Actively Invest in Passive Real Estate as A Busy Professional with Taylor Loht

For folks who are in real estate who are really dedicated to being successful. If we want balanced lives, we need to think about investing our time in places other than just in our businesses.

Welcome to the Truly Passive Income podcast. I'm Neil Henderson.

And I'm Clint Harris.

Our guest today is Taylor Loat. He's a real estate investor focusing on multifamily apartments and self storage properties.

He's invested in over $50 million of commercial real estate acquisitions. He has made it his mission to help others learn how to escape Wall street and build wealth on Main Street. Taylor, thanks for coming today, man.

It's always great to see you. I've known you probably three years now. We've had you on our previous podcast for Road to Family Freedom and it's great to see you again, my friend.

Thanks for having me today. It's great to see you. It's been about four months since we last saw each other in person, correct?

Yeah. Great to see you again.

I was at the Best ever real estate conference back in March. Always a life changing. The first time I went to that conference two years ago was absolutely life changing and blew me away.

And you were part of that meeting as well. So great to see you again. Thanks for being on. You got a lot going on.

So you created the passive wealth strategy show you created the company NT Capital.

I want to hear a little bit more about that a little bit later, but quickly kind of tell us a little bit about yourself, how you got started, how you got invested or involved with passive investments and eventually getting to the point of raising capital for those investments. So give us some background.

Sure, absolutely. And speaking of having a lot going on, as we were discussing before we started recording, I got married about three months ago now.

So so much going on in life, in business and everything.

Congratulations.

Thank you. So it's a ton of fun and you know, love talking about that. But anyway, yeah, how I got started in the business was rewinding.

When I had my first big boy job well over a decade ago now, I finally had a couple of nickels to rub together and I thought, well, how do I turn these nickels into dollars? And even more.

The first thing that I did after listening to various investing podcasts was I picked up a book that is right here on my right, the Intelligent Investor by Benjamin Graham.

That is the actual copy that I read and it's a very dense read, but teaches you about public security, investing, stocks and bonds, that kind of a thing. Once again, it's a pretty tough read, but that got me My start in the publicly traded space, you know, index funds, that kind of a thing.

And after a few years, I was doing well in that investment, but I was also doing the math and seeing where that was going to lead me, and it wasn't taking me where I wanted to go.

Essentially, I found out and learned that I needed to be able to add value, to produce cash flow and to generally grow differently than you can in the stock and bond market, so be able to kind of actively participate in my investments and all that kind of a thing. So eventually, after a few years of searching, I found real estate investing, as many of us do, and I'm sure your listeners have.

And that led me to learning about commercial, specifically apartment investing. And I thought, wow, that just got me so excited. How can I own an apartment complex?

I remember years ago living in apartment complexes and wondering, who owns this? I kind of wondered that, but I was just like, oh, rich people own it. It was separ from me. Then I learned ultimately that, hey, I can own this too.

So learned about that and saw that my inroad into apartment investing would be syndications.

I wanted to get on the general partnership side of things, to be able to be an active participant and add value in addition to just growing my capital. And there are a lot of paths you can take to get into that space.

For myself, since I had capital saved, I had investing experience, and I was in my 20s at the time, so I had a relatively long time horizon. So I felt comfortable essentially taking what could have been considered a risk at that time.

All investment carries risk, of course, but thought I understood what I was getting into, so started passively investing in apartment deals. I was spending a lot of time and energy and frankly, money attending these national syndication events that folks are aware of.

I've been to so many of those over the years and was meeting sponsors again. I had some money and I was like, all right, I want to get started passively investing. And that led me to the more active side of things.

Wanted to get into the active side of things, but needed to get my foot in the door. Needed to learn, really about how these deals work firsthand rather than just reading books. And books are very important.

If folks are watching the video, you can see I got an awful lot of books behind me. I'm all about reading books, but you're always going to learn more by doing so.

I got started passively investing with the goal of getting on the active side, essentially.

Gotcha.

