#24: Steven Woolworth, Consultant & Investor - How to start your real estate adventure, leveraging your network, and why to diversify your investments

If you want to invest your money, you have a close relationship with the investors that you're investing with, versus if you go into stocks. I mean, you're not going to call a stockbroker and he's not going to call Wall street and call the company and say, hey, Tesla, why did your stock drop, you know, this much over the last month? You know, but as an investor in real estate, you can call and say, hey, I noticed a downward trend in some of this stuff, like what's going on here? And typically, you're, your investors are giving you monthly updates, and if they're not, well, you should get different investors. But yeah, or, yeah, general partners. But I would say that, you know, you can reach out to them and you can have a personal relationship with them and, and understand how things are going with the actual business. Again, these are both, you know, stocks and real estate. They're both businesses. You're both investing into businesses. There's just two different ways to look at it.

On today's episode, we have consultant and real estate investor Stephen Woolworth. Steve, we had an excellent conversation with Stephen, and he talked about how he got started real estate investing, and it shouldn't be surprising that this is the path he took. But because it's not a path that most people take, it was really kind of eye opening. He got started in real estate investing by simply asking experts where he should begin. And again, that's so intuitive. Like, yeah, that's, that makes sense. You should do that. And that's definitely something that Steven would do. But most people don't take that path. They grind it out themselves. They figure it out through failures. They watch a YouTube video. I don't know, but I love that. He laid out a very clear path of how he got started. And it really lays out the golden brick road for others to know how they should start as well.

You know, people have a problem asking questions because they, they're afraid of being perceived as. They don't know the information. They're. They're asking the wrong questions. But I can tell you, you just keep heading west by asking the questions because there will be a data point or some information that will be transformational in what you're doing. You've got to ask questions and not give up.

Yep, 100%. All right, let's head west. Stay. Stay tuned as we discuss how to start your real estate adventure, leveraging your network, and why to diversify your investments with our guest, Steven Woolworth. This episode is brought to you by Skyline Point Capital. If you're anything like me, you're always considering where to invest your money. Stocks, bonds, crypto, and rental home. The list is literally endless. As we've all seen over the past year. The stock market is unstable, the housing market is just weird and inflation is on the rise. In times like these, the clear place to invest my money is in multifamily real estate, AKA apartment complexes. Here's why. Returns on real estate investments have little to no correlation with the stock market. There's lower volatility, stable income streams, and the tax benefits are insane. And let's not forget that the apartments will typically appreciate in value over time, which means you can walk away with a pretty nice return when the complex is so sold in three to five years. Best of all, multifamily investing is passive, so you get all the benefits without the hassle and headache of your typical rental home investment. Getting started has never been easier. Head to skylinepointcapital.com to learn how you can start investing today. All right, Stephen, what I love about your story is that you're a real estate investor. But that's not all you are, right? You're a consultant as a, you're a full time consultant. Like you have a full time job and you're a real estate investor and you're at a prestigious consulting firm, Deloitte. I mean, if you hear about consulting, It's Deloitte, it's McKinsey, and there's probably a couple others. But when I ever hear about consulting, it's those two. So I really want to talk about real estate investing. How you got started in that, what drove you to that? What do you love about it? What keeps you there? But because consulting is such a prestigious job and, and it's so difficult to get into and it's probably just as difficult to stay in the business. I want to start there. I want to hear how did you get into such a prestigious role? How do they keep you around? What keeps you there? And then let's get then into what got you into real estate. So let's go into your background of how you got started in consulting. Can you walk us through that a little bit?

