#36: 10 Things You MUST Know Before Investing in a Passive Real Estate Deal

Foreign. Welcome to the Passive Income MD Podcast, where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now, let's get on with the show. Hey, everyone, Let me know if this sounds familiar to you. Have you ever looked at an investment opportunity and thought, I have no idea how to tell if this is a good investment or not? Or have you ever thought, I don't even know what questions to ask or what to look for to evaluate this deal that's right in front of me? But you might have also had this competing thought. I mean, I know I need to make my money work for me and I need to invest in something. So should I just go for it? Well, that was me not too long ago. I was working as an attending with medicine as my sole source of income. But I knew I didn't want to be a highly paid hourly worker, just like stuck in the rat race or the hamster wheel or whatever you want to call it. And I knew the only way to escape that would be to have outside sources of passive income. I needed to have my capital or my income or my money working for me. When I wasn't putting in time at the hospital, I mean, I was making a good living. I wasn't attending, I wasn't thought I made it. I mean, I had a life which I would have given anything for when I was in med school. But have you ever gotten something that you really wanted and worked really hard for and then realized it wasn't exactly what you thought it'd be? Now, don't get me wrong, I really enjoyed being a doctor. I mean, I still enjoy being a doctor. It's just that I didn't have the control over my life that I thought I'd have. And so I quickly realized, as I mentioned before, that I needed to create other streams of income. So in order to make a change, I started investing in real estate. And the cash flow from the investments began to create real impact in my life. In fact, I like to say medicine is a hobby. I mean, I do it because I enjoy it and not because I need the income from it. I do own some rental properties, but I also invest significantly in what's called passive real estate opportunities. And that's what we're going to talk about mainly today. So what is passive real estate investing? I'm not going to assume everyone knows because I had no idea a short time ago, but I think everyone does know the basic model of being a landlord. Buy a property, rent it out and manage everything that goes along with that. The best part is as a landlord, you control the investment or the asset. You get to decide what to do with it, when to fix it up, how much to spend here or there, keep or remove the tenants, increase rent or, and all of that, the business plan and the implementation of that, it's all under your control. So what's the downside? Well, you control the entire asset. So you have to make all those decisions and you have to put in the time to learn how to do all of these things. Well, if you're going to truly maximize your returns, all of this while most of the time being on the hook for the loan. So passive real estate investing exists where the model is this, find a deal, decide to invest and then receive returns. I mean, there are huge benefits and trade offs on both sides, both active and passive investing, and that's why I personally do both. But today, again, we're going to be talking about being as passive as possible when it comes to real estate investing and getting the max potential benefit. So I talk about passive income quite a bit and I say it takes at least one of three things to create it. Time, energy, or capital. Now, if you're able to put all three things together, that's when you really supercharge that income creation. But as doctors, we make good money, so we have that capital. But I would say we're limited in time and energy, especially when you fill your life with family and other things that you enjoy doing besides work. So in my opinion, the goal is to leverage what you have in terms of the three resources mentioned above, as much and as smartly as possible to get the greatest desired effect, which to me is to create your ideal life. So I believe that passive real estate investing is a great vehicle for doing that. As doctors, like when you're invested in a syndication or fund, which we'll talk about later, you're actually leveraging the time, experience, team energy, relationships, the knowledge, all of that to make money. You don't control the day to day. In fact, you've totally removed yourself from that. But you still control the asset in accordance to the investment. Terms mean that you control a piece of it and you get a check at the end of the day. So the key word again is leverage. And to me it's leveraging your most valuable asset. And that to me is time. And can that leverage help get you where you want to be? And so I think about that quite a bit. How do I want to be spending my time? Am I willing to give up control for time and diversification? So when it comes to these passive or private real estate deals, this is as close as you can get, in my opinion, to what we all think of as passive income in real estate. However, one of the biggest misconceptions is that you don't have to put in any work at all. And to me that's completely false. And that's when you get into trouble. You actually need to put the work up front, then you can reap the reward or the benefits later. In fact, you have to choose who to invest with or whom to invest in. Sure, you can make that as easy a process as possible, but like doing no due diligence, maybe just crossing your fingers and just investing with anyone who asks you to or that your friend is investing with. But I think we can agree that that sounds like a