A Real Estate Champion's Guide to Multi-Generational Wealth ft. Lee Yoder

Start owning something. Get into real estate. Own something. Because every inflation— all countries love to devalue their currency. They love to spend more than they bring in. If you want to build a business out of it, and I really want to scale it, you're going to bump your head up against a really solid ceiling if you go with small property. So you're going to buy them all over the place and you're going to be so spread out, it's really hard to manage property. So there's some good property management companies out, but you have to stay all over them. So you You have to be very actively involved just to manage the manager.

Good day and welcome to The Wealthy Entrepreneur Podcast. I'm your host, Bob Gauvreau. It is a pleasure to have you join us today. I wanna remind you that The Wealthy Entrepreneur Podcast is the place where we dissect the elements that contribute to entrepreneurial success from mindset and leadership to profits and revenue. Have a special guest today, uh, excited to share the conversation that we had today, or Our guest is Lee Yoder. Lee is the founder and CEO of Threefold Real Estate Investing, where he helps both new and experienced investors access institutional-style multifamily real estate opportunities through apartment syndication. Now I'm going to get Lee to share with you his story, but Lee did not start out in the real estate space, but found it later on because it became a true passion. We'll let him share the story, but I do want to preface this to say, and I will say this again throughout, that real estate isn't necessarily for everybody, but you can invest in real estate in multiple different ways as a passive investor. And, you know, someone like Lee may be able to access those resources or provide you with that type of investment opportunity where you get the benefits of real estate, but you don't have the headaches of real estate at the same time. So without any further ado, I'd like to welcome my guest to the podcast today, Lee Yoder, CEO of Threefold Real Estate Investing. All right, so without any further ado, I'm really excited to bring Lee into the show today. Excited to hear some of his journey, some of his experience, some of his expertise, and for all of us to maybe learn a little bit more about how to be successful in real estate investing. Lee, thank you so much for joining us today.

Yeah, Bob, thanks for having me. Excited to be here.

Yeah, my pleasure. So we typically, when we start off on this show, we normally are bringing in entrepreneurs, founders who've found their own path to some form of success or, you know, some form of building a business or an enterprise. Would love to maybe hear your story, maybe take us back all the way to where things got started for you.

Yeah, sure. And that's what it was, you know, I'm in real estate, but it really started with a desire to build something. Honestly, that was like the phrase that was in my mind. And I, I didn't even really know what that meant. So yeah, I'll take you all the way back. I, you know, went to school for a long time, got my doctorate in physical therapy, got out practicing as a physical therapist, did one year in an outpatient clinic. Then I did home health physical therapy. So I'm driving around to old people's homes, mostly, you know, doing exercises with them, walking up and down the sidewalk, doing their stairs, things like that. And I was pretty bored. I guess by God's design, I was actually with a company at the time. Didn't even really know it, but it was a startup staffing company in the healthcare space. Now they brought me on as a physical therapist in the field, but mostly what they would do is they'd find staff for other people. Like they were staffing hospitals and home health companies, stuff like that. So I came into that company just as a physical therapist, but they brought me in to be a clinical director, which I jumped at that opportunity because I was just looking for something more challenging, something more exciting. Well, when I got kind of in the office, I was really helping build a division within this startup company. So I was really, it was very entrepreneurial. I really felt like I was, you know, in this fast-paced environment, a lot of, a lot of young people, a lot of energy, you know, building something together. And I was, you know, one of the somewhat top people at the company and it was exciting. The problem, Bob, was like, you know, this was pre-COVID and back then, as probably a lot of your listeners can relate, like the way you showed that you were committed was being in the office as much as possible. So it was just like more hours, more hours, more hours. And my wife and I were starting our family at the time, and that kind of went against a little bit like what we were trying to build for our family. So, you know, I would wake up like super early trying to get work done before the kids were even up so I could work more but not miss more time. And, you know, my company was like, okay, that's great. Yeah, keep doing that. Also, we still— yeah, we still want you to stay here late in the evening and maybe come in on the weekend.

We need somebody to turn the lights off and it should be Lee.