That was great explanation, but I wanted to ask one question before we Move on is you got to start off reading the Intelligent Investor, Benjamin Graham. You know that's very securities focused, correct?

Yep.

So why not Wall Street? Taylor? I invest a little bit in index funds and things like that. Why the focus on real estate?

I always love hearing other people's explanation for this.

Sure. So I think we can look at Warren Buffett's journey with the value investing model. Now, Benjamin Graham was Warren Buffett's mentor back in the day.

And that's the strategy that Warren Buffett used originally that essentially be described as I think he puts it as picking up, walking around, picking up cigar butts and taking the last couple puffs off of the cigar rather than looking for great opportunities.

Warren Buffett went on to meet Charlie Munger, go into business together, and they stopped doing the cigarette butt strategy and started looking for better value opportunities.

They built a business around that and that's really how they grew, was growing Berkshire Hathaway and looking for great value opportunities, not just looking for cheap value stock investments on the market and waiting for the market to kind of come around.

And what I found in my way was that as real estate investors, when we go and do deals, we have great opportunities to buy a property that is underperforming. It's under the market.

We can take the reins and take control if we're on the active side of the deal, of course, and improve that property's operations, its income, everything around it to grow its value and then either refinance it or sell it for more later. But when we buy any publicly traded security, we can't do that. We can't take the reins and take control. Now, there are pros and cons of both. Right.

We want to give a balanced picture here. One of the advantages that you get with many publicly traded securities like index funds or whatever, is you have quite a lot of liquidity. Right.

You can get out of your investment at any time if you need to, or choose to. Now, as real estate investors, we kind of can't do that.

Yeah, you can fire, sale your assets, but you're going to take a huge bath, lose out a lot of money. Right. Real estate is an illiquid investment, so you can consider that, that a downside.

Folks have conversations around the relative advantage and disadvantage of liquidity versus illiquidity.

But to me, the ability to really take the reins of our investment, take control and forcibly add value and control the strategy, I think an undeniable advantage of real estate investing.

That's a great answer, great response. And especially the ability to have control over the asset and the forced appreciation that comes from whatever it may be.

Like swinging a hammer and increasing the value of the property through renovation or through asset class conversion buying. One of our strategies is we buy old retail and we convert it to self storage.

So any kind of forcible way that you can dramatically increase that value, it's very linear. You can tell what it's going to do to the appreciation if you're using a net operating income valuation basis.

One of the things that you said early on is you got invested. You read the book, you got invested with that and then you started doing the math.

One of the things that I get concerned about is attempting to be a co host with Neil's great at podcasts and I'm flubbing my way around. And one of the things I about is sounding like a broken record because a lot of the same thoughts keep coming to the forefront.

People say they're all learning the same thing in different ways. And I kind of try to summarize it a lot of times and so I'm going to hear myself say the same things a lot.

But my belief is that the previous generations could save their way to retirement. You could get a decent job that had a pension and you could just put money away and you could get yourself there just by saving.

And frankly, I think that got taken away from us by a lot of bad fiscal policy and other things. Instead of just being able to save in a bank account or a very conservative savings account, you had to start getting more aggressive.

And it's gotten to the point now with our generation that in my opinion, depending on what your final financial goal is, it can be really hard to save your way there or to even invest your way there if you're not being aggressive. Like if you're just trying to use the stock market approach, it can be hard to get to the destination that you want.

So that control with the asset that comes along, you're betting on other people's ability to run their company the way that it needs to be run for you to get the benefit off of that. It's gotten to the point that in order for you to kind of get the returns that you want, you have to be a little bit more aggressive.

And as you're more aggressive in the stock market, traditionally that comes with a lot more risk. I love the fact that you started doing the math. And that's when I was like, listen, we got to do something else and I need to be in control of it.

Absolutely. And that has, what you said sparked another thought in my mind that I'm still, if I'm honest, working on crystallizing.

So I can best explain, but you'll probably relate to this.

