Spencer Hilligoss - The Untold Stories of Real Estate Investing Podcast - Diversify Investments

Welcome to the Untold Stories of Real Estate Investing hosted by Wayne Courageous iii. A place where active and passive investors come to hear the good, bad and ugly of real estate investing. Our guests consist of experienced operators and investors who want others to succeed by sharing their stories. If you're looking to syndicate deals or grow your wealth passively in real estate, you've come to the right show. It's now time to sit back, take mental notes and enjoy next episode of the Untold Stories of Real Estate Investing.

Welcome to the Untold Stories of Real Estate Investing. I'm your host, Wayne Courageous. For our next episode, we are excited to have Spencer Hillegoss. Spencer is a full time real estate investor, registered securities professional and former tech leader who walked away from a lucrative career of 13 years just five months before the pandemic. Now Spencer makes it easy and simple for passive investors to invest in large cash flow and real estate properties that are already stable and profitable, such as storage and apartments in the strongest growth markets across the U.S. his company, Madison Investing has closed on real estate totaling over 6,000 units for more than $800 million. As a technology leader, Spencer built a 13 year track record of growing high performing teams across five companies, three of them unicorns valued at more than $1 billion. Welcome to our show, Spencer.

Yeah, Wayne, thank you so much for having me. I know we joked about it before we got started, but I got the memo about the same shirt. So we're looking good today.

We dressed up for each other.

That's right.

So before we dig in, is there anything I missed or anything you want to add to introduce yourself?

No, I mean you hit all the key points and thank you so much for that. So you already mentioned this, but I'm out in the Bay Area, California and most of my career has been spent in technology companies and so that was the local business that was available to me once I got out of college. But for some quick background for folks, I have been encouraged to bring up the fact that I technically did start in the real estate business at probably the ripe old age of 6 because my dad was a broker and he was doing residential real estate in the bay area for 30 years. And so he was having me actually work in that business growing up as a teenager and doing open houses and stuff. I didn't enjoy that at the time, but I guess I was learning stuff not consciously but somehow along the way at that point because here we are and at the end of five company marathon through Silicon Valley and scaling these big teams and growing high velocity teams and stuff. I found myself at a real estate company at the tail end of that, and the company was called Lending Home. And so it was really like my bootcamp into real estate. We were doing by the time I left, like 600 individuals fix and flip transactions, fund or month. And so it was just a great introduction to real estate, but didn't want to become a flipper. And somehow I found myself investing in multifamily and eventually storage. And I didn't expect that to be like what I do every single day now and help other investors do the same thing for their family and for their livelihoods. So it's really been a whirlwind, but really excited to kind of share whatever kind of nuggets or learnings or experiences or embarrassing stories that I happen to get along the way with. Any of your audience.

Yeah, I like your dad's style. Been taking my kids. We've been doing like a daddy, daughter, daddy, son, date, and checking out properties and doing these things. And usually it's bribing them with some type of food. Last time, my. We don't eat Popeyes a lot, for example. And she really, Lily, my middle child, really wanted Popeyes. So that was her say carrot to get out and help with me, you know, on some of these properties and teach them young. So it's good that you got the business early. So, uh, good on your dad for doing that. Hey, so I know December. Cause I was trying to get you on the show earlier and I know you were slammed and fourth quarter was busy for a lot of people, understandably just with COVID and such. But love to dig in on how 2020 went for you on the real estate side. And were there any changes that you made to your operations or your acquisition criteria as you closed out the year?

