Spotlight series. And you fit this profile perfectly because a lot of our listeners and a lot of investors in general want to get to that point where, you know, the passive income that they receive can, you know, exceed their earned income and they can functionally retire and have freedom and time freedom. And, you know, a lot of the different asset classes you're invested in allow you to do that. And really what we love to do is just hear your story, hear about your background, how you got into this, and what's worked well for you, what hasn't worked well, and being able to learn from those, uh, successes as well as challenges and things that come up so that we can be better educated. I know you're an educator at heart, used to be a high school finance teacher, I believe, and a financial advisor, and now you're full-time passive investor. So really, really excited to have you on, Jim. So if you don't mind just jumping into your background and how you really got started in all this and what was, you know, the whole transition from financial advisor to real estate investor?

Yeah. Well, again, thanks for having me on. And, you know, my story is I'm kind of on career number 4, hopefully the final career. I started out just in business working for a reinsurance company and that, you know, did that for about 11 or 12 years. And then, as you said, I went on to become a teacher, finance and accounting in the inner city Columbus schools. And I did that for a few years. And then, at the end of that, I slowly transitioned into being a financial advisor because I wanted to be more independent, work for myself, and I've always been really interested in finance and money. And what that led me to is I really learned about money and I learned about finances more than I ever thought I had because I thought I had it all figured out. You know, I'd been in finance for years. I'd been investing in the stock market, mutual funds since I graduated college. And the more I learned about money and about how finance works and about how financial institutions work, the more I kind of went towards real estate and realized that the paper assets that I was selling were not really what I wanted to invest in. And, you know, I always prided myself on only invest or only putting my clients' money into stuff that I was putting it into. And so, I slowly found out that I was recommending real estate to clients, but I'm not licensed for that. I also don't get paid for that, which is why financial advisors really don't recommend it. So, I made the switch. It was a slow switch. You know, I worked kind of both financial advising and my passive stuff for a couple of years. And when I got to the point where I was going into the office and 90% of my day was working on my real estate stuff, I figured out, hey, it's time to move. And at the time, I also had sold all of my active real estate investments. So that gave me kind of the cushion where I had some money so that I could generate the cash flow, I could put the investments in, and then know that the cash flow would come. And so that's kind of where I ended up. And, you know, I've been investing in all, you know, you listed off a bunch of asset classes. I've been investing in a lot of different things. And at the beginning, I didn't really know what I was doing. And slowly I've learned and used my community, my network, and now I kind of have a handle on it somewhat.

Yeah, no, that, that's so, so fascinating. And I'd love to hear a little bit more just on, you know, we, we find with a lot of our investors, there are these kind of these two worlds of investing, right? It's all either all stocks, bonds, mutual funds, the traditional stuff, or they're real estate is everything and active, you know, real estate Robert Kiyosaki type folks. And, you know, what was the point kind of maybe bridging both of those gaps? Was there a point that, you know, salient moment where it's like, hey, this is where I want to go and real estate seems to be the path that's going to get me to where I want to be? Or was it just kind of over time it just developed that way?

I think it was a little bit of both. You know, when we— the way we came up with the name Left Field Investors is my former colleagues in financial advising, they always looked at me like I was way out in left field field doing this crazy real estate stuff, these alternative investments. And to me, they're not alternative. It's where you live. It's, you know, self-storage. It's where you put your stuff. I mean, this is, these are real assets that produce real income. And what I realized was that the stock market and some of those paper assets, to me, it's speculation, right? That's speculation. You are hoping at some point that you can buy something and sell it to somebody else for a higher price later. Right? Then I realized in real estate, that's investing because what you're doing is, you're buying something, you're making some improvements to it, you're probably forcing appreciation, and then it doesn't matter what the market says about it. And the whole time, you are receiving income and every time you force appreciation or do something to the property, you're increasing the income that comes back to you. And that doesn't matter if you're active and you're actually doing that or you're passive like I am where you're investing in people that are doing that for you. And so, I realized that what I want financially is assets that produce cash flow. And the paper assets just don't do that. And also, paper assets, something can happen that has nothing to do with the stock you bought and the price can crumble. And that just doesn't happen in real estate. If the price of the asset goes down, I'm still gonna get cash flow. It might be a little bit less eventually, but it's not It's not this boom and bust stuff. So I think of paper assets as speculation. There's a, there's a place for it. But the bulk, the majority of what I do is invest in real assets.

