Follow These Tips to Master Diverse Investments with Chris Larsen

The nice thing is, even if you're an investor in, say, four locations, you're going to get that increase in equity multiple based upon the fact that we're going to sell that entire portfolio in the next three to five years.

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

And I'm Clint Harris.

Our guest today is Chris Larson from Next Level Income. Chris is the founder and principal at Next Level.

In addition to real estate, Chris owns multiple car wash locations across the Southeast, which I'm sure Clint and I are going to be digging into because it's an asset class we haven't talked about. So, Chris, welcome, man. It's always good to see you.

Oh, yeah. Love seeing you guys. Clint, Neil, great to be here. Thank you.

Absolutely. So you started investing in real estate at a very young age. What inspired you to get started so early?

And what were some of the biggest lessons you learned from those early investments?

Yes. Wow. We could talk for a couple hours just on that. Great question. I'll condense it, but I'll tell you how to get a copy of my book.

I kind of really delve into my story and kind of my origin story in real estate, if you will. You're listening today. We even send you a copy. But bought my first property at the age of 21. And yeah, a lot of people are like, wow, it's so young.

Like, you know, what drove you to that? And looking back, I'm like, that didn't seem that young to me. It's funny how your perspective shifts, right?

Yeah, Your perspective shifts over the years. But I do love to say that real estate's a get rich, slow game, and the earlier you start, the better.

So it allowed me to get an early start and also start learning lessons. So I went to Virginia Tech, got a biomechanical engineering degree. You know, Clint and I share a background in the medical device space.

And we just had Clint on the podcast and the Next Level Income show to talk about his story, which is phenomenal. And I knew I wanted to race bikes. I didn't want to be a biomechanical engineer. I didn't even know about the medical device space at the time.

And I said, okay, I'm going to go to college. I'm going to race bikes.

I'm going to go pro, and then I'll come back to school, maybe get a master's degree and figure out what I really want to do with my life. But I wanted to give it a go as a professional cyclist.

First day of summer, aptly the longest day of the year.

And I came back to school that fall, put my head down, and I just rode my bike and rode my bike and didn't get good grades, but I used the bike kind of as therapy. And I was training 20, even 30 hours a week, like, just burying myself. I got really fit. I. I hit kind of the highest level of amateur cycling.

My team ended up going pro, but right before they went pro, I actually quit. So I walked away from the sport because I didn't feel any love for it anymore. I didn't feel any passion.

And if anybody really contemplates it, people think, like, the opposite of love is hate, and really, the opposite of love is indifference. And I was indifferent towards the sport. I had no love for it. I had no feelings for it. And that was a really weird place to be.

So here I am, now a junior. I come back to school.

I sold all my bikes, sold everything, kept, like, enough stuff that I could build a bike again if I wanted to, but I sold it all. And I had. This is coming from somebody that had, like, eight bikes, right? This is a big deal.

And I'm like, all right, I didn't have a girlfriend, started going to parties, started making friends. And I said, you know what? I'm not going to have any regrets. I'm going to live without regret.

I'm going to live the life that, you know, Chris doesn't have. This is my friend. Chris doesn't have that. I have. I'm going to honor that. And to honor that, you have to have financial means.

You have to take advantage of opportunities. Like, if you want to raft down the Grand Canyon for 16 days, you have to be able to take the time.

You also have to have the money to be able to do that. So that was a financial reality that I knew, and I was given Money magazine by the same family friend that introduced me to cycling, Clint Provenza.

Made a massive impact in my life. And I started learning about the stock market and I was day trading in the stock market.

But I'm laying there at 3am one morning and I'm thinking like, this isn't investing, this isn't passive. I'm like, this is going to kill me by the time I'm 40 if I can't sleep because I'm worried about how to trade the stock market.

And I'm like, there's got to be a better way. So I read over 250 books on finance, stocks, real estate, investing, business. Actually got an MBA in finance and portfolio management.

And during that period I said real estate is going to be my path and because I can control the price that I buy it, I can have control with respect to the value that I create with the real estate. And that first property. I chuckled when you were talking about this during our recording, Clint. It was a house hack.

I said, hey, when you're ready to sell it, which I knew he was going to sell it. I said, come to me. I said, tell me what they listed for and we'll split the savings on the commission. We did that.