bad idea or a bad way to go when it comes to investing large sums of money. I mean, I've seen it happen again and again. I've seen people spend more time figuring out like which hotel they want to stay at when they go on vacation. I mean, they'll read the reviews, go to TripAdvisor, look at the pictures, cross cross reference, look at maps, and they'll spend more time doing that than deciding on a $50,000 investment which could produce for them like tens of thousands of dollars in income over their lifetime or honestly can create a loss. And I'll be honest with you, I've been guilty of that myself and I've gotten pretty lucky in the past, but I have made some mistakes. So when it comes to your future and your family future, you don't want to rely on mostly luck and again, crossing those fingers and just hoping for the best. So when it comes to these passive real estate deals, again, realize all the work is done up front before you make the investment. It's deciding whether this is something that you absolutely want to put your money in. And I know and you know that that money did not come from just out of thin air. I mean, it's time that you spent working sweat capital time in the hospital that it took you to create this income. And you're hoping it will create more income for you down the line, right? I mean, that's the whole point of all this. And so just like Warren Buffett's two rules of investing, number one, never lose money. And that comes with doing the proper due diligence and, you know, mitigating risk and doing your best job possible. And rule number two, never forget rule number one. And so we want to simultaneously look for good opportunities and try to mitigate risk by weeding out those that we know obviously don't fit our goals and objectives. I put Together the top 10 things you must know or understand before investing in a passive or private real estate deal. Whether you got it from a friend or like from our investor club, for example, or on a crowdfunding site. I mean, I consider this talk more of a masterclass type talk than a typical conference talk. So if I have your permission, let's get ready to buckle down, take some notes, and if you're with me, wherever you're at, I want you to raise your hand and say, I. I can't hear you obviously, or see you do it, but I'm assuming you did it. So let's dive right in. A deal might look something like this. You see some nice pictures, you get some investment highlights and there's going to be a little summary there. And so what do you do and what are those 10 things you need to know? And let's start with number one, who is running the deal? You need to get crystal clear on this because sometimes it can be a little confusing. Initially, there are some different roles out there. The people or the company introducing you to the deal might not actually be the same ones truly operating the deal. I'll be referring to the ones truly running the deal as sponsors. They might be called general partners, syndicators, operators, but to keep it simple, I'll stick to sponsors. But know that all those things mean the same. And so here are some things that you need to know about the sponsor. What is their experience and track record? I mean, you want to know who's actually creating the business plan and who's going to implement it. Who's going to be in charge of the day to day adjusting and course correcting over time? How many times have they done this before and how well have they done now? If you don't see it in the initial paperwork, which sometimes happens, you better ask for it when it comes to the track record. And you have every right to ask for it. I mean, when patients come see you and they're going to get a procedure done, they want to know if you've done it before and it's totally legit for them to ask. And if you're confident and experienced, you shouldn't have any problems giving them your numbers and your data. And let me tell you, there are good sponsors, bad sponsors, and everything in between and when. I mean good or bad, I mean everything from their skill set or their expertise to their moral character. Trust me, a bad sponsor can kill a good deal. And I always like to bring it back to medical terminology. It's like putting in an iv. I mean, I'm an anesthesiologist, so I talk about that all the time. I mean, someone might have the best veins, like your patient, but if you don't know what you're doing, doesn't matter. You can easily blow it, give them a harder vein and forget about it. I mean, someone with experience might still have a hard time, but by no means does it guarantee success, but they know how to adjust and ultimately make it work. And the sponsors are the same way. The best sponsors might still struggle, like in a deal, due to conditions that are outside of their control, but they're going to give you the best shot of figuring their way out of it successfully. So ask a ton of questions, dive into the track record, ask about deals that haven't gone perfectly and see what they've learned from them. Try to get a sense for how they mitigate risk. I mean, this is extremely important, especially when the market goes up, when the market goes down, and we're in an interesting time right now, and it might just do exactly that. And so I have so many more questions that I typically try to find out about the sponsors just so I can get a good feel for them. But this is a great start. And if I could stop, or if I did stop to talk right here, and if you implemented just this thing every time, it would probably save you 70 to 80% of the headache of getting into a bad deal. But Honestly, I've got 10 things to share with you, and that's just one, so let's just keep going. Number