Yeah, that's awesome. Can you share a little bit of just the genesis of Left Field Investor Group that you started and what kind of prompted you to do that? And, you know, what's the functional purpose of the group at this point?

Yeah. So Left Field Investors, it started 2020, I had made the transition and I was doing more passive investing. While I was active years before, I had started a local meetup group and I got a lot out of it. So I wanted to do the same for passive investing. And I wanted to keep it small, to have my own little mastermind of 12 people. We were gonna have a dinner club. And our first meeting was gonna be March 18th. And I remember that because I believe March 16th is when Ohio shut down for the pandemic. And so we never met in person. We still haven't met. We still haven't met in person. So, we transitioned everything to Zoom and that really allowed us to invite more people, former financial advising clients, friends, people that were interested, and we could get people from out of town. And then, we realized we can get guest speakers, syndicators, other kinds of people. And as we kept growing our group, we tried really hard to keep it small because we wanted like-minded individuals and we wanted to build a community. And it slowly grew and we decided we needed a brand because we were reaching out to syndicators and we wanted them to know, hey, we're all coming kind of from the same place. And it just slowly grew. We developed tools to analyze deals, to screen sponsors, to track your portfolio. And that's when we came into— where there's two kind of parts of Left Field Investors. One is, you know, we have our monthly meetings and blogs and just some resources. And then we have what we call the infielders group, which is a paid group, and that's more for networking. And we have a forum in there, and then all those tools I talked about are available there. And so really, the purpose of Left Field Investors is education and networking for people who are interested in passive investing. And that's what we're all about. That's our goal. So we have people who are super experienced and are in over 50 deals, And we have people who are just working towards their first deal and everything in between. And so, it's really a group of quality individuals that are, you know, all interested in building wealth through passive investing and syndications.

That's awesome. Is this an open group? Do you take new members? Do you have a vetting process?

Yeah. It's completely open. You know, if you want to be in the infielder group, you know, there is a charge to that. We charge $199 a year. For that. But everything else on the Left Field Investors website is completely free and anyone can join.

Awesome. Yeah. We'll have some links at the end here so we can be sure to point people there. Jim, did you have a question? Jim Fuccio? Yeah.

I wanted to ask Jim and for myself, but also to clarify for our audience here, you mentioned that at one point in time, you sold your active investments to move fully into FOLI. And so, fully into passive. So, what kind of— were those like rental houses, do you mean, or development projects, apartments? What were your active assets to make the distinction between active and passive here for some of the folks?

Yeah. So, the active was I bought— I started as an accidental landlord. We moved, couldn't sell our house in 2008. And that was great because that got me into real estate. And then, I bought a couple of other single-family homes, rented them out. Then, I learned about turnkey investing where you can You know, someone else rehabs the house, they sell it to you with a tenant. So, I did that. And then, once I kind of found out you can make a little bit of money on a single-family home, I thought, well, of course, you can make a whole lot more on multifamily. And so, I started buying some multifamily properties and the market saved me. The cash flow was not coming in. I did not like managing the managers. I had to switch managers. They, you know, they weren't doing a very good job. And that's when I found passive investing. And I realized that that's a better model. You have professional people who are managing properties for themselves and for us. And it was just such a much better model. So I ended up selling all of my active stuff. And again, I was rescued by the market. So, I didn't get the cash flow but I got the appreciation. And, you know, then I talked to my accountant and he calls it the lazy 1031, right? So instead of trying to find a new property to go into when you're trying to avoid these taxes. If you just invest in syndications, you get the cost segregation, bonus depreciation, and it wipes out your gains or defers the tax on your gains. And so, that's what I did when I sold the active stuff.

Awesome. Thanks for clarifying that because I know a lot of people think, when they think of passive investment, a lot of people actually think owning rental homes is passive investing. And if you've ever done it, it's absolutely not. So, It's not— there's nothing passive about it, but even if you have a good property manager.

So no, that's, that's a great point because I did think I was passive investing and I certainly wasn't because I was on the managers all the time running reports. You know, it was not at all passive. So that's a good distinction there.