Yeah. And happy to go back to 2020 a bit. I mean, what a year. I mean, really for the world. Right. For me specifically and for Madison Investing, which is the company that myself and my co founder, Jennifer Morimoto run. We went into that year right on the heels of really great growth. And so to be clear with the audience, what we do is we run an investing group. Folks can sign up and it's truly for, like, passive investors. It's not for the folks who want to sign up and be hands on. And, you know, it's not a coaching or mentoring program for future sponsors. It's a passive investing program. And I saw tons of great growth in 2019. But we also saw that multifamily, which was at the time our Primary bread and butter. We had done some great transactions and great projects in 2019 and earlier, but it's pretty darn overheated. You have to really work hard. I mean, we were just chatting about this as well. Wayne. There's excellent deals to be done that are out there, but you have to fight for them. You often have to overpay for them. And there's a ton of competition in multifamily to find great deals that can pencil so well that investors can also get the return profiles that they are looking for. And so we made a decision in Q3, 2019 to move storage as an asset class self storage facilities higher up in the priority stack for our business. And in hindsight, man, I didn't know that Covid was coming. Like no one did. So that decision ended up being a really good one because we take a really deliberate, slow approach. I mean, even though it's a relatively small operation, we have all the key functions that a financial services business should and would have. But we stay lean, but we operate with a lot of rigor. And here's what I mean by that. I'm a co sponsor. And so what that means is we have about six different teams, asset managers that I partner with and I join them in the general partnership team in different states like Texas, multifamily in Texas, multifamily in South Carolina, North Carolina, Idaho, Colorado. Those are kind of our markets. And when we get to know folks, potential partners, I mean, we take three to six months to get to know them. Like I'll invest my own money with them, put them through a background check. I do all this stuff and that takes so long that we didn't end up closing kind of first storage property of 2020 until about the summer. And we ended up closing on two great facilities in 2020 that were storage facilities and five multifamily properties in 2020 for a total of seven closings. But back to your point from earlier, Q4 was bonkers. We had like four closings just in. Four of those, seven happened in Q4. So it was intense and it was great. It was just kind of an interesting roller coaster ride from the time that you got into Covid back in Peak Fear in April. Everyone in the market is kind of like, where's this headed? You know, this isn't looking good and we're still living in this now, you know, I mean, we don't necessarily see the light at the end of the tunnel quite yet, but hopefully we will soon. But early in Covid wasn't quite sure. How the year was going to pan out. You know, we had one deal on the table that we were working on and we closed on it, thankfully. But most of that was backloaded to 2020 at the very end in Q4. So now, I mean, really, it's growing like gangbusters. This year is lining up very differently already. You know, we're working on a few different projects already just in Q1 this year. So we're super thankful. We have the best investors ever who are very trusting of us and we communicate very proactively with them. I'm just so grateful to work with great people. It really does come down to that. Like most other things in life, it comes down to having great partnerships, both with your significant other and co founder in this case for us, as well as just investors and asset management teams that we work with in different states.

Yeah. And I was having lunch with a friend and he was talking about multifamily and just the red. The red seas of just how the competition is so big and there's a lot of deals are just becoming overpriced because there's just so much money flown in. So how are you seeing the deal flow? How are you getting the deal flow and how are you able to find sort of the bluer seas where deals make sense for Madison to invest? Yeah.