Exactly. So I just felt like, man, I got to a point where I'm like, man, I, this is just feeling like a line in the sand where like, this isn't the life we want. But it was hard for me, Bob, because I felt like I found the work I wanted to do. I did not, I was doing, so by this point and for a couple of years, maybe even 3, I was doing no physical therapy at all. I wasn't like practicing as a therapist. Now I was managing a lot of therapists. So I was still using that license., that degree in some way. But I was like director of operations, you know, business development, sales, and just liking that stuff. So I really felt like, well, what do I do now? Because if I'm not going to do this, you know, climbing the corporate ladder, helping build, because it's not good for my family. I also felt like I really can't just go back to being a home health physical therapist, even though it's great for my family. My wife loved when I was a home health physical therapist. That is just not fulfilling enough for me. I mean, it's just honestly like Yeah, it's just not challenging, not fulfilling. So I start looking around. I read a book called Rich Dad Poor Dad that a lot of your listeners have probably read. Started talking to people. I had a buddy at church who was in real estate full-time and started to feel like maybe real estate is something I want to get into. My dad's in construction, so I grew up around construction. So just thinking about like flipping a house or owning a small multifamily and like doing some of the work myself, that all kind of fit me. So I thought, all right, maybe that's what I wanna do. So for your listeners, I mean, what's neat is today this is even more available for people because there is so much hybrid work, so much flexibility in like where you work from. Again, there wasn't at the time, but I went back to being a home health physical therapist because I had a ton of flexibility in that. My patients would just come to my phone. I could schedule 'em whenever I wanted. It had to work for them, of course, but like I only got paid for the visits I did. So if I took a day off, nobody cared 'cause I didn't get paid for that day. My patients just have to be seen on time, things like that. So it was a perfect job to start a real estate side hustle. When I say, you know, there's a lot of people today that might be working from home, your boss might not know, might not care if you're also kind of making some calls on the side trying to find a good deal or something, right? So that's kind of what I was doing. I mean, I'm driving around a ton, you know, I had a lot of time in between patient houses to make calls. So started a real estate side hustle and I'll kind of jump through that, Bob, and you can ask me questions about it. I'll answer anything you wanna know. But so I left the corporate job at the end of 2016. Went back to home health, physical therapist. In the fall of 2017, my wife and I flipped a house in the town we live in. I guess I never said that, Bob. We live just north of Cincinnati, Ohio, so not too far from you guys up north. And then in 2018, we bought a duplex and got to see like, okay, this is what owning a rental looks like versus just flipping a house, making some money, and then you got nothing, just some extra cash. Now it's like, okay, as long as it's rented, we're going to make money off this thing for forever and they're paying down the debt. Okay, that's really cool. But I wanted to go bigger. I just knew I wanted to go bigger, wanted to own bigger multifamily. We didn't like managing that duplex ourselves. So typically it's easier to get a property management company to manage your property well if you got bigger multifamily properties. So in 2019, we got a 16-unit, and then pretty quickly after that, we got an 8-unit and then a 10-unit. So we had 34 units working with a property management company. I was working as the GC, like all the projects, all the roofs that needed done, renovating units. Again, still full-time home health physical therapist. We flipped another house in there as well. So by the end of 2020, Bob, I was like all in on real— I mean, I was honestly all in pretty quickly after I got— I just loved it. So I was just dying to go full-time into it. Fortunately, the COVID stimulus boom was really good to real estate owners. So my portfolio kind of doubled. And so I basically at the end of 2020 and beginning of 2021 sold those 34 units, took all my equity, put it in my savings account and told my wife, all right, this will last us for like 3 years. We can live off this for like 3 years. So let me go try this. If I can't do anything, I can always go back to being a physical therapist. My wife's an RN. She could go back to being an RN if we needed to. And so, you know, she agreed to that. The Lord led her in that way, fortunately. And so been full-time ever since the very end of 2020. In 2021, we started buying bigger apartments. So we started bringing in more investors. We call that a syndication. And so we've been doing that ever since. A few years into that, we started our own property management company so we could manage our own properties. And today we own 930 units in Ohio and Indiana, and we manage all those ourselves and love it, love it as much as I did when I started. I mean, You know, just want to do more of it. I want to keep growing. We really enjoy what we do.

Now, I have to ask this because obviously getting a doctorate in anything is, you know, it's a lot of work. It's a lot of education. Do you have any— like, are you pissed that you did all the schooling and you're like, oh man, I just love real estate? I could have got started at this at 18 years old instead of going through the school process. How do you reflect on that?

Yeah, 100%. I mean, I know guys, Bob, that, you know, stumble on real estate in their 40s. So I feel like, well, You know, I was pretty young when I found it. So sure, I wish I would've found it much younger. But, you know, having that job, it was a great job, as I explained, to allow me to transition into real estate. So there was some benefit there. I mean, I was well paid and barely working 40 hours a week, great health insurance and a ton of flexibility. So that helped. It allowed me to get into it. But yeah, I mean, I'll tell you, like when I talk to my kids, I'm not that big on college, you know, I'm not a big like, oh, go to college, you know, because Yeah, I spent 7 years and a ton of money and I don't use that today. But I, you know, it was part of my journey. It helped me transition. So not all bad. My wife, I mean, early on, my wife is like, you have a doctorate. Like, what are you doing thinking about giving that up? You haven't even done it very long. Like, you know, what did you do all that for?

And so, yeah, you can still call yourself doctor and people will give you that respect, right? Whether you use it or not. Hey, it's a level of education that only a minute few can actually accomplish. So it's, it's fantastic.

Joke that I, you know, try to get my kids to call me doctor and they have no interest in that. So yeah, I guess I'll let you do it so I can at least get some.

Fair enough. And see, now I'm at the other end, so I'm 43 and I'm going, I think I will pursue my doctorate at some point, but in entrepreneurship more so to be like, hey, I might as well get something out of all the research that I do and the writing that I do. I might as well just go through that process so I could appreciate it. You know, the investment in time and education. And, you know, I tell my kids they're just getting into university age, right? My son's applying for university universities right now. And, and I would say, you know, go find what it is that you're interested in there. But if you don't choose to pursue it anymore, that's okay. Or if you find something that you really love, that's okay. I actually went to university wanting to be a teacher, and I got there and I took my first entrepreneurship course, and I was like, okay, that same energy that you identified, Lee, I was like, that's it for me too. That is everything I want to be doing for the rest of my life. So yeah, I can completely appreciate that. Question for you here. So a lot of time business owners, they sort of hit a ceiling with their income and it's never really enough. Why is multifamily real estate such a powerful tool for people to start building true wealth?