Yeah, that, that's, that's really helpful. And, you know, I love that you're doing this group because we find, you know, with, with a lot of our investors that we work with at Aspen And we did a survey recently and said, you know, what are your biggest challenges when it comes to investing in these types of assets and these passive investments? And the number one, or actually number two things were, um, you know, I can't find deals. It's hard to find good deals. And then two, I don't know how to, I don't know how to underwrite them. I don't know how to evaluate if this is a good deal or not. And so it kind of keeps people on the sidelines, right? And they hear the stories like maybe from you, like, man, that seems like the life, you know, to to know and have confidence in investing in these other sponsors and have passive cash flow. But talk a little bit about how you guys, and you personally as well as in your group, you know, how do you vet sponsors? How do you get deal flow and how do you educate around these different types of investments?

Yeah, that's a big question. And it's the most important question for me is the sponsor's number one. So, the way we, what we do is we evaluate the sponsor, we evaluate the market, We evaluate the asset class, and then the deal kind of comes on the end. That comes last. And if you don't have a good sponsor, it doesn't matter how good the deal is, it's just not going to work. So the big question is, how do you find a good sponsor? Because they're all over the place.

Yeah.

And, you know, I have a podcast, you have a podcast, and there's plenty of people that have podcasts that are better marketers than they are operators. So really what you need to do is not find a great podcaster or a great marketer, you want to find the great operator. And sometimes they're both, Right? They don't have to be mutually exclusive. So, really, that's why we're building a network and a community because these are some of the least liquid investments you can make. And, you know, typically, you're gonna get on a call with the sponsor, talk to them for maybe 30 minutes or an hour, and then, you're gonna be expected to wire them $50,000. Right? That's a heavy lift. So, what we do at Left Field Investors is, We screen our sponsors. We have a sponsor screener kind of spreadsheet with all the questions that we like to ask. And most of those are typically answered when the sponsor introduces themselves and talks about stuff. But it's just a, it kind of keeps everybody on track. So, you have your questions to ask. But another thing we do is, if you build a community, you can refer people and find out who the best operators are. And then, when new people come to the group, we say, "Hey, who do you work with? Here's who I work with." and you just share the knowledge, right? Because we're all investing with different people and a referral from someone that you know, like, and trust will probably end up with a sponsor that you know, like, and trust because that's the most important thing. So, finding a sponsor is really difficult and what I recommend is, use your network, use some kind of, you know, have some dialogue with them and then continually test them. For example, when someone sends me a deal, We have, as I said, we have a deal analyzer through Left Field Investors. And we have it, you know, there's about 30 metrics that we look at and it has to fit in this box. And for anything that doesn't, it turns, the Excel spreadsheet turns red. And, you know, you may have 4 or 5 red cells. You're like, okay, that doesn't mean I don't invest in the deal. That means I ask a question. And this is a great way to test the sponsor. And what I'm testing for is, I'm going to email you the questions that came out of my deal analyzer and I'm gonna expect a pretty immediate response, right? Because if I haven't given you money yet and you don't respond to me in a timely fashion, there's no way you're gonna respond to me after I've given you my money.

When that problem really happens.

Exactly, exactly. So yes, I'm passive, but this is a test, right? Because if you're not gonna communicate with me effectively, that's gonna frustrate me. So I don't want any part of that. And then the other thing I'm looking for is how do you answer those questions? What, you know, not only the speed with which you answer, but do you really know the deal? Are you annoyed? Do you say, hey, go watch the webinar if you want those answers, or do you respond to me and give me answers in detail? And that's just kind of another check on the sponsor. So that's kind of how we do it. There isn't a hard and fast way to evaluate a sponsor. It's very difficult. But if you have any funny feelings or you don't feel good about them or you don't think they're good people, then just move on because there's plenty of sponsors, right? Yeah, there's plenty of deals. So you want to make sure that you're dealing with people you know, like, and trust. It's hard to get there, but using your community helps.

Yeah, I've heard another passive investor refer to themselves as an active passive investor, right? And so, and instead of being an active real estate investor, you're managing your own properties or the property managers of those properties, you're now managing— or not managing, but you are vetting these sponsors who are the ones using your funds to whatever the strategy is, you know, generate a return or income. And, and that really becomes the focus. And it's something that a lot of people feel ill-equipped to do, but, um, some of you guys, you, you help investors with. Could you just— I'd love to dig in a little more on that. Like, where, what do you guys— like, some of the, some of the real bright lines that you will, you know, be automatic no with the sponsor, or if they hit a certain number of criteria, it's a no. Break down to how you do that a little bit because I'd be very curious to see what factors kind of make up that decision matrix.