So now I had six bedrooms next door to each other. I rented out five of them and that's how I got started.

And then I did that, ran out of capital so went and found a high six figure career that I could go and create capital and just invested, invested and about 10 years ago started investing in the multifamily space which ultimately grew into the business that we have today.

There's a lot to unpack there.

Unbelievable tribute to your friend and what a great story, part of this that we just talked about on your podcast, that your story resonates with me in a lot of different ways. You and I ran into each other at a very pivotal part of my career and in my life.

Pivotal after that meeting, then right before it, that was actually a key moment for me is that I had just started been doing short term rental investing with some success. Just started getting into the self storage space when I got invited to go to a real estate conference.

And at that conference just you and I happened to cross paths and you had a very similar story to me. I had a background selling and implanting pacemakers and defibrillators as did you. And you passively.

Well not passively, but outside of that, nights and weekends you built a real estate portfolio and a system in place to help you make a transition. And I want people to know. One of the reasons it's really difficult to do is because I know that you're really good at your job.

I know the company you work for. I know that the area you were in, and I know that you had a lot of success there.

And that career typically has a very high ceiling, and that can be very, very hard to walk away from. And so I think there's a lot to be said for the way that you did it, that you put a plan in place.

It was something you've been working on for several years.

You made sure your company knew about it, and when it came time to make that transition, you had the fortitude to do that, which is something I was always wondering, like, how am I going to navigate when the time comes?

And when you shared your blueprint with me, it was something that really resonated that you set the company up with the sales plan and your team in place for. For a trajectory forward to have continued success.

And you made a move out of that into the investment space because you knew it had a significantly higher financial ceiling, but it also had a much higher ceiling in terms of the amount of time that you spend on it, the location independence involved with it. You've got two boys, just like I do, and the way that you were able to spend time with them in trips.

And I'm seeing what you are doing now, and you've told me some of the trips you have coming up. It's the same reason why I felt pulled in that direction. So it's beautiful thing for me to be able to see.

And it was at that moment, after you and I connected at that conference, there was a pivotal moment. And a friend of mine, Alex Feliz, was the photographer for that conference, and he captured the moment.

And I've got it framed in my office is that I was standing there.

Oh, you got to send me that picture. Yeah, I will.

It's a great picture because he's a great photographer, not because I'm great subject matter, but he was. He caught me at the moment I was standing in the lobby.

I had messaged you, and I was waiting to connect with you again to talk a little bit more about how you made that transition.

And.

And Alex came up behind me and snapped a picture.

And as I was in my life realizing I've got to quit my job, I've got to quit my career, because I know what the ceiling is, and I've got to go into something where I don't know what the ceiling is. I don't know what the floor is either, and it could flop.

The ceiling is significantly higher, not just financially, but our podcast is called Truly Passive Income because it's the pursuit of, you know, financial independence is shallow by itself, but when it comes with the amount of time that you're able to spend with your family, and when it comes with the way you're able to be location independent to go to lacrosse tournaments or tryouts or anything else, it's incredible. I want to talk a little bit about the financial acumen that you have.

You got an MBA and taking that into the real estate space, the way that you've used that across multiple different asset classes.

I know you to be extremely well rounded and you're diversified across mobile home parks and multifamily and self storage, as well as car washes, which I want to hear more about. And I think that this is a good point to bring up. One of the things that we talk about a lot of time is that it comes down to the operator 100%.

You're betting on an asset class. You're betting on a racehorse, right? In an individual race, this is a situation where you're betting on the jockey and not the horse.

And you're going to ride a bunch of different horses in a bunch of different races. Talk to me about that.

Are you doing that just because you want to be a well rounded investor, or are you listening to the market or putting yourself in a position where people can bring you different opportunities and you're picking. Tell me about that part of your journey.

Yeah, that's an excellent question. I don't actually think I've been asked that question before. I probably do a hundred podcasts a year. So real quick, let me mention something, Clint.

So first off, I mean, your story is awesome and it's something that anybody can do with a little bit of time. Your story is why I do what I do. And I just wanted to talk about that decision to leave. It's really hard.

You actually went to college for your career and if you're a surgeon or you're a medical device rep, or you're a business owner, whatever you may do.