Yeah, yeah, definitely. Yeah. Thanks for having me on. Happy to talk to talk through it. I would say that, you know, wanting to get into cons, I've been wanting to get into consulting for a while. I, I really learned about it talking to a mentor of mine. He, you know, I was having kind of a career conversation with him and, and he mentioned to, you know, he asked me what, you know, Kind of what, what skills that I had and what I really like to do. And I talked to him about, you know, I love to solve complex problems, I love financial modeling. And he suggested that I looked into a career in consulting. So, you know, I, I knew it wasn't an easy industry to get into and, and the advice that I had received from other people who knew about consulting and were basically to network with people that are already in it. So that's, that's exactly what I did. I, I began reaching out to consultants from the different firms that I was targeting. McKinsey, BCG, Deloitte and a couple others. And, and I, I mean I probably reached out to 50 plus different consultants to try and land some informational interviews to, to learn more about their experience at the firm, their role, what it was like working for the firm. And you know, not, not all consultants got back to me, but surprisingly more, more thought, more did than I thought would have. And it kind of taught me a nice lesson too about, you know, sometimes make that leap and reach out to people that you don't even think that there's a chance that they will reach back out to you. I mean, timing is a lot of things. So I mean, even if it's, if it's the right time of the day and that person just happens to get your message, they, they may reach back out to you and, and be okay with having a conversation. So, you know, I, I had probably about 25 conversations from consultants at, at some of the top consulting firms and ultimately they, a handful of them offered to submit my, re, my resume internally and which that led to some interviews and then ultimately I ended up going with Deloitte.

That's super interesting. Let me ask you what made you want to actually get into consulting and what I mean by that is consulting for Deloitte, consulting for McKinsey, any of these prestigious businesses is a tough job from what I've heard. I'm obviously I'm not a consultant, but from what I heard, the hours are insane. You're traveling a fair amount of time. It's hard work. It's great pay, but it's really hard work. I've heard the burnout rate is fairly high. Great platform though, great place to learn and cut your teeth. But why take that route when there are other potential options that could have helped you utilize that skill set that you have of. You love solving complex problems, you love the financial modeling. Why consulting specifically? Was there, was there a desire to, to reach that, like that upper echelon of difficult Things to. To aspire to or what was really the driver behind that?

Yeah, you know, it's really the fact that you're primarily surrounded by some of the smartest people from some of the most elite schools, and you have the opportunity to work on some of the most complex problems for. From some. For some of the largest companies in the world. I mean, it. It really forces you in a good way to consistently and constantly be pushing yourself and your creative thinking to new heights. It also also requires you to never stop learning. I mean, there is just the. The learning curve in consulting is. Is exponential. It is. It is so fast, and it takes you to unmeasurable heights. So that was the real main driver that pushed me to want to go into consulting.

Steven, you've been in consulting for a number of years, and I imagine you've seen changes of how people think, industries, AI and all these new things. How do you keep up with all the changes when your customers expect you to be the best?

Yeah, I mean, the firm does a real great job of providing us with sources of learning material and data to help us stay up on the new trends, the newest trends. In fact, our firm actually leads the industry on a lot of trends. In terms of internally, we're always constantly building out new AI platforms and new platforms in general that help companies take their business to the next level. So internally, I would say the firm really helps us grow. But then externally, you know, you're always keeping an ear. I read the Wall Street Journal. I'm always trying to learn different things. You know, you hear something about, oh, this AI platform or something, and, you know, YouTube 15 videos on that, or get a book and just read up on that, because I just. I love learning this stuff.

Yeah. All right, so how. I'm really interested in how you got into real estate from this. I know the skill set are likely very transferable. Financial modeling, solving complex problems, that absolutely translates into real estate investing, especially when you're working on behalf of your own investors. But what led you into real estate? Was it. Did you. Did you identify early on that that's okay, there are some skill sets there I can leverage that that would be advantageous for me. Or was there something else that piqued your interest in real estate that got you moving in this direction as well?

Yeah, so I would say that really when I became interested in real estate is. It was really like a lot of people, I just needed to start investing my. My income into something. I had no idea where to start. I mean, you know, I have friends that Say, you know, I, I, I bought a house or I have friends that, you know, I put some money into some stocks, but you don't really know what that all means and there's no details behind that. So, you know, it's just buzzwords. Exactly. And so, and everything has its own specific nuances that you have to dive into. But, you know, the only understanding I really had at this point from, from my little research that I had done was basically real estate is less volatile than stocks. And from a long term perspective, real estate is always going up. So if you have those, you know, those two mindsets, I mean, that's not, to me, that was, that was enough to say, okay, well let me explore this real estate thing a little bit more.

Yeah.