So, you know, in my opinion, the more traditional, if you will, Wall street investing and wealth building model in terms of planning for retirement is based around accumulating enough assets and the price appreciation of assets over time because you bought them, you know, whatever, 30 years ago and you're going to sell them off when you're ready to retire. Okay, when I need money out of this, I'm going to have to sell it.

I'm going to have to sell a couple units of this investment to the market and get the money and that way I can use it. Whereas real estate investors think differently about that and many other things.

But real estate investors tend to look at the cash flow of our investments. We want to own a property and just get paid for the fact that we own the property.

And again, real estate investors, if our goal is indeed to retire or whatever, we're generally going to plan our retirement around having sufficient quantities of assets or what have you that will produce cash flow upon which we can retire.

Not that we're going to buy up so many properties that, okay, one year we're going to sell this duplex over here and we're going to live on the return for that for a year. And then, okay, we had 10 duplexes, for example, now we have nine. We sold off one of them. Now we need to go sell number nine.

Now we go sell number eight so that we can live off of the return from those. Granted, there are some real estate investors out there that will do that.

But the majority of real estate investors, I think probably inspired by one of these books over my shoulder right here, Rich dad, Poor dad, we think about the cash flow of our investments and I think that's just probably one of the biggest disconnects between the way real estate investors think about building wealth over time versus the more public stock and bond type of investments and dividend paying stocks out there. You can get bonds that are going to pay interest over time.

But still for the most part, I found that the mentality is still based around accumulating assets that you'll sell off and then live on the sold off return rather than the cash flow.

Well, I think that was a fantastic explanation and you brought this right up at the end, which is what I was going to say is that the closest analogy in stock investing to me is dividend investing.

But I think what you're typically missing with dividend investing is one, the tax advantages that come with real estate and two, the leverage that comes. And I think that's two, leverage does cut both ways and you need to be mindful of that when you're investing with leverage.

And there are obviously people who invest with leverage in the stock market. I think it's an even riskier strategy than investing physical asset that you're leveraging. But to me that's the closest analogy that I can think of.

And I love that your explanation of you're not going to have a build a portfolio of 10 single family properties or whatever and start selling them off. Mostly a smart real estate investor will just re leverage them. You'll just do a cash out refinance after they appreciate it.

You can either live off that money or use it to invest in another cash flowing asset that increases your cash flow.

And that to me, if I was, was in that position where I had all those rental duplexes and I needed to sell one to live on the, the capital, I would kind of consider that a loss like oh, this isn't quite going the way I had planned, you know, so. But that's just fine.

So as you were making the jump obviously into syndication, you needed to supercharge things and then you immediately knew that you wanted to get on from the limited partner side to the general partner side. Now that's a two edged sword, right? Everybody kind of want to make that jump.

And a lot of people ask well, what do I need to do to be a general partner? And a lot of times the answer is, well, you need to quit your job and work 60 to 80 hours a week and not get paid for three to five years.

And here's a list of everything that needs to be done. You pick out which ones you're going to accomplish.

It can be a lot, but ultimately, especially if you're a young guy like you like that's the Runway to get to your final destination. So how did you make that jump. And how did you start? Talk to me about NT Capital.

And obviously, if you're partnering with operators that are out there doing syndication, you got to have three things. It's time, it's experience, and it's money. So I think that you help with the money side of things and the capital.

So tell us a little bit about that journey.

My first real venture or successful venture onto the general partnership side of deals. It took a few years, honestly, to put all the pieces together to make it happen.

I mean, people aren't going to tell you is how hard and how long it can take to put all the pieces together to really do your first deal. Now, certainly there are folks out there who do their first deal very quickly, but that wasn't me, that wasn't my experience. I just stuck with it.

You know, I'm kind of stubborn or persistent, however you want to look at it, but stuck with it until it worked. So my first foray into the general partnership world was not just raising capital.

You know, we bought an apartment complex, asset management, all those other things. Everybody's expected to raise capital for the deal, of course, when you're doing a deal as a general partner.

