Podcasting Trailblazer Trevor Oldham Discovered Passive Investing: Plans to Retire Early

Foreign bowling here with Pivot to Prosperity, brought to you by Pivotal Real Estate Investments, where we help our investors build wealth and income through commercial real estate that also improves communities. And today we have Trevor Oldham. And Trevor, thank you for coming on. Appreciate it. I will do a brief intro and then let you fill in the missing links. Trevor came to me through podcasting, and he has been a podcaster for much longer than many people and specializes in that. And he's going to tell us about his journey, which you'll find very interesting, I think. And he's invested in some multifamily self storage and notes and a few things passively. And so, Trevor, why don't you take it away? Tell us how you got started.

Yeah, thank you. I appreciate that overview and I'm looking forward to chatting today and providing some value for audience. But my story really begins back in 2015 and it was at that time I was running a different company than I run today, and I thought it'd just be cool to start my own podcast. I just wanted. I was very into personal development and entrepreneurship back then, and I realized a lot of the people that I was reading the books that I wanted to interview them or I just wanted to talk to them, I should say. But I realized I couldn't reach out to them and say, hey, can I pick your brain for 30 minutes? They would, how many times a day do they probably hear that the more successful that they get? So I would reach out to them and say, hey, I would love to interview you as a guest on my podcast. And I got a lot of people that I interviewed. I think at the time I no longer run it, which I wish. I. I wish I was still running it. But at the time I interviewed about 65 different people and obviously not all of them said yes coming onto the show, but I was able to interview a lot of entrepreneurs and investors and just gain a lot of knowledge. But at that time, I was bootstrapped in the company. So I was the one that was booking the guests. I was editing the podcast. I was doing a recap of the episode of the podcast. I was creating social media clips for the podcast, and I was doing pretty much everything that went into it. I mean, I was spending an easy five to ten hours a week to produce one episode a week with everything that got involved. Now, fast forward about two years and I was still doing the podcast, but I was sort of getting just a little burnt out about it. I wasn't making any money from the company, wasn't making any money from the podcast. So I just started freelancing out to make some extra income on the side. And when I was freelancing myself out, I was just picking up contract gigs of people that needed help editing their podcast, needed social media clips, needed to find guests for their show. Basically everything that I had previously self taught myself for the previous two years, that's now what I was doing. And even in 2017, the podcasting space was still in its infancy, I would say, compared to what it is today and all the podcasts that are out there. So it's fairly easy to pick up gigs. One day I started working with this turnkey real estate investor out of la. She wanted to go out and get booked on podcast. I thought, well, I've booked a lot of guests for my show. How hard could that be to get her booked on shows? Honestly, started working with her, started finding more people that wanted to get booked on podcasts as guests. And fast forward about a year, brought on that first employee because I knew I want, if I wanted to grow, I had to have that employee. And then about two or three years later, finally got like a website down. Because I honestly, I never expected it to be as big of a company as it is today. Kind of just fell into it. I mean, I had started three or four companies prior to it, but this one just happened to be the one that made money and all the other ones were making money. So I figured, why not just roll with it? And then probably about three or four years ago, we just decided, hey, let's just go all in and working with folks. I say the alternative investment space, but at the time was really the real estate space, and we're only going to work with people that are in the real estate space. And obviously that's a, that's a wide niche within itself. When you're just talking, you can think of all the different asset classes and then you can think of who also helps in the real estate space. You have your CPAs, your attorneys, your cost specialists, even your whole life insurance people if you're going down that route. So it was a whole Orion. And really that's how we built up the company over the years. And then because of that, like you mentioned earlier, about two or three years ago, my business coach I was working with, he was like, why don't you ever invest in real estate? You help investors get booked on podcast, you're talking to them all the time. And I was like, oh, I know, I never really thought about it. And that let me down that rabbit hole where Eventually. Now I'm an LP in four different deals and I don't know if I'll ever be active, but I definitely enjoy being passive for the time being and getting those monthly distributions.