And, and so, you know, I was so new into real estate that I, I didn't really even know that there were so many different types of real estate. For, you know, for example, just, let's just take say single family homes. Within single family homes, you can invest in long term rentals, short term rentals such as Airbnbs fix and flips, wholesaling, house hacking. I mean there's, it's just endless. It just, the list goes on. And so, you know, that's just within the single family category. And then you dive into the other real estate asset classes such as retail, industrial, office, mobile home, self storage, and you know, and the real estate asset class that, you know, I'm focused on is, and we're focused on is apartments. And so even within those asset classes, you know, just the different commercial ones, there are nuances for each one of those. So for, for me, when starting out, I was, it was extremely overwhelming and I just, you know, I just kept asking myself, okay, well, where do I start? Which direction do I pick? Do I, what do I need to start listening to, to educate myself? I mean, there's a, there's a million different directions you can go, so where do you start? And so really the, the only way I knew how was to reach out to somebody that I knew who was personally doing it. So I had, I had a few buddies that were investing in real estate. Some, most of them, most of my friends had been doing it into single family. And then I had one friend of mine that was doing it in a multi family. So I had conversations with them and then I had conversation with him. And so one of them was, was my good friend and now partner, Dan Breezy, who owns Granite Tower Equity Group and with his partner Mike Roeder. And Dan was investing in departments at the time. And so I reached out to find out more about his experience and what it was like and why he invested in apartments over, you know, single family homes or other asset classes.

I want to, I want to jump into to what Dan said and like, what, what did he say that got you really inspired into this? But there's a trend here that I'm picking up on is that before you got into consulting and before you got into real estate, you took the path of reaching out to people to ask their, their experience, talk about their, you know, their advice. And that's, that seems very intuitive that you would reach out to people who are experts in their industry to ask for some suggestions and whatnot. But that is not, from my experience, what most people do. Most people Google search it, they, you know, they just wing it. They, they grind it out until they figure it out. And you took this path of, again, most intuitive but also probably the most efficient way of getting to what your desired result was. Do you have any idea of this sort of roundabout way of asking why do people just try to figure it out on their own? What was it about you in that situation? You're like, I'm just going to reach out to the best of the best and help them, let them help guide me to where I want to go.

Yeah, I guess at the time Chat GPT wasn't available, so I had to go through other sources. Just, just a joke.

But.

So, you know, yeah, you really, like you said, you really have two options. You can go the I'm just going to figure this out myself route, make some mistakes, learn from those mistakes, or I can just try and leverage the, the network that I have and see if I can do that. You know, in consulting we always rely on our team and we always rely on the people around us, you know, that are much, much more smarter than we are. And so we, you know, ask them and that's, that's just kind of, I guess a learning something I learned within consulting is probably what I would attribute that to.

Stephen, you, you hear all the time that real estate is a team sport and trying to do it on your own. And in. For full disclosure, Skyline Point Capital has cogp with Granite Towers and Stephen on multiple properties. And it is a team event. Absolutely, a team event. Can you describe that? Why is it a team event and why don't you just do it on your own?

Yeah, so, so good, great question. I would say that the importance of a team and, and this would both apply to real estate. Your work life, your work and Your home life and what we, I mean, we all know what a team is. It's, it's essentially a group of people coming together with different experiences, viewpoints and skill sets to create a powerful brain trust of knowledge and essentially support one another to achieve a single objective. So, you know, having said that, I, I believe that the key to a successful team is open communication with one another. For example, let's just say you have an issue with someone or someone, something or someone, and the team or individuals needs to sit down when emotions are out of the picture. That's very key here and have a well thought out discussion about it. So, you know, we do this in consulting all the time. We always do scheduled one on ones and I personally think that scheduled one on ones are a good time. A great way to do this because you're not emotional about the subject. It's already on the calendar. Most likely something hadn't just occurred right before that. So it's a good time when, when two people can talk freely and, you know, kind of bounce ideas back and forth on each other as well as give feedback. You're not always going to see eye to eye on everything with your team and partners. That is 100%. But if you communicate well, you really don't have to see eye to eye on everything. And in fact, actually it's extremely healthy to have different points of view on a team as it does challenge you in, in new and different ways of thinking. I mean, Steve Jobs is really onto something when he said think different. So.