But through that experience and other experiences early on in the business as a general partner, I learned that my favorite part of the business was working with investors and finding investors for deals, raising capital, all the things that come along with raising capital for a syndicated deal. That was just my favorite part of the experience. I never really enjoyed hanging out with commercial real estate brokers.

I like doing due diligence trips and things like that. They're interesting. Great way to learn about your investment in the market and everything like that.

But nothing just gave me the juice quite as much as spending time talking with investors. So first few years of my time on the general partnership side of things, I really set my sights on focusing on just raising capital.

And that's a hard thing to do if you care about following the laws. There are a lot of folks out there that are just kind of flouting the securities laws and don't really care and they get caught eventually.

There have been some folks that have been slapped on the wrist or worse, but I didn't want to find myself in that position. My number one concern is being able to sleep at night honestly and feeling good about the business that I'm building.

And the big part of that is following the rules, right? Of course, doing deals, behaving in ethical manners, all that kind of a thing.

So that also took a while to find the right opportunity to be able to raise capital for deals and focus on that. So there are also folks out there that are starting their own funds to pull investor capital and invest that in deals.

Back when I was kind of getting started in this business model, there were a few of those services out there, but they weren't really quite fleshed out. And my understanding is that there are some question marks as to how some of those structures go with RIA laws and things like that.

This is a bit outside of my area of expertise because I, again, I haven't started my own funds.

But yeah, it took time to decide how I wanted to reposition myself and kind of redesign my business around just raising capital for deals and, and building the right relationships to be able to do that and getting all the pieces in place.

And then once all the pieces were in place, learning about how I can continue to further optimize the business so that I could continue to grow and raise more capital, find better investors, all those kinds of things. I'll give you a few things that really moved the needle the most for me. And I didn't know at the time that they would.

If I'm honest, it was, honestly, it, it felt like a risk, but it was a limited risk. The benefit of hindsight wasn't really that big of a risk long term.

But that really boils down to the people that I hired in my business because early on I was hosting the Passive Wealth Strategy show, talking about real estate investing in general and redesigning my business. But what I was doing was all of the day to day work in running a podcast. I was editing the show.

I edited I don't even know how many episodes, probably 150. And despite all the talking that I'm doing, I actually don't really enjoy listening to myself speak. So that was a little painful of an experience.

But really the issue was all of the time that I was spending on editing the show. So it was the big time investment versus the relative ease of editing a podcast. It's not that hard to do. It wasn't that hard back then.

And now with just how much better the AI tools and speech recognition has gotten, you can kind of just click a couple buttons and edit a full show. You have to get into it a little bit more to do a really nice, polished final product.

But spending that time doing something that was relatively easy and that led me to just spend too much time and too much energy and too much mental focus on the day to day of just putting out a podcast. Eventually I found somebody who could help me edit the show.

One of the problems with that was some of these podcast editors are charging an absolute arm and a leg for this easy service, right? So hired somebody that gave me some of my time back, but I still had some pieces that I had to deal with.

I put out weekly newsletters to my investors and to folks who listen to the show. Just educational content, giving the content itself to the editor. That takes time.

Again, it's not that hard to do, but it takes time to download those files and put all the things in place. So after a while of doing that, I was like, all right, this isn't quite enough. I need to hire somebody else.

So I started hiring virtual assistants to handle those tasks in my business. And that was largely spurred on by my friend. And I'm sure you guys are friends with this guy as well.

Whitney Sewell, one of the best guys I've ever met in this real estate business.

We've been friends for a while now, but he's always been very willing to share his knowledge and experience and provide input and that kind of a thing. And one of the things that I think he did very, very well, very early on in his business was hiring people.

And I kind of dragged my feet on that a while, but I thought, hey, I'm. I'll emulate his experience. And started hiring virtual assistants. And I failed at it at first.

Like, some of them wouldn't show up or they would do a bad job, or just everything around it wasn't working out. And I thought, okay, so this works. Hiring virtual assistants in your business works.