And if you've created this identity, and I think, you know, it's funny, like in America today, it's like taboo to talk about things that seem normal to me.

Like, hey, I'm a man in America and I work 20 years and my identity is wrapped up in my career and I'm a provider for my family and, you know, I take A lot of pride in that. And I had to realize that before I could release myself from that identity and move on to something that was bigger and better.

And I think the challenge is it's not the financial piece. A lot of people, if you're striving towards financial independence, I want you to hear this.

Once you have the financial piece in place, that's not a roadblock. The roadblock's gonna be in your mind. You're gonna have to be okay with walking away from what was a prior identity.

And you're also going to have to create a bigger why, a bigger meaning for your life. Because you mentioned it, the pursuit of passive income is shallow.

It's also shallow to, quote, unquote, retire at the age of, say, 40 and not do anything anymore. You have now been given this opportunity. Like, I realize, hey, I have this life. My friend's dead. I have this life.

I now have this ability to do whatever I can. How can I make the biggest impact, right? And a big part of what I do today is being a father that you alluded to Clint.

And actually this year I flew him out for his 13th birthday as a surprise. I flew him out first class. And we spent two days skiing in Utah there and had a phenomenal time. So that was very meaningful.

But when it comes to my investment strategy and then how does that interweave into my business? So the framework that I have and I'm working on kind of how to, how to codify this so I can share it with more people.

The same reason I got into Med Device is the same reason I got into multifamily, which is demographics.

So I believe that if you follow the demographic trends, as you all do, when you pick markets, right, you pick solid markets, secondary tertiary markets in the Southeast, you want markets that have people that are moving to em, like, that's a tailwind, that's a rising tide that's going to raise those ships, right? So I look at the demographics. So I said, okay, 10 years ago, multifamily millennials are renting. Hey, baby boomers are also retiring.

They're starting to rent too. You know, we still have strong immigration numbers. These are all good things for multifamily, right? We had a housing shortage.

We still have a housing shortage. Those are all good things. Self storage, same thing. People are moving to new areas. They're downsizing.

Maybe they can't afford a home, or maybe they're waiting to buy a home. They need a place to store their things. Mobile homes. We have an affordability Problem. We can't build affordable housing.

Like, you literally can't build affordable housing. You have to create it some way or subsidize it. Mobile home parks, in my opinion, are great opportunities. I've always followed demographic trends.

And then in my book, I talk about how we apply the value add strategy to multifamily. And that's the other thing.

We want stabilized businesses that create cash flow and that we can create additional value, and that's going to yield cash flow for investors. It's also going to yield upside. Now there may be more upside in adding like a developmental component like you all do.

And, you know, you just have to be really good, whatever strategy you pick. So we do the same strategy for car washes. It's different.

Now the car wash space, which we can kind of jump into, I'm going to kind of set that aside because that's more of a business. It's got a couple different nuances, but still has a lot of those same components.

And when I started, I had one partner, gentleman, and we did a little bit of everything. And as you talked about Clint during our interview and Neil, you and I have talked about, it's like you realize you can't do everything yourself.

And the African proverb says, if you want to go fast, go by yourself. If you want to go far, then go together. You know, go with a team. And I want to go far. I want to have a lasting legacy.

So I want to have a team that I can work with. And I look for people that complement my skillset. Now, I can do operations, but I'm not energized by operations, and that's not good. Right?

So that's the other thing. Once you realize you're doing something not because you have to, you should choose to do something because you. You want to.

And if you don't want to do something and you're forced to do it, or you make yourself do it because you think you have to, that's going to pull energy that you're going to have away from things that you really want to do.

It's going to pull energy away from your health, it's going to pull energy away from your family, it's going to pull energy away from you personally, your spiritual energy that you have. So you have to be very cognizant of that. So I came to that realization probably in the past four years and said, wait, I don't love operations.

I built systems when I was in the medical device space. And that's how I believe I was able to be successful. And what I realized was I really enjoyed developing the teams.

I really enjoyed developing talent and then taking the systems that I had put together and showing people how to use those systems. And what that did was it allowed a repeatable process and you could substitute individuals into that process. It was a very robust way of doing it.

And then what I also found was I'd be in the OR and I could be the rep and say, hey, I want everybody to pay attention to me and look at me because I know what's going on.