two, what kind of deal is it that you're looking at? Is it a syndication of a single property or is it a fund? Is it a debt deal or an equity deal? And what type of asset class is it? And don't worry if some of the things I've just mentioned aren't clear to you. We're going to go over the definitions really quickly here. What is a syndication? Just so you know, you might have heard that term before, you might not have heard that term, and you're going to hear quite a bit. When it comes to passive real estate, it's essentially a pooling of funds to purchase a property. People put their money together to buy an investment. You might have talked about that before with your friends. So this Must be common to you. I think everyone understands the idea of this. The sponsor is the one that runs the syndication. They put the deal together and you decide to invest in it. And your title as an investor is typically called a limited partner. Now, instead of single property, you might be looking to invest in a fund that's in front of you where the goal is to purchase not one single property, but, but to invest in multiple opportunities. So what they do is they raise the money first from their investors and let you know what the business plan is and then go out and purchase the properties. And so you have to decide, is this a single property that I'm investing in or just, you know, figure out? Or am I investing in a fund where they're going to go out and buy multiple properties? You know, are you investing in a debt or equity deal? Now, when you invest in debt, you act as the bank. You lend money out and you expect to receive monthly interest payments for set term and then you expect to get your money back at the end. Or is this an equity deal where you actually own a piece of that property or the apartment building, for example. And so not only do you get paid from the profit created from rents, you get a profit when the property gets sold at the end of the deal according to whatever your ownership stake is. And you also want to know what asset class this is. So you want to know whether it's an apartment building, also referred to as multifamily, or is it an office building? Is it like a retail like, kind of storefront, strip center, or is it self storage, industrial warehouse like it is here, mobile home parks, et cetera. There are so many different types of asset classes. Each one of these asset classes carries its own pros and cons. There are different goals, different markets, risk profiles, returns. For example, some do better or are known to do better in recessions. Others have, again, different risk and return profiles. So my advice would be to get a really good understanding of one asset class initially. I mean, many seem the most comfortable with apartment buildings. I mean, I know I am. I typically stick to them for the most part because I've lived in them and I understand the tenant as well as the whole process. But I have invested in others, but I first got really, really comfortable with multifamily. Okay, fantastic. You guys are doing a great job. Let's move on to number three. What are your expected returns and when do you expect to receive them? This is really saying, in essence, if you invest in the deal, how much do you expect or hope to make? From it. I think everyone understands the concept of, of basic cash on cash return. But I'm going to illustrate it here really quickly. If you invested $100 and you got back $110, which is $10 more than when you started, that's typically a 10% cash on cash return. But what else would you want to know about this? You want to know how long it took to get back that $10 extra or that $110 in total? Right. Was it over a year that you got it, or was it over five years? And that makes a big difference. So what we do typically is we annualize it. And here you can say we divided by the number of years to get your annualized return. Now, to add another little wrinkle, let's say it took you five years to get that return. Does it matter to you whether you got that return all in years one and two, or that you got nothing and you got everything at the back end of the deal? You know, years four and five? To me, it absolutely makes a difference because when you get the money back at the early end of the deal, you can do something with it, mean that you can reinvest it, you can do what you want, and it's not locked up. Whereas if you got that at the end of the deal, your money was locked up that whole time and you received it at the end. I mean, you might get the exact same cash on cash return, and you might get those exact same annualized cash on cash return, but it's very, very different according to when you got that money back. The truth is, when it comes to these passive real estate deals, especially the equity deals, returns aren't super consistent in terms of their timing. You know, they come and go, you know, higher one year when there's a refinance, for example, and then there's definitely a larger return at the sale of the property. That's why you'll often see the returns promoted in terms of something called the irr, or internal rate of return. It not only tries to take into account your total return, like in sum, but also the timing of those returns. And that's why this thing exists. Most people mistake this IRR as an annual return or even as a guarantee. And I want to let you know, it's far from it. It's kind of like a guesstimate as to the annual returns, taking into account how you receive those returns over time and assuming you would be reinvesting that money that you got back. So let me ask you personally, if you're going to get money back from a deal, would you rather get it sooner