64: The Great Game of Real Estate Investing with Doug Marshall

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This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program, you'll learn about the world of commercial real estate and find out why it's one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to episode number 64 of Real Estate Investing Live from New York. This is your host, James Nelson, principal and head of Tri State Investment Sales for Avis and Young. And wow, what a show last week with Adam Gordon entitled Pivot. And Adam had great story on how he has invested in pretty much every asset class out there. I know you all will get a ton out of it. If you haven't listen to it. And for today's show, we've got a treat for you. Doug Marshall, the author of the Art of Commercial Real Estate Investing is back with us. He came on very early in the program, so if you haven't listened to those shows, go back and check out episode four and five to get a real baseline. And Doug has now come out with a online course which will teach you how to invest entitled the Great Game of Real Estate Investing. And if you go to his website and I'm going to give you that link later on in the show, you can use the promo code NELSON1 and get a discount off that course as well. So I'd highly recommend it and give you the tools and the fundamentals to begin your portfolio or improve on what you have now. So as always, and I want to thank you, I had a couple people reach out and email to jamesperiodnelsonavisonyoung.com you can always reach me there. Also, people connect with me on social media if you haven't already, amesnelson NYC shoot me a message through LinkedIn or we're active on Instagram and Twitter as well. So however you want to stay connected. And lastly, really appreciate if you subscribe to the show, whether it's on itunes, Spotify and leave a review, it's very gratifying to hear that you all are getting so much out of this. But also it helps spread the word. So appreciate that we're going to have a brief word from our sponsor and then we'll get right into that interview with Doug. And the last thing I'll say on this is make sure and listen all the way through. We get into a really interesting conversation at the end about limited partnership investing. I know we talk a lot about how to go and buy properties and take things down on your own, but having the ability to invest with other sponsors, we get into a really great conversation towards the end of this interview. So make sure and listen all the way through. And with that, we'll have a brief word from our sponsor and we'll be right back.

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To our show and now it's time for our Investor Spotlight. And with us today. Back with us is Doug Marshall. Doug is a seasoned commercial real estate professional with 40 years of experience. In 1999 he received his Certified Commercial Investment Member that's CCIM designation. Many consider this designation to be the PhD of Commercial Real Estate as only 6% of all real estate professionals hold it most most of his experiences on the lending side with loan originations over his career estimated at over 600 million. In 2003 he launched Marshall Commercial Funding, an independent commercial mortgage brokerage firm headquartered in Portland, Oregon. And most importantly, since 2007 he has also invested in commercial real estate. In addition to education and real estate experience. He is an award winning author of Mastering the Art of Commercial Real Estate Investing, how to successfully build wealth and grow passive of income from your rental properties, which is one of my absolute favorites and what I recommend first to anyone looking to invest in real estate and just released this year, which I'm going to encourage you all to join on and participate in his new online course, the Great Game of Real Estate Investing. We're going to tell you at the end of the podcast how you could subscribe, but let's get right into it. So Doug, welcome back and thank you for Being on our podcast.

Well, thank you, James. Thank you for giving me this opportunity to speak to your podcast people. And I. You know, that introduction is excellent, but it's incomplete. And I might add, it's a little bit distorted of who I am. So let me tell you my story from a different perspective. For the first 24 years as a real estate professional, I was living on that never ending hamster wheel of low paying jobs. I'm sure there are people that can relate to that. I was living paycheck to paycheck and truly I was just barely getting by financially. And that all changed when I made two critically important decisions. And the first one was that I started my own mortgage brokerage firm, Marshall Commercial Funding. I did that in 2003, and it turned out to be the best business decision ever made. For the first time in my career, I was actually making good money. In fact, the first year, I made three times what I made the previous year. Not 30% increase, a threefold increase. And boy, did that feel good. But even so, I knew there was no way I was going to retire well, because I didn't. I was in my early 50s already when I started my own mortgage brokerage firm. So I can, you see, I could do the math. And I understood I was too close to retirement, you know, to make up for the hard, lean years. And I realized it was very likely I may never be able to retire. But the second thing I did that changed that was that I knew that the only way I was going to retire well is if I started investing in rental properties. So I asked a longtime client of mine if I could start investing with him. And that was 13 years ago. And because of that one decision, I now can retire. Well, today I'm one of a small group of investors that owns several rental properties that are valued at over $60 million. So that's the other side of my story. And why am I telling you this? Is this to beat my chest and tell you how incredibly intelligent I am? Heck no. I am. I'm no more intelligent than anybody else out there. I'm telling you this because I believe that many of you listening to me right now are either living paycheck to paycheck like I was, or you realize you aren't going to retire well. And I'm here to tell you that if I can do it, if I can achieve financial freedom through investing in real estate, so can you.