Oh, man, good question. I— well, I can definitely relate, Bob. I mean, we continuously feel like we're hitting a ceiling. Like, I feel like entrepreneurship and building a business is definitely like a stair-step thing to me. Like, you kind of get to a new level and you kind of stay on that level for a while. And the next level is like a big step up and you almost have to like build up a certain amount of momentum, feel like you're overworked by a bunch and like before you can finally take that next step, right? It's not like this, like little, little steps, you know? So you feel like you're at a ceiling until you finally break through and get to that next step. So I can definitely identify with that. But what I'll say about multifamily, I mean, one thing I, love about it and was very attracted to. I mean, it is kind of infinite. I mean, you, no one can ever own all the multifamily properties. I mean, you just can't imagine how many there are out there. And I don't know about you guys, but it's very, it's beneficial for a politician today to talk about institutional owners of real estate. And it's kind of a joke. I mean, the stats don't back it up. Now that never stops a politician from, you know, telling a good story, right? So I get it. But, you know, the biggest guys in the United States own hundreds of thousands of units and they own like less than 1% of it. I mean, no, like less than 0.1% of the stock. I mean, I think the biggest like 50 owners combined own less than 3% or less than 2%. I think it's just astounding how much there is. So that's part of it. And I think it's the other thing I like about it, Bob, because I'm not like that smart I'm not super creative.

I'm not buying that, doctor. I'm not buying that. I'm not smart, doctor.

Come on now. School comes somewhat easy to me, but like, I'm not creative. I'll say that. Like, I could never— I could never like create a new product. I could never create an app or something like that. Like, I'm not the guy that's going to be like, there's a hole in the marketplace. But multifamily is very different than real estate in general. Real estate is like, people have been doing this for thousands of years. If you can figure out how to do it well, it should kind of work for you, right? Like there's good times, like interest rates go up and down. That affects us a lot, right? Like sentiment goes up and down, the economy goes up and down. So it's not always good. It's certainly not easy because it's very competitive because people know it makes money. But if you get in and figure it out and kind of build a business around it, build a model around it, you can kind of just keep doing it. I mean, every property we add, honestly, about like, they're all challenging, but it is getting a little bit easier each time because we get better at it, but also because scale helps. Like the more we own, the more economies of scale we have where like, okay, now we got 2 properties together. These maintenance guys can help each other out. We can actually manage both of those properties with 1 property manager, whereas when we only owned 1, we still needed 1 property manager. So I'm probably talking too long, but there's— it's just a business. It's been done for thousands of years. You can figure it out and like you can just keep building, you can keep adding properties and it actually gets like a little bit easier, more efficient, I guess you should say, like more efficient. And it's endless. I mean, you can build it, you can never imagine how big you can build it.

It's not for everybody. You know, a lot of people don't want to be landlords, right? I get that. But here's a couple of reasons why I completely agree with you, Lee, about the opportunity that's in this space. Number one, if we're looking at the new generation that's coming up, they don't necessarily buy into the whole ownership model. So They want somebody to own a place and rent it, and why not let that be you, right? Number 2, if the property cash flows itself and it's paying down a mortgage, all you're doing is building equity that can be re-leveraged and reinvested into another property. I know, and I know you've done this multiple times, but in some larger scale, I have some larger scale commercial projects. And you know, when you can buy a project where the income is low, the rent is low, it's maybe an underutilized property, you go in because you've got experience, you fill up the building, you increase the rents, or you increase the property, the income from the property with, you know, different options, whether it's locker storage, laundry facility, whatever that is. All of a sudden the property value goes up based on the income potential or the realized income. And now you've got new equity that's available to you. You get an appraisal, you pull that out, it's not taxable, you reinvest it in the next project. And that's where Lee's talking You know, the scalability and the economies of scale. Once you get rolling with this, right, you're constantly just building equity in this that you can continue to borrow and leverage from, which is so very powerful. Now, Lee, I got a question for you. I see a lot of business owners, right? They jump into real estate. Everybody looks at it and says, well, successful wealthy people own real estate, right? Like, that would be a huge generalization statement, but something that I hear all the time. Now, sometimes entrepreneurs are buying small properties. Why would you argue that going after bigger properties is a better approach?

You know, it depends who you're talking to, Bob. For me, I think it is, but I wouldn't say it is for everybody. I mean, you know, if some people in my area said, hey, like, I kind of want to get some exposure to real estate, you know, I want to just buy like one house every year and slowly pay it off.

Great.

