Everything You Want to Know About Real Estate Investing & REITs - Joy Schoffler

You're listening to Finances Demystified with Dominique Broadway, the podcast that provokes the conversation of money, demystifies all your finances, and shows you how to bring all of your dreams to reality so that you can live your very best life on your own terms. Welcome back to another episode of Finances Demystified with your host, me, Dominique Broadway. And today I am super excited because I'm not just interviewing an awesome, awesome, phenomenal woman, but we're actually in person. You can't see us, but we're here in person doing this interview. And I'm so excited that I came to Austin today to interview her at her office. And so today our guest is Joy Shuffler. Did I say it right? Yeah. Awesome. Awesome. Now Joy is the Chief Strategy Officer of Upside Avenue and previously the owner of Leverage PR. Thank you so much for joining us today.

Absolutely. I'm so honored to be here.

Yay, I'm so excited. So there's so much we can talk about in this episode, it's kind of crazy. Um, where should we begin? Like, tell me about young Joy.

Yeah, so, um, definitely did not grow up with any sort of, you know, resources, or I'm the first, the only one in my family to go to college. Um, the only one to actually graduate high school.

Oh wow.

And so, you know, grew up single mother, 3 kids, poor, poor, poor.

And where, where did you grow up?

Uh, Oregon.

Okay.

And so there was not, you know, a whole lot of resources. Um, but that, that didn't stop me. I think early on, if anything, it really drove a passion for me to, um, educate myself as much as I possibly could. And I just I really latched on to education and really tried to be around the best and the highest quality people that I possibly could, who had things that I could learn from, and I could take those things and use the good and just leave out the bad, leave out the other, right? Like, the wheat from the chaff and just keep on moving and continue to grow myself and and build myself. And I really took that to heart from a financial standpoint as well as kind of a personal standpoint, but just had a passion for finance.

Yeah, yeah.

When other girls were reading like, you know, the Teen and Teen Cosmo and all that stuff, like I had Rich Dad Poor Dad.

Yes, Money Magazine.

Exactly, exactly.

I totally get it. Now tell me like I know you said, you know, single mom, you know, well, 3 kids altogether. Obviously that had to be tight financially. What do you feel like was your biggest— well, I guess 2 questions. Your first experience with money growing up. What was your first experience with money in your household?

I think my first experience was, gosh, I was an entrepreneur from day one. I would, you know, we'd have little garage sales and like I'd I'd be going through and finding what I could find of my toys. Yeah, it was their toys my sisters didn't know about. You know, just like what, you know, um, how to, how to make money, how to, you know, how to get out there and learn how to make it. And then, um, you know, then the hard lessons of, of not just blowing it, you know, not just going to—

typically when you would do your garage sales or lemonade or whatever, what would you do with the money once you got it?

Yeah, early on I would blow it. I would, you know, walk down to the store and buy something or whatever.

Make it rain at the candy store.

Absolutely, absolutely, yes. But the older I got and the more financial education I got, I think that the savvier I got and the more I started to save and the more I started to to, you know, just, um, really look at like, did I need what I was buying? And, you know, like, it's because it's not what you make, it's what you actually, you know, keep with it.

Yeah, yeah.

At the end of the day, um, and so, you know, we've kind of, as I've continued to grow, um, and as I, you know, graduated college and ended up going into the working world and doing these things, I really looked at how can I spend— well, first of all, setting my goals and figuring out what are the things that are really important to me and then allocating towards those things. Because a lot of people, they never do the things they really want to do because they don't make it a goal and a focus wasn't a priority financially. And so my husband and I lived in a house that we probably could have moved up and bought a bigger or better one or bigger, better cars for several years when friends were moving up or—

Yeah, getting fancy cars.

Yeah, or doing other things or would build their dream house and we were still in our starter home. But we continued to just sock money away. We tried to follow the rule of, you know, one, one person's income goes for all of the expenses and everything like that, and then the second one paid for child care, and then everything else they saved. So if somebody did lose a job, or you're okay, yeah, we're okay. And we just, we continued to just save that money and invest that money and, you know, really get ourselves in a position where the, the little things we did. We did a lot of real estate just because I was, I was in the real estate field at the time, and, um, it made sense to me, and it just, you know, it just, it just worked for me because I'm— I don't know if I'm— I'm not smart enough to do the stock market, but like, I've tried it.

I think people like real estate too because it's something that they can see. It's something that's physical versus even the stock market. Like, you'll go and you buy stocks, and yes, you can see like the respective positions or securities that you own, but it's different versus like, oh look, I own that house or that, you know. So I think sometimes that's probably what it is for a lot of people too with real estate.

Yeah, I love that, but then I also love that like if something really bad happens and there's a market crash like in 2008, yes, you know, 2009, like oh girl, I lost it.