But what I realized was when I helped the staff in the room, the nurses, the surgical assistants, the physician's assistants, the nurse practitioners, do their job better and not take credit, they were more fulfilled. And they actually, even if I wasn't there, they appreciated me for that. And I'm like, well, hang on a second. And then the surgeon was happier.

So it's like it taught me a lesson that I still take with me today, which is you don't have to have the credit. You don't have to be the front person.

If you can help other people that are better than you at things and want to do those things and are energized by those things, you're all going to win. So what I do now today is I partner with great operators in these spaces and I analyze the deals on the front end.

I help put the capital together when we acquire these deals. I work with investors. We also have an investor relations team here at Next Level Income.

And then I also, I'm always looking for, for new opportunities in the future because I'm a believer in the real estate cycle. I think that the market goes in cycles and you have to be able to be agile and pivot.

And while development in, like the single family space may be good, you know, like it was in my opinion, 10 years ago now, residential market, super expensive. Maybe it's not a great space right now, so you have to look at other opportunities.

So having that framework where look at the demographics, I look at the value add, and then I go after asset classes that fall in that framework at a specific time allows me to enter these other spaces and get better returns, I think, as an overall portfolio and also build a more robust portfolio.

Love it. So let's dig in to car washes just a little bit. So Clint and I, we talk about multifamily investing all the time. Self storage.

We even recently had Sam Wilson on where we talk about laundromats.

Oh, yeah.

And so what is from a syndication standpoint, what Is the typical business model of acquiring and turning a car wash into an asset for a passive investor?

Yes. So first off, I think it's important that I say the majority of our portfolio is in multifamily and self storage and mobile home parks.

Like that's the base of our portfolio. So if you're listening and you're like, wow, these returns in car washes are amazing, that's all I should invest in.

Just know that's not what I personally do. We've added car washes as a business class on top of that. So I think you first need to ask and say, well, why car washes, Chris?

Like why are car washes a good opportunity right now? So as far as the numbers go, 3/4 of people go have their car washed by somebody else. Some people have their car detailed.

You can get your car detailed for 100, 200 times 300 bucks depending on the treatments that you use. Or you can go have your car washed at a car wash. You could use a self service car wash where you do it yourself.

You could use in bay Automatic, like we own an in bay automatic car wash here in Asheville. Or there's a newer type of car wash called the express tunnel car wash. And probably a lot of people are nodding their head up and down.

It's just like it sounds, it's a big tunnel and it pulls your car through in an express fashion because you pull in on a conveyor belt and it pulls you through. So it's going to wash your car in three to five minutes. And these are the most popular washes now.

A lot like self storage, which is now becoming more institutionalized and mobile home parks. The majority of the space, the express tunnel car wash space are owned by small like mom and pop operators. So they own four or less locations.

As a matter of fact, according to international standards, there is no one major player in the space.

So according to the international business association is what they define a major player as somebody that has 5% or a company that has 5% market share share. And the largest operator in the space has less than 4% market share. So it's a very fractionalized business that's out there.

And if you think about it, it's going to cost 5, sometimes as high as $10 million for one of these state of the art tunnels. So let's say it's five, six or seven million dollars. It's hard to buy a lot of those if you're a smaller operator.

You need a lot of capital, you run out of financing Options, you know, if you're doing SBA loans, you, you know they're going to say, well Chris, you know, you guys have too much outstanding, right?

So you're not going to be able to continue to build institutions like the space because it has monthly recurring revenue, because we have memberships. So they love the space. But there's not like multifamily and self storage.

You and I, like we can all go into a large city and we can find an operator or a management company to manage a multifamily, a residential, a self storage property. Okay, it might not be the best one. We might have to search around a little bit. But in general, I like to say you can get one off the shelf.

If you buy a car wash wash in one of those same cities, the chances of you opening the phone book, which I know people are listening, like, what's a phone book? You go on Google, like you can't just find an operator for a car wash. You have to actually be an operator.

So a lot of people, they join a franchise so they get the operational capabilities of that franchise. You have the smaller owners that operate them themselves, which that's buying a job, right?

So then you're left with these big companies that are out there that are buying up these locations and operating them themselves. So when we looked at all the options out there, we said, well, if we're going to enter the space, we have to have an operating company.