or later? Would you rather make a certain amount earlier or possibly make money if your deal is held for longer than the deal? Now, all of this matters as a personal like kind of preference in your situation. And that's why it's important to understand the irr, like how it's ultimately made up and the timing of those returns and how they're going to get those funds back to you. And it's all based on assumptions of the deal. And for you, as you look at more and more of these, you're going to start to understand how these assumptions are made up. Now, I could do a full lecture on irr and it's taken me quite a while to understand that, but it's something I wish I understood before because what I used to do is that I used to look at different deals and compare them exclusively by the IRR number. Now, I don't know if anybody else has been guilty of doing that, but I did that for so long. Boy, I understood that there's a lot that goes into making up that number and understanding that. So I would highly encourage you to look into that and try to understand exactly what that number is and how it's made up. The other thing you want to know about your returns is when are you going to get paid? When is that first distribution and how often will you get paid? Is this going to be a quarterly or monthly distribution? That's something you want to know. Especially if you're basing your cash flow on this. You know, if it's a debt type deal where they're maybe getting interest, you might get paid starting month one. Well, maybe it's the type of deal where they have to do a lot of construction or rehab and it's extremely cash intensive upfront, then you might not start getting your money for a year or two. Now if it's like a development type deal, you may not get paid until the property is completed and sold. So that might be somewhere between three and five years. I mean, I learned this the hard way because, you know, my first investment, I invested $25,000 into a passive real estate deal. I mean, I was extremely nervous. I mean, I didn't know much about it. I was extremely scared. And about four months later I realized, hey, I haven't gotten paid from this thing yet and what's going on? So I asked the sponsors. I was a little timid in doing so, thought I maybe missed something. And I told them, hey, when am I going to actually start getting paid. And they told me it turns out that my first distribution wouldn't be from anywhere from 12 to 18 months. It's because they were using that cash per construction. And it's fine, it's just that I didn't know and so I planned differently and I had different expectations in my head. The funny thing is about a year later I ended up getting about half of my capital back because they ended up going through a refinance. So it's one of these things where you want to know just to set your expectations, especially if you're relying on that cash flow. So to summarize, you want to know how much you're getting paid and then when you're getting paid. On to number four, what's the business plan and what is the strategy of the sponsors? How are they making money for investors? How are they going to produce those returns that they're talking about and promoting? Are they increasing rents? Are they doing rehab? Are they decreasing expenses by having better management? So what is the story here and that's what you want to uncover? They'll need to paint it for you in very, very clear colors. They might say, we found this deal and we found it under market rents and it's been owned by a mom and pop operator. So we're going to bring our professional management on board, we're going to reduce those expenses, we're going to do some rehab, we're going to increase rents and really drive up the value of the property. And we think that over time the market will also increase here as well. We expect to do a refinance after year three and we'll likely sell at year five. Now that's your business plan and story. You want to be able to understand it and ultimately for it to make sense enough for you to believe it. Or maybe this is the story. Instead, we're going to build a high end luxury apartment building in an area that has a developing tech scene. And that company will be hiring a ton of engineers in the next few years. So there's a huge undersupply in this area of housing and the need is great. So maybe that's the story. Don't invest in something where you can't easily explain the business plan or the story in a couple sentences to a friend. And at the end of the day, you've got to decide, do you believe that story? Are they going to be able to do those things that they've mentioned? Going back to an earlier question, do they have the track record to implement that business plan, have they done it in the past and have they been successful at it? All of this comes down to do you end up believing that they'll be able to do the things that they say they're going to do. Number five, you want to know this. What is the expected hold time or how long is the deal in their expectation? Now this can vary quite a bit depending on the type of deal. Is this a 12 month debt deal or is this like an ongoing type thing? Is it expected to span three to five years or is it eight to 10? Now that makes a huge difference on your expected returns and it also makes a huge difference for when you get a capital pack and your cash flow. You might be investing in a long term hold type fund where they just keep going and at a certain point you can pull your money out without penalty, but you can decide when to do that. That might work out for you and your cash flow. Now this is a great time to talk about something called vintage risk, where you risk your investment