Yeah, I think that's a great story. And you know, that's so much what I try to tell people. They can be busy with their life and whatnot, but LP stands for limited partner. And it's so easy to be a limited partner because like we were talking about, you know, you do your research and make that decision. Once you make that commitment, then you don't have to do anything. So you know, it's smart to keep up with what's going on, read the monthly or quarterly reports. But yeah, as far as being able to do your own thing, your busy life, it's way easier as a limited partner. But yeah. So tell us about your first investment then.

Yeah, most certainly. So it was a very small investment. So I guess to preface it leading up to it, I believe it was June of 2022 now or July of 2022 and I made a goal for myself. I want to invest by January of 23. So I gave myself about a six month Runway to get into that first deal. And I just started interviewing different operators and sponsors that were out there. I think I talked to about 25 to 30 different people before I was ready to invest with them. And early on I didn't even know what to talk to these operators or these sponsors about. I hop on the call and they would say, what questions do you have for me? I'd be like, I don't know, what questions should I be asking you? I was very, very basic, down to what's the difference between a 506B deal and a 506C deal? Non accredited vs accredited deal. Not even really knowing what that means. So I mean when I started I was, I was fairly new at it, but I just started interviewing all these different sponsors. I was reading different real estate books like one such as like the Hands Off Investor by Brian Burke that goes through. That's very good for if you're a passive investor. I got a subscription. I believe it's called the Real Deal. It's not all just real estate investing. It brings in a lot of the real estate agent, brokerage side of the business. But I find it's helpful when, when it comes to real estate investing per se, it talks about different operators and sponsors and was just soaking up all this knowledge. And so basically what happened in October of 22 when again I thought I was going to get into that first deal on January 23rd. And there was this mortgage note fund and, and it was funny, the minimum investment, it was so small, was like $500 to get into it. And it wasn't like on Crowd street or one of those platforms. It was directly through their company and they raised the minimum. I think it's 5K now, but I put the $500 in. I think I got. It was like 8%, 8% annual return paid out monthly. So I get like $3 a month on that investment. But it was like I got that first investment. I was like, oh wow, like I can actually do this. And I was like, okay, now I want to look for my next investment. And then what happened with that one is I came across a triple net lease offering. And this is someone. I had spoken back fairly early on and I liked it. It was very simple. It was 7 to 10% annual return. There's not going to be a ton of appreciation on it because the buildings are going to be your corporate grade A tenant. So you have like your Dollar General, your autozone, a vet office. So it's almost like a fund of five different properties put in together, which is nice. So I knew I was going to make a ton of upside, but I had that monthly distribution and I invested with them. I believe it was that November because I could get 100%. It was the one. We could get 100% depreciation on what we invested into. So I was like, well, instead of me waiting for January where it's going to be knocked down to 80% at the time, why not do 100%, you know, why not get 100% of it? And again, I wouldn't invest just in anything, just for the tax benefits. But I did like that at the time. So that was that, that was more that bigger first deal that I got into was investing with them where it was like a 25k minimum just to get started with them. Eventually I went back and this past February I put in 25k into that tr. Into the, the mortgage note fund. So now I bumped up my investment from the 500. $500. I mean they've been very consistent, but $3 a month isn't going to do a whole lot. But it was almost like just making that initial investment and getting that first distribution, even though it was very, very small. It's like, okay, like this is actually a possibility. Obviously investing 25 or 50k into a deal is a whole different beast. But I just, I don't know, just like switched that light for me, I was like, okay, like this is actually something that's possible. I could actually be getting a monthly distribution again. So small. Three, three bucks a month. But it was like that was the first time I'd ever invested anything outside the stock market and sort of just got me started on it.

Well, and you were what, just three years out of college?

Yep, yep, exactly.

So that's phenomenal because many, many people take decades getting to that point. You took a nice small amount, did a proof case, found out it really does pay back and yeah, it's good, it's, it's excellent actually that you did that. And I bet a lot of people, you know, are braver for it. Right? Do you share it with your friends and.

Yeah.

Family and yes, I'm trying to get.

The friends and family to invest. But I would say I join this community, it's called Left field Investors. So it's a really good community for folks that are passive investors. There's a lot of. It's almost like an online forum per se.

So it's Left Field investors.

Yep. Left Field Investors.

Oh, bluff.

Left field left.

Like left field. Okay.