But there's something that I'm not doing right, or maybe many things I'm not doing right to make it successful. And months and months of plugging away, hiring different people, I learned that there are a few things that I'm doing wrong.

Feel free to cut me off at any time here. But this is. Made a big difference in my business.

No, I do have one question.

Sure, go ahead.

Did Clint put you up to this?

I've been having this conversation with Neil for weeks. It feels to me like you read the book who, not how, by Dan Sullivan. About to say, I bet it's somewhere in your office right now. But no, keep going.

This is fantastic.

Yeah, no, I've got the audiobook and I'm listening through it, and that book probably has been recommended to me by more real estate investors than any other book. Maybe there might be one or two others that are up. Never split the difference.

Right behind me and rich dad, poor dad, that's the top three, but who not how huge. Love it. Everybody should check it out. But I started doing this before I'd ever even heard of who not how, right.

I just been told to do this by so many investors years ago and I thought, oh, I'll try it and fail at it. But the things that I was doing wrong.

So first off, I wasn't paying enough because I wasn't as committed to having someone who was overseas, professional, knowledgeable, willing to learn everything that we look for. For some reason I was in my head thinking about hiring a virtual assistant.

Like, and I hate to say this, but like they were an overseas robot who could just learn things and work for next to nothing.

Granted, even if higher earning virtual assistants compared if you hired someone in basically any part of the United States, the US person's going to be a lot more expensive no matter what. But first off, I was started being willing to pay more. I mean that was number one.

Number two, so you'll notice here in this conversation I'm trying to be very careful about saying hiring virtual assistants and not using virtual assistants because I think our language really informs the way we actually approach problems. And a lot of people when they talk about virtual assistants in any business, they talk about using them rather than hiring them.

And these are people, right? If we want great people who just so happen to live overseas, then we need to treat them as we would and think about them as we would.

You know, Americans, we wouldn't talk about using employees to manage our properties or whatever. We'd say we're going to hire employees, we're going to hire a property manager, whatever.

And so making that mental shift actually made a difference for me. And I honestly, somebody had to tell me to do this. I didn't think of this. Somebody taught me this, they told me that.

I was like, oh yeah, that makes a lot of sense. Started applying that to the business and started making a lot of difference.

Of course, training, setting very clear expectations with the VA is very important.

Being willing to hire someone for more hours, whether it's part time or full time, folks who are are willing to show up on time, who are knowledgeable, who are oftentimes college educated overseas, can speak English incredibly well. You'd be amazed. Well, they want consistent income and employment.

So if you're hiring somebody for two hours a week, well, they need more time than that, right? They need to feed their families, they need to pay for their housing and everything like that. So that made a huge difference providing tools.

And again, that comes in the form of training, but also kind of online tools being available most of the time to communicate with my assistants, mainly through Slack. They can message me through Slack at any time. Very important. My assistants also give me a daily report every day when they're done. Very simple.

It's what you accomplished today. Couple of bullet points on what did you get done today. Next one is issues. What issues did you have today? If none, that's fine, but just right now.

And then number three, what are you going to work on tomorrow or at the end of the week? What are you going to work on Monday? Nothing formal, but it's letting me know that, hey, you're on track if you had any issues.

Oftentimes those issues are something that I can fix in all my almost no time. Right. But I don't know about that until they tell me that there's an issue. So I need that report.

And then what are you going to work on the next day or Monday? This just showing that they have a plan, they're staying on track and that's been very important. But so many of those things, I didn't know that.

Right.

I hate to say it, but I went through some folks who were probably really good people and could have been great overseas employees, but I didn't know how to work with them to optimize their performance. And all of those things have. Have really helped me quite a lot in doing better with hiring VAs.

That was great. To me, that's really about getting your time back. Right. So that's the number one thing that you accomplished here with that time.

Obviously, you're putting together, you got a weekly newsletter, you're putting together content on your website, you've got a podcast going. Once you get your time back by having the people helping you produce that content, I know that you've probably doubled down on what you were doing.