Do that. That's fantastic. I mean, I would say, you know, I would get in some debates with a buddy of mine, Bob, who's in real estate full-time and he owns single-family houses. And I'm like, why would you own a single-family when you can, you know, go buy even just a four-family? That's four under, like you've got so many roofs. And his answer was like, yeah, but Lee, they never call me. Like they never, this is their home. They'll stay there for 20 years. He goes, I talk to them once a year to renew their lease. And I'm like, yeah, that's a lot different than what I'm doing with mine. Even a four-year, you know, they, and honestly, I think the bigger you get, A lot of times it seems like people see it as less of a home. I mean, it just looks like less of a home, right? I mean, even if you've got some townhome units, those kind of feel like a home. A duplex with the garage in the middle can kind of feel like a home. So there's some benefits of owning some small stuff, building equity. But what I would say, Bob, is it just depends how big you want to get. So if you told me, hey, I want to keep working full-time, but I want to buy my own properties, then I would say go buy single-family homes, buy nice single-family homes in nice areas where you're going to rent to high-end residents and they're never going to say anything to you except to renew once a year. But if you said, I want to build a business out of it and I really want to scale it, you're going to bump your head up against a really solid ceiling if you go with small properties. Because again, if you want to buy 100 units, you really think you're going to be able to buy 100 units in a small town? I mean, there's just not that many that become available. So you're going to buy them all over the place and you're going to, you're going to be so spread out you can't run those efficiently. And so you're going to get to a point where like, this is too much. It's too crazy. Even for a property management company, they're going to have to charge you a lot because they're driving all over the place to see yours. So it's harder to scale. It's harder to build a business around it. But Bob, I know guys that own 50 units and they are doing really, really well. I mean, they retire early and sit at the beach off of 50 units because they own it by themselves. They build a little, you know, management company themselves. And it does well, but that's kind of the limit. Like you're going to be limited and you can't add a bunch of people because it's not big enough to support a bunch of people. Whereas you buy bigger properties, you can manage them more efficiently. I'll say that because you can hire professional staff that go show up at that property every day, work on that property every day. A maintenance tech is there every day, so you can just service it a lot better in a lot of cases, more efficiently. And you can build a business around it. So it was really cool, Bob, when we bought like our first 100-unit and we put a property manager in place, put a maintenance tech in place, and like they run the thing. I mean, they just run it. And then you do that a few times and then you get a regional person that's actually managing. You can develop some layers and that's building a business, right? It's scalable. Like you can do that again. There's, that's infinite. You can do that and own hundreds of thousands of units. Whereas if you, if you want to keep it small, that's fine. But like, yeah, you really will bump up against the ceiling. But if that's all you want to do, that's great. So I don't think everybody should do it. But if you want to build a business and you really want to scale it, I do think going big makes a lot of sense.

Yeah. And I would just throw in too, for, for my entrepreneurial listeners, like we evaluate some of these projects with some of our investors, right, to help support them financially, you know, affordability and whatnot. And one thing I would say, you know, talking about the, let's say, a 4-unit versus a single unit, building, you know, the 4-unit is less risky because if one tenant leaves, you've still got 3, right? If your single family leaves, well, you've got no income. And so there's no cash inflow that's coming in to help pay and support for that. But to your point, the profile of the tenant maybe is going to be a little bit longer in the single family home versus there. But you know, in, in all of North America, we're still in a housing shortage based on the growth of the population. So like now is a decent time to be a landlord that demand for what your product is, is going to be continuously high. I got a question for you. Like when you are looking at some of your multifamily investing, what are some of the red flags you would see when you look at opportunities that are an instant no, I'm not getting involved in this project?

Location is the first one that everybody knows, and it really is, Bob. I mean, it's so cliché to say, but it's because it's so true. Like you just, that's one thing that you can't change. I mean, you can never, change location. We buy in more tertiary markets, so a lot of those are good areas, but we have to be careful because here in the Midwest, there are towns that are decreasing in population. So that— I'm not going to buy where it's decreasing in population. Now, I don't need to see much population growth because what actually the part of the market cycle we're in right now is actually a lot of the cities are in like the areas that where most guys want to invest, they're, they're overbuilding and it'll get digested, but it's going to take some time. So those areas, the population's growing, but they can build faster than the population grows. And they've done that in a lot of cities. So in the areas where we're investing, that's not happening. There's like no development and the population is just slowly creeping higher. So I don't really need to see much of population growth. Maybe it's kind of flat, but it's in an area where they're not building, but I cannot see a decreasing population that, that would really scare me. And yeah, just an area that's— I mean, we, the first syndication we did was in a rough area of Dayton, Ohio, just north of Cincinnati. And I won't buy in an area like that again. It's tough to operate, you know, who's your next buyer, you know? So I was happy to get outta the area. That's the main thing, the location. I mean, when I'm looking at the buildings, I don't love buildings built before 1970. The plumbing is often cast iron. And I mean, we've got one right now. I don't want to tell anybody which one it is because I want to sell it to somebody. We'll tell you take it.

Who, who will appreciate that as a project, right? Like, it's interesting, right? It may not be for you, but it may be perfect for somebody else.