You know, Stephen is, is, and we've talked before about business and what does it mean to be in real estate. And you look at, you look at real estate, it is, is running a business. It takes someone that's great with acquisition, someone great on the financial side, someone great on the underwriting side, someone great on the property asset management side. Everybody's got a talent and there's a strength that. No different than a football team. Come on, you manage a football team with everybody being a quarterback. And that's what I love about the real estate side, is that you, you surround yourself with really smart people in these categories and when you get that right team, it's magic. Absolutely magic. And I'm assuming you see that with what you're doing in your real estate side that it's critical to have the right team and you all have the same vision and what you're trying to accomplish. Because I hear stories where some teams, they have mixed visions that can be, whether in real estate or in business, can be tough.

Yeah. 100. And I think it's, you know, I think it's really critical again just to sit down with the team and talk these problems through. The ones that I usually hear about, you know, because it's small industry, you hear about all these, all these things. And so the ones that you hear about, it's usually, you know, just lack of communication and lack of vision to. Lack of vision alignment at the beginning. I mean if you're, if you're all aligned and you have a business plan and you go to execute that business plan, things are going to come up along the way that, that is hands down gonna happen. But you just have to talk it through and try and see it from the other person's point of view. Not when things are heated, not when things are, you know, in disagreeance. Sit down, set some time, sign time to yourselves where you can just sit down and really like talk through and understand, be open to understanding what the other person has to say and then see, try to see it from their viewpoint. I think that's absolutely critical to being successful in this business. I mean you're not only. I'm not even just talking about your partners. I'm talking about your, your investors. I'm talking about your on site team, your property management company, your spouse. Hey, can you let me work 16 hours a day? Come on. What do you mean? You want me to come to sleep somewhere or you know, hang out with, hang out and go, go get dinner?

Yeah. You know, there's a, there's a nugget here to pull out whether if, so if you're, if you're passively investing in real estate, find a team to partner with where you can ask them how is your team aligned? What's the, what's the shared vision? You want to find a team that really is a cohesive group. And if you're looking to be a general partner, someone who's actively investing in a property, you want to find those partners that you, you know, you trust and you like because like you point out there's, there's going to be times where you disagree on something. But if you have that foundation of trust and like, and you know them well, then you know where they're coming from. You can trust that they have the, you know, the best intentions on what their, what their viewpoint is and it smooths out a lot of potential problems before they even get there. So to your point, from the get.

Go, have that established and absolutely make sure that you're teaming up with people that actually have run businesses and they know what it's like to run a business. You see a lot. Steve, I don't know if you've seen this, but have you seen some of the people jumping in the real estate that come out of a W2 job? I've done this and done that and never have really run through a gamut what it's like to run in a business. And now they're in the real estate side and it's surprise, surprise.

I mean, you couldn't hit the nail on the head. I mean, there's, there's definitely some key skills that you, you know, you can learn, but you know, that are transferable into real estate. And you know, you see people that have never run a business or don't understand business itself. I mean, there's a big difference between, you know, being able to read a P, L and, and kind of, and, and executing a P and L. Yes. So, um, yeah, 100%.

Steve, I, I want to go back to your conversation with Dan Breezy. Dan Breezy. Shout out to him. He was our first podcast guest on Heading West.

So number one.

Yeah, love him. And Mike, what did Dan say that got you inspired to get into real estate?

Yeah, so he, you know, really, I reached out to him and, and he was like, okay, look, you got to get the foundations down if you want to get into this business again. It's a business. It's not just something that you just go buy something and, and hope, you know, all right, we're good to go. We're gonna make money. So it is a business. So you do need to understand the fundamental, you need to have an understanding of the fundamentals of the business. And so he gave me a couple books to basically go read and then said, hey, after you read these books, then let's set up a few follow up conversation and, and, and, and talk about what you learned. And so after I, after I did that, I, you know, I, I read the books and I, I had a couple conversations with him and I was sold. I was like, all right, multifamily is my, is my investment choice.

Yeah. What books did he recommend? Do you remember?

Yeah, this is a while ago, but I would say it was, I, I think it was Rich dad, Poor dad. Just from a mindset perspective, which most people I would say is, have read it. Um, the ABCs of real estate was a, was a huge one. Basically kind of outlines the, just basically showcases that it is a business. This is how you look at it as a business. And then tax free wealth. I think was the other one that he sent to me, which is basically how you can mitigate your tax burden on your, on yourself by investing in real estate.