Is that avenue to social media content and the newsletter content, the podcast content, is that the number one way that you think that you've really had your success with raising capital and attracting new investors that you're able to connect with?

For me, far and away, my podcast is the best way for me to initiate relationships with investors. Right. We don't talk about our deals in the show or anything like that. It's purely educational content. Getting to know me.

But when folks listen to your podcast and they hear about how can I get in touch with this person to learn more about their deals, they can take some time to hear that message till they sign up to have a call with me or whatever. But I think that helps build comfort with. With who they're dealing with. Right. They're listening to my voice a couple hours a week oftentimes.

Or if they watch the YouTube channel, they're seeing me. And I have, honestly, my YouTube channel is tiny. I don't have all that many viewers.

But the people who watch and join in are just more engaged and several actual investors in my deals through my YouTube channel. Again, even though it's pretty small.

But it's because people get to know you through spending time with you and they get to see your eyes and how you behave on camera and all that kind of thing. The questions that you ask, asked to guess. And that's been very successful. Like, I used to spend quite a lot of time on the Bigger Pockets forums.

Like a lot of time participating on the forums.

And I did have quite a few people come to me through their website to sign up to learn about a messing with me and schedule calls with me and everything like that. Not one of them invested in my deals. And that might change in the future. I'm not honestly sure why that is.

I think it's because you're on a forum like that, you're one of a thousand faces that, you know, maybe they talk to a ton of other people and that's okay, but they don't really engage to build a relationship with you through those forums generally. And maybe it's because I just didn't quite figure out how to foster that relationship, but it's just a learning over time.

And I will back up to comment on something that I said. So I said I used to spend a lot of time on the BiggerPockets forums and this is something that I'm working on myself trying to change.

But I mentioned earlier about how much our language that we use, but also the way we think about things in our mind, the words that we use in our heads when we're kind of talking to ourselves how important that is. So spend time. Yeah, we can look at it as spending time, but really I think we're investing time in no matter what we're doing.

At least for me, when I think about investing my time in something, then it becomes significantly more meaningful and you can use that for anything. I invest time with my wife yesterday on the holiday to go spend time in a park and hang out and things like that.

Or invest time in a certain way, certain part of my business. Spending time is so much more like flippant and oh, I spent. Blah, blah, blah, blah, blah.

But if we think about our Time as an investment in whatever we're doing, I think it's a lot more empowering, but it also highlights the importance of our time and its scarcity because exactly like you said a bit earlier, Clint is just our time is our most important asset. It's something that we can never, ever get more of of.

And for folks who are in real estate who are really dedicated to being successful, if we want balanced lives, we need to think about investing our time in places other than just in our businesses, whether it's investing time in ourselves and our physical fitness. I love training Brazilian Jiu Jitsu. I go train about four or five days a week.

Or investing time with our spouse's significant others or our families or children or whatever. That's still, I think, a key part of having a balanced life generally. So that's something I'm working on for myself.

I want to stop saying spend time, and I'm starting to catch myself staying spending time, but I haven't quite corrected it in my head. I'm hoping that I'm optimistic that'll make a big difference.

I love it. Our mindset and the words that we use both internally and externally make a huge difference in everything. And I love that.

Just that slight mind shift of not spending time, but investing time. And I think about that all the time. I invest a lot of time in this podcast.

I invest a lot of time in our business, and there are times where I'm not investing enough time in my son or my spouse. It's a great mind shift, and I love it. It also gets back to so much of what we're talking about here over the last 10, 15 minutes.

And people certainly didn't log on to find out how to run a podcast and not lose your mind. But I want to circle it back to what it is we're talking about, which is that that what's your core focus? Like, what's your core money making?

What's your best leverage that you get out of the hours that you invest every day in doing things? And for you, what you've discovered is that the highest and best use of your time was not editing your podcast personally.

And it's a challenge I'm facing on a daily basis, is that it takes an enormous amount of time. And I'm also a perfectionist because I know enough about media and stuff like that to be dangerous.