One of the things that I had to make a really tough decision on early in the life cycle of our whole business was that, okay, a mentor told me, spence, you got to take stock of your geography. You're based in San Francisco, you're based in the Bay Area. You're not going to find the deals you're looking for for cash flowing, large real estate deals here. You live in a money state, Spence. You don't live in a deal state. And verbatim, that's what he said to me. And I was like kind of rocking me to the core at the time, Wayne. Because at the time I was trying to go in racing down the hallway and become a lead sponsor on a project and I wasn't going to move and we're not going to move. I mean, I know that people love to talk trash about California and how much it sucks if they don't live there, which it doesn't, by the way. But it's a separate podcast. I'll just say that we're not moving. We like it here, but we invest in real estate everywhere else. That is something that we can help with. It's a business problem that we could solve. And as soon as we started Investing our own money into projects that cash flow and have solid returns in Texas, Carolinas and beyond. It was very clear that there was a business problem to be solved there because everyone kept asking us about it in our network. They're like, how do we get into these things? I had the background and expertise with a good foundation already from a tech background, but also from being in the guts of a lender that was doing 600 transactions per month and understanding how to framework great underwriting. Just had to apply it and learn some more on the commercial side. So that's what we did is we built an excellent co sponsorship business. And what that means is that we vet the WHO and we spend a lot of time on that. And so that's where I go first because I really believe are there great markets that are far better than others? Absolutely. Hell yes. But there's great operators who can pull a killer deal out of a mediocre market. And as long as you've got some population growth behind you, you got the job supply going, you got all the stuff that you would typically expect for a strong enough market, A great partner and a great sponsor or operator, whatever you want to call them, can pull off a great deal. And so we spent a lot of time on that and we planted those seeds years, years ago with a few of these partnerships and got to know the folks who were like, I align with that person's criteria. Okay, like, let's get to. I'm gonna get to know them really, really deeply on our business level and like, understand, is our ride and writing criteria gonna jive with theirs? And can we truly strike a partnership here in joint venture on future deals? And that's what's worked out for us. You know, it's really like leaning into a few places. Like Texas is a great example. I think Dallas, probably one of the most hotly debated markets, despite the fact that it's just such a leviathan, both in physical space, it's a huge place. And that's just off the heels of talking about how large California is. Dallas is massive. And so you look at that market and a couple of years ago, people were saying it's saturated. Oh, it's past peak. Oh, you just can't look at markets that way. It's too big. It's just too darn big. The other comment I'll make on this briefly is that Covid in some cases has reignited kind of waning momentum for a few of these markets because people are leaving places that they previously enjoyed living and going and bringing the jobs and employers and all the stuff with them. So Dallas is a great example of that. I mean you've got work from home, open mindedness from big employers. You've got HP and Oracle moving out there, announced those things just in the last two months. You've got all these things around Texas that is just, you know, bring in a lot more focus and positivity around it. So anyways, sorry for the tangent.

Oh, that's good. You're talking up my market. But that was one of gonna be.

The questions I was gonna ask you.

Is how do you being in the San Francisco area and being invested in eight different states is how are you finding the deals? How are you finding the management companies? It sounds like you already have boots on the ground, investors that are already on the general partnership that are already knowing the area, knowing day to day operations and then they're coming to you and saying, hey, we got this opportunity. You've of course vetted them in the relationship and align with your values and such with them, but that's how you're able to scale in these different states. Did I hear that correctly? It's just by the teaming and the partnership.

Correct? Much more eloquent than I put it.

Yeah.

So essentially it takes a lot more time, patience and I would even argue business development acumen to just get to know people in their business and say, hey, hey, I'm not looking to take your deal frankly. Like if I were to just put take out the names and faces of companies and stuff for a moment and just say how I approach these folks or if they approach me. Because when I first started I was like me going to them and saying, please take me seriously at this stage. I'm just so blessed that people are actually coming to us so regularly every week now and saying, hey, we have a deal, do you want to work with us on it? And unfortunately I have to pass on that most times because we just don't know them yet. We don't jump into deals with strangers. It takes months to get to know people and we have to go through all of our vetting. But the conversation is pretty human, pretty simple and straightforward. I mean all it really is is here's what we consider a good deal. Sounds like you guys consider that same thing in the same ballpark. Can we maybe continue this conversation? And if you guys are looking to go and grow, we have also not just investor capital and investor relations acumen, but frankly some really solid core competencies around tech and infrastructure. I don't mean like software development and what I mean is kind of rudimentary stuff for the tech world, but really helpful for real estate professionals, which is like, how do you build a really effective marketing presence as well as just email infrastructure? Something as simple as sending great project updates with like, do you have solid drone footage to send out about the property? Like all that stuff is the kind of stuff that we typically, expertise wise, also bring to a given partnership, to a GP team.

Why multifamily? Or how did that transition? I know from the tech or real estate side, but why multifamily? Why not office retail? What did you see in that particular asset class? And then I would ask the same question for self storage when you were looking to go into that.