Yeah. It's hard to say that there's a solid, anything solid that will discount, you know, tell me no for somebody. You know, if they're guaranteeing returns, that's a no. If they're, you know, once I look at their deals, if their assumptions are way out, in left field, um, I will say no.

But really, right field, right? We don't like—

exactly, in right field. Um, and, and this, this isn't— there isn't really a solid way for me at least to, to screen people as far as the, the nos. Um, because I don't want to eliminate someone just because they don't have experience. But you know, if you don't have experience, I want someone on your team that does. Or if you don't have experience doing syndications, I want you to have had experience in real estate. For an example, the worst deal that I've had and where I lost money was someone who was a turnkey provider and they decided they were going to go into office buildings. And they'd never done it before. They didn't hire anybody who knew how to do, you know, real office space. And it was a disaster. They did a horrible job. Lost money. And, you know, so now I've learned I'm not going to invest with you if you're doing something new. Now, there's another syndicator who recently, they're multifamily and they recently got into self-storage. Well, the first thing I did was I asked, you know, who's got the expertise? And they hired someone who had significant expertise in self-storage and that was now the person running the show. And so, okay, I would consider investing with your self-storage there because of that. But I'm not going to invest with somebody who has no experience and they're doing something brand new. I don't want to be the guinea pig on that. So, I think those are the couple of things that are the hard lines and it's not a whole lot. The rest is just, it's just kind of touchy-feely. Like, you have the conversations and you see if you like the people because you're going to be dealing with them. And if you don't, you kind of move on. I wish I had a better answer but I don't at this point.

No, that's very helpful. You know, how do you approach your allocation strategy personally? You know, when you look at, you know, you have 45 syndications you're a part of, you know, a lot of K-1s, and you know, how do you approach this?

Are you—

what's your objectives? You're looking for, for income, for growth? It depends on the deal. You're looking, you know, market-driven opportunities. Did you look at particular asset classes you like? And, you know, risky riskiness level, you know, break down how you approach your, your personal kind of allocation strategy.

That's a great question because at first it was just whatever crossed my desk, I was like, I'm in, I'm in. You know, when I first started, I had a 401 from a previous employer and I put it in a self-directed account. I went to a seminar and everybody I met, I invested with them. And those deals are doing okay. I would never invest in any of those deals now because I've learned that, you know, you do have to do what you have to allocate and figure out where to put your money and make sure it all works together. So now, my goal is to diversify by sponsor. So I don't want everything with one sponsor. I'm diversifying by asset class and market. So, I'm trying to get deals, you know, because for multifamily, that's the bulk of this. You know, I don't want all my deals to be in Dallas, Houston, and Phoenix. You know, I want some deals in other places. So, that's one of the things I do. Also, when I When I first started and I was doing the lazy 1031, there was a sponsor that did a great job at cost segregation and bonus depreciation. So, I did a bunch of deals with that sponsor and then I realized, you know, I need to get other sponsors in case this isn't what I think it is because these take so long to play out. It takes you 3 to 5 years before you know if you made a good investment or not. So, it's really hard. And so, what I try to do is, you know, I have spreadsheets and now we actually have a portfolio tracker on our website for Left Field Investors. So, I can see, How many multifamily deals I'm in? How many self-storage deals I'm in? And I don't really have a hard and fast number for how many I want of each. I just know that as new deals come in, I'm looking for things to fill holes in places that I have, and I don't want everything to be of one type. And again, I think there aren't really, like, in the stock market, it's fairly easy, you know, they say, hey, you want 70% in stocks and 30% in bonds, or whatever it is. And I feel like we haven't figured that stuff out yet for these passive syndications. So, I don't really know. And I try to— I'm investing for income because it is my full-time job and I'm hoping that appreciation comes on the back end. But, you know, cash flow is the most important thing. So, there's several deals I'll do that are strictly cash flow plays, like the note stuff that we're doing with you guys and some of the other companies that maybe do lending. I try to do that out of my retirement accounts, but still, I also do some of that in my taxable accounts because that is income that I know is going to be steady and will come in. So, you really have to figure out what are you doing? Do you have a large W-2? If so, you probably don't need the income. So then, you are investing for appreciation. You can do it a little bit differently. And I don't think I realized that at first when I was doing all those cost segregation investments. So now, I'm much more focused on cash flow.