So we stood up an operating company, we learned the business, we worked with the biggest consultants, the best consultants in the space and did that. And what we realized was this is not state of the art business. There's a lot of stuff that's not been doing done up to date.

The technologies aren't up to date. So there's a lot of opportunity there.

So we're buying these individual locations, Neil, typically anywhere from one to four locations from a single owner. And we're rolling them up into our brand, which is called Hurricane Express Wash.

And you can check us out@hurricane wash.com and we have about 30 locations currently. Now why it's appealing to an investor is because we can achieve typically double digit cash flow.

You typically have about 50% margins in this space, but then we need to bring the capital to purchase it, the capital to rebrand it, right, the operating capital for this. So it's very much like, you know, when you're buying a property. So then you say, well, where's the value add? Like where's the upside?

So the upside comes not from increasing rents, it comes from increasing revenue. We drive that from memberships. So what we do is we bring in a sales associate at these locations.

This is a little of the opposite of what the industry does, because if you're a smaller owner, if you have to pay, say $50,000 to be a sales associate, you're thinking, well, if I have four locations, that's $200,000 I could keep in my pocket. But the way we see it is if we can drive memberships, we drive the value of the business significantly higher.

Very much like when you all go in and you do a value add project, whether it's in the multifamily space and you invest $5,000 and you're creating say 50,000 in value in that one unit, it's very similar. Now, the other piece that adds value to this is that when we buy 1, 2, 3 locations, maybe we're paying an 8x multiple of EBITDA.

When you roll these up into a portfolio, you can get 12, 15, 18, even as high as a 20x multiple of EBITDA based on the size of the portfolio. And that's because now you have players, you have larger players in the space that want to buy your locations or your portfolio.

And also because we have an operating company, we can actually sell to a private equity group that can now own the whole business outright, which they can't go and do themselves by buying up a bunch of little individual locations. It's just too much work to get there. So investors invest in the.

Typically it's a portfolio, four to eight locations, and they get a little diversification across that portfolio they invest in. They get cash flow, typically from the first month that we own it, and then they get appreciation when we come to sell it.

And the nice thing is, even if you're an investor in say, four locations, you're going to get that increase in equity multiple based upon the fact that we're going to sell that entire portfolio in the next three to five years. And people may be saying, ah, I see these things going up all over the place. It's going to take about 15 years to fully build out this space.

So we think the opportunity lies in the next five years that we can sell and the new owner operator can operate for another five years at a really profitable way. And they still have five to 10 years before, you know, the space is fully matured.

As a fragmented market, I think we can all see there's kind of a gold rush on the horizon. As that fragmented market consolidates, you're going to end up with A few institutional players in that space that are branded on a national level.

And in that delta of like the acquisitions of all those coming together, it creates a value delta there and there's certainly a lot of opportunity there. It's going to be a land grab. Right. It's going to be a gold rush and you're going to be.

That's exactly right.

Part of the supply and not part of the demand. I love that. That's really cool.

I think this is the first time that we've talked about increasing the company by increasing the net operating income is not new. Right. You can do that by putting in granite countertops or stainless steel or whatever.

This is the first time I think that we've talked about increasing the net operating income of a company by bringing on a sales associate or a sales team.

Because even though you're increasing the fixed overhead cost, you can outpace that with a sales associate and increase the overall net operating income. That's really cool.

I mean, typically as a real estate investor, you're thinking about forced appreciation from swinging a hammer or from an asset class conversion. And this is really just optimizing the operations of the business.

But outside of that, realizing the value of a sales associate, go away from brick and mortar and be able to push those sales on the outside. I don't know why I haven't thought of that before when I had a 16 year career in sales. But it's actually very similar.

Right.

Method. I would never think of a car wash doing it, but those people are out driving it, pushing it, creating that membership.

That membership, whether or not, how often people use it or not, is creating a fixed baseline of net operating income coming in. And then you get that portfolio bump on top of that. You know, that's something that you're right.

I feel like there would probably be a window on that. And I think you're right. Five to ten years probably feels like what that is.

If it's going to take 15 years to build that out, some people are going to be willing to overpay to move into the first position. As that market consolidates, you stand to be in a very good position. That's a really cool strategy.

Let me add something here. Is that my understanding of what you guys are doing also. Car washes are a commodity.