Yeah, so it's just so darn simple in the best way. To me, multifamily is like large multifamily in particular. So we had actually invested. It's such a cliche path. In hindsight, it is. Rather. We went and we wanted to go invest in a rental, right? So we actually invested, shopped for a whole summer. This is a few years ago now. We drove around all summer in the greater Bay Area to find a rental property. We had our infant son in the car at the time. We have two boys now. They're a little older now, but it took a long time, took a lot of work. We spent a little over $100,000 to go buy a $430,000 duplex for it to cash flow over $200,000, $200 a month, which is the furthest thing from a home run when it comes to cash flow investing. And we had to go through that learning first before we then realized, well, wait a sec, maybe we can go get more bang for our buck if we go outside California. So we went and bought outside of California, got some turnkey properties. So we went from step one, buy local, step two, buy turnkey, and we did the long distance thing. And it just ended up being good, but not nearly as great as it's chalked up to be, which is like, okay, we had maybe five properties in Kansas City. Three of five were cash flowing fine. Vacancy was higher than expected. Shocker, they're C class. And so it just ended up being more of a hassle. You still have to manage the property manager. So all those cliches about rental property management being passive is bs. It's semi passive at best, even with a property manager. And so that was our journey, firsthand experience. And we were like, wait a sec, just look at the math. If you have a 400 unit apartment building, one person leaves. Compare that to our single family home that we went and purchased locally. I mean, I mean, we haven't purchased it in Kansas City. Rather that thing gets a vacancy. I mean, you're not having any rental income come in. Big, big apartment of 399 other renters, you've got plenty of rent coming in, you know, so it's. It's just those simple comparisons and economics and it's just the best kind of boring, you know, it's. All you're doing is you're buying a profitable business and improving how efficient that business runs and how much income that that business generates. As a business guy, that's just so common sense to me. Of course, we are actually some of those corny folks that actually care about values. I know that's not always the case in the real estate world, but for us, that matters a lot. So, yeah, we also care about people having a comfortable place to live, a safe place to live. And during COVID you've got to make sure people have all those things. And so storage is a different topic because you don't have to worry that. But happy to go there if and when it takes us there.

Yeah, you know, I think we take our turn with that too because it's not something that I have really talked much about on the show and really honestly don't know much about. I mean, in my mind, the simplicity of storage sounds amazing. Surely there's risk and there's. So I'd love to go into that with you if that is, if you're comfortable going there right now. But, you know, how did you get into self storage? I'm sure it sounds like you probably had a partner or somebody that maybe have come to you or did you find your first storage? How did that all work? And how do you underwrite storage versus multifamily? I know there was a lot of questions there, but love to dig in more.