It may be. Maybe they'll replumb the whole thing. That stuff, it's just breaking down. I mean, it's just, you know, again, 1970, like, you know, we're 55 years out from that. That plumbing's done a good job. It's held on for 55 years and it's wearing out. So, but PVC is holding up a lot better. So stuff built in the '80s and newer, um, I do like that more. Now, where I'm at in Ohio, Bob, I don't know about where we are, but we have they built a ton of stuff in the '60s and '70s and they didn't build that much. I mean, to your point on the housing shortage, I mean, we went through some times where we weren't building that much in the '80s and '90s and even 2000, like we didn't build as much. Now just here recently, all of a sudden we're building a ton and they're comparing it back to the 1970s because that was the last time that we built a ton of stuff. So I can say I don't want to buy those, but that's a ton of the product around here. But those would be the big things. And then it just comes down to price. I mean, honestly, there's a ton of properties out there, Bob, that I would love to own. I just can't own them for the price that somebody else is willing to pay for it. So that's what honestly stops me the most.

And if the market is maybe saturated with too much building right now, higher than population growth, it's likely a nice buyer's market, right? You know, economics would suggest that the price of these properties based on supply is going to come down. So, you know, continue to stockpile the money like you did back when you got started and right, like everybody should be thinking about that and paying attention to some of these indicators, lead indicators that Lee's talking about, right? So we can see that the market is going to shift if there's population growth, but not at the scale. You know, developers are finishing projects that probably started 6 or 7 years ago because that's when they got their permits and ordered materials and everything, you know, delays during COVID and supply chain and all that stuff. So, you know, maybe not such a terrible time to be stockpiling your cash and getting it ready for the next opportunity, right?

So often pays to be patient. I mean, in all investing, just—

and I don't know about you, Lee, but like, are you a patient guy? Because I, you know, when I look at opportunities, I'm like, I just want to jump on it now. I can't wait.

You know, I know it's so hard. It's so hard. My wife's super— well, I don't know if she's patient, but she's risk averse. So that helps. She, she was my—

yeah.

So that's honestly helpful. As frustrating as it is. I mean, we've continued to buy. We've, we bought every year. It does help me honestly. I mean, if I was a flipper, I'd probably struggle more because like could gobble up the houses, I guess, and keep churning even maybe when you shouldn't. But it takes so much for us to raise the capital necessary to take them down. Like I can't just go do it all the time. I kind of am forced to be. So I guess that's helpful because no, yeah, I'm, I'm not patient. As soon as we close on a deal, I can't wait to find the next one. I'm ready. So yeah, it's probably maybe That's why God has me in multifamily, that like I'm kind of forced into it.

So let's talk about syndication, because I think a lot of people who might be listening are going, okay, well, you guys have talked about syndication a little bit, but we don't even really understand what that is or how you get started in syndication and how they even work. Can you walk us through that, Lee?

Yeah. So those first few early deals we did, Bob, 16-unit, 8-unit, 10-unit, I just partnered with one person and that's just— we call that a joint venture. So we just create an LLC, you know, a new business, come up with a name, and that LLC buys the property. I own 50% of the LLC. My partner owns 50% of the LLC. You know, they brought the money, I brought the deal and the time and the expertise and all that, and we just split it 50/50. All a syndication is, it says, well, now instead of buying a property for $500,000, we're buying it for $5 million. So now instead of needing, you know, $100,000, I need $2 million. I don't know one person that can bring $2 million, so I can't do a JV. I'm going to have to raise, you know, $50,000 a pop, I need, you know, 20 people. So technically, Bob, a joint venture says that the people involved in that are active. They all have an active role in it. That's what makes it not a syndication. As soon as you bring people in on the deal that are completely passive, meaning they're not going to make any decisions, do any of the work, that by definition is a syndication. And a big part of what that means is just you got to get syndication attorneys involved. They write up a ton of paperwork, your investors have to sign off of it. Now it's more like they're buying a stock because when we buy stock, we have no involvement in the company, right? So that's more like what a syndication is, is now I'm going to go buy an apartment building with an LLC and now these investors are each— they're going to buy shares of this LLC. You know, they're really not even buying— actually, they're actually not owning the property. They're kind of removed from that. They're buying shares of the LLC that owns the property. And because they're going to be completely passive and have no say kind of— there's some rights and they have some say, but very little. They're not active, they're passive. That's what makes it a syndication. So it's just a group investment. We're buying bigger deals. We need a lot of investors. They're not going to be active. So it's a syndication where we, you know, a lot of paperwork that they sign off on saying they understand the risk, they understand that I get to make all the decisions, they understand they could lose their capital, and they think of it like investing in the stock market.

Yeah. And typically in a syndication, right, you've got experienced real estate investors who are running this and they're, you know, attracting money from investors who want to be part of their projects.

Right.