So, so it's a rich dad, poor dad. Robert kiyosaki. We've got ABCs of investing. Ken McElroy, I think Ken McElroy and tax free wealth is Tom Wheelwright.

Correct. And they're all part of the, I think it's Rich dad advisors or whatever. They're great at writing books. What's that? I said I think I got a.

Couple of them stacked over there. Oh yeah. Excellent books.

And the nice thing about the writers is that it's very easy to understand you when you read the book.

Yes.

There's actionable things within the book.

Yep, yep. And you, you can get the concepts. You don't have to be a CPA to understand the tax free wealth. And it's actually an enjoyable book. I've read some dry tax books and man, it's brutal.

I won't ask you which those books are.

Yeah, I don't even recommend them.

Okay. So you have this conversation with Dan. He recommends some books you're sold on multifamily. I mean, and you could get into anything. You can get a residential, you can get, you can get into buying a retail ship. I mean, and there's a time and a place for all those. We don't, you know, we wouldn't discourage anybody from getting a real estate. But we agree multifamily is the way to go in most cases. So. But I want to hear though is having the knowledge of I want to do multifamily is one thing, but then getting to I'm going to do multifamily is an entirely different thing.

Yeah.

So, so two questions. One, how did you, how did you motivate yourself to take that first step? Because a lot of people quit right there and then how did you actually start, like, what was the first few steps that you did to get into multifamily investing?

So yeah, so I would say this. The first step was, is I, I just educated myself as much as possible. I, I went out and I, I sought after advice from different people, including real estate seminars. I even went to one with Dan and ended up signing for, up for some, you know, education and where they, they really kind of deep dive into the actual business of the, of, of multifamily. So I got my education there and then it was, then it was from there it's kind of like, all right, well how do you dive into this and so for me, you know, it was identifying a market is obviously number one. So it was, all right, figure out what market you want to be in. I, I really like the Southeast. This is back in, I think 2017, 2016 maybe. I really like the Southeast. So I'd been going to Nashville a ton for, to visit friends, go out there. I was going out probably, you know, two to three times a year at the time. And so I went, I flew out there and I just took a week off of work and I said, you know what, I'm just gonna rent a car and I'm gonna drive every single market that I, I, I'm looking at in the Southeast and just figure this out. So I got in a car, set up, I lined up calls or meetings with brokers and property managers in every single market. And I started in Nashville and I ended back in Nashville. And it was a 1700 mile road trip that went from Nashville to Asheville, Charlotte, down to Augusta, Savannah into Atlanta, over to Birmingham, up to Huntsville, to Chattanooga, down over to Memphis and then back to Nashville.

I love that. And sorry, I'm going to interject, I love that because that is straight from ABCs of investing with Ken McElroy of How to identify a market to invest in. And in the book he talks about, I think his team flew to, it was Portland or Seattle, I can't remember which one it was, but they spent a weekend there. They set up meetings with brokers, they toured the neighborhoods, they, they jam packed their schedule to better understand this neighborhood. Essentially they got down to a specific neighborhood to invest in and that is how they found their first deal. So I love that you read something and you took action on it and actually implemented it. That's a great place to start.

Yeah, yeah. And I mean, that's really how I got my start. So going and seeing these markets and understanding that, hey, I was driving down this street and then I got to the next street and wow, this is a different picture than I had thought this market would be. You know, and there's, there's certain markets where I drove and I was, you know, it just would have been much more difficult to actually get started investing in those because street by street by street make a huge difference of where you're investing. And I mean, there's certain, there's certain markets where if you didn't grow up there, it would be real tough to, I think, invest and really understand exactly which streets are good to invest on and which streets are not. I mean, and so I ultimately ended up on Nashville, it is a fast growing, incredible market. There's tons of jobs. I love that the underlying, the underlying industry there is healthcare. So that's obviously never going to go away. So that's kind of the baseline industry within Nashville. And so I, out of all those markets, I ended up settling on Nashville. And it's been, it's been great.