Yeah, interesting. Yeah. And it's a really good community and I had found that because of that I was able to meet a lot of other younger investors like myself and I was able to steer them into investing with the company. Not that I was like raising capital or anything like that. It was more like, hey, I got started. I think if like you're younger and you don't have a 25k to put into a deal right now. And I think back when I was joining the group then the minimum might have gone up to 2500 or 2000. I think now it might be 5000, but yeah, it's a very small number compared to 25k. But I'm trying to get my friends and family to invest in real estate. And something that I had done is through the left field investor communities. Me and a group of 10 guys, we got together and we put in 5k each into a deal. So now the deal we got to the minimum 50k investment and part of the group, we had met for like six months and we were interviewing, we were checking out a new deal like every two weeks. We were all non accredited. So it was just nice to get together and learn from each other. But that's sort of what I'm trying to do with my family and friends, trying to convince them and it's hard because no one's ever invested in real estate outside of myself. And my family, I was the one that, you know, took the plunge and invested in it. And now I can see these returns. I can, I can see, like when I get that K1 at the end of the year, yeah, I made, you know, a decent amount of income on these investments, but because of the depreciation, I don't owe anything. At least right now, potentially in the future. But at this given point in time, I didn't pay anything on these investments. So I try to tell them that. So trying to see if I can get them to pull them together where we just each put a little bit in, where I think it's harder for someone that doesn't know as much as like myself or someone that hasn't been in the space a long time, like friends or family that haven't delved in, into it as much, 25 or 50k might seem like a lot to them. So I go, okay, if we can get together and we can each put in 5k, form an LLC, we can go out there and invest in a deal similar to what I had done with the group. So that's currently what I'm working on, trying to convince them to do it. Because, I mean, for me, I see the benefits of it and trying to convince them, especially like my wife, trying to convince her to, to invest in real estate. I'm like, you see, like, you know, you start off small and you start to get these little distributions. But now that I'm into like my fourth deal, these distributions really start to add up and then you can work back the distributions on your monthly expenses and you realize, like, and you start to run the numbers and you realize, oh, I don't have to wait till I'm 59 and a half. Potentially retire. When I say 59 and a half, just going after your IRA and your 401k accounts, where now I have access to the money before then because I just invested through a high yield savings account. And that's where I put the distributions coming in. So I can use that money. If I choose to want to switch, let's say I want to sell my company and get a job somewhere else, or I want to just sell a company and just spend more time with our daughter. Just different things like that. Or if I'm like this, too stressful running a company, which can be sometimes, you know, selling the company and doing something else. So it just gives us that flexibility. So, yeah, definitely trying to convince the friends and family aspect of it to invest in real estate. I mean, I really enjoy it.

Yeah, and it can, it can really give you some additional income stream and double your wealth quickly. You know, it's so often, especially the last few years that were unusually great. You know, people were doubling their money and thereabouts or more every five years, sometimes three years. So that's attracted a lot of people to the business. I want to go back for a second though and unpack a little bit of what you said. You, you referenced accredited investors and for the listener that might not know who that is, basically it's people that are the main two criteria are making 200,000 a year or greater or two years and on track for a third and 300,000 if they have a significant other or somebody they're filing jointly with or have a net worth of a million or greater, excluding the principal residence. Now if you own a company that has enough revenue, that's another way to be accredited. So build your podcast company up to be big enough. Right, Right. Yeah. But anyway so yeah, so if you're not accredited then you have to go into the 506B syndications which are the friends and family is what they were generated for. And as a result then there's up to 35 sophisticated investors. You have to be sophisticated enough to understand risk and real estate and all to participate. But you've obviously after interviewing so many operators and syndicators you've gotten quite knowledgeable it sounds like to me. So that's awesome. Now as far as we talked briefly I think more off camera, you said you had especially interviewed a lot of people in the syndication world. Tell the audience who all you're interviewing.