Look like the average person is going to drive by, they're going to go, oh, there's a car wash. My car is dirty.

I'm just going to pull into the most convenient location there is and I'm going to drive through it and I'm going to pay once and get my car washed. Cheapest rate, whatever it is. Or if I feel like splurging, I'm going to go for deluxe car wash, whatever, and go through it.

But when you, you put a sales associate there, now you're trying to capture that customer for the long term. Now it becomes a little bit less of a commodity. Now they know, hey, I've got a membership at that location, so I'm going to go to that location.

Even though maybe it's not the most convenient location that I could go to right now. As I'm driving by, I'll think, oh, I need to get my car washed. I need to drive by hurricane car wash next time and get my car washed.

Yeah, that's a great, great insight with that question. So I think that goes to, like, why do people, like, get their car washed in an express tunnel car wash?

Because it's like, okay, I can go have my car detailed, right? Like, you get your car detailed. We have it done every three to six months. It's 100 to 200 bucks somewhere in there, you know, per car.

It's not cheap, right? But then, like, every week we go to, to car wash and wash my car. Sometimes I do it like two or three times a week, depending on what it is or.

So if you poll customers, why do you get your car washed in an express tunnel car wash? Quality is number four. Okay? So they say, all right, it's number four. It's very similar. We want to be like the Chick Fil A in this space.

So if I go to the local restaurant here that's like a mile from my house, they have an awesome chicken sandwich. If you guys come to Asheville, let me know. I'll take you there. Fried chicken sandwich, it's got this hot mop sauce. It's got pimento cheese on it.

They make their own bread, they make their own yeast there. It's like, it's awesome, right? But it's 15 bucks. And I sit down, there's a tip. You know, it's like, it takes a while to make it.

So it's an investment of time. It also costs a fair amount of money.

Kind of like when I get my car detailed, if I go to Chick Fil A, I know there's a better chicken sandwich on the other side of town. But my kids love Chick Fil A. The employees are nice. I got my app that's easy to pay with. We'll come back to the app part.

I, you know, get points it's convenient, it's quick, it's great value. Right? The quality is. Is good, but not the best. So when people go to an express tunnel car wash, it's similar to why I go to Chick Fil A.

They want good quality, but really they want good value and they want it predictable amount of time.

So if I pull up to Chick Fil A, even if there's a long line, I know I'm going to be out of there in 10 minutes if I go to a car wash, even though if there's a line, I know I'm going to be out of there in 10 minutes. Right. So it's very similar when it comes to that. Also, our employees are dressed nicely, they're trained well, they're nice to the individuals.

We clean up the spaces. That's why we have extra staff members compared to the industry average. It just has a slightly better feel compared to the industry.

And then, you know, if you can, like you said, Neil, capture that individual, because they're probably going to go to that wash because they live in close proximity to it. So if you can do that, then you're going to be successful. And we've talked about all that stuff. But also we have national contracts now.

So the day we take over a site, we lower the cost per wash by about 30%. So we're also saving on the bottom line.

So that also, as you mentioned, Clint increases that noi, that ebitda because we're also lowering the operational expense. But sometimes it is worth paying an additional individual to drive the top line revenue.

We did our numbers and first 2/4 of the year locations where we added a sales associate, we were up an average of 125%, so more than double, you know. So Clint, back in the day, if I could say, hey, you can hire a sales associate at each location, you're going to double sales.

If you hired a sales associate, how many would you hire? Right? As many as you could.

Yeah, as many as I had facilities. Yeah, that's the answer.

And then we also found out that there's not a lot of sophistication in the business. So, you know, it's like if there's not great applications that were out there. So we have a proprietary CRM, we have an app.

We do things a little bit differently so we know what kind of car you drive, which allows partnerships with different companies that are out there that want to know, hey, what car does Neil drive? What car does Clint drive? Can we market to them?

Can we provide some additional value and you get value because if you're in the same household, then you can use one membership and you can wash all the cars in your household. But now we know what cars you have in your household. So you get something, we get something.

And that something creates a lot of additional value, not only for us, but also for our investors as we build the technological platform with the brand as well.

One last question before we move on from car washes. I love it.