Yeah, I think taking a step back, looking at the asset classes available, I'm very sold on the narrative that real assets are a great and critically important component of an investment portfolio. Just at a high level. It's a very general statement, but frankly, I think most people don't get that. I didn't get that for many years. By real assets, I'm talking about something that exists in the real world, like that you can see, touch and hold and it depreciates over time, but it also often appreciates in value. So apartments, rentals, homes, storage, all these things. So I got that at first glance, once we got into multifamily and we had closed a bunch of deals there with happy investors and seeing our capital go do well there, I was curious, like we're clearly not in a rapidly growing economic expansion anymore. I mean that decade came and went, but we're in something new now which no one can quite fully define yet because no one's ever, no one alive has gone through a global pandemic yet. So everyone's kind of learning as we go. But what I do believe firmly is that choppy waters are ahead. And that's not a scary statement. I just believe that to be the case. And so I was looking for something even more recession resistant. Recession resilience. Pick the phrasing that someone, as long as someone doesn't say recession proof because that still does not exist. I've yet to find anything recession proof. But recession resilient is what I was looking for. Multifamily has been already showing that it has that assuming you're investing in the right markets. Storage, it removes a couple of those other things, those variables. The most important, and obviously I don't want to dehumanize it, the most important de risking variable difference between multifamily and storage is the tenant. And so, you know, with a storage facility you have stuff you don't have a human, a very important valuable human life inside this tent, this unit, right. You have some stuff. And so you're trying to figure out how do you meet a real need in a time of challenge. Well, these D words tend to go up unfortunately in a downturn. And what that means is dislocation, divorce. It's pretty grim stuff to talk about frankly, because it has to do with hardship. But like storage use has shown to go up during these tough times. Death to dislocation, downsizing, all the words just helpful to memorize it that way. People often store stuff even more that was attractive as an asset class because the need was clearly there. I think that if the economy were to keep taking some hits over time, it would prove to be a great investment both for our investors capital and our own. We've leaned in harder to that. Probably just a couple of the headline differences in terms of underwriting them would just be you're still looking for a lot of the same fundamentals like you're looking for growth markets, you're looking for matching the supply and the demand. And in this case the supply is just going to be, or at least the need is going to be created by people who pick the first one. We closed on in 2020, it was actually a tertiary market south of Dallas. It's a combo of non climate controlled units, 100 or so units. And then it's also got a combo of RV and boat storage. And that was actually a really interesting one because at first I'm like, well I'm not particularly interested in like the RV and boat storage. But the more I looked at the deal and the more I looked at that particular market, it became very clear. It was like, wait a sec. People who store their boats and their RVs at this place, they also store their stuff related to using those items. It's vacation stuff. Most of the time people are going to the lake and there was like three bodies of water within reasonable driving distance. And so it was just, and it was more than 95% occupied without any advertising. And so these are the types of facilities where you're just kind of sitting there going, wow, that sure seems stable to me. And the rents haven't been moved in a very long time. They are not managing it efficiently. You actually have misuse of certain on site office space, you know, people not even using it for that given facility. So you can actually just. You keep seeing these great value add opportunities for a facility like that. So hopefully, hopefully that helps. On my very, very long winded diatribe tangent, just to basically say, you always want to look at the basics though on storage, like traffic count, how much visibility do you have for that storage facility. But for us we're doing non climate control stuff. Our partner is just really great at doing the direct approach to mom and pop sellers and just making it worth their while to walk away from something that they don't really feel like managing anymore.

Yeah. And how do you. One thing in our area, we live in West Austin and we have an RV and it is hard to find an RV parking space near us. And so in my mind I'm like, hey, that would be a good development. A lot of boats, a lot of RVs, a lot of like you said, recreational storage. But when you go into these markets, you talked about that supply and demand. What do you look at to see if there is that need for more storage or, or there's maybe a surplus of storage. Maybe there's just too much. How do you go about in seeing what makes sense from a purchasing standpoint?

Yeah, you know, and it's been a great education for me over the last few years too because I was so deep into like the residential stuff and then I got deep into the multifamily stuff and I Mean, I mean you're, you could probably run circles around me on a lot of this stuff. It's just the terminology that you swap out and if you keep KPIs. Right. And so I think for this, one of the most fun exercises in the last, like I would say year or so has actually been, I work with now two analysts that work with us. And one of the analysts has been having a lot of fun with me using a platform that's now out there called Radius Plus. I'm not paid to say this, I just like their platform and it's storage specific. You know, they basically incent operators or owners to provide their occupancy data by saying you can see everyone else's if you give us yours. And so it's a good carrot. So, you know, we look at stuff like that. We look at like what is the amount of, of what's the raw square footage of storage within a 1 to 3 mile radius. How are the current rents in the market relative to the ones on the one that we're looking at. I don't want to overcomplicate it beyond. One of the reasons I like it so much is because frankly, it's simple. I think storage is far simpler than multifamily. And that's not a rip on multifamily. I'm talking about an asset class I love. I'm just saying storage is even simpler. And that's a blessing and a curse. I mean the blessing is easier to underwrite, easier to understand a value add plan, execute our value add plan. The downside is can't always do a cost seg study on a storage facility. Can't always get pulled this incredible depreciation pull forward so people can see those wonderful K1s as a passive investor in year 1, 2, 3. And so there are differences. But I would just say that it's a slab oftentimes. Like the last one we closed on that was in Houston. It was in Q4 back in November. We had just a big slab of concrete, you know, with like a steel gate, a small shed where like a security guard would be able to do his work and make sure the place is safe. And then you've got basic construction and so it's, you can't, you don't have like all these moving all these necessarily more complex parts that you would usually see on a 400 unit apartment complex. So it's. Sorry for the tangent. It's just.