Yeah, most certainly. So typically interviewing anyone coming across any different asset class. I mean for me I'm just so interested and all of them and I think that speaks to myself and investing in four different asset classes. But I mean really just interviewing and talking to different folks whether they're in multifamily self storage, mortgage notes, obviously triple net lease, trying to talk to folks and understand the mobile home park space, trying to learn more about it and potentially find an operator where I can invest in there. Haven't come across anyone yet that does not accredited or if they, or on the flip side if they do do non accredited. The minimum is pretty high. It's like a hundred, a hundred K, 250K. That's just more than what I want to invest into one specific deal at this time. So different things like that. But yeah interviewing people and like even talking to people that own laundromats like and they similar to real estate Investing, but they own these laundromats. So it's like a part business but part real estate at the same time. Talking to people where they just do these assisted living, as an example, like, that's another interesting asset class. So, yeah, just, just talking to different people on where they're investing. Because I could talk to one multifamily investor and their specialty is say, Florida, Georgia, Texas. I talked to another one and they're Indiana, Michigan, Ohio. Two totally different locations, two totally different spots. And just interviewing them, like, why do you invest in this specific market over a different market? Why do you invest in class A over class B? Just different things like that. And then I find that depending on the market is a more of an appreciation play or is it more a cash flow play? If it's, you know, why, if it's just cash flow, why should I invest with that? If it's more equity, why should I invest? I think equities, it's become a little bit harder, I think in more recent months in the last year, just, it's a little bit harder to do that forced appreciation, just given how everything was. So I think for me it's more looking at the cash flow play where, yeah, if the building goes up in value, that's a nice play. But if I could get, you know, a decent set of cash flow coming in right now, which is, which is nice. And so I find just talking to all these different investors from all over the country, just learning about them and finding, I know, just finding them fascinating. I think every different, every investor has a new story to tell. And I just enjoy talking to them and learning all about their different investments. And you start to just unpack these different asset classes that you didn't even know you can invest in. Like I was talking to someone where they own a winery in Texas and you can invest in their vineyard. So it's like, wow, I never thought about that. And then I come across like a, a bourbon, A bourbon investment company where you can invest in barrels of whiskey. And it's like, you know, we're talking like a 50k investment. So it's not on the, on the, on the lower end, like you might see on some of these platforms, where it's like $500. It's like this is a real investment. Even one where it was like a life insurance settlement company. So as an example, what they do is you have a million dollar policy, they'll buy the policy from you for 800,000 per se. So then obviously when you pass away, they are the Rightful owners of the million dollar policy, they paid you 800,000. They get, you know, a nice return on their money. I don't know exactly how they do it. I'm sure they have to use actuaries and, and different things like that, you know, similar to health insurance and how they, how they go into that space. But it's like, wow, like I never knew I can invest in a company like that that does that. And then obviously you get your car washes, your ATMs. I mean, there's, there's really no shortage of asset class. I mean, if there's something you want to invest in, I mean, horses you could invest in. It's, it's, it's pretty crazy, all the different assets. And that's why I love interviewing people and just learning about all the different asset classes because I think on the surface level people might think, oh, you can only invest in apartment buildings, which, which makes sense. I think people usually default to that and that makes the most sense. But not realizing that there's all these other different asset classes out there.

Yeah, no, I get it. And I was an appraiser in the 1980s and so I like a lot of asset classes. But also that was during the savings and loan crisis. So I got a little chicken about new development. A lot of banks were shut down and a lot of developments were shut down because the banks were shut down. And it wasn't always that the development wasn't fine or was in trouble. It wasn't always that. So I've been slow to get into development, but we are way behind on housing. And so, but it all depends on location. You know, you got to pick the locations. Right. And the team. Like you say, the, if you have the best property and the best plan, it doesn't matter if you don't have a team that can implement it. So that's in my book, the most critical of all. So yeah, yeah, it's fun to learn about all the different asset classes though. I'm, I'm into a few. I'm trying very hard to stay within my lanes. It's multiple lanes, but data centers is another one that I think has a ton of potential with AI blowing up like it is. So yeah, it's, it's a brave new world out there, that's for sure. So what kind of an asset do you want to invest in next? Do you know?