exiting at the wrong time. But it's like vintages of wine, it might be the same vineyard, the same soil, same winemaker, but depending on the weather, you know, again, the soil, one year's vintage might be a classic and the next year might not be so great. So when you enter an investment, you have all the info in front of you, like what is the current market? Like, what price are you buying it at? The exit is where the great unknown is. You know, are you hoping to sell or the sponsors hoping to sell the property, like right at a time where it's like before 2006 or 2007, at the height of the market, or are they planning to sell at a year, you know, without them knowing that it's like after 2008, a great recession, how long will you like your capital or my capital be locked up? And when you make these investments, just so you know, you have to assume that you're going to be on the ride till it ends. There's really no jumping off. So are you using money that you think you would need? And if you are, just so you know right off the bat, this is not the right type of investments for you. For passive real estate investments, and I'd say real estate investing in general, as I mentioned before, you're going to give up liquidity for returns and diversification. And for those of you who may not understand what liquidity means, it just really means how quickly or easily can the investment that you have be moved or converted to cash in your bank Account number six. You want to know what is the minimum investment. You have to see whether it makes sense for you. I'm guessing if you're looking at these investments, you saved up some money or you're thinking about converting some of your retirement portfolio into cash so you can invest in some of these investments. You want to know whether it makes sense considering your goals and your portfolio. Different people allocate different amounts of real estate. Traditional financial advisors might tell you one thing, but I've basically flipped my asset allocation. I just like the returns better when considering risk profile diversification and cash flow in real estate investing. But people ask all the time, what are the typical minimums for these type of investments? Usually I say they're anywhere from 25,000 to $50,000, which is why they appeal mostly to high income professionals. In fact, for most of these investments, you need to be what's considered an accredited investor. If you're not familiar with what that means. An accredited investor by definition is someone that has made $200,000 of income the past two years individually or $300,000 as a couple and has every expectation of making that again this year. Or you can have a net worth of a million dollars, excluding your primary residence. Just so you know, they're actually starting to relax these standards a bit. So recent regulation has allowed people with certain certifications to qualify as well and think you'll see more changes in the years to come. There might be some opportunities to find deals with lower minimums than what I mentioned before. Maybe you can find it on a crowdfunding site sometimes, like our investor club, for example, tries to negotiate some lower minimums so people have more access and choices. But it's important for you to know so that you can figure out whether it makes sense for you what you saved up, your goals and your overall portfolio. Number seven, what is the loan? You know, I used to look at these things and look at the irr, but I did had no idea what it takes to create those returns. One of those key components is the financing or the loan. It's also where a lot of the major risk in a deal is housed. When we invest, we're always trying to mitigate risk and maximize returns. Mortgage lending, just so you know, is what caused, you know, pretty much most, if not all, the issues in 2008. And pretty much every housing crash that I know of really has to do with the loan and financing. So shouldn't we take a little more time to understand the financing of a deal and what the risk is there? You know, there's somewhat of a kind of, I say, poorly well defined scale from riskier to more conservative loans. It has to do with the size of loans in comparison to the value of the property, the term, the interest, and what happens at the end of the term. I'm going to go over these really quickly. I don't have a lot of time to go over all these in full detail, but what's the size of the loan and the loan to value? They want to know, you know, how much leverage are you actually using in comparison or in a ratio? The more equity that you have in a deal, the safer it's considered. So usually a number under 70 to 75% of the size of the loan to the overall value of the property is what's considered a little bit more conservative. You know, once you're above that, your margin for error and for cash flow becomes a lot slimmer. You also want to know, like, how long is the loan term? Is it 12 months? Is it 3 years or perhaps a little bit longer? 