I'm always a little selfish thinking forward as myself as an LP and going, identifying new, you know, opportunities down the road for me to invest. So I love this. But my question for you mentioned this is that you're able to reduce costs by 30% on first month in operation. How are you doing that?

Yeah. So think about if you have like two or three or four locations, you're going to get certain contract negotiating power.

If you have 30 locations, you're going to have a little bit of a different negotiating power. We have national contracts.

So we come in, we have the best chemical company in the country that we utilize and they've given us a very, very much reduced rate. And they also bill us differently than they do on these smaller locations.

We also use state of the art technology that monitors the chemical output as well as the water. So we know if there's a leak, if the chemicals aren't being used in the right fashion, you can also change the flow and the nozzle direction.

So Cameron, who runs our operations team, is mechanical engineer, also has a chemical background, actually ran a medical production facility which has mechanics and chemicals. So that allows us to optimize not only the cost of chemicals but also the amount of chemicals that we're putting out there.

So we maintain a high quality, but we're not producing a lot of waste. And that might spur a question in people's heads. You might be thinking, well, is this bad for the environment?

It's kind of like washing your dishes at home. Like if you wash them in the sink, you use way more water and soap than you do if you use it dishwasher. And it's the same at home.

Like you're not capturing the soap and the grease and stuff before it goes into your drain. We capture all that stuff. So we're skimming it off, recycling as much water as we can.

So it's much better for the environment if you come to one of our washes versus doing at home. Typically, unless you have some sort of gray water recapture system bacteria that's eaten the oil that you get in there.

But we do all that stuff as well.

Wow.

I've got a newfound respect every time I drive by an express tunnel car wash. There's a much more sensitive scientific approach to what's going on there.

And I love the way that you've embraced the operations there and use the example of Chick Fil A. I'm sure a lot of our listeners are not going to be happy about the way that you spoke about the Lord's chicken.

But since you focused on customer service. Okay. The way that you focus on.

But we are open, I will say we're open on Sundays with our washes.

You haven't been struck by lightning yet. That's good.

So, yeah, the continuity with the service and the expectation that people know what they're going to get anytime they go to one of your locations. That's beautiful. I think that it fits really well in with your portfolio. You've got mobile home parks, multifamily storage and car wash.

Things that, well diversified with different asset class geography operators, some that lean more on people just need a place to live. Right.

And some that it creates different levels of diversification throughout economic cycle as well as to where you are and where you are with your portfolio.

So I understand that's just a small, a small part of what you do, but I think it's a really neat way to diversify yourself and also create opportunity for people to invest that already know you. We alluded to before, at this point, they're betting on the operator.

You're finding the deals, you're bringing these to your investors and it allows them to.

Instead of them having to go out and find a bunch of different operators and trust a lot of different people, everybody wants that diversification along the way. So at this point, like they can call you, be like, hey, Chris, what you got? Like, what's happening right now?

I know you're listening to the market, so I just need to listen to you. And if you're listening to the market, where are we with that?

So I'm sure it's given you the opportunity to create continuity with a group of investors. So what's next?

I mean, do you like where you're at now and the way that, what do you think is happening with the market moving forward and what do you think is the right thing for you to focus on with your investors over the next five, ten years?

Great question. Yes. I'm always thinking, you know, like the Wayne Gretzky quote, skate to where the puck's going to be.

So where are the demographics going in the future?

I Think one of the challenges we have as real estate investors today, especially with some of the asset classes you mentioned, is that cap rates have gone up, returns have lowered, rates have gone up. You know, it's eroded cash flow. So you may say, hey, I'm happy with my stable, multifamily and self storage portfolio.

But if you want higher yield, if you want higher returns, what do you do?

You can work with a group like yourself that is doing development, that is, you know, going in and creating value by literally being creative with your strategy. Or you can do things like look at businesses like we are with the car wash space and do that.

But when it comes to other areas of real estate, you know, when I look at the demographics, I think we're facing another crisis here in the next decade. And that crisis is with seniors. We're not going to have enough senior housing.

And I think people have, I don't know if ignored or just not open their eyes to it because Covid, it really shut this business down in a lot of ways from a revenue perspective. So these businesses largely couldn't operate and that does not make them appealing from an investment perspective. Right.

They're hard to operate operationally. You have to have really good operating partners with respect to that or be a really good operator in that space.