No, it's good. Are the returns not going into specific numbers, but are the returns Generally similar to what you've seen in these value add deals because with it simpler and the returns are potentially just as good and every deal is going to be different. But what you're seeing is it about.

The same, I would say, and I appreciate you keeping it at a certain altitude on that one. I think I would say comparable from a couple years back in multifamily. But the differences would be like here's an example of a difference in value add that I would. I'm sure there's a thousand different people out there. They're going to say like no, that's wrong. But I'm not trying to engage in unsolicited debate here. I'm just saying in my humble opinion, the value add levers that you can pull on the type of storage that we look at, they're not rehab driven often. So you have these two buckets of value add. Value add often means is it renovation driven. And I'm using that really loosely. Like are you changing the construction in some way on the facility you're buying or is it operational? You know, usually the vast majority of the multifamily deals that are marketed out there are going to have both. You know, operational would be you're putting in your property management or you're enhancing it somehow. Amongst other things. The renovation side is going to be like, oh, you're going to go do some kind of like exterior touch up. If it's a light rehab and then renovation lighter, heavy on the inside. Storage is more like fix the repairs. There's no hardcore renovation budget necessarily on the stuff that we do. There's absolutely an operational improvement and that's the lion's share of the improvements, which is like it's a modernization play. You're going in and you're saying I'm not sure if we need a security guard frankly, because it's self service kiosk driven with new technology. Right?

Yeah. You can bring in the access cards and the security cameras and even probably dial into a call center if you need after hours support or that type of thing.

You can literally read the bullet points off of the update I sent on our last deal out to our investor list yesterday that had those points you just made. Yeah. So it's like spot on. In addition to popular play, make a contract with U Haul and park some trucks on your lot and you're getting more revenue without necessarily having to incur a bunch of overhead. So it's just not heavy on the renovation stuff and so it's able to eke out Good value.

Is the competition to buy self storage just as heavy as multifamily is in the current environment?

It's pretty darn aggressive. Yeah. I mean, I would still say that, like, compared to multi. I haven't seen anything as hot as multifamily come from a competition perspective, but I'm sure plenty of acquisitions professionals out there will disagree with me on that one. It really depends on the market, but I think for the stuff that we look for, yeah, it's competitive.

And this is probably a silly question, but is the cap rates with multifamily and self storage like the value, the valuations and such? I mean, it's based on the net operating income, similar to what you would do to evaluate a multifamily or office. But are the cap rates pretty much in general or is it completely different?

It's a little different. It's a little different, a little higher. But, yeah, probably not something I want to nerd out. Not too hard because it just opens up cans of worms.

Yeah, I'm just thinking. And then platforms, I guess, their local resources to really dig in on what other properties are going for and such to make a good offer right now for me, without having dug into it, it just, it's a little foreign. I'm really familiar with office and retail, industrial, multifamily. But self storage, though, it's something that I've. I've used and it seems simple. It's not something that I've really dug in much on. So can we shift gears to syndication? Because you've obviously done a lot of syndication. What, what have been your challenge points? What have been some learning things that, you know now that you didn't know starting out. And you can take it however you want, whether it's capital raising, and we talked about a little bit about that earlier before the show. But just syndication in general and your thoughts and feedback of, you know, moving forward to help, you know, people be successful at it.