How do you manage just the illiquidity factor? You mentioned that earlier, right? And it's one of the biggest maybe hurdles for a lot of investors where you get into a deal with a sponsor and it may be 5, 7, sometimes 10 years depending on the strategy. And that's money that you can't pull out if you need it for an emergency or whatever. So, how do you manage that being this many? I mean, at this point, you've probably got enough that are paying off over time so you have liquidity events that are occurring and you have enough cash flow. But earlier on, how did you kind of manage through that to make sure you weren't maybe over-allocating into less liquid investments?

Yeah, it's tough because while you have the W-2, that's when you need to start. You can't just quit because you're not going to have any income at first. And so part of managing that illiquidity is making sure that you have income from something else, from a job, or in my case, it was, I had, you know, some income still coming in from financial advising. I also just sold a bunch of properties so I had cash and I didn't invest at all. I kept some back because that was, you know, until I had a certain amount of income coming in every month, I wanted to make sure I had enough cash from the sale of the other properties to kind of bankroll that. So I think you just have to figure out You know, it takes a long time. This is not a get-rich-quick scheme. It's a get-rich-very-slow-and-steady scheme. And then it just snowballs, right? So I think you just have to set your goal and figure out what that is, set a monthly income goal, and once you get there, then you can start thinking about, can I get rid of my W-2? Can I maybe go part-time? Can I figure something else out for the income? But it is very important to manage that cash because these are so illiquid. If you invest in, you can't sell them, right? There's no buyer for these things. So that's a really good thing to, really important thing to think about.

Yeah.

Jim, I got a question for you. So if I'm a new, you know, let's say I just, you know, have a job, have a day job, decent paying job. And then, you know, someone in the family up the line dies and I get an inheritance and now I'm looking at, and I want to be you when I grow up. I want to be 100% passive. And this comes from watching people make a mistake, so I'd like to hear your insight on it. So, at what point in time, let's say I'm going to put all my money into passive investments that are cash flow oriented. And so, I can look on paper and say, wow, that cash flow. And this is, of course, assuming all of them keep performing per, you know, per the program. You know, what factor would you want to see that cash flow? Would you want to see like, 120% of your replacement income before the person pulls the plug and turns in their resignation on the day job? Because I've seen people leave prematurely because they're so excited about being an entrepreneur, so excited about being a passive investor, and then all of a sudden, 2 or 3 of the deals go south and now, they've gotten used to living on $100 grand a year and now, all of a sudden, it's down to $70,000 and that's even being threatened and they don't have the job anymore. I mean, do you What kind of a cushion would you suggest to somebody that's waiting to make that leap into passive investing and quitting the day job?

Yeah, that's a great question. And for me, I think it's more of a time cushion than a dollar cushion, right? So, if I'm trying to replace $100,000 of W-2 income, you know, because of the way you're saving on taxes with real estate, you probably only need $70,000 of real estate income to replace it. But what I would want to do is, I would want to have that $70,000 come, coming in for a year, maybe, before I pull the plug or, you know, some length of time. So, you have some idea that this is actually working. So, and you don't go from zero to that $70,000 a year in one year, right? You're going to invest. And even if you do have an inheritance, I would recommend, you know, investing in that over a year or or more so that you can learn as you go. And I think what I did wrong at the beginning with my self-directed IRA is I went all in with all of it right away with, and then, then I was just sitting there like, okay, if, if one of those don't work, that's okay. Cause this is my retirement account. But you know, if that was with money that I need to live on, I would be having problems. So I think as you're learning, you go slow, you join a community like Left Field Investors or others. There's plenty of other communities around there. It doesn't have to be ours. But you learn from others as you're investing. So, I would recommend that you set up a plan and say, you know what? 5 years from now, I'm gonna drop the W-2. And we have people in our group who are doing that. But you can't just say, hey, I'm dropping the W-2 tomorrow and I don't have any cash flow to replace it yet, or I'm looking at the pro formas and the pro formas say I'm gonna get $70 grand a year, and then you realize, oops, I got $35,000, right? So, it's more of a time thing for me. You should set the amount of money you want or you think you will need, but then I would put a time component on it and I would definitely also put a buffer. If I think I need $70,000, I might not fully quit until I get $90,000, but I could reduce my hours or go part-time or something once I see that it's actually working.