I mean, what an incredible story. And you're such a powerful example, because there's a lot of people who Teach about real estate investing, maybe. And I'm not a knock on some of the professors out there, but if you haven't done it, if you don't practice what you preach, how well can you take that advice to heart? So that's why I love recommending your book and now your course, because you've actually done this. This is actually tried and true. So we really appreciate your sharing your story with us today. So there's a lot of books out there and online courses on real estate investing. And so tell us about this new online course, the Great Game of Real Estate Investing, and tell us how it's different.

Yeah, that's a good question, and here's my answer. And I don't mind if you give me some pushback on this if you think otherwise, but I put most real estate investing books and online courses into one of two categories. Excuse me for a second. The first group is what I call the you can do it group. You know, these are long on, you know, rah, rah, you can do it, you know, and. But they're short on any really meaningful content. You can read through one of those books and get no real tidbits of how to invest. And so that's the first group, and then the second group of online courses and books, they teach you things you really, James, you really don't need to know. So let me explain what I mean by that. Most investing experts agree that every successful real estate investor needs to assemble a highly competent real estate advisory team, and that team members should be seasoned experts in their fields of interest, including, but not limited to, you know, somebody who does the real estate brokering, a general contractor who can determine the capital repairs of a property, a mortgage broker. You could add to that, obviously, a property management company or manager for you, and a cpa, an attorney. Those are the types of people that you need to have on your real estate advisory team. And you should add those individuals to your team who are more knowledgeable than you are in their area of expertise. I mean, does that make sense?

Absolutely. You know, again, that's why you bring in trusted professionals, because they know how to do it. So, you know, I really think about, and I talk a lot about having the right team in place. You're the, you know, you're the coach, right. But you're gonna bring in just because you know how to call the plays and know what needs done, that doesn't mean that you're gonna go down the sidelines and catch the football. So, you know, again, you're definitely putting Together, the right team. And we've learned through, I mean, we've had this show going on for now, over a year. And you know, what's interesting is you go back and listen to all these interviews, the word that's used the most on this show is people. And you might think everyone thinks about what's the key to a great real estate deal. Is it location, location, location? No, it's the people that you can bring together and the professionals. And you're bringing them in because they know how to do a specific job. So, yeah, could not agree with you more.

Okay. Yeah, that's really the key to success, in my opinion. So if that's the case, then why do these real estate investing experts then focus the remainder of their books or online courses on checklists that are needed for one of their real estate advisors? You see, it makes no sense to me. For example, let me give you a couple of examples. Three examples. You don't need to know how to negotiate the details of a purchase and sale agreement that will protect you from a nefarious seller. Your real estate broker should know those details. And you don't need to know what things you should be looking at during a walkthrough of a property determine its condition. Your building inspector should know these things. And you don't need to know how to get the best possible financing for your property. Instead, you need to have a mortgage broker who does. So my philosophy is, if you have a task that can be delegated to one of your real estate advisors, delegated, you as the new real estate investor will never be as good as your real estate advisors in their areas of expertise. So why shoulder their responsibility? Empower them to give you their seasoned advice. So simply put, delegate those responsibilities that your real estate advisors are more capable of performing than you are. And conversely, save your time, energy and brain power for those decisions that you alone should be making.