Yeah, so I think for me going to go, I would say cash flowing asset. And for me, I think that's if I could find a mobile home park Operator, that's probably where I'd want to go. I haven't come across one that I mentioned mainly just accredited, where I'm not accredited or that they just have a higher minimum. Again, I don't want to go 100k into any one deal. So I think outside of that probably go back either. I wouldn't do the mortgage, not just because I made another investment with them back in February, but maybe the triple net lease opportunity if they have another. So I invested like their fund one. So if they have another, I think they had a second offering of a couple of buildings and then I don't know if they have a third one. If they do have a third one. And I like it just from the cash flow standpoint and it's very easy for me to say because I can look at the numbers and I can go okay, if I. And you know, I ran these numbers actually at the beginning of the year, if I invest 50k into a deal, whether it's one deal a year or whether it's two deals a year split up at 25k a piece and I just get an 8% return and if they compound every seven years I double my money just to make it simple. Based on that, I'll have enough income coming in from these properties, from these deals to cover my monthly expenses after seven years. And so right now, you know, halfway through year one and seems to be going, you know, since I calculated these numbers, I know I've been investing about two years now, but calculated them this year. So trying to look for a cash flowing asset that is going to produce at least 8% annually. Obviously some of these deals out there, they're more equity place. So I think that's part of it. But I think right now I just want to get into another cash flow play. I think for me I just want to get into, I just want to get to that point where right now I have like between all these deals coming in, it's at like 600amonth coming in for cash flow. I expect to be in one more this year that would be at 800 and then I want to get into another one to be at a thousand a month, just coming in from cash flow, coming in from that and then maybe do another equity play. I just want to hit the four digit number coming in on these distributions and knowing like, okay, like our expenses are about 3,000amonth but honestly it'll probably be even lower than that because we pay. So that's split between my wife and I. So that would cover My expenses we pay, each pay our child's daycare is like 1600amonth. So I pay 800, my wife pays 800. We just split it up like that. So that'll definitely come down once she's in about, I don't know, we've got a long road there. We got about four more years of her daycare. She just under a year so it'll be a little bit while but it's just trying to get these cash flowing assets. But again I like when I'm looking at like a multi family deal if it makes sense because the IRR is obviously going to be higher where it could be say 15% but the cash flow is only 5 or 6% depending on the entire time of the deal. But I get that nice appreciation and equity at the sale of the deal. So I think for me it's right now probably go more cash flow and then the one after that would probably be more equity play. Just again just want to hit the four digit number of the distributions coming through just to mentally have that number and then get into that next deal at some point that's going to be more equity. And I say and what I mean by equity is like I'm in this self storage development deal where I invested in, I don't know, God, it's been like a year and a half now or it'll be a year and a half before I get any distributions out of the deal. But they're building the self storage development units. There are units on the spot but they're going to increase the rents on it because they're like 250% below market. So it's, it's a really good deal that I got into and the goal is to get about a 2.5 to 3x equity multiple over five years. So obviously that's going to accelerate my money a lot quicker than a triple net lease deal where maybe I double it over seven years where the triple, where the self storage I triple it in five years. But I don't get any distributions for the first year and a half to two years just based on how the deal is set up. So I think it's always just trying to juggle like do I want to go cash flow, do I want to go equity. I find a lot of investors run into that same sort of problem. It's like do I want to get more money in the long run or do I want to have more cash flow Now I don't think there is a right answer. I think it's just Personal preference at the end of the day.

Well, and your financial situation, I mean, you know, if you're making lots of money in your job, then you probably don't want more income, you want more write offs. Right. So yeah, it's kind of situational. But yeah, no, I get what you're saying and I think that the more that you meet the operators and what they like to do, they usually tend to have the same strategies. Then you can line yourself more and more with the operators that are doing the same. I too prefer cash flow. The refinancing that they were all doing in year three roughly to give investors back some or all of their money is a great thing if you can really do it without spending too much money doing it. But yeah, it's, there's a lot of, lot of deals out there that are also stressed because they did the bridge debt, the floating rate debt. And so that's why over the next 12 to 24 months we're expecting some good opportunities to finally come by. And I'm seeing a lot more across my desk. How do you see your volume? Do you see more coming out?