Oh, it was—

I didn't have a whole lot there, but I had—

I was working in it and we had clients losing a million a day. I remember they would halt trading at like 1 o'clock because the market was— I mean, that was like my first couple years in the industry, and I'm like, what field did I get into? Absolutely, that's crazy. So how did you get from— I know you originally were passionate about real estate, and then you opened this PR company, right? Is that kind of where— how it went?

Well, actually, so I was with, um, Actually, the parent company of Upside Avenue now, the PPA Group. So we're 160 employees spread over 5 companies, and Upside's our latest, newest venture that we just launched. It's a REIT that allows everybody to be able to invest in real estate.

And what's a REIT for people that don't know?

Yes, it's a real estate investment trust. Basically what it is, is you own shares in a multifamily, We invest in a ton of apartments, student housing, senior living facilities, and you get a share of that, and you get a share of the regular cash flow. So we're projecting 6 to 8%. Oh wow. And then when the apartment sells, you'll get a share of the proceeds, and we're projecting a total return of 12 to 15% for people when you take into account both the cash flow as well as the upside on the appreciation there. At the end. So yeah, that's kind of upside.

Okay, and what a REIT is. Yeah, so back to that, that was a learning moment there about a REIT, but going back, so how did you kind of, like I said, make that transition from real estate to PR because they're totally different?

For sure, for sure. So I started out in real estate and actually started out in fintech in college and at a payments company, and then on the side I ran a real estate investment club. Well, one of the speakers was Monty Lewin, who at the time was just starting his real estate investment company. And he, when I moved to Texas from Seattle, he offered me a position helping out. There was 4 of us. And helping out in his property acquisitions department. Well, we grew the company from 4 to 75 employees in a year and a half.

Wow, that's impressive.

Made the Inc. 500 list both years, the fastest growing companies, and did a quarter of a billion dollars in acquisitions.

Whoa.

Over that— that was—

y'all were moving quick.

Yes, over that period of time, and all the acquisitions that we made during that time have just performed beautifully.

Wow.

Um, some returning up to 6, 6 times the investment. So just nice, nice stuff.

Good.

Yeah, yeah. Um, so, you know, I— when the market crashed in 2009, I just had my first daughter. I knew no deals were going to get done for a while. Um, and so I was like, you know, I'm gonna— I'm just gonna hang out with my daughter.

Yeah.

And, you know, kind of just chill for a little bit. You know, I just had a really good year, you know, and had some savings built up from that. And because me and my husband hadn't altered our lifestyle.

Yeah, yeah, you're always living within, below your means or within your means.

Yeah, we just kind of like, you know, kind of moved along. And then I started getting a lot of consulting offers from other finance companies and real estate and technology companies to come help them follow a similar growth trajectory as that company. And I found out what I— how I did it was through PR. And so, you know, through great high-quality content creation and working with influencers and putting out the right content with the right message and just really providing people with the right education and stories that they needed to add value to their lives, but that also showcased how a brand could add that particular value.

Okay.

And so that company ended up growing very successfully. We were, I think, the number 2 financial services PR firm in the country at one time as far as revenue growth.

Wow.

Um, with our O'Dryer's industry ranking there. And, um, we grew, and then I ended up selling it to a phenomenal company called Caliber Corporate Advisors out of New York, um, that kept my Austin team in my Austin office and grew New York. And I think now they have another one in other areas. Yeah, they've just— they're just expanding and growing like crazy.

And what made you decide to sell it? Like, what was that? Because, you know, as entrepreneurs, we build things and they're kind of like our babies, but I think we all want to exit at some point, but it's still kind of like, you know, our babies that we're growing. What was that pivotal moment where you're like, maybe it is time to take that next step?

I think that I missed being on the inside. Part of what I did—

it's interesting.

Yeah, part of what I did for a lot of the companies, so I had a decent-sized team that did the PR and I helped a lot with high-level relationships and strategy and making sure that that right message really came across. But getting to be on the inside of actually developing a company and making sure that it's helping people and doing the right thing and that it's providing value and then helping to grow that company and to be part of the hypergrowth. I got to be part of the hypergrowth on the outside with a lot of my clients, but I, you know, I missed being part of a team from the inside, I guess, you know, from that perspective. And not just serving as a consultant developing, helping them develop their product, but actually being in charge and developing one. That's interesting.

I know for a lot of entrepreneurs, they, everyone like you know, it's girl boss and I'm the boss and they want to be the boss, but it's like, it's not always fun being the boss. I just want to do the work and create the content and things like that. So that's actually really, really interesting that you were able to, to realize that I want to make this shift and I want to do something else and I'm fine with letting this go in a way.