Stephen, I mean, just you, you kind of answered the question I was going to ask is what are some of the metrics you look for in a city? You said employment growth and et cetera. So when you look at a city, and I know you're looking probably at some other cities besides Nashville, what are some of those metrics you want to hone in on and make sure that they are absolutely rock solid before you go into an area?

Yeah, yeah, no, it's a good, good question. I mean, they're, it's, it's definitely a, it's, I would say it's more of an art than a science. There's, there's a whole bunch of different metrics that you're going to be looking at, but you're going to want to look at the, the trends for over the, the past, you know, 10, 10 plus years. And you know, if you know the market better, like I, I'd said I'd been traveling to Nashville. You know, I have friends, friends that actually live in a lot of those southeast markets. And so I would talk to them about, hey, you've lived here your whole life. Where have you seen growth going on in, in these different markets? And then try to validate all of the, your hypothesis with, with actual data. And you take that data, you take a baseline data, whether it's on a market that you know super well and try to baseline it against one of the markets that you're looking to go into. Or you can just take a straight up baseline from historical numbers and then see, hey, is there growth going on in the areas that I'm concerned about? Like you said, job growth. I would say industry moving to that, to that area. So are there, not only is there job growth, but are there jobs. Is there new industry moving into that, into that city? Is there, is there population growth? What is, what does the population look like around there? So there's a lot of different metrics that we use that really are a telltale sign if it's a market that we want to be in.

One of the metrics that I find always interesting is looking at the one way u haul trips and those are the people with taking a one way U Haul are going to be your potential customers, your renters in your community and things like that. And it's fun looking at and see where people are taking a one way U Haul.

Yep.

To that city. So that is, that's something you look at. And so you're looking at rent growth. Are employers coming in? Are people taking the U Haul trips? Is it in. The path of progress is in when you start looking at submarkets. But you're right, there's multiple metrics you look at and, and some of them are different for cities. But you've got to hone in on that before you say, I'm going to come into this place as compared to. Go ahead.

Yeah.

100. No. And, and there's also the intangibles too. You, you know, you have to understand some of those. So for instance, Nashville, Nashville brings in a lot of new eyes to the city all the time because it is such a destination location. And so people are constantly going there just to visit. And then they say, wow, I really love this place. Oh, wow, there's a lot of job openings here. Let's try this for a couple years and see if this is someplace that sticks. Or, you know, you could use, use that same example for, let's say Orlando or Tampa or Miami. You know, you go down there on a, some, some summer getaway to Miami and then you go, hey, this is, this is actually kind of a great city.

So I want to know how's your guitar playing and how your singings coming? Are you making any money on the strip?

Oh, man. Well, it's, it's been a little rough. You know, I rattle that tin can all the time, but people don't really want to listen to cats screaming. So it's stick to real estate investing.

Welcome to the club.

Like I was saying earlier, you already, you have that sultry voice. I think you could be, you could, you could make it real well on, on Broadway.

No, no, not gonna do it. Not prudent.

All right, so, Stephen, I want to, I want to, I want to finish up with. What about multifamily? Because you said you had this conversation with Dan. He, he turned you on to some books. You, you did the work. You and you identified pretty early on that multifamily was the place that you wanted to invest. I could tell you why Steve and I invest in multifamily, but I'd love to hear why specifically you liked multifamily above the other asset classes.