Yeah, totally. You know, I appreciate the broad way you frame it too, because it's a fun way to do it. Not to get too lofty here, so you're going to have to read me. And if I get too lofty, I think that it's fascinating when you step back and you look at the year around 2010 to now, basically, and the maturity of the syndication space. I wasn't in that space back in 2010, but I joined it eventually through that journey, I said earlier. But you look at that and you're like, okay, besides a few articles, you can find from back in the 70s, literally. It's a fun exercise people should try. Go look up things like syndication on the Internet and you can find some old clippings. It's been around, but it hasn't been around in public consciousness the way it is now until what, the last five years, roughly, and at least not to the degree that it is. And so you've got that out there. So where is the biggest, I would say fun challenge? Has been trying to educate folks as the retail investor because oftentimes I think a lot of big brokerage houses and certainly institutional players and definitely banks, they lose sight of the average sophistication level financially in terminology gap that exists with the average retail investor. We're talking about really sharp people. Like most of the folks that we work with on the passive investing front. They're from my similar background. Generally they come from Silicon Valley, they're brilliant academically, often they have an amazing track record in terms of their own careers. And they're still working and like ripping it up, just doing amazing stuff in the world of technology, you know. And these are employees of like Facebook and Netflix and Google and all this stuff. So they're not dummies, but they want to be spoken to and communicated with and educated with the degree of empathy, you know. So what I think has been a really fascinating, fun challenge has been trying to bridge that gap for them in a way that is not placating and in a way that is actually going to be useful to get them involved in something that I truly believe to be an excellent part of a portfolio. It's the thing that I wish I had started doing far earlier. I was dumping money into my own 401k for 13 years and I kind of wish I didn't overdo it so much. I still think if people are out there getting a company match, they should always get the free money on the table for that, as an example. But if you could have told me you could take the excess that you have instead of overdoing it on your 401 spends and go and find ways to actually generate cash flow you can use in your lifestyle now, I wouldn't have believed you. And so I think a lot of that opportunity on education has still yet to be met correctly. And I look at that challenge as something that's really fun for us to deal with. Meaning an investor reaches out and the first thing they often have in their mind about what it means to invest in real estate is I go buy a rental and I manage it myself. I mean that's it. I mean, that is the common association people make. So how do you get them from that posture of thinking? Okay, I'm going to go. This is my manifestation. I've usually done index investing. If I'm a theoretical investor, I've done Index Investing 401. Maybe I've done some single stock picking. Maybe I'm really pumped with how my Tesla position is looking. Oh, now I should go consider investing in this piece of a large storage or apartment facility. And that's the kind of stuff that's just really fun to work on because it is a compelling asset class or they are compelling asset classes. But it's not easy to wrap your heads around the stuff that you already have expertise in deeply in your own career. Lane and I've come to build over years. People don't walk around thinking, oh, gplp, totally the common structure to find in a syndication. It's just terminology that scares the bejesus out of people. So that's probably been one of the most fulfilling things, is just being a resource and educator for people. But we still have so far to go on that front.

Yeah. And I think the traditional investments and the things that you and I know well from our Corporate life is 401k, the traditional. You know what, buy a house and grow equity over time and not look at alternative. A lot of times alternative investments weren't even an option to a lot of people. There wasn't even. It wasn't even out there, to your point, in the last five years. Now it's really growing and such. And there's 506C where you can invest as an accredited investor, but there's those options as a 506B where if you have that education that you're talking about, Spencer, then you can be growing into a sophisticated investor, which you can then start investing in these investments. So the more knowledge, the more education, especially given the days we're in now we're having that physical asset, that property that you can touch, feel, go to and see is good to have in any portfolio. I don't think, and I've told people this, who are my investors and getting out of the stock market completely or getting out of your comfort zone completely and putting money into real estate. I'm all about diversification and learning and growing based on experience and trust of, you know, who you're working with, but appreciate that. And as far as the education, I mean, podcasts are obviously one avenue that you are doing it. What other ways are y' all educating your investors or Potential passive investors.