Yeah, that's really helpful advice. Where do you find most of these opportunities? I mean, I think at this point you probably got some good deal flow coming in just by the nature of what you've built, but As you're getting started, you know, and that's one of the big hurdles for a lot of these investors is where do you, where do you kind of source these and, you know, maybe start the genesis and then now, as I'm sure it's changed.

Yeah. Again, it sounds, I don't know, repetitive, but it comes down to your network and your community. So how I started was I went to a couple of seminars and I met people and I invested with them. And, you know, at first, as I said, I didn't invest in the right ones necessarily for me. They're not bad investments, but they didn't fit. And then, I learned some more. I went to some more seminars and I connected with a couple other people and invested with them. But the thing is, if you go to a seminar, you're not only gonna meet the syndicator, you're gonna meet their investors. And they're investing in multiple syndicators. And so, I met a couple of guys and we started talking. With one of them, we started our own little mastermind and we would call each other every 2 weeks and just talk. And I found out, oh, he's investing with this guy, I'm investing with that, and we would just share information. And so, I think that's the way to build your— because you could Google syndicators, right? And you're gonna get the great marketers and then you're gonna have to sift through and figure out which ones of those are also great operators. And that's why I think using a network and taking it slow, it is, especially if you have a lump sum like Jim said, it's— you're gonna be so excited, you're gonna wanna jump in and do it all. And just put the brakes on. One of the best pieces of advice I got from one of the guys in Left Field Investors is he said he doesn't invest in a second deal with a sponsor until he tries to wait until at least one year because then you get to see, is it working? I think, because what I've done is once I meet someone and I like them, I might do 2 or 3 deals right in a row. But if they're, if they turn out to be not who you think they are, now you're in 2 or 3 deals that you don't want to be in. So, patience I think is one of the most important things because you just want to get to the, get to the freedom from the W-2 right away. But it takes patience. And if you can do it in 3 to 5 years rather than waiting for 20 years to retire, so you're going to accelerate it because once you start doing this, it snowballs. But you can't— it's not going to snowball right from the start.

Yeah. Of those 45 syndications you're in, how many sponsors is that broken up between roughly?

Oh man. So, I don't know exactly but it's quite a few. It's probably 20. And so, my plan is, I want to, for the next 3 to 5 years, I'm trying to invest at the minimum with a lot of different sponsors. Not anybody that crosses my desk but I, anyone who fits my parameters once I evaluate them and talk to my network and figure out that, hey, this is a sponsor that could be a possibility. Then I want to invest the minimum with a bunch of them. And in 3 to 5 years, I'll be able to see how they performed and I'm gonna pick the best 3 sponsors in each asset class. And instead of going in at the minimum, I'm gonna start investing more with them because, yeah, it's a hassle with all the K-1s and dealing with all the different sponsors. And I don't wanna do that forever. But right now, while I'm building Left Field Investors and figuring out what we're gonna do as a community, And I'm really just getting into the meat of being a passive investor. I want to make sure that I'm evaluating everything. And eventually, I'm going to settle on a smaller number of operators.

Yeah. That's a great strategy. Who do you kind of have in your inner circle? As we talk with the other investors, and this is, it's a lot of work, like you're saying, with all the K-1s, and then, like you're saying, building the network in the community. But for you personally, do you surround yourself with certain accountants with a certain expertise or attorneys and financial advisors or who's kind of your inner circle outside of the Left Field Investor group, but that you kind of surround yourself with to help just manage these investments?

Yeah, I have a great accountant. He's been real helpful from the beginning and he's a real estate investor too. And that helps. He's more active, but Just having somebody who's in the business doing your taxes, I think, is a huge advantage. You know, I also, we do, the founders of Left Field Investors, we talk all the time and are sharing information and, you know, others in the community. Then, I still have a financial advisor. You know, I am almost zero in the market anymore and the only thing I have is dividend-producing stocks because, you know, I want income from my investments. But he also handles insurance and other things. And he also is gonna be a real estate investor. He's not, he hasn't really invested yet, but he's looking into it and he understands it. He's worked hard to understand it. So, he works with a lot of real estate investors. And I find that really helpful as well because he understands what I'm doing and can, you know, find if I need a, you know, some kind of insurance product or or some kind of financial product, he can help me find something that fits with what I'm doing in real estate.