5 to 10 years? A longer loan gives you more Runway to execute your plan. I mean, this year with COVID and everything that's gone on, this has really changed people's timelines and their Runway. So for people that might have been stuck in shorter loans that are about to come due or mature, they have a lot less Runway and hopefully they're able to figure a way to either extend or improve that loan. But that's a huge risk there. We also want to know about the interest. Is this rate fixed, meaning it's set and consistent, or does it float, meaning one year it can be one thing, and the next really a lot higher? That matters because your returns are based on your mortgage payments. That's a big part of it. Then what happens when the term is up? Is it what's called a balloon, meaning that once it's done or the loan matures, they're expected to pay the loan back in full? Or does it settle into what's called a floating rate? Is there a big prepayment penalty if you exit the loan early? That can totally change things. Again, the loan is one major way for you to be able to measure the risk in a deal. And it's absolutely important for you to take time on and to understand. Okay, everyone, you're doing fantastic. Let's move on to number eight. What market is it in? I mean, we always hear about the real estate market and how it's doing in the news. However, you and I know that the real estate market is locally Based, you probably recognize that when you went to buy your own house that there are these invisible lines on the map or on streets that make prices fluctuate. Might have to do with the school system, maybe it's the county. Might have to do with being in a flood zone, for example. Maybe the zip code is better. I mean, all of these things matter. And you have to understand that when you evaluate the market. So there's data out there for this and it tells you how things are doing and how prices are moving and fluctuating in one area to another. So what are some of the key metrics that tell you what typically fuels growth and demand? Because that's what it's all about. It's about demand. Population growth is one of them employment or job growth, as well as job diversification. These are all things that you have to look into to understand that market. You want to know which area you're investing in and does it have like the wins behind them or is it like in front of them? And these are things you absolutely need to know when you look at a deal and you try to understand the market when you do that. Now, number nine, this is a big one. And what all of you, I'm sure like, are curious about, how are the sponsors getting paid? I don't know about you. When people provide a service for me, my goal is to make sure they get paid well, because that creates incentives and the right type of incentives, you want to have someone that is motivated to do well for you, but at the same time, they really only make that money when you make money, especially in these type of deals. So we look for that exact thing when we invest in passive real estate. It's called an alignment of interest. I mean, there's a saying, how do you know you can trust someone? Think about it. It's when your interests are absolutely aligned. And I love that, and I use that principle when looking at these investments. So how are the sponsors getting paid? They're likely getting compensated in two ways. Number one, it's in fees, and they're splitting some of the profits. So what are some of the fees that you might see in these type of deals? There are things called acquisition fees, asset management, disposition, loan fees, construction fees, all these type things. You should just recognize them and it should be clear in the documentation, in the paperwork what those fees are. Now, your goal should be to see whether they're in line with what's called normal for that type of deal. They also make money through the sharing of profits. Investors bring in most of the money for the deal, but the profits are laid out in a way that there's a share of it. And this is typically what's called the waterfall structure. It outlines the, the structure for how the profits are split out. You should be able to find it in the deal paperwork or the offering memorandum that they typically call it. Otherwise you got to look in what's called the PPM or the private placement memorandum. Putting together the fees and the waterfall structure, the goal is to see, as I mentioned before, if there's an alignment of interest, are there excessive high fees on the front end. So the sponsors are just incentivized to get in as many deals as possible and doesn't care as much about performance or the deals like Backloaded so that these huge profit splits. So they're incentivized to try to hit home runs at the end of the day and take big risks. Again, you want the sponsors to make money, you want them to do well. They're putting in the hard work and we've talked about it. They're creating the business plan, they're doing the day to day management, they're doing the operations, they've done the scouting of the properties, they've gone through the process to acquire the properties and gotten the loan in place. They done essentially 100% of the work that's involved and it's completely active. The thing is you bring in the capital, but they do the heavy lifting on the day to day and at the end they cut you checks. So what's fair? Looking at enough of these deals you get to understand the market and what seems fair. There's no one particular number or one fee that's like the right or wrong thing. You got to put all these things together. There's another story here. And once you see enough of these deals, you start to understand what the market is like. Lastly, number 10, you want to know how much are the sponsors contributing to the deal. Another way of saying it is how much skin do they have in the game? In essence, how much of their own money are they contributing to the deal? They want to know how much they have riding alongside of you as an investor. Personally, I want to see that number be as high as possible because I believe that, you know, that means our interests are further aligned or in the best possible way. Now there's no make or break number, but a typical number that you might see is somewhere between 5 and 10% of the raised capital. But I've seen up to 50% before. I mean all this plays into the story of whether you're