Well, the cool thing is I actually kind of do run the REITs. Okay. So, um, I'm in charge of a very large portion of the decisions, not the property acquisitions. We've got, we have a full committee that selects which assets will go in the REIT, and a gentleman who's got 30 years experience selecting those assets. But, you know, our initial company started out that you had to have a net worth of a million just to work with us. We've done over a billion in investments. We're, you know, work with pension funds and large, you know, very large institutional partners and are partnered in our investments, but there's no room for anybody who's just an average everyday person who really wants to get in and like do it. And like you have to be able to access good financial products to build net worth.

You do, you do.

You have to.

Yeah.

And so when, you know, I really saw this as an opportunity because I've been an investor with the company for the last 10 years and I know and I believe in them and I know what they were doing, I get an opportunity to come in and actually help to build something. And then I made their minimums $2,000 for people to get in.

That's huge.

And it's open to unaccredited investors, so anybody can invest in this product.

That's phenomenal. I think there's, there's obviously, as you know, there's not a lot of um, REITs or products, financial products in general, with such low, um, level to get in, such a low entry. So that's, that's good to, good to hear. So let's say if someone is, you know, investing in their 401k at work, and they are, um, you know, maybe even have like a Roth IRA on the side, or maybe doing some other investing, and they're like, you know, I really want to be in real estate, but I don't want to be a property manager, I don't want flipping a house, I would love to get into something where someone else is managing it, like a REIT. When do you think is a good time for someone to consider that? And as people are looking for various REITs or, you know, various real estate investments, what are some things that they should keep in mind when they're kind of, you know, vetting or looking at different companies?

Absolutely. So, you know, at Upside Avenue, we purposefully built our REIT to be a very low-fee product. So we only have 1% advisory fee, 1% management fee. There's no loads, meaning that there's no upfront cost. If you invest $2,000, $2,000 goes to work. We're not taking fees and commissions and everything like that. That's good. We're not, you know, we get 2%. And so some of the times there's companies, there's some REITs that are taking really high fees. And they might, on the surface it might look like they're not, you know, they might just say, oh, we're, you know, this or that, or, but when you dig deeper, they've got promotional fees and they've got, you know, broker-dealer fees or outside third-party fees that they're paying. And that can really add up to a lot because if, how the channel works a lot of time is that people will be paid to bring investors to a particular company or group, and then they'll get, you know, paid maybe 5— anywhere from, you know, half a point to half a percent, maybe like a finder's fee, right? So up to like 5, 6, 7%, depending upon what it is, right? But what ends up happening is then that a lot of times will get taken off the investor's investment.

Yeah, and that's pretty much how life insurance works, where, you know, when you're buying a life insurance policy, you know, you have your— as a life insurance agent, you get a percentage of that first annual, uh, premium, you know, you're getting a percentage of that. And so a lot of times people buy, um, what they call it, uh, whole life, uh, not the universal index life policies. And I, you know, I meet people all the time, they're like, oh, I bought this universal index life policy and they say it's going to great over time, but, you know, I'm looking at the cash value and I know I put in $2,000 this year and the cash value is like, you know, $900. I'm like, well, because it takes about 4 to 5 years with those type of policies for you to see, um, kind of your cash get back to where it was because there are such, you know, front load or just kind of such large commissions that have to be paid. So that's really good to know and something good for people to look out for because they're not realizing that. And if you have to get out of that life insurance policy in the first couple years, you're not gonna— you might not even get back what you put in.

Absolutely. Or say, yeah, you can't pay it or whatever.

Like, yeah, which is common.

Yeah, absolutely. It's also really important for people to look at what types of assets are the REITs investing in, like any REIT that you go after.

And what are some types of assets that people are like— let's say, what are the good ones, or what are some of like red flags?

Yeah, so In my mind, like personally, anything that says retail, I would run from. I mean, like we've all seen the Amazon effect.

Yes. Oh gosh, they're killing everyone right now.

Yeah, right? Like who goes and shops anymore?

Who goes to stores?

Yeah, like you do when you have to, or you know, like for fun, but on a regular basis, like life's too busy to be shopping.

That's actually, that's good. So things that are retail, any other red flags you're looking for?

You know, I think that office can be really hard because I think a lot of, you know, you look at the trend, there's a lot more people working from home and co-working and things of that nature. That's a good point. Anything that's new development is going to take a lot of time to get your cash flow out because think about it, you've got to get all of that. They start out with dirt, right? Like they buy a piece of land literally, and then they have to go and get all the permits and everything from the city and do all that, which can take forever. And then they have to build it, and then they have to lease it up or sell it or whatever, right? And so that entire process, you're not making a penny because they're not making a penny.

So that could be a 5, 7, 10, 20-year time frame.