This just makes so much sense. And it was really the reason why I started this podcast when I went out and started looking for shows. Because I get asked by clients to say, hey, my son, my daughter, they want to get into the business. Save sending them to NYU and Master's program, which is a great option. What books should they read? What's a good course? How do I teach them how to do this? And you know, looking around online and, you know, now that I'm in this whole podcast world and seeing what's out there, I mean, you mentioned this kind of get rich quick. I mean, that's 95% of what's out there, how to flip homes. There's this whole thing called wholesaling. I don't even know what it is, but I know there's a lot of podcasts where, hey, you try to buy cheap, you fix it up, you flip. Like that's not what we're talking about here. You know, real, real estate investing, I know you wouldn't agree with me more, is about cash flow and about creating value for long term wealth. If you just go in and buying and selling and flipping, you know, that's not how you create generational wealth. And you know, sure, I'm sure that the, you know, many of the legends that I've had on this show, maybe they flipped a couple properties over the years, but they talk about these portfolios that they amassed over time that they use to leverage and to grow bigger portfolios. So could not agree more with you. So let's talk about, you talked about a lot of the things that an investor doesn't have to worry about. If they have the right professionals in place. What do they need to be focusing on?

Well, James, there are five distinct concepts that I believe investors need to learn things they cannot delegate to anyone on their real estate advisory team. So we talked about those things that we can delegate to our real estate advisory team. Delegate them. But then there's five things that I've broken down into five teaching modules in my course, the Great Game of Real Estate Investing. So let's go quickly through those five modules. The first module is the five real estate calculations that every investor needs to know. And I'll explain those in a minute. But there are five calculations, you just have to know them backwards and forwards and in your sleep. The second module I talk about the number one reason people don't invest in real estate. And surprisingly, I don't believe it's a lack of money and I don't believe it's a lack of knowledge. I believe the number one reason people do not invest in real estate is fear. Fear of failure and the fear of the unknown. And I explained in this module how to overcome those two types of fear. And then the module three, I go through and explain a five step process for identifying which properties to purchase out of the many that are available. You know, you just go to like LoopNet and try to look at all the properties that are out there. You know, it's, it's huge. You know, there's no, how do you bring that number down to like one or two or maybe three properties? And there's. I'm going to explain in module three, how I do that. And then in module four, I talk about how to get the best possible loan for your property. And Then finally Module 5, how to complete a property investing analysis spreadsheet that answers what I believe are the four most critically important questions that ultimately answered the big question, which is, should I buy this property?

Doug, I love how you hit this head on because we have tens of thousands of listeners to this show now. And my wish is every single one of them takes this advice to heart and they go out and they buy property. But the unfortunate reality is probably 95% of them will not do it. And that's what kind of separates the successful ones out there. And you can give them the tools, the advice, but could not agree that that fear holding people back. And I've counseled so many people over the years, say, James, how do I get started? How do I get in? I haven't even bought a place to live yet. And I said, look, there's some incredible programs for first time buyers out there. You could go buy a 4 family, live in one unit, collect income from the rest. And I don't know if it's just, they just feel they can't do it. It's too much. Maybe they'll make mistakes, but that's part of the process. And for those of you listening, go back, listen to Jordan Vogel's podcast that we did, I entitled it and hopefully Nike doesn't mind, just do it. Because a lot of people, they hold back for this fear. So we're giving you the tools. You're not going to know it all, but you have the right professionals in place that's going to really make sure that you don't go way off the guardrails. But there's an acronym for fear. And I don't have to say it now, but the reality is that if that's holding you back, make 2021, make this the year that you can actually jump in and do something. All right, let's. You've laid out a great outline, Doug. So let's go into these five modules. Let's talk about for a new investor. What are the five real estate calculations that you show someone how to calculate on your new online program?