And I know that how I want it to look, and I'm not trusting anyone else to take that away from me right now. And I have to let it go Just like. And now here's where I roll it back to real estate investing.

So many investors need to let go of that control in order to get their time back.

Whether they are an active real estate investor who like hey, I can make 35% on my money investing actively in the real estate that I buy and we go okay, that's great, we can get you do close to that, let's say on average of let's say 20%. And all you have to do is wire your money and read the investor updates and maybe do some due diligence on the operator at the beginning.

And that's powerful. And there's a lot of people who are don't invest actively, but they have good, well paying jobs that take up all their time.

Most of our investors are doctors, lawyers, business owners and the last thing they need is another thing on their plate. But they need to find a way to leverage their money so that they can buy their time back. That's my speech, that's great, Neil, to.

Expound on that a little bit. Especially if you think about who these investors are, the white coat professionals or the people that are high income earners.

I tell people this all the time.

Look, if you want to go be active, if you want to wholesale flip houses, whatever you want to do in real estate, you can beat the margins that we can offer you. You can like that's just the reality.

If you want to actively go out and work it and that be your job job, you can go be a real estate investor on your own and you can beat our margins, but you're going to have to be very active and it's going to take you a lot of time.

For a lot of these people that are high income earners, like if you're a physician, a CT surgeon or colorectal specialist or something like that, I mean you're operating, you're worth a couple hundred bucks an hour, right?

So if you're going to invest your time to go get experience and learn the lessons of how to choose contractors and get renovations done, or go to the courthouse steps to buy properties, whatever it may be, the opportunity cost of that time is really going to eat you alive in the long run.

The highest and best use of what you're doing is just to keep doing like keep the main thing, the main thing, just keep working at your day to day job. And that's worth so much more than you going to learn how to flip houses or anything else. Just keep doing that.

Then you live on, right, like whatever you're Earning spend less than you earn, right? So you take that value delta, you give it to somebody else who can take the time to get the experience.

To get it right.

Right. And for those people out there that like being active investors, that's great. And a lot of people have a love for it and a passion for it.

And I'm one of those.

I certainly get that at some point, if you are an active real estate investor and that's how you're making your living, you've created a job for yourself, right? You've got a job. At some point you're going to want some kind of passive income, right? The name of this podcast is Truly Passive Income.

At some point, you need that passive cash flow that's coming from a property that somebody else is managing and operating or building out. And I would argue that the time to do that is about five to seven years before you need that passive income.

It takes some time to get invested with the right operator, work with the right capital company, find the right projects, and get through the forced depreciation phase to where one large investment or multiple investments diversified across either a fund or a group of properties. It takes some time for those to start coming out. I use the analogy like you don't wait until it starts raining to build Noah's Ark, right?

That's something. You got to think ahead for that. But when it starts raining, then it's a little too late at that point.

So it's one of those things that for people that want to be active investors and make that income do it, just be aware that at some point you're probably going to want to stop doing that. And that's not the day that you want to start thinking about making that transition and getting that time back.

Because it takes time to kind of unwind an active portfolio and switch it to an impassive investment strategy.

Takes time to get comfortable with that.

And I think to go back, a lot of folks are looking for more excitement in their investments, no matter what they're investing in, whether it's real estate or Wall street stuff or, heaven help us, we saw the crypto boom, you know, in 21, 22, and a lot of folks buying NFTs for hundreds of thousands to millions of dollars because it seems so exciting. And I don't know, some of us were taken in by that stuff. I certainly wasn't, but I saw that and I was just waiting for the balloon to pop.

But I think people are looking for that one thing, this one investment that's going to set me Free.

But the truth is that over time, if you take it slow and make a plan and execute and spend less than you earn and all these other things and do the tried and true things that honestly are not exciting. It's exciting to have a cool car, at least for a little while.