And that's typically what we're seeing. And just for anybody who's going, well, this seems brilliant, Lee, it truly is. It is a very specialized area of law, though. If you're going to get involved in this, you want to work with a lawyer who does have experience doing syndications. It's not like every real estate lawyer can jump in and do that. No, but it is Fantastic. And ultimately it's the pooling of funds to acquire a property from people who are passive investors and, you know, real estate investors who are going, well, where, where's the GPLP structure? And that's sort of it as well. To a certain extent, the syndication is more of the pooling of funds. And just for everybody's sake too, there is syndication mortgage companies as well, where if you need to go borrow that $3 million, you might not get it from one person, but you might get, a mortgage through a syndication mortgage company where they pool funds together as well. So that's where you kind of see those two syndications, but super powerful. And if you're looking at larger scale projects or wanting to do this, you know, in the way that Lee's doing it, what a great way to get access to capital. So love that. Thanks for, for sharing that as well. You know, you talked a little bit about interest rates and economic cycles. How are you feeling right now and what's your prediction? I know maybe you know, you're a doctor, but maybe not in economics. But what's your thought as a sophisticated real estate investor? Where are things going right now?

Yeah, well, I think we're in a recession here in the United States. I think our residents— we own workforce housing, C-class is what we call it, but it's, you know, pretty affordable for most people. And I think our residents have been in recession for a couple of years. If you don't own assets, inflation only hurts you. And that's why I try to get people into real estate. Is because not to get political, but I don't see how if you study things, you don't see that the haves benefit more than the have-nots in almost every scenario. And like, so you can be mad about that, but why don't you just become a have? Like start owning something, get into real estate, own something, because every inflation, all countries love to devalue their currency. They love to spend more than they bring in. That's like the best way to get elected. I'm going to increase spending, decrease taxes, right? Why would you not do that? That's a great way to get elected. So you run up the deficit, right? And it devalues your currency. We are on a one-way path to continue doing that. When that happens, you know, you can call it inflation, you can call it the devaluation of the currency, but it crushes people that don't own anything. People like me that own a lot of real estate. Sure, my groceries are more. It's more to buy a car. It's more to buy a house. It's going to be more to send my kid to college. But my 401(k)'s up, all the properties we own are up. So I'm benefiting from inflation and I'm being hurt by it. If you don't own anything, you're hurt by it. So I say all that to say, like, our residents have just been crushed by inflation over the past few years. All they've seen is their grocery bill go way up and everything else go way up. They don't own anything. That's— I mean, that's part of why they're renting, right? So it's been tough for them. We've seen vacancy be higher, delinquencies higher. It's more of a struggle. It was, you know, 2021 and 2022 were fun. You get to see the good side of inflation. Like everybody thought it was fun 'cause they were all getting money and then, you know, the expenses come behind it and now, now everything costs more. It wasn't just we had more money. It's like, well then the expense, you know, the cost of everything caught up. So I think we're already there. I still think I do worry. So I'm definitely not an economist, but that's my favorite thing to study. Like all the podcasts I listen to, it's all macro. I love it too.

Yeah.

And I think we got a private credit bubble that, that is popping. I mean, you've seen a couple already and they get to hide a lot of what's on their balance sheet, Bob, as you probably know, like they're not a lot of, they call 'em shadow banks or private credit. Like they don't, they're not regulated. They don't report stuff like banks do. So our banks in America are in pretty good shape compared to like, it's, you know, we never repeat the last crisis. So it's not gonna be like 2008, but there's gonna be another one. And I think it's gonna be more on the private credit, the shadow banks. And there's a lot of debt on books that is not good. And in commercial multifamily is one of those spaces where there's these shadow banks, there's these private credit debt funds that own office buildings that aren't worth the debt, but no one's marking them to market. They don't have to. So I think there's a lot of stuff going on. I still think we're going to have kind of like the rubber meets the road, the chickens come home to roost. Like, I still think we're going to see that. I think the consumer in America is struggling a lot more than some of the headline data shows. I mean, we just printed, you know, a lower unemployment rate., but yet we had to correct last year's jobs by a million, or maybe it was 900,000. I think the year before was a million. We keep going like, oh yeah, we, we thought we added originally it was like 600,000 jobs. We just realized we only added 180,000 jobs last year. Meanwhile, healthcare added like 350,000. So that tells you everything besides healthcare, which is basically, you know, government subsidized, lost jobs last year. So it feels like the top line, it's like the economy's great.

It's all manipulated.

Yeah, our stock market's at an all-time high, but like it's really not. And you know, we're kind of on the ground level because we've got the residents, you know, that are in that space that are actually hurting. So I think we're already there. I think it's going to become more evident. I think we're going to have some more like come-to-Jesus moments for these private credit debt funds, these shadow banks. I, you know, we've had a couple of them, but Bob, I've been predicting that for like a year or two now. So like, I mean, maybe I'm just early, but maybe I'm just wrong. I mean, if you're that early, it doesn't matter. And that's why I keep buying. Like, I do think we could be headed for a worse time, but I don't know. So I'm not going to like stop buying. And also I think multifamily is a good place to be in if we have a recession, because likely more people need to rent when you're in a recession. More people lose their home, more people need to rent. Our rent might come down a little bit, but we buy in a way that like we'd be okay with that. So yeah, I still think we've got some pain. I don't think we're out of the woods and that's a contrarian belief right now. I think most people, you know, the stock market would say like, People are like, no, it's all good. And, you know, Trump's telling us we're going to have 6% GDP growth. I don't buy any of that.