Well, the five are kind of like the basics, but absolutely are necessary. And that is how's a property valued? It talks about capitalization rates, among other things. On valuing a property, the second metric is how is the loan amount calculated? Isn't just take 75% of your purchase price. How is that loan amount calculated? Usually it's constrained or can be constrained by debt service coverage ratios. Number three, how is a property's cash on cash return is calculated? And to me, cash is king. And that's what I focus in on, is the cash, the cash on cash return. So I, I explain how you go about calculating a cash on cash return. Also number four is how a loan amortization impacts a property's cash on tax return. Incredibly important and people miss this all the time. So I explained the importance of the length of the amortization period and how that affects cash on cash return. And then finally how leverage, and by leverage I mean the amount of debt borrowed to purchase the property affects a property's cash on cash return. And you see, you cannot delegate the understanding of these real estate metrics to anyone. You not only need to know the importance of these numbers, but you need to know how to do these calculations. As I say in your sleep, and you need to know them backwards and forwards. They need to become second nature to you.

Couldn't agree more. And for our listeners, please go back. And you know, Doug and I spent two full shows, our fourth and fifth shows, really diving into this terminology. So these are new terms for you, you know, listen in, obviously take the course. But you know, I remember you saying in one of our earlier programs that a lot of sophisticated investors, they talk about this internal rate of return, the IRR, what is it, over the 10 year hold. And we're going to project the future cash flows 10 years from now. And not only that, we're going to project what it's going to sell for in 10 years. Clearly I've been doing this for a while and if you told me, James, where property value is going to be a year or two from now on, I could give you a good estimate. But you take me out five, 10 years, I might as well be throwing darts. So the fundamentals of cash on cash return, how much cash do you have in the deal and dividing that into your cash flow, what you are receiving at the end of the year after debt service and what is your money making you? This is what it's all about. And I know that's a big part about your course and I know that you agree. So, all right, we're gonna. I already went off on a little bit of a tangent with fear. I couldn't help myself. But I know you devote a whole module to fear. So, you know, why do you spend so much time on this?

Well, as we talked about it, you know, in order to be successful at real Estate investing, you need to overcome fear. I wonder how many, how many investors I've talked to that call me and say, as soon as I find my rental property that I'm going to purchase, I'm going to come back to you for my financing for it, because that's what I do. And that same person will come back a year later and this time maybe not so enthusiastically. He'll say, yes, soon as I find my right rental property, I'm going to come back. At some point you need to learn to pull the trigger. You just need to go, Jane, you need to, as you say, just do it. And as I mentioned before, courses on real estate investing, I criticized them and I probably shouldn't be so critical, but they're divided into one of two categories. And the first category is you can do it. And they're long on encouraging to buy your first rental property, but they're kind of short on content. In fairness to them, these instructors, they get it, they understand it, they realize the inertia that is caused by fear and that is why they attempt to tackle this issue head on. And so in that regard, they're right on the mark. And there are two types of fear that people struggle with. There might be a third one, but I'm going to talk about two today. The first one is the fear of failure, and the other one is the fear of the unknown. And in this module I talk about how you overcome these two related but different types of fear. Fear of failure is all about looking foolish in the eyes of family and friends should they things go wrong. To overcome this type of fear, you need to change your mindset. And I explain how you go about doing that in this module. And then fear of the unknown is overcome by answering five fundamental questions before you buy your first rental property, not after you bought it, but before you buy your first rental property. And if you answer the five questions that I have posed in the module, much of that uncertainty of what you're doing will be drastically reduced and that fear of the unknown diminishes substantially. So fear of failure and fear of the unknown are the two things that you need to tackle head on. And so in this module, I explain how you overcome these two types of fears.

Perfect. So let's talk about module three and how you go about choosing a rental property to invest out of the many that are available. So what's your approach?