Yeah, that's really cool. You know, coming from the world of financial advising, I'd love to hear your thoughts on this because we found with Aspen, we work with several financial advisors that refer clients to, to our funds that are, you know, private, private syndications, private funds. But we found there's this kind of great divide, right, between financial advisors that that are comfortable with these types of investments and then those that don't. And a lot of times we find that it's usually a lack of understanding, number one. And two, they can just write off as, well, this is just too risky or too illiquid or whatever. And, you know, a lot of investors, as they're kind of maybe getting excited about some of these types of investments, maybe find roadblocks with their advisors, right? Where it's just, you know, say, no, that's not going to be a good investment, just trust me. And you know, what do you kind of— what's kind of your approach there? I mean, obviously you want to have outside input and, you know, they provide a valuable insight. But, you know, do you find a financial advisor that's invested in real estate like you said yours does, or do you just kind of keep a portion with them, or what's kind of your approach with financial advisors?

Honestly, If you go to your financial advisor and they say, oh, that's too risky, or no, don't do that, I go look for somebody else. Because you have to have the confidence as a financial advisor to think, hey, you know what, I'm gonna give the best advice to my client I can. And it drives me crazy that they call them alternative investments because they're not. And that's why people think they're risky, right? Because it's alternative. And so, I would look for a financial advisor that is gonna work with you and say, oh, you wanna do this? This other thing, whatever it is, real estate or something else, and they need to take the time to go understand it and say, okay, I might not get paid for this deal or this amount of money that you're going to put there, but I'm willing to let it go because the greater wealth that you grow, the more opportunities for me to make money off of you, right?

Yeah.

So, if it's a financial advisor who's just saying it's the stock market or nothing, or anytime you mention an alternative investment or something that they don't understand and they just say, nope, don't do it, then you're with the wrong person. And what you want to find is someone who is open-minded and willing to look at other things, willing to sacrifice some fees or commissions, knowing that they will get paid back because if you do a good job for me and get me into this real estate, I'm going to tell all my friends and now you might get new clients. So I think you just have to have somebody with an open mind and willing to help you learn and help you grow. Yeah.

It's funny because, you know, the list of people that fall into that latter category, it's growing thankfully, but it's very small. You know, we, with our funds, we actually started doing some events just to test the waters. So, we got these, you know, high net worth individuals, fed them a really nice steak dinner, did our presentation of, you know, answered pretty deep questions and And I mean, these are people that were pretty educated, professional people, retired people. They loved our deal. They loved everything. They asked all the right questions. And then, when we followed up to a person, "Well, I got to talk to my advisor." And none of those kind of advisors happened to be in this particular subset. And so, the results were dismal, yet all these people saw the deal and they knew it was a good deal. But their advisors just didn't get it or like you said, couldn't monetize it, short-term thinking. And instead of serving their clients and actually looking out for their best, I think they were just kind of looking at their own paycheck. And so anyway, kind of learned the hard way there, but we had to try, you know?

Yeah. And they don't understand it, right? So that's the problem also is that they don't— the financial institutions and the banks, and I used to work for all these companies, they are really good at marketing and telling you what products you should buy. You know, they market the stock market and bonds and all this stuff. And so, everybody is comfortable with that. Everybody has a 401 they put their money into. So, anytime you venture out of that little bubble, you know, people panic. And it's also, it's much easier for a financial advisor to say, hey, look, you need to invest $2,000 a month in this mutual fund. Then for one of you guys to say, hey, send me a wire for $25 grand, right? It's the same number over a year. But in one instance, I'm sending $2,000 to someone who's going to put it into the market where I can see the value every day. Whereas if I send $25,000 to you, that $25,000 is immediately gone. I don't know if I'm going to see it again. And I have to wait 3 months for you to send me $167, you know, as my 7% return. So, it just, it takes a mindset shift to understand that, you know, my $25,000 didn't just turn into $167,000. That's going to grow and all that. Where in the market, you give them $2,000, it could be $1,000 tomorrow if there's a drop in the market for whatever reason. Right.

Yeah. Okay. Now, for the fun questions. These are kind of the final questions we like to ask. But what's been the best investment you've made in the last decade?