I'll take the other side of that. Part of it likely too, with his announcement of no taxes for last year. Right. And hopefully, you know, that comes to fruition for a lot of people who would rely on that. But to your point, like, listen, people who are getting their taxes back, it's the intent is that that gets respent economically on you know, the wants, not the needs. And so for people who are getting that position, save those funds and look at investing those for real estate or for something else, right? Like the idea is that, hey, you know, your personal spending cash that you have available just went up by all your tax money. So spend it, please. So, you know, like, let's be cautious with that. You know, the cost of everything is going to go up. You probably want to hang on to it, right? And, and see what you can do.

But that you have—

get out of debt. Yeah, because if inflation goes up, we know interest rates are going to go up with it as well. So yeah, just be cautious of that, guys. And to Lee's point, because I don't want to again get political, although I feel like, Lee, we could, but, but, but you're so right where, you know, everybody's just got to be paying attention to this. I think a lot of the data that we hear gets manipulated in the way that they want it to. Come across for strategic messaging. So just be smart, everybody, right, in what you're doing with your money and, and how you're investing. And know that really the only person who's going to take care of you is going to be you.

Oh, right.

So, yes. Lee, how do we— so if we invest in a multifamily portfolio or even a major real estate portfolio, let's say we get to retirement age, you know, what's the plan for real estate investors at that time? Is it is it, you know, using some of the cash flow from the buildings to live off of? Is it exiting? Is it a hybrid? What does that look like for you? And maybe advice for people who are looking to enter into that stage of their life?

Yeah, I would say it's a little bit of both. That's what I think is so neat about owning rental real estate is that I say like it pays you now and later. So we are creating a nest egg. You explained it well. Like when you're paying down the debt, right? That's forcing equity. You're creating equity with each, you know, principal payment you make on your debt. Meanwhile, again, our government's going to continue devaluing the currency. So everything is going to go up in value as the dollar becomes less valuable. So you're going to appreciate that way. So we're definitely building a nest egg. So you get in on one of these projects and you own it, like the value is going to go up over time. Now we have, you know, times where it goes down and it kind of Maybe it's up and down, but that up and down is in general going up and to the right. I mean, values are going to keep going up. So you are appreciating. But yeah, we typically, we only want to buy if while we're, you know, letting appreciation happen and letting our debt pay down happen, we are cash flowing. The income is more than the expenses and we pay the debt and there's enough left over that we go ahead and distribute that to our investors. So That's what's great about it when it's done well. And it's not always easy. And there's times that we, we aren't able— there's been projects that we don't always hit our distribution, but in general, we're able to distribute every quarter is how we do it. And so you're cash flowing. And if you get enough invested in that, that might end up being enough to live off of. Meanwhile, you are building wealth. And then when we do sell, okay, now you get all your capital back plus some. And so now you get to invest even more. So your cash flow on the next project should be even more. And then that one sells, right? So it's just kind of this compounding thing. And of course, the earlier you start that, the better. But even, you know, some of the people in their older age, they have more money to get started with. And I don't know how it works in Canada, but we can— our investors can invest through their IRA or 401(k). It has to be a self-directed IRA. So there's like a conversion that has to happen, but you don't pay any taxes. It's not a conversion that is a tax event. And they can invest the same tax-advantaged way through their IRA or 401(k) that they can in the stock market. You can invest in our syndication that way. So a lot of older people that have built that up and they're like, man, stock market's been great. Makes me a little bit nervous. We're at all-time highs. I'd like to diversify at least a little bit. They just convert that to self-directed and they can put that in. And again, it's kind of nice because now with that money, they are getting some cash flow. Now, in that case though, it just goes directly to your IRA and 401(k), but it's a way to to build that up and get it, get some diversification for sure.

That all makes sense. I'm going to ask you a few sort of quick, fast answer questions. All right, let's do this. If I give you $100,000 today, what are you invested in?

I'd be multifamily for me.

Yep.

Okay.

What's one myth about apartment syndication that you wish every entrepreneur would stop believing?

Probably something along the lines of like that. You can put a property management company in and be somewhat passive. It's really hard to manage property, so there's some good property management companies out, but you have to stay all over them. So you have to be very actively involved, just a manager. And if you're going to buy a bunch, I think you're probably going to want to manage yourself and then it's really— create your own— intensive. Yeah. So it just, it's never passive unless you're a limited partner in a deal. But if you're the one doing, you're the one, you know, doing it, buying it, the GP, it's never passive.

This one, it has to be one or the other because the true answer is both. But which one would you choose, cash flow or appreciation?

I would definitely say cash flow. I agree that it is absolutely both. We're not going to get rich with the cash flow, but cash flow is more of— nothing's guaranteed, but it's more of a sure thing than appreciation. Appreciation is always— there's a lot of speculation involved in that. Cash flow, if you tell me this property is 92% occupied and based on 92% occupancy with the rents where they are, the income's more than the expenses, that shouldn't change that much. Even in recessions, rent doesn't go down very much. Your occupancy might go down a little bit, rent might go down a little bit, you know, but it's going to stay pretty much the same. So I'm just— I'm willing to bet more on cash flow.