Well, you know, everyone has their own method of analyzing the merits of buying a property. And I realize I rely heavily on investing criteria. I've developed over the years as well as my intuition. And finally on my own approach analyzing the numbers. And in this section I share my five step process for analyzing real estate opportunities. And they are the first thing I do is all commercial real estate investment opportunities are filtered through four specific criteria that are unique to me. And your criteria will, which you'll develop over time, will be unique to you. Let me just give you one example of one of those four criteria. I like to invest in apartments and that's my first love, so to speak. But I also invest in multi tenanted office, retail and industrial properties. If they come along and it looked like the numbers would work, but I won't even touch things like hospitality or assisted living facilities, things of that sort of. So it's real simple. It's a simple way of coming up with I have four of these criteria and if they don't hit those four criteria I just move on. So that's the first thing I do. The second thing is I listen to the property story and the listing broker generally will have his shtick about this property, why it's such a great property to buy. And most of the time quite frankly it's bs. But occasionally they will tell a compelling story. I want to hear what that story is, why they think it's a property to purchase. And the one that I usually look at, the one that pricks my ears up, is that if it's been owner managed, that property's been owner managed, there is a high probability that there's an upside on a return on that property. Because generally the rule of thumb, not always, but generally owners run their properties into the ground. They should be professionally managed. So I listen to the property story. I run the numbers using the actual profit and loss statements, not the pro forma from the buyer. Sales flyer I size the loan based on the lenders seven rules of thumb. Most people don't realize that lenders, they're a conservative lot, they don't want to get that property back. So they, they have seven rules of thumb that they use the size alone and if you know those things it would be, it's in it and they're not, you know, it's not like every lender has the exact same rules of thumb. They don't. But in general there are these rules of thumb that limit the size of the loan. And I can I explain exactly how that's done. And then I calculate the property's cash on cash return based on my numbers, not the numbers off the bias. Sales flyer so this is my approach for Sifting through the pile of for sale listings that come across my desk. And I explain in detail these five steps in module three. And over time you should create your own real estate investment strategy. It'll be unique to you and you should consider it inviolable. Meaning you should think long and hard before you invest in a way that doesn't agree with how you invest in real estate. There's one time in my career when I in my investment career, I should say that I ended up buying a property that did not fit in my criteria and I made a mistake. It was not a good property. I had to live with that property for about seven years before I sold it. And so I've learned the hard way it is better to forego a really good can't miss rental property than to go against your investment strategy. And what a disaster would be if you allow somebody else to determine these things for you.

Great advice and I know you're referring to some of these concepts. You know the lender seven rules of thumb and just want to make sure. And also point everyone to your website marshallcf.com and subscribe to Doug's blog because you get some great advice there as well. I would add one more filter in what to look for in a property and I think you could probably fit it in your number two, what's the property story? But I would add what's the owner's story? What is the seller's motivation? You would be surprised how rarely someone asks me why is an owner selling?

And good point.

Yeah, it could be an estate sale, it could be a partnership dispute. The broker says well hey, if they can get this price, they would sell. That's not a good opportunity. That's someone who's going to hold out for every last dollar. But you want to. And look, there's going to be some challenges after this pandemic and there's going to be distress out there. And so you want to make sure that certainly there is distress that you're speaking to the right person as well. It might end up being the lenders. So but again, find out the seller's motivation. Why are they selling? Okay, so let's move on. And I know this is really your sweet spot here and where you specialize. So in module four you talk about how to get the best possible loan for your property. So what would you say there?

Well the key, obviously I'm biased cause this is my as you're right James, this is where I write down my strike zone. But the key is getting a competent commercial mortgage broker on your real estate advisory team. That person will substantially increase your chances of getting the best possible loan for your property. So I began by explaining in this module the four advantages of using a commercial mortgage broker. But you also need to be knowledgeable about financing. It's not all on their shoulders to find you the best financing for your property. So in this module, you'll learn the four financing traps that you need to avoid like the plague, and then the three most common types of prepayment penalties, the two rules of thumb about prepayment penalties, and finally the two questions you need to consider before choosing the type of prepayment penalty you want with your loan. So I go through and actually hit head on probably those issues that are kind of avoided. People don't like to talk about prepayment penalties and they don't like to talk about financing traps. They just kind of have a gloss over those particular issues and then what happens later? Five years or 10 years down the line, they regret that they got that particular loan because of the substantial prepayment penalty that they had with the actual loan. So those are things that I talk about in module four.