Yeah. I personally can't get around how helpful it is to just look at real deals. You know, like, it's just pragmatic. And so when people like, we recently launched a new website and an investor portal. And I'm excited about that because that just means that we're able to get more eyeballs on the deals. And sure, that helps with the business, but also, frankly, most of those people won't do it. And that's fine. What I would rather have people do is learn from fact, is learn from stuff that is not a bunch of hogwash on the Internet, because unfortunately, a lot of the information that is out there is just okay with a small fraction of being downright dangerous. And so to validate your point further, Wayne, I think I'm the guy who wants to get the message loud and clear to folks. No one should go take all their money out of the stock market and dump it into real estate. That is not ever my message, period. It's about balance. It's about thoughtfulness. It's about a balanced portfolio with a chunk that's carved out that solves for your specific needs and goals. I think seeing real deals is a great way to do that. So if people want to go educate, what I usually do is I'm also the person who's confident enough in what we do to point folks towards other people that some might argue our competitors because they come back so oftentimes, the more that people are able to educate by doing, people can go get some diversification across different groups, asset classes, and beyond. And that's a good thing. We all pay attention more when we've actually got skin in the game. And so I think folks, if they can just carve off a modest amount of their investment capital, take the time, do their research, get on biggerpockets.com if they haven't done that yet. I still think that, like, one of the most underlevered resources out there is not just the website BiggerPockets. It's a big website and they're not paying me to say this, by the way. I think the forums, like, go into the forums and nerd out. Just nerd out on the forums in BiggerPockets. Click into every possible one you can find. If you're, like, deep into your podcast journey or devouring stuff the way that I did a couple of years ago, you know, go in there, but read with a keen eye. There's just as much good stuff as there is not good stuff. So you still have to read, but you're going to find excellent resources, excellent people in there. And as I encourage people to do that well.

And as we close up here, what are some of your proudest moments investing in real estate?

Oh, man, I think the proudest moments are when I get a personal note back from someone, not necessarily just an investor. Those are wonderful. It's really nice to see a recommendation or a referral from an investor to another person. Person because they had a great experience. But as silly as this sounds, that, that one duplex that we bought that I told you about where we overpaid and we still have it, it's just chugging along, getting a personal handwritten note from the tenant that lives there because we met them halfway on building a fence, you know, and like, it's those little moments, as corny as that sounds, where they, they kind of validate, like, cool. If we're going to be in this kind of business, we're doing in a way that I can sleep well at night, you know, and so it's a small moment. So it's not as grandiose as probably some people were hoping for. But, but, but that, that's the stuff that matters to me.

Yeah, taking care of your tenants, I mean, that, that's pretty big. Regardless of what, you know, there's, there's a lot of people out there not taking care of tenants and let's say, given this time, anytime really. But the more you take care of your tenants, the more they'll take care of your property and you long term.

Yeah, totally.

So in closing, you know, are there, is there anything you'd like to share or provide information on how listeners can reach out to you?

Yeah, I mean, I'm pretty active on LinkedIn and I mean, you already know that, Wayne, but I think every day I'm on there ranting on the Internet basically. So usually it'll be some mix of real estate education combined with professional development because that used to be a big focus of mine in my corporate life. So, yeah, please do come connect with me on LinkedIn. But also we just launched our brand new website on Monday. Last Monday. Sorry. And so go check it out madisoninvesting.com and reach out.

Well, congrats on your success and wish you much luck and fortunate in 2021. But if I can do anything for you, let me know. And glad you're on the show and really glad to meet you today.

Yeah, likewise. Thank you so much, Wayne.

That's all for this episode. We hope you subscribe, share and leave a review of the show. For more information about passively investing in multi family apartments, check out Wayne's free ebook by going to creipartners.com eBook. Also, follow us on Facebook by searching CREI partners. This was the untold stories of Real Estate Investing.