Right, like, you know, hopefully it's not that long, but if the market crashes too, you know, those developers are making a bet on the market market continuing to grow and be strong. And so, you know, my opinion is that you look for things that are going to be good in both up and down markets. Okay. For our, you know, our particular REIT at Upside Avenue, we're investing in like apartment buildings that were built between 1980 and 2000 a lot of times. Okay. They're older, you know, they're not in the best of the best neighborhoods. They're not in the worst neighborhoods. They're working class, normal people. The people who are the teachers, the office workers, the medical assistants, the people who make the world run.

Yeah, literally.

Literally, exactly. They are not hourly workers, a lot of times who if the economy goes bad, they'll be laid off. They typically have more steady employment. But it's— they're also not the people who are gonna buy, you know, go and rent an apartment that's brand new with all the amenities where you could really be paying a mortgage for that same price, right? So it's the right in between. Yeah, it's the middle. Yeah, yeah, they're not too hot, not too cold, you know, the Goldilocks apartment.

Exactly. So what about those specific years? You said 1980 to 2000. Other than the obviously the people that are occupying them being, you know, being steady.

Yeah, pretty much, for sure.

What about those properties, I guess I'm thinking from a not construction but from a physical standpoint, do you think is alluring? Is it like because they made buildings bigger back then or like the construction or kind of what's that?

It's more so the price point, right? So those Because the, the unit sizes can vary, but they're typically the, um, the medium, you know, the kind of the mid-range price point, um, in mid-range neighborhoods. And there's typically value that can still be added. Okay, right. So, um, I don't want to— we're not interested in looking anything at anything where we're just banking on appreciation. Um, we— if the economy tanks or, you know, things go wrong, we want to make sure we're buying with cash flow already there. We want to see a plan to cash flow and to some appreciation no matter what, you know, which is even if we have to hold it a little bit longer, right? Because that's really, in a scenario like that, as long as it's cash flowing, you're going to pay off your debt service. You're not going to get into a situation typically as long as you're not overleveraged, meaning you didn't take out too big of a loan, you're not gonna— you probably won't lose the asset.

Yeah, yeah.

May— the worst case scenario, if you have an economic downturn and you're not highly leveraged and the apartment's cash flowing, is you may just not sell it for 2, 3, 4 years.

Yeah.

And you may not get your appreciation for longer. But if you go into an office building or retail where now businesses are closing because the economy's bad, people always need a place to live. People don't need an office. They don't. People don't need to, you know, have a store.

I mean, yeah, yeah, that's true.

And so, you know, people don't need the Class A apartment. They, you know, but the mid-range apartment, those people who were Class A owners, now they're going to move there, you know. And there's also a little bit more room to where if the economy's still doing good and things are great, that you can take some of those older units and you can fix them up, you can paint them. We actually have great relationships through our CEO with, who runs the Asian Chamber, is the chairman there, with a lot of different Chinese manufacturers. Oh, cool. We do shipping containers, because we've got, you know, a billion in real estate, right, that we've invested in. So we'll buy entire shipping containers at a time from China with faucets and fixtures.

Oh wow, so you're getting good prices.

Wood flooring and cabinets and the whole nine yards. And at any one time we got a shipping container on the water from China.

Wow, that's so cool. That's cool.

We have economies of scale, right, because we can go fix these up a lot cheaper. We're 160 employees, so we can go in and We have the guy on staff who's the main, who can fix AC units. We don't have to call an AC guy. We got a plumber. We just have these expertise on staff, so there's not the same, it just saves us costs.

Yeah, that's true.

Because we're such a big company. And so there's just the economies of scale there, and we can use those to go and improve the apartment complexes for cheaper. So it's kind of a, you know, we look at where can we add that value. We'll also invest in senior living facilities as well.

Yeah, that's a good, yeah.

You know, because the baby boomers, the just the trends, we want them to be, you know, the nicer facilities in areas where there's a lot of immigration. So where people are moving, you know, a lot of people like to move from the colder areas to the Sunbelt when they retire. I don't like to be cold. Yeah, and I'm only, you know, almost 40. Yeah, I can only imagine at 80.

Yeah, no way. Yeah, more. Now what, um, I guess with, with, with the real estate too, what actually I would love to hear your thoughts on this. I've been reading a lot about multi-generational housing.

Yeah, for sure.

What are your thoughts on that? And that's like, for you that are like the multi-generational housing, where's a lot of, you know, you know, the younger and older families are just living in, um, the same house. Yeah, it may be the parents, the grandparents, and, and maybe the millennial or Generation Z kids all living in the same house because millennials or Generation Z are having to take care of the older parents. Um, I just saw for the first time, actually saw a community being built in Houston, and it said multi-generational housing, and I was like, wow, this is And you know, when you're a kid, your whole goal is to move out and not live with your parents. But being realistic, for a lot of people, their parents aren't financially prepared to grow older. What are your thoughts on those types of communities? Like, have you seen anything or any trends?