But if you kind of forego on that and instead invest in a deal or buy a rental property or invest that money in some other way that that instead of being worth a quarter of what it was in five to 10 years, if all goes well, do the right real estate deal, it should be worth quite a bit more. Right? That's a goal. That's why we're here. But kind of frivolously spending versus investing our money, obviously one is a lot more fun in the moment.

I think we probably all agree with that. But ultimately if we make long term plans and stick to them and execute over time, then things tend to work out pretty well.

That's great. Probably wrap it up here. But I actually want to ask one more question before we take it out.

Is that you're investing in multiple asset classes, self storage and multifamily, correct?

Yes.

All right. How are you picking your operators that you trust?

Man, it's a big question, right? So for me there are quite a few things that I would look at and consider. So track record is obviously very important.

Have they done done deals before?

And not only have they done deals before, have they done this exact type of deal before and preferably for me, have they done this exact deal or something extremely similar in this market before? Do they know the business model and do they know the market firsthand?

Because even experienced investors over the last few years of this market cycle have gotten into new markets that they didn't really understand but they were chasing yield they thought they understood, but they were getting into a new city and blah blah, blah, didn't invest the time and energy to understand that city bought the wrong deal and it didn't work out for them. So those are a few things that we look for.

Track record, experience in the market, experience with the business model, alignment of interest is very important. I love if I can. This is not always easy but if I can talk to some of their passive investors that I can go find myself rather than get referrals.

But go track someone down and if you spend a lot of time networking in real estate, can send some emails. You can find those people if you ask around and put the reins in your own hands.

Sometimes folks don't think about are just the individuals on the team, what are their personal balance sheets look like? Do they need to do deals to keep the lights on in their home? And you can kind of go both ways with that.

They need to do deals so they're motivated to get out there and do deals, or they need to do deals so they'll do anything to get a deal done. Do they personally have the capital to be prepared for a rainy day in one of their deals? If that makes sense.

Even though I started in this business as a young guy in my mid-20s, I'm in my mid-30s now, which is young to some people, but it's not young to me how I used to be. Right. I'm one of the older guys now. I'm getting some gray hairs, concerned my hair might be thinning a little bit.

But anyway, there are a lot of young guys in this business that don't have the experience that I like to see.

So if I see a really young team of guys who haven't really done more than a couple of deals, I'm personally not interested because I think it might be less so now that interest rates are so much higher than they used to be. But when rates were 0% for the longest time, I think it was obviously good for a lot of real estate investors.

But that cheap money helped a lot of people do deals that weren't great and maybe get some big heads. So I think older guys that have men and women, older men and women who have experience and have seen.

Seen good deals and bad deals and done good deals and bad deals, to me, very important. So those are things that I personally think about.

I think that was a great collection of knowledge there to finish off.

Let me give you one last thing, actually. Let me throw other things out there, Google their names.

I mean, honestly, there are people out there right now, names that I'm not going to say for reasons that are obvious, like not treating their investors well. And you can just search their names and find like websites.

So there are full websites about some people, there are bigger pockets, forum threads about folks. It's one thing if you have a deal go sideways, but you're doing everything in your power to do the right things for your investors and all that.

Like, we can't control everything in real estate deals. Sometimes things go wrong and sometimes things go wrong and you just kind of screw your investors. Obviously those are very different things.

You can learn a lot by just Googling about a company or a person. So don't underestimate the power of just Googling people.

Great stuff, Taylor. So if any of our audience wants to reach out to you and find out more about what would be the best way for them to reach out to out sure.

If you'd like to learn about our deals or just chat about real estate investing, you can go to investwith Taylor.com that'll walk you through all the steps. I do love talking with folks, talking with listeners, learning about what folks are up to so you can reach out to me directly.

Taylor t.capital group.comtaylor thanks so much.

It was a real wide ranging kind of conversation. We went into a lot of different territory, but I loved it and I think our audience will as well. Thanks man. I appreciate it.

Thank you.

Thanks so much Taylor. Really appreciate it man.

Thanks for having me.

Thank you so much for listening and watching the Truly Passive Income podcast.

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