In the last decade? I'd have to say it was some of the active multifamily investments that I made because although I didn't have them managed properly, I didn't do anything right except for buy them, I sold them and more than doubled my money on there. And one of them I sold to a guy who is in my active investing network and he went ahead and doubled it again in another year. And so, it was a win-win, right? Because I wasn't willing to do what it took to get that second double. So, that was probably my best because it really got me moving into this passive stuff because I finally ditched all my active and I made good money on that deal.

Very cool. You know, as a lot of, you know, these asset classes are cyclical, what are you most interested in right now? Where are you seeing the most opportunities, you know, the deals you're looking at and what are you most excited about?

I really like mobile home parks right now. I think, You know, they're not making any more of them. In fact, you're losing them. So, and, you know, workforce housing is a huge, huge issue right now. There's not enough housing for people. So, mobile home parks were, and most of them are owned by these mom-and-pop guys. So, you can go in and, not me, but a syndicator could go in and you can really raise rents and make the homes or the park a much nicer place, put in improvements, raise rents, And you can really make a lot of money on mobile home parks. So, I like those for sure.

Awesome. What's been the worst investment that you've made and what did you learn from that?

Well, there's been a couple but one of the worst ones was also my best one because I could have doubled it again and I just done things right. But really, it was the one we already talked about where I put money with somebody who's getting— they were getting into two new things. I forgot the other one was they were leasing CBD equipment for the, you know, when the big CBD craze happened and then the market tanked and they didn't know what they were doing and it just went belly up. And really what that was, was investing with people that I did not vet enough. I didn't run them through my network, but most of all, it was investing with people who were doing something new and I didn't ask them any questions about, do you know what you're doing? You know, just because you know how to do a turnkey single-family home does not mean you know how to, you know, manufacture CBD oil, right? Or do office buildings. So, that was my mistake, was not understanding that they were doing something new and they really didn't know what they were doing.

Yeah. Are there any kind of investments or asset classes you'll never invest in?

Never, not that I can think of. I mean, I'm in a little bit of Bitcoin just because, you know, I like the asymmetric risk part of it. I do some angel-type investing. You know, I have a very small part of my portfolio is devoted to speculation, but not the stock market kind, just new businesses and things like that because it's easy to do online now. So, there's some of the riskier stuff I do. But I can't think off the top of my head something that I just wouldn't do. It's all degrees, right? If it's super risky, I'm going to put a lot less money in it.

Yeah.

Well, Jim, I've got a solar-powered Bitcoin mining operation I want to buy you. You think that might be something?

But also using CBD?

I only need 10,000 acres of desert land to put the solar panels to power the mining, but I think it's going to work. I really think so.

All right, there's one. There's one I wouldn't do.

I knew you could go.

No, I think, um, for to be honest, I'm open to looking at anything. There are plenty of things I say no to. In fact, I say no to investments more than I say yes, but I always like to say yes, I'll look at it, because you never know what it's going to end up being. You never know who you're going to invest with or who you're going to meet. So I try to keep a very open mind and not say no to anything without getting some information and evaluating it.

Yeah. Well, Jim, this has been so, so fun. I love, love these nuggets that you shared. Um, what, what's the best way to get a hold of you and just the Left Field Investor Group? And if, you know, folks are interested and said, hey, that sounds like me, I, I want to get, you know, plugged into a community of like-minded investors and learn more about these, these investments, what's the best way to, to reach out to you guys?

Um, you can go to our website, uh, www.leftfieldinvestors.com, and in the right-hand corner there's a subscribe button. And that'll get you on our email list when we send out weekly or every other week newsletters with some blogs and our podcast and information about our meetings. And you can also, there's a button on there to click to get on my schedule and, you know, to have a call with me if you want. I do that all the time. If you want to contact me directly, it's my email address is jim@leftfieldinvestors.com. And I, as I said, I'd be happy to talk to anybody. That's what I spend a good part of my day doing. It's part of me building my network. And every time I talk to somebody new, I learn something. And that's what I'm all about, is learning how to become a better investor. So I'm willing to talk to anybody.

Awesome. Jim, thank you so much for, for taking the time and sharing your wisdom with us. And guys, if this sounds interesting, definitely reach out. I think they've got some really cool things going on over there. And yeah, join the community. So appreciate it, Jim.

Great chatting with you, Jim.

Great, thanks for having me. It was a pleasure.