Yeah, I definitely do. I think people are very cognizant of the interest rate more than anything else. I find that that's like the number one highlight other properties. A lot of the times I find the deals I'm coming across where they're assuming a fixed rate loan and I find that's been very popular where people are going into these deals and maybe they're assuming the, whatever the number might be, like 4% fixed rate loan for another, whatever the duration is left on the loan, maybe 10 years on it, I find that. Or people are doing fixed rate for five years and then maybe it goes variable after that. Maybe obviously that's a little bit risky depending on, on what's going to be going on. But I think there's just so many, it's almost like mind blowing to me how many creative ways you can structure deals. When it comes to real estate especially, I see a lot of just interest only for the first five years. And it's like, wow, that's. I wish I could do that on my mortgage. That'd be nice, only having to pay interest on it. But yeah, I think for me it's, I'm seeing a lot of the deals that are just more. Either people are coming in fixed rate, if they're coming in fixed rate, sometimes they might be coming in at that 7%, 7 and a half percent. I mean you got to really make the deal to work if you're coming in at that fixed number. But more often than not, I find there's just an assumption of the loan where they're just taking it over whatever the rate that had previously been there whenever the loan was taken out, you know, so many years ago.

Right, right. That's pretty common for sure. Well, very good. Well, so like I do with everybody there at the end, I like to ask you, what is a pivotal person or event that's happened to either bring you where you are today or that's pushing you to where you want to be? Is there a person or event?

Yeah, most certainly. So there was this gentleman and I met him through LinkedIn and it was part of this networking group and he had been a passive investor for a few years. And I remember I was early on starting about passive investing and I was on a car ride. I remember my wife wasn't too happy because we were about to. It was like a three hour car ride. And I talked to this gentleman for about two hours. But he just really pushed me to become a passive investor. And he was the one that gave me the goal to invest in January 23rd. And he was one of the first people that I had talked to and he would check in about every two or three weeks with me, hey, how's it going? What's the progress you're making? And he just held me accountable. And I found that was just very pivotal for me because it's easy to say, oh, I want to invest in real estate, but then you never do it because no one's holding you accountable. Because it's easy not to do. I mean, it's definitely, I mean, wiring $500 is not bad, but when you're wiring 25k into a deal, there's, am I wiring it correctly? Is it going to where it needs to go? Is this person actually going to say what they're going to do? How do I make sure that? I mean, you do all this vetting on the back end, but how can you make sure that you trust them? So it's definitely scary early on becoming a passive investor for the very first time. So I found he was just pushing me and he would tell me about the deals and he would introduce me to different operators. And yeah, he just played a very pivotal role early on and just pushing me to become a passive investor. And I think without him, I don't know if I ever would have made that first investment where again, when someone's checking up on you all the time, you're like, I Don't want to not do this. I don't want to. I don't want to disappoint him. So I found that was very helpful for me was sort of having that mentor. And again, I just met him through a LinkedIn networking group. I learned that he was a passive investor. And I said, I reached out to him on LinkedIn and was like, hey, I'd love to just talk to you, learn more about your passive investments. And then again, we, my wife and I were going away for the weekend. We had three hours to kill. And I think I talked to him for about two hours on the phone. I think he was on a car ride somewhere else on his own end on a business trip. So it worked out good. But yeah, I found that just having a little extra motivation and someone to push me was, was very beneficial.

That's great, that's great. And you know, I have on this podcast a special series called Local Legends and Pivotal People. So if you want to name him, we'll do a shout out and if he wants to come on the show, he gets a pin and he gets special. Hoo yah. So do you want to say who it is?

Yeah, I believe I haven't talked to him in a little while, unfortunately. I should say unfortunately. I should probably reach back at them. But his name was Dave Leon. I believe he was out of D A V E L E O N. I believe he was out of Texas or Arkansas. Somewhere down south. I can't remember exactly where, but somewhere down south.

Okay, well we'll do a shout out, but we'll leave it up to you if you want us to. You can tell him you nominated him.

Yeah, I'll definitely do that.

That really makes them feel good. And that we would like to interview him if he's willing.

Yeah, that sounds perfect. Yeah, I'll definitely chat with him and see if he's open to it.

Yeah, that's great, that's great. So that's what we want to do is find those pivotal people. So great, great. Okay, well, so tell people how they can reach you if they want to reach out.

Yeah, most certainly. So one, it could be through our website, just podcasting you.com, such as podcasting why are you. Com. Or they can just get. Probably the best way to get in contact with me directly would just be Messaging me on LinkedIn and that's.