Oh, yeah.

Is this going to be a thing?

Yeah, I think especially in communities where there's a lot of Asian cultures, so like Seattle, Houston, San in some of these bigger cities and coastal cities, there's a lot of developers who have multi-generational floor plans that they're selling within their communities and marketing it that way, because it is a very big trend to have your parents to live with you.

Yeah.

And so, you know, we're actually seeing some of that as well with millennials really just delaying moving out of their parents' delaying homeownership. And so there is some of that, there definitely is some of that that's reducing homeownership ranges, especially at the entry-level points, but I think that also increases, you know, rental occupancy as well. So it's kind of a wash. The other factor too is that Baby boomers are actually opting to go rent in apartments again as well, especially in more urban areas. Yeah, so a lot of baby boomers will go and they'll rent in Class A buildings. Okay, because they want those amenities and all of these different things, but what that's doing is then that's decreasing, you know, availability in those Class A, making it more expensive in those cases. Yeah, they're a little bit more recession I guess sensitive, if you will, with the Class A buildings there. And so I would say I don't think the baby boomers are having a huge impact as far as like the, you know, the, the older apartments. However, you know, one trend we may see is baby boomers saying, you know, we definitely did want to move out closer in.

Yeah, yeah.

Um, or reduce costs so we can go travel. So let's just keep a regular apartment and not go to the high end. Yeah, right.

So you're saying that's really interesting. So what, um, just really quickly circling back, um, how were you able to— because now you're like real estate queen, like you know all about the real estate and investing, and you own properties within the company but also personally. How did you— for people who are looking to be in this space you know, or maybe even looking to make a transition, um, what do you feel like helped get you to this point? Obviously you had a, you know, uh, not the— maybe not the easiest upbringing, you know, it wasn't like your parents was like, oh, here's 5 rental properties to get you started. What did that look like? How were you able to kind of leap into that space without having, you know, family connections or whatever it may be?

Started out with education, just learning as much as I could. There's so much free education. Don't pay for education. I mean, sometimes education's really great to pay for, but when it comes to different types of investing, use your education, invest a little bit. You know, there's ways that you can invest a little bit here and there and then use the trial and error. If you took, you know, paid $5,000 for an educational course, you can spend that same $5,000 Investing in real estate, we actually have an Earn While You Learn program that we're rolling out.

We're so excited to share that with the audience. That's going to be great.

And people can invest $2,000, and people can invest $2,000 now, but they can get access to free webinars. When we deploy money into an asset, we'll go through, we'll do an analysis of why this particular asset, why that particular market, you know, what, what we looked at in underwriting, like all these different things. Along the process because, and it's by people who have 35 years, you know, 40 years experience, some of the biggest real estate firms in the world working on our teams, and that's what they do is just portfolio analysis. And so, you know, what makes me, what really makes me sad is people who kind of prey on people who want to learn.

Yes, we had a long conversation about that earlier, how You know, it's all these— I guess you want to call them real estate personalities who leverage their fame or influence to prey in a way where, you know, you're going into a free real estate investing class and at the end it's like, well, you have to pay $20,000 to work with me. You know, people are literally running and giving their money away, their hard-earned money A lot of times you hear it's— I mean, I've, you know, read those stories of people like, this is my last $20,000 and I gave it to so-and-so and it didn't work, or, you know, and it's, it's sad and you're seeing people take advantage of people. So it's really exciting to hear that, you know, especially with your firm putting out this Earn While You Learn program where it's like, okay, you can learn and you're still going to earn. It's not like you have to drop $50K and hope and pray that you earn something.

And nobody's— you don't have to, you don't have to invest be part of it, you can just log on and join it and get the education. And people can go to upsideavenue.com and sign up and just say, "Earn while you learn," and the, you know, "Sign me up for Earn While You Learn" in the comment box, and we'll send them out when it launches.

I'm definitely signing up.

Yeah, definitely. But it's, you know, for me, I just think it's It's so personal because growing up poor and without a lot of resources, I would see my mom get all hopeful about this or that and really think like, "Oh, I can make it." And I know the impacts. That's people's— Your money is not just money. That's your kids' college. That's your health. That's your ability to make better choices for yourself, right? Because once you have money, once you have savings, even if it's just a little bit, you know, you, you have options. Money is options. Money is freedom. Um, money is health. Money is everything. Money affects every aspect of your life.

Yeah.