Perfect. Then finally in module five, you're talking about how new investors go about completing a property investing analysis spreadsheet. And this is a great one because I've taken your course, I've seen the downloads, and for people starting off, they might not have a background in financial modeling. So maybe talk a little bit about what makes your spreadsheet unique for someone who maybe, you know, doesn't have a background as an analyst. You know, is this something that is pretty easy to learn?

Well, I believe that it's not rocket science, but it does require some effort. It really does. And I wish I could make it even simpler, but I provide my students with an Excel spreadsheet that I've created and modified over the years that is unique to my financing background. You know, most of those spreadsheets that are out there come from the sales broker's side of the business. Nothing wrong with that. But mine focuses in on the financing side because not only am I biased, but I think it actually there are some questions that need to be answered that you can only answer on the financing side. So my spreadsheet answers four critically important questions. I mean, these are the ones that really need to be answered. One, how will the lender size the loan based on their rules of thumb? And so I explained that that in detail in this, in this module. Then how much cash of 1031 exchange equity will be required at closing. And if, if the loan amount is not what you expect it to be, obviously that means that you're going to have to put in more cash or 1031 exchange equity. So this will kind of tell you in advance how much that's going to be and then what is the monthly mortgage payment for each lending alternative. As a mortgage broker, I try to get my clients three to four or more loan quotes that they can take a look at. And so this Excel spreadsheet has a side by side comparison of those loan quotes so that you can then figure out which one, the fourth question results in the best return on equity. So those are the four critically important questions that this Excel spreadsheet answers. And by answering those four important questions, the investor has a much better understanding of what price he should offer for the property and what loan alternative will best optimize his return. And doing a property analysis like I'm proposing, really, it isn't rocket science, but at the same time, many investors are attempted to delegate this analysis to someone else.

Yeah, even as a broker, and I'm very fortunate, I've got a whole team of analysts. But I don't just take whatever is prepared and just present it to the client because you can get a model to tell you anything. It can tell you a Property's worth a million dollars or $10 million. But if you don't understand the assumptions that go into it and you don't understand, I mean, certainly once you, over time you've built up a portfolio, of course you'd have someone helping prepare the numbers, but you understand. So I can look at one of these valuations very quickly and I want to see the assumptions and I want to see the projections on the rents and are they accurate. But one thing that I always say above and beyond, I like starting to look at the comparable sales first. I want to know what zip code I'm in and I want to know what do these properties sell for? And it's not just good enough to know the price per square foot. I mean you need to know, okay, where were the rents in relationship to market? What was, you know, was there capex required to your point, was it long term ownership, you know, self managed, was it professionally managed? You know, you need to have kind of a sense of what you are trying to solve for. And so, you know, again, there's no substitute for that. So I really like how you say, you know, you can't just delegate, ship it off and then hope someone's going to, you know, give you a number where you can achieve success. So now let's talk a little bit about, you know, doing your own financial analysis, even if you're, you know, a passive investor. I mean, I know for many people and I do it myself. I mean, I'll go in, I'll invest as a minority partner. I like having exposure to a lot of opportunities. So, you know, even in those cases, why would it be important that you know how to do this?

Yeah, well, I think it's important that a passive investor, and I am a passive investor, I get, I'm. Thank goodness I let somebody else make all the major decisions. And what I do is I just get my monthly ownership distributions, you know, so they can make all the decisions and I get my owner distributions. I think it's a great, it's a great approach to investing in real estate. But if you're a passive investor, the syndicator or the managing member of the LLC is looking out for his best interest, not yours. I mean, that's just, you know, that's just common sense. Do you think his property analysis that he's going to show you is unbiased? Heck no, it's not. He needs you to invest in his deal. And if he has to fudge the numbers a bit to get you interested, you think he's not going to do it? Of course he will. And if you're an active investor, remember, the real estate broker needs the commission he gets from closing on the sale. Do you think he is completely unbiased in his role as your real estate advisor? Well, if you have a good real estate broker, yeah, you might very well be. But maybe not. He too is looking out for his best interest, which is getting paid. And that is why a seasoned real estate investor needs to independently determine the worthiness of a potential purchase opportunity. And not doing so can lead to an overpriced property that never lives up to the syndicators or real estate brokers projection of income and expenses. And you not they have to live with the results of that poor decision for the next five years or longer. So you don't want to be that investor.