Yeah. So I would really, I would probably break it down in Three reasons why I really liked multifamily. So each one of those would be. So the first one would be forced appreciation. Second one would be a higher cash flow than let's say single family. And then number three would be typically more of a adverse risk, risk adverse asset class. So you know, kind of breaking down each one of these forced appreciation, you can essentially so in multifamily I really like it because you can essentially force the, an increase in the value of what the actual apartment complex is worth just by simply making improvements to the property. These can come into the form of exterior improvements, interior improvements, improvements to your management of the property, which is your property manager or your on site team, reduction of expenses, etc. And then those improvements really allow you to add the value to your residence, which is the most critical part, which enables you to capture higher rents and then to lower your expenses, which ultimately boosts your net, your noi, which is your net operating income, which is your bottom line income before your debt payment. And then that in turn boosts your overall evaluation of the property. Number two is cash flow. Typically multifamily has just higher cash flow than single family rental rentals. And that's just primarily due to the economies of scale, I mean, meaning that you share your expenses among multiple units. So you just have just have a result of lower expenses than if you were just doing a whole bunch of single family homes. And then the third one is, historically it has been more of a risk adverse asset class for a couple reasons. One, it can withstand economic downturns as typically when people can't afford their home that they've either purchased or they're renting, let's say they're renting a big three bedroom house, they have to sell or get out of it. And they typically move into apartments. And then number two is that AP diversify any vacancy over multiple units versus in single family, you are either 100 occupied or you are 100 vacant. So for, and I will say there's exceptions to that. So if you're renting out each bedroom in your house, that's, that's different. But I would say typically people rent to a family or a group of friends. And then, and so for an example, you know, if you're, if you're in a fourplex and you lose one or two of your tenants, you're still able to cover your mortgage payment. So you know that is pretty critical. And that's a, that's a big piece of it being risk adverse. So it's basically the risk adverse it being adverse risk combined with the strong returns. Those were the two main drivers of why I ended up choosing Multi family over the other asset classes.

The other thing I like with what you're saying is the tax benefits of owning Multi family. And yeah, if, if you're set up right, it's a, the government is paying you to buy these things, which is absolutely awesome.

Yep.

You know, one of the things we had a former guest talk about why they invested in, they invest in the real estate but they diversified it by investing in real estate. And would I say that? Right. They invest in the stock market and then diversified by investing in real estate. And one of the things he pointed out was he has no control over how the stock market performs. He has some control over what he invests in within the stock market, but he still has a very limited amount of control there. With real estate, specifically on the multifamily side apartment complexes, is you're executing a business plan and that business plan actually can increase the value. And you said this, it could increase the value of the property itself. And so despite a market crash and despite interest rates rising and despite inflation and all that, if we're able to increase rents through, you know, like you said, exterior improvements where we might, you know, change the facade exterior, might add a coat of paint or we add a, you know, covered parking, you're able to, to gradually raise those rents which increases your noi net operating income like you suggested. And that is how the value of the property increases. And so when you sell it in however, 3, 5, 7, 10 years, you can now capture that value that you specifically created. And that's specifically why I love it, is that it's more risk averse because I have more control over its outcome. Rather than whatever bill was passed in, in by government or whatever the Fed decided to do, which I have no control over. And so I, I love that I have control over what my, what my asset is doing. And that's, that's one of the main reasons why I got into real estate.

Yeah, yeah. And to your point, even, even as an lp, let's just say if you wanted to compare apples to apples, let's say you want to, you want nothing, you don't want to do anything all day long. You just want to invest your money into something that's going to bring you wealth. You know, so I have some LP investments as well. And so if you want to invest your money, you have a close relationship with the investors that you're investing with versus if you go into stocks, I Mean, you're not going to call a stockbroker and he's not going to call Wall street and call the company and say, hey, Tesla, why did your stock drop, you know, this much over the last month? You know, but as an investor in real estate, you can call and say, hey, I noticed a downward trend in selling some of this stuff, like what's going on here? And typically your, your investors are giving you monthly updates, and if they're not, well, you should get different investors. But. Or, yeah, general partners. But I would say that, you know, you can reach out to them and you can have a personal relationship with them and, and understand how things are going with the actual business. Again, these are both, you know, stocks and real estate, they're both businesses. You're both investing into businesses. There's just two different ways to look at it.

Stephen, I thought you had a personal connection with Elon. You, you had the secret number since you live in California.

I just don't want to, I just don't want to tell. Tell your audience that. I just.

Okay, I'm sorry, Jake. We need to cut this out.

Okay?

Don't worry. So you talked about LPs, and so for those listening, that's a limited partner. That's typically the individual, like most people who want to invest in real estate but don't want to do anything else. They just want to give you the cash. And to a general partner like Steve and Steven and myself, and we run the business. And so my question for you, Steven, and then we'll wrap up with a speed round of questions, is why did you decide to get into the general partner arena where you're actively partaking in these investments as opposed to what majority of people do, as in a limited partner, where they're passively investing and there's, there's no wrong LP gp. There's no, you know, right, wrong or different. But I'm curious as to what drove you to go right into the gp.

Yeah, I would say that the, the main. So I started as an lp. So I, I started investing passively into this.