And money determines how people treat you and if people prey on you and all these things. And so when I see um, some of the real estate courses and whatever, or some of the programs out there where they're like, you know, you got to sign up to do this to, um, and, you know, here, here's this class and we'll teach you. The fact is, and, you know, I, I, I don't mean to be rude about it, but people cannot do what we do. Um, it is, it is very— we're a 160-person team. We buy apartment complexes that may be on the low end or $10 million on the high end, all the way up to $75 million apartment complexes and facilities. And we, you know, when we're acquiring these particular assets, we only get these assets and even have access to them because we don't buy a whole lot of on-market deals because of relationships, because we're so active. And, you know, we get better rates with lenders because we have such a proven track record of doing good and never losing money for a client. We, you know, get access to, to just different things. We have our property management team and the, you know, the relationships in China for materials and all these things that the average person— you can spend hundreds of thousands of dollars education there, you will not have that access. And so, you know, for I think for some people, when I see people almost like preying on them and they're saying, we'll teach you how to be a passive income investor. And I'm just like, you don't, you can learn how to do that without, by passively investing, not even with us, with a different company who knows what they're doing.

Yeah.

You know, with the changes.

You have better odds with putting your money with someone that has a proven track record and has the resources can give you greater returns because their costs are lower.

Absolutely. And just, you know, looking at those fees, making sure that you're reading everything, that you're doing your due diligence. Ask them for their track record. You know, we publish our historical performance on our website. We had it audited by Cohen Resnick, one of the largest firms in the country, and submitted it to the SEC before we even got approval to launch this street. Like, you know, you've got to do, um, and you've got to look like, are they— what are people promising you? Like, are people promising you 10 to 12% and then investing in single-family homes?

Well, how is that—

well, that could be possible, right? And you could have done that, but are those single-family homes super expensive homes, or duplexes, or fourplexes, or 10-unit apartment complexes? In really expensive areas.

I guess it also depends on how many they're buying. I mean, right?

Yeah, well, you get economies of scale with bigger apartment complexes, but you could buy 100 houses and still not have those economies of scale because it's not in one location.

It's all individual.

Exactly, yeah. And so as the economy, you know, if we are headed for a downturn, which I think that there's a very strong possibility we are, as is a lot of third-party data houses and major financial institutions. If the market goes down, housing prices are going to decline. If housing prices decline and you've just invested in a fund, even if they've done great for a long time, that's primarily investing, being equity or debt to single-family investors, you are in trouble if that market goes down. So you really have to look at like, you know, not just like what's the historical performance, but what are they investing in? And like, is it safe? Nothing's 100% guaranteed. Yeah, you know, we don't— we're not guaranteeing 6 to 8%. Nobody can guarantee unless you go put your money in a CD in a bank, that— and that's just FDIC guaranteed.

Yes.

Yeah. There's no guarantees in life, right? But how can you mitigate risk, and what is the track record that the people have of mitigating risk in both up and down cycles? Because people who were buying assets in 2005 and are still around and have been doing the same kind of thing for a long time, can— they know the warning signs and they know when to take their foot off the gas. And they know when to buy right and the different strategies. And so, you know, I would just say more than anything, like, if you're interested in some type of real estate investing, do your homework and make sure that the people are, you know, they have the experience, they have the right access to the right kind of deals. Um, that comes through relationship experience again, you know, and that like really look at their cash flow and their fees, right? Like, where are they saying this cash is from? They're saying 10%, but you're doing a development, so yeah, it may be 10% a quarter, but it could be a lot of quarters before I get my money back.

Maybe a few years. Yeah, yeah, that's, that's really important. Um, I guess with also too, um, I guess I want to know what was your first investment?

Yeah, our first investment, we invested invested in a, um, our first real estate investment. We invested in a $65 million apartment complex. Wow. We owned 0.002%. Or 0.02%.

You own the maintenance costs, right?

Exactly. Um, but I put $26,000 in. Okay. I've already got $40,000 back.

Awesome.

And it was a 3-property portfolio with some land that they developed. Okay. They developed another 200-unit apartment complex. They sold one of the properties, and I still have 3 apartment buildings I own, and I've already almost doubled my money.

Wow, that's amazing. Yeah. And how long ago was that?

10 years ago.

10 years ago. That's pretty good.

Yeah.

And so did you go through— was it a real estate investment trust?

Actually, it's a company.

That's really, that's really good. But I like— it's good to see, like, yes, you— it's a $65 million project, you owned a small portion.

Yeah.

But you were able to make money from it.

Yeah.

I think that that's where sometimes people get deterred, where they're like, oh my gosh, I could never contribute to this? Well, she didn't have $65 million to contribute, but she was able to get a very, very small portion and still be able to make money. And so sometimes it's looking for those deals where you can get in for $2,000, $3,000, or $4,000, and over time it will pay, and it can give you, depending on some, you know, nothing's guaranteed, but a lot of times it can be a better return than the stock market. And it also helps with, obviously, you know, we talked about building wealth and you have to have that portfolio and you have a little bit of cash and some in stocks and some in real estate because you have to have, you know, that diversification. So if the stock market does tank, maybe your real estate will thrive or, you know, you never know. So I think that's really good to know that he kind of— that first investment was not huge, but it's still paying.