So, Doug, and that's. Couldn't agree with that more. We do have a little more time and I want to definitely summarize this up and I want to tell people how to get this course because it's so exciting. But I do, I want to ask you a couple more questions along these lines because this isn't something that we actually talk a lot about on this show. You know, most of the Stories we hear about are, you know, hey, I went and I bought this property. I'm the general partner, I found it, I'm doing the work, taking the lead, and then I'm going to find investors. So I would say almost all of our guests have been in the general partner, you know, situation. So what you're doing, and I want to really explore this more and kind of ask you as the investor, but. And you alluded to it a little bit, but talk a little bit more about being a passive investor and why is that beneficial? Is that a better way to start out than just doing one of these deals on your own?

I have a bias, James, and I really believe that you just need to find a good general partner or managing member of an llc, somebody who is a great investor and just glom onto that person. I think it's a really good approach. As long as you know that the person that you're dealing with is a man of integrity. Okay. I got to know an individual's name is Jerry Mason about 25 years ago and I started financing properties for him then. And as I said, About 13 years ago, I started investing in real estate. I went to him and I said, because I got to know him, I knew who he was, I knew he's a man of integrity and I now invest almost exclusively with him. Back at this point, I do exclusively invest with him and it's been a good working relationship because I trust him. I know that he is not, he's looking out for my best interest. And as a passive investor, all I do is that I get the operating statements once a month. And I, as a passive investor, I really review those financial statements, operating statements, and I'll ask questions when there's something that's out of whack, that doesn't quite make sense or there's been some issue, you can tell that maybe the occupancy rate has declined or there's been some large expense on the, on the capital expenditure or just, you know, something is not quite right with the financials. I'll ask them and usually just by asking the question, it keeps them on their toes. They, you know, sometimes the people forget to really stay on those property managers who really make or break your property. It's the property, the on site manager that really makes the difference on a property. So I take on that role. I take on kind of like an asset management role to make sure that things are going well. So I think a lot of people should look into finding the right person to invest with. It's A much easier approach. I was doing a little bit tongue in cheek there when I said, well, they make all the decisions. I get my monthly owner distributions. But my opinion, it's kind of the perfect world so I don't have to spend all my day to day affairs overseeing a property and making sure everything is going well. I trust that to them and all I do is I just make sure that when I look at the operating statements that there aren't any glitches there.

It makes so much sense. Especially you know, we both have full time jobs, right. And we're fortunate that we're in the real estate business. We understand how this works, we see a lot of opportunities. But let's face it, being a general partner and being hands on, that's a full time job. Right. Especially for our listeners who, you know, we're not saying, hey, go quit your day jobs and just jump in. All in. In fact, I've got, you know, I have friends who have on the side, they've been building up a mini portfolio and then they say, hey, once I get to a dozen buildings, I'm ready, I'm going to make the jump. But I would say the added benefit, well, you already said the most important thing of going with a trusted sponsor is there's no better education than to do it and to be able to really look under the hood and understand how they're doing it. So you're watching and learning, but you also have the ability to participate in a lot more opportunities. So I've done this dozens of times and I get access to different types of properties all over the country. And the last thing I'll say that I really want to underscore and that integrity that is so important because I've gotten to a point now and maybe some of the general partners I invest with, if they're listening, well, they take this as a compliment. But there are sponsors now that if they tell me it's good, I'm in. Because I know and this is certainly after I've done, I have one sponsor I've invested with over a dozen times and I know how he underwrites. I know that when he tells me this is kind of the conservative baseline he always overperforms. You kind of talked about the risk of the flip side where someone says, oh, this is going to be, you're going to triple your money. You know, you hear that, you know, if it's too good to be true, it's usually too good to be true. But you really, for me it starts with the sponsor you know, as opposed to, you know, the property type and all that. So I know we went on a little bit of a detour from your course, but I just really wanted to hone in there because it's so important. And, you know, we've been doing this show for over a year, and we don't talk enough about it. Everyone thinks, hey, I want to go invest in real estate. What I need to do is go buy it myself. I. No, you find a great opportunity, you might be a lot better served to go bring it to a trusted partner and say, hey, I found this opportunity. Can you bring me in on it? And you know what? If you play your cards right, they probably even give you some sweat equity and say, you know what? I'm going to give you a finder's fee. I would have paid a broker 3,5% for this. I'm going to give you credit in the deal, and then you can put more money on top of it. So I hope you don't mind, and I hope the audience doesn't mind kind of burning a little bit, but I think this has really been a great discussion to kind of follow up on.