So I'm going to choose cash flow. Yeah, 100%. And, you know, we saw this too, like COVID. When COVID happened, initially prices went skyrocketing. I don't know if you guys had a similar situation, but that was, you know, as a real estate investor, your real estate sort of went up. Right. But a lot of it's based on the income approach of the property. So you're looking at it and going, yeah, like the price per square foot, fair market value definitely went up, but not probably at the same rate as residential. It just went— it blew up like crazy. And then— but on the downside of it, right, like it doesn't go down because you're— again, if it's an income-based approach, your rent levels really aren't dropping, especially if there's demand for real estate rentals in your area. It tends to just go up. So that, you know, that drives, especially in the bigger properties, single family is different, but bigger properties, it's driven by income approach. So like your appreciation is, is likely going to be there long term because rents just won't decrease. So listen, last question for you, Lee, and then we'll wrap this up. But truly, thank you for joining me today because you definitely brought some, some really great insights and thoughts. For many entrepreneurs who are looking at it and going, you know, maybe their side hustle is real estate too. Last question would be, if you had to go back to the beginning and give yourself a piece of advice based on all of your years of experience and knowledge now, what would that one piece of advice be?

I think one quick one is to network earlier, more. You can meet people specifically what you're looking for is guys and girls that are doing what you want to do in a way that you want to do it. I mean, make sure they also have the life that you want. I mean, there's some people that build awesome businesses and their life sucks because they like sacrifice their family for it. So, you know, you know, I wouldn't want to do that. So I'm going to, you know, model myself after guys and girls that are crushing it, but also, you know, have a great marriage and their kids like them. You can go find those people. And I mean, they can unlock doors for you that would take you 5 years to unlock, right? So it's, you know, it's not as easy as like just reaching out to them on LinkedIn and say, hey, can I get you lunch? I mean, you know, they're busy people, but there's masterminds, meetups, conferences., you know, different things and like, go be around these people and you just, they give you a belief that things can happen because they're doing it. And you meet them and you're like, seems like you just kind of did some normal things. You just did it for 20 years.

Yeah. And you're normal people.

Yeah. And you're normal people. So, okay. So I should get started today. In 20 years I can, I can be where you are. And that was, that'd be the other thing, Bob, I knew, and I think sometimes you just have to see it, but like, it really does take a long time. I love to show like the linear growth chart versus the compound growth chart. And it's that idea that there's a great book called The Compound Effect that talks about this a lot. And, uh, he tells a story, Darren Hardy, right?

Yes, exactly. Right.

And he tells that story like, would you want $5 million today or I give you a penny today, but then I'm gonna double the amount I give you every day for a month. It's just almost impossible to imagine that. Okay, I'm gonna have a penny today. You're gonna gimme 2 pennies tomorrow, 4 pennies the next day, 8 pennies. I mean, you can go 20, 22, 25 days and like, I'm still so far behind. But it's those last few days and that's what compound growth is like. I think that's what entrepreneurship is like. It is such a slog and you're probably going to be behind your buddies that took the high-paying job because they're getting their, you know, 3 to 5% raise. And so they're just doing better. But like, man, if you keep at it and you build the momentum, it's going to take off at some point for most of us if you really stick with it. So I just have that long-term mindset, if you stick with it, it's going to take off for you 100%.

Well, thank you, Lee. So my last comment here, guys, I sort of said this earlier as well. Real estate isn't for everybody, but I think there is a space in real estate for everybody. And I'm going to invite Lee to maybe share how you can reach out to him. But real estate investors like, like Lee who have portfolios and are raising capital to invest in projects, right? You can either be the person who's investing your capital and being the landlord, or you can put your capital behind somebody like Lee who's experienced in building successful portfolios and successful properties. Lee, how can people reach out to you, connect with you, and maybe even work with you in the future?

Sure. Yeah, I would be happy to. We— I'm on LinkedIn. That's my social media of choice, I guess. I don't like the other ones. I do like— I like being on LinkedIn. So you can look up Lee Yoder on LinkedIn. And then if you jump on our website, that's our company name, Threefold. That's T-H-R-E-E-F-O-L-D and then R-E-I as in real estate investing dot com. So you can find a lot of stuff about us and connect with us through the website.

Awesome. And we'll make sure that we attach that and your contact information in the show notes. So for everybody for joining today, thank you again, Lee. Been an absolute pleasure. Great conversation today. And maybe we'll take the political economic discussion and debate and carry that on in the future. But thank you once again. And for everybody who joined us today, Thank you. This has been the Wealthy Entrepreneur Podcast. It's been a pleasure to have you join us today. Lee has shared a lot of insights on what real estate investing could look like, even going to high levels of advanced education and then pursuing real estate because it's a true passion. And, and truthfully, that would be my advice to everybody is find your passion, man, and you'll find the money after that. If there's been some insights that you've liked today, please share them out. We're here to empower entrepreneurs with the financial confidence and knowledge to truly find financial success and ultimately change the world together. So please share this out. If there's anything that you've liked, leave a comment. Make sure you drop any questions. We will definitely be addressing those. Make sure you give us a like. We want to make sure that you get access to the next release, which will be every week or every 2 weeks depending on the schedule. But once again, thank you for joining us today. It's been a pleasure to have you and look forward to seeing you again next time.