Absolutely. And I just, I don't sleep well at night with my stock market investments. Like, I am just, I I have tried. I've tried.

The stock market is not for everyone, and that's why I think it's really important to talk about other ways to invest, you know, because people think that they have to do the stock market or they have to be invested in the stock market or they have to buy all the houses on the block, and that's not the case. There are things like real estate investment trusts and other things that you can put your money in where you don't have to be, you know, fixing the toilet in your tenant's house if you don't want to.

Absolutely. You know what I mean?

So I think it's important to highlight those different things.

Now there's publicly traded real estate investment trusts that you can buy through like on the stock market, and then there's non-traded REITs. So we're a non-traded REIT, and what the difference is there is that traded REITs— so we'll give an example. There's a company called BlackRock, which is a major real estate estate company, they had a REIT in Dallas. It was a privately held, non-traded REIT. The book value was $6 and some change. So that was what, well, basically the, you know, what people could go and buy it for. And then it was paying a return on that particular book value, had a portfolio of properties in it. You know, let's just say, I don't know the number, but let's say it was $100 million worth of properties in it. Well, and it was probably closer to a billion with going public, but say it was, you know, at $6 and some change, they had a billion in properties.

It's just $6 and some change a share.

A share, exactly. So they go public and now their share price jumps up to $20 the IPO, and then $25 eventually was their high, but as of a couple months ago, Well, did the underlying value of that real estate change? That billion dollars in real estate?

No, it didn't.

It didn't. But now people are paying when you buy the stock, that return, because it's per, you know, like you're getting paid based upon your pro rata share, right? So $6 would have had a higher pro rata share. So then it went public. Now you still got a billion dollars of underlying real estate. That didn't change. But now you've got, it's $25. So it's basically what, 4 times?

Literally, yeah.

Literally almost 4 times. And so you're making a fourth of the return. And it's tied to the stock market. So you could go in, you could buy it at $25 a share, just like, wow, it's amazing. And then because REITs have such like high correlation, they're so like, with the market volatility, they're like super, super high. Like, that means like if the market goes, they go, you know, they just like—

they go down, they go down, they go with the market.

Absolutely. So a non-traded REIT, like what we're doing, we're just— it's like getting into that $6 and some change, right? Like, you're— the assets we own, you're not paying the liquidity premium. And if you're not trading your stock on a daily basis, right? So that's, you need the liquidity if you wanna trade, right? You're paying so you can get your money out at any one time. But if you just are wanting to have a little bit that you go and you put away somewhere as part of a balanced portfolio that you're not gonna touch, and you know, that's what real estate, the non-traded REITs are better for. And there's liquidity, you know, after the first year you can take your money out with them. There's a 2% penalty the first— after the first year.

Is there— so after— so $2,000 in, then after the first year there's a 2% penalty. Does that ever go away?

So a 2% penalty, um, the second to third year. So like if the first year you can't take it out, second to third year, uh, there's a 2% penalty. Third year it's a 1%, and then no penalty after that. Yeah, yeah. So, you know, and then our book value, like our what people buy the stock at, they buy it at $10 a share, but every single quarter we have an independent third-party auditor who's going and auditing our books and doing an independent update on our share price. And so, you know, your share price can potentially grow along the way, but then you're getting your quarterly dividends. And so, you know, that's kind of how we're targeting quarterly dividends. So that's kind of how you know, we're really, um, we're structuring it. But I thought it was important to mention the difference between non-traded and traded, because you can go and think, oh, I'm investing in a REIT, but you're really, you know, because it's a publicly traded REIT, yes, you do have liquidity, right? So if that's— you gotta weigh, is liquidity important, or, you know, would I rather, um, not pay the liquidity premium if I'm gonna hold it anyway?

Okay, that's good. That's a really good, um, it's really important to kind of understand the difference between the two because I'm sure there's a question people have. So just to wrap up, I guess, what are any final things we need to know about like real estate or REITs or just anything else that could come to mind you think could be really beneficial to our audience?

I would just say, you know, um, I've been so incredibly lucky, um, and, and, and blessed because of the decisions that I made in my early 20s. Um, and I really want to go back and, you know, I just, I'm very thankful that, um, we made the decision to, you know, live like, you know, live more conservatively, put money away, invest that money. Um, that's allowed me for the last 4 years to be able to spend at least a month overseas traveling with my kids and me and my husband. It's allowed me to be able to meet a lot of life goals. It allowed me to help start a company because I had additional cash flow coming in. Invest for cash flow, you know, not only for the short-term gains, but get yourself some passive streams of income coming in because when you have that, that is freedom. And at the end of the day, that's what we're here for.