Okay.

And then, so, you know, I got to. Which was really nice because I, I really was able to understand the business from an investor side and, you know, see, kind of, you know, I'd get the monthly updates of how our, how the investment was doing. And, and then from there, then I, I took the leap into being a gp because I, I mean, I, I work in business as, as my day job, and I, I absolutely love business. I mean, when you get into consulting, you, you absolutely have to love business. And so I, I was like, you know what, this sounds like it's going to be a ton of fun. So I, I wanted to go the GP route and so, yeah, so I, I dove into the, the GP side. You know, obviously it's a very lucrative side of the business, but it's also a ton of fun if you really love business.

Yeah, well, Stephen, I'd love to jump into speed round of questions.

So in speed round, get your seat belt on.

I, there was no way I was going to prepare you for this, so sorry, speed round. It's quick questions, quick answers and this is just really for the audience to get to know you a little bit better. So got a few questions for you. Speaking of business, what's one business you wish you could go back and invest it or start?

Oh, man. Well, it's a great question. I, if you would have asked me 10, probably 15 years ago now, how well Amazon would do just off the bat. I mean, that, that, that one kind of blew my mind, but I mean the fact that they are the number one retailer now and it's just an online retailer is just, it's, I think that's mind blowing. That would probably be the number one that I would go back and invest in. But man, if I could tell younger me, hey, start investing in real estate a lot younger, I would also do that.

Well, that sort of stole my second question, but you can give me a different answer. What's one piece of real estate advice you'd give to others?

Well, since we just answered that piece, I will say do your homework on the, on the GP team if you're going to invest as an LP and ask the right questions. And if you don't know the questions to ask, reach out to somebody like Steve, Jake, myself and we're, we're happy to kind of help you and run you through the types of questions that you ask. Even if you don't want to invest with us, we're just, you know, we're happy to, to support you and in, in your growth in, in the, in your real estate business.

Great. And what's one thing in business or real estate that you're really excited about?

I would say the, this is going to sound super cliche, but the advancement of tech, the advancement of technology actually really excites me about business because it's going to make the businesses run all more efficient and, but the companies that use technology the correct way are the ones who are going to be successful, the ones that just hear buzzwords and say, I need to implement this. They're the ones who are going to spend a ton of money and not have a lot of success.

So.

So true.

Yeah, I had ChatGPT. I had Chat GPT open just now and it says it agrees with you. All right, last question. The.

The.

The title of the podcast called Heading west. And that's a way of saying life is a progression. You start in one place, you end up in another place as you head west in life and business and in real estate. So my question for you is, as you head west in business and life and real estate, where do you hope it ends up? Not geographically, but what's the end of the road for you?

Honestly, I hope there is not an end of the road, but we all have that, that day that's coming for everyone, so there has to be an end of the road. But not to be morbid and turn this into a weird conversation, but I would say, honestly, I just love business and I love real estate. Like, I'm, I'm. I'm just looking to just keep growing my, my business and, and just keep, keep buying real estate. I. It's. It's a lot of fun. It's. It's a ton of fun. Real estate's a ton of fun. I, I really love my day job and so I, I would. I just love business in general. So I, I hope I can do this as long as I possibly can.

Love it. Well, Stephen, where can people find you if they want to reach out to you?

Yeah, anyone, you can just either email me at stephen@blackridgeequity.com or you can, and that's BlackRidge Equity, two E's. Or you can just shoot me a text or give me a call. Phone number 530368, 6603. Once again, 530368, 6603.

Love it. And if you're interested in private real estate Investing, go to skylinepointcapital.com not only can you get subscribed to learn more about real estate investing, but also just start to get deals in front of you so you can take some baby steps into this world of private real estate investing. But thank you so much, Stephen. That was a blast. There was so much nuggets of wisdom there that people are going to be able to, to listen to. And I just can't wait till our next conversation.

Yeah, that was. That was a ton of fun. I look forward to talking further.

Thanks, Steve.

Thanks, Jake.

I'm looking forward to seeing you in Nashville singing.

You'Re coming on stage with me.

I'll do it. I'm in. There we go. Well, actually, we'll just stick to being what we good at, which is Real estate investing.

Yeah.