Yeah, yeah, I agree.

So. All right, so let's get back to the real estate investing course because we got to tell people again, why is this different, again, than the other things that are out in the market? Why should people be taking this course?

Well, thank you. As I said at the beginning of this podcast, I focus on teaching the investor only the things they actually need to know. And I really believe, honestly, James, that that's the difference between what's out there on the market and what I'm proposing and what I have in my course. The typical investor doesn't need to know the things they're going to delegate to their real estate advisor advisory team. You know, that's why you have them on your team. This approach to real estate investing saves your most important resources for your time, your energy, and your brain power on those tasks that cannot be delegated to your. If I could say it to your team members. And that is why this course is different than all the other online courses on this subject. All five modules on this online course teach concepts, key concepts that you. You need to know in order to become a successful real estate investor. You cannot delegate learning these concepts to someone on your real estate advisory team. You have to know these concepts backwards and forwards and in your sleep.

Fantastic. All right, so how does someone go about signing up? What's the cost? Because I know we've got a Lot of listeners out there who are going to want to know how to go take this course.

Okay. The course Normally sells for $795 on my website, but I want to offer it to your loyal podcast listeners for 6.95, a savings of $100. And to get your discount, type in Nelson1 where it asks for a coupon. And understand this, you're protected by my 100% money back guarantee. If within 30 days of your purchase for any reason you're not satisfied, just contact me for a full refund. There'll be no questions asked and there'll be no hard feelings. So to enroll, click in the link that James is going to give you to be able to enroll in this course.

Absolutely. Yeah. We've created a bitly to get you into the great game of real estate investing. So if you go to HTTPs.

B.

As in boy, I T as in Thomas, period. L as in Larry, y as in yellow, 38 the numbers p is in people, e is in everybody o f as in Frank, v as in Victor. So HTTPs bit ly 38 p e o f V. That's going to get you directly to that link where you can sign up for this course. You can get that hundred dollar discount using the promo code NELSON1. And this is going to be a tremendous investment in yourself and your business. And so, and so I am recommending it for all of our listeners to Real Estate Investing Live from New York. So Doug, thank you again for coming back and joining us. You're such a wealth of knowledge and I said right from the beginning of the show what makes it so compelling is you practice what you preach. So thank you again for joining us.

Well James, thank you for the opportunity to be on your podcast once again.

Perfect. This is your host, James Nelson, Real Estate Investing Live from New York. Thanks for listening and we'll get back to you and connect with you next week. Thank you. Please make sure and connect with me at James Nelson NYC on my social media handles and we'll look forward to being in touch. Thank you.

A different approach to putting our clients first. Avis and Young's Tri State Investment Sales Group sells multifamily office retail development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We we put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter LinkedIn and Instagram amesnelsonnyc to learn more.

Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host host James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast on Wednesday mornings at 7:00am Eastern Time and 4:00am Pacific Time, as well as always on Demand. We'll talk again next week.

Sam.