That's what we want. That's what we all want. Yeah, just the freedom to do what we want when we want on our own terms. I think that's super, super important. And I like what you said because I think even with social media nowadays, it's like, it's a blessing and a curse. I think it's a blessing if you're a business owner. I think it's a curse if you're not because you have this whole comparison thing. And what I'm seeing for a lot of people people, especially with this, this new generation. For a lot of us, we are the first person in our family who went to college. Yeah, you know, the first person to have like a really good salary position with benefits and all these different things. But we're trying to keep up with everyone else, and so we're constantly living beyond our means. And, you know, really just trying to— that's why I like your story, because it kind of shows that if you can sacrifice and still live a good life but not be super extravagant and just spending every dollar you make, you know, in those 20s and early 30s, and even once you hit 33, 34, 35, whatever, 40, 50, whatever, you can live a much better life.

Absolutely.

It can be such a higher quality of life, and I know it's something I remember when I bought my first house because I was young, I was 22, and my mortgage was always based on my 22-year-old year-old salary. Yeah, which was, I think I was making, I want to say $39,000, which is great for 22. Yeah, it was good, but it was like, even I sold it at 32 and I was making nowhere near that. Obviously I was making way more than that, but that's what my mortgage was, right? Right. And so it allowed me to save so much more even after having that huge financial setback with my business. Yeah. Um, but it was being able to have such low expenses that helped me get back on track.

Absolutely.

Swiftly, right? Because my expenses were low, um, and you know, I, I went out and bought a car, but it's because the other car caught on fire. I'm sure you've heard that story before, but I went out and bought a used car. Yeah, you know, so I still have my 2008 BMW. It's paid off.

I love it.

Yeah, why am I getting rid of it? Like, you should buy a Tesla. I'm like, why would I do that when this car is paid for and it does exactly what I needed to do? Get me around town and it's still cute, right?

Absolutely.

And so I think those small decisions that we all make, um, is how we build wealth and how we change, um, the generational poverty that a lot of families are, are in, you know. And, you know, showing our kids that you can, you can still live a great life without balling every weekend, you know what I mean, wasting money. So I think that, oh, I feel If we could just get this message through to everyone, that would be so, so important.

Absolutely. Because you can be poor, you can be a very rich poor person, right? I know so many people who live in, you know, their kids are in private school and they're living in these huge houses, but you know what? They have 2 bad months and they are done.

Yeah, and I, the sad thing, I talk to a lot of people who are like that. Um, I was talking to a young lady a couple weeks ago, and it was the exact situation. And I've seen her on social media, and we started going over finances, and that's exactly what it was. She— they bought this house, the mortgage was $4,000, and they were paycheck to paycheck. They had the big house, the fancy cars, both the kids in private school, same— you know, she had a part-time business. And from the outside, I'm like, I would have never known, yeah, that you had $1,000 saved.

Yep.

At 38.

Yeah.

But your house poor. Like, and it's— that's scary to me. Yeah, and that's why I'm so frugal. And people always joke, like, me and my mom, she saw my luggage and she's like, you really should buy a new luggage. I'm like, it has a little crack in it, it's not broken, you know what I mean? But I'm like, until it stops working, what's the point? Because I'd much rather— I've been broke before.

Absolutely.

No one wants to go back.

No.

Not a good time. So it's kind of like No, I'm going to keep all this money and hoard it and try to make more money from it instead of just trying to impress everyone that's out here. Yeah. You know, and I think even it's funny sometimes when I post like little outfits on social media, people say, oh my gosh, where did you get that from? I'm like, Target. You know, even the shoes I have on today, like people are like, oh my gosh, where are those? They were $30. Like, I'm not going to spend $300 on those shoes. I'm just, I'm sorry. No, no. When these are the same exact thing, right? So I think it's about making those really small decisions. So thanks so much for sharing that, um, and also sharing your first investment and just, you know, how you were able to get where you are today. So it's, you know, thank you again.

Thank you so much for having me.

Lasting words or anything? And we'll put the links to the Earn While You Learn, all that stuff, um, in the show notes, um, so everyone can access. Have any lasting words?

You can, you can do it. You have it inside of you. 100%, like, do not be discouraged. Don't get analysis paralysis. You know, save, just put it away. Save a little bit at a time to build up to whatever your minimum is, and then just save that. And, you know, put it in something that you can't touch. I did savings bonds actually for a long time because I wouldn't touch them. But if it was—

Whatever works.

If it was in my account, touch it, but you can do it. Like, it's super possible, and your future self will thank you.

Yes, make your future self happy. Yeah, that's a great note to end on. Well, thank you so much again, Joy, for joining us, and, um, I guess we'll see y'all soon. Thanks.