aligned or not. So to summarize, we've gone over all of these 10 things that I feel you should know before investing in a passive real estate deal. I mean, it's not something I figured out right away. It took me a while to figure these things out. And if I can create a shortcut for you, I'm absolutely excited about that. I mean, this comes from investing in multiple deals, talking to experienced investors, and there's obviously so much more that you could know from these top 10 things. But honestly, just this. If this could save you from one bad deal that you're investing 25 or $50,000 or more into, I mean, what's that worth it to you? So people ask me all the time, where do you find out all this info? It should be laid out extremely clearly in the deal paperwork and if not, you ask the sponsors directly. Remember, you have the capital, they have the deal, but nothing happens without you, the investor. So if there's one thing I try to ingrain in every early investor, whether they go through our course, whether I talk to them on these, you know, Q and A sessions, you have every right to get your questions answered as well as all of your concerns satisfied. And if you ever feel like there's difficulty with transparency, then just move on. There's going to be more. There will be, I promise you, more deals ahead. You don't get penalized for letting deals pass. Or as Jim Dolly, the white coat investor states, there are no called strikes in investing. I'm trying to tell you, never operate out of FOMO or fear of missing out. I mean, I've been guilty of it and so I'm trying to spare you the mistakes of that. So watch the webinar, if they have a webinar, read the offering memorandum. I mean, I will consult with other like minded investors, ask them about the deals. If it's a go and everybody seems to be on board but you've done a full due diligence and it makes sense for you, then you kind of look into the PPM or the private placement memorandum and then you decide to invest. Once you've invested, you just wait for the reports as well as these, you know, monthly or quarterly checks, those deposits. I mean that's a great feeling, trust me, I love them. And then you use your time however you want. Otherwise. And as I mentioned before, trust me, there are so many things that you know, you need to understand and it may seem like a lot, but if you're actively investing as well, and I know this from experience. You have to know pretty much all of these things yourself as well. But it's all on you. It doesn't get presented to you and you have to figure it out. And the most important thing being the business plan. And that's the fun of it, but it's also the challenge of it. Now all these things, the top 10, this is like the 80 20. And I don't know how many of you are familiar with the 8020 rule that says is Pareto principle that usually 20% of whatever it is usually gets you 80% of the results. To me, these top 10 questions, it's the 20% that you need to know that will get you 80% of the results. When it comes to vetting or doing the due diligence for these passive or private real estate investments. For those who are interested in learning how to do this better and knowing how to do the proper due diligence on a higher level and these skills can translate to other investments in the future. We have a course called Passive Real Estate Academy where we teach people to confidently invest in real estate without being a landlord. And it's a four week course done at your own pace if you want, all online and you can find that at www. Passiverealestateacademy. So I want to leave you with a couple things. Learn to do the proper due diligence. Don't invest because one returns looks better than the other. Don't invest because just your friend told you that knowledge. Once you learn how to do this properly, it's going to carry over with you to all the other deals that you do. In fact, I find this carries over to all types of investing that I do. It's a skill. I mean, it's not as difficult as what most of you and I do on a daily basis dealing with life or death or real people. Just so you know, it can be learned with experience, time and repetition. I mean, I see it all the time from people who take our course who go from having no knowledge and seeing how good they get at this. I mean again, it's just taking time to focus on this and make sure you find other people that you can bounce deals off of. This is a team sport. That's what I say. It's not like one person wins or loses. Take all your collective knowledge and experience and really help each other to invest in the right type of deals and to really maximize your returns while mitigating risk. Just so you know, all of this knowledge means absolutely nothing without taking action. However, we've all heard that knowledge is power, but I adhere more to the idea that applied knowledge is power. So educate yourself and take action. But just so you know, not every investment will be perfect, but you'll learn from it. And course correct. There isn't anything guaranteed in investing, but there is something guaranteed. In my opinion. It's that if you do nothing differently, nothing will change. So thank you so much. I hope you got a ton out of this. I'm so excited for to see where you go from here. Happy to answer any questions on my Q and A session. Make it happen. Everyone. Take care. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, make sure to hit subscribe. Are you part of our community yet? Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. You can join us on our Facebook group PassiveIncome Docs, and you can always learn more at our website, passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.