So I think that the senior housing area is going to be the next big opportunity. It's something that I've put a lot of time into researching here over the last five years.

We actually almost pulled the trigger on a project right before COVID and we were fortunate that didn't go through as Covid kind of wrecked, wrecked space for a couple years. But Warren Buffett says when there's blood in the streets, it's time to buy.

And I think right now, if you look at that space, just been a bloodbath the past couple years. And it's time to really evaluate that. So we'll be most likely having something in the next year or so for investors in that area.

And again, I like to bet on trends that are going to be here for the next 10 years. I think multifamily has another 10 years because of the housing shortage. We talked about the timeline with the car washes, as you mentioned, Clint.

And then I think the senior housing space is going to have really, really strong demographics that are going to explode here over the next 10 years as we continue to see our population get older, baby boomers retire, and there's going to be a massive need for not only affordable but also premium senior housing.

I always Say that I look to invest passively in asset classes and companies that have strong demographic tailwinds behind them. And that's why, you know, we talk about multifamily, we talk about assisted living space and mobile home parks. I mean, it's just demographics is.

And I can't remember the name of the book, there's an entire book on this about how much of our world is shaped by just demographics. Like, we think that, we think there's, oh, you know, the economy goes up, the economy goes down. But if you really look at it from a pullback from it.

Yeah.

So so often it's just the demographics of where a certain population is in their life cycle.

Absolutely. That's a great point, Neil. Like, you don't have to be a genius to figure this out.

You just look and it's like people say, well, how did you figure out where to buy this property in Asheville? It's like, you're so smart.

It's like, well, I just went on Asheville's website and they said, hey, we're going to go develop this area here in the next five years. So I'm just going to go buy property in that area because that's where infrastructure is going to be.

Demographics is the same thing you can do from a macro scale. I had a conversation a couple years ago, some, somebody, they're talking about China.

And I said, I think China's in for a lot of pain because of their one child policy. So they gave themselves the ceiling with their demographics. Well, look at China's stock market. Look, they're now paying people to have babies.

They're encouraging people because the government is scared. Elon Musk, he said, population. If we don't increase population, the biggest threat to humanity is a reduction in population.

Elon Musk himself said that. So if you take that down one level, you say, well, what countries are growing the fastest? Look at India.

India's going to be, in my opinion, an outperformer here over the next 10, 20, 30 years, the US is going to be okay because fortunately we do still have migration. I think we could improve our migration strategy and encourage more of more brain power to come into the country.

And you know, there's a lot of political discussion on both sides about immigration, obviously. But we're fortunate that people still want to live here. And in my opinion, that's because we are the greatest country on the face of the planet.

And I'm very grateful to be here.

All right, one last question before we let you go. In your book you talk about wanting to build multi generational wealth. So how do you educate your two boys on investing in wealth?

And what is your biggest hope for the wealth that you hope to eventually pass down?

Awesome, Neil. Thank you for asking that question. So, first off, if you want to copy the book, I, I just remembered that I said I'd give you a copy here.

Nextlevelincome.com book if you put your address in and you're listening today, I'll send you a free copy. And then what I'm going to talk about here, you can also get kind of some bullet points that are derived from a chapter I wrote for a parenting book.

It's nextlevelincome.com kids I give you five tips on how to raise money. Pros. So I think the biggest thing that we're doing, Neil, is we're making conversations about money natural with our children.

And, you know, that may be paying our children like a salary or paying them to work in the business so they understand the value of money. If our children save, our family rule is save 50%.

So if they save, let's say they have $100 and they save $50, I will actually match that when they put it in their bank account. So if they save 50, I'll give them 50. If they save 75, I'll give them 75. I think investing is kind of an abstract concept for younger children.

That's a very simple way where they can see an immediate impact and the value of saving their money and putting it to work. We started Roth IRAs, so that's kind of like the base we also, we take our children. Like, I have investor meeting next Friday.

And you know, I was talking to this investor and she said, oh, I'm sure you don't want to bring your son. And I said, no, I'm going to.

And the point is, like, I want him to sit and hear these conversations that I'm having and understand and come up with questions about why we do things and why we invest in certain spaces and understanding that you have to not only create capital and make money, but you also can realize that you can own your own business and do that. So I encourage them to start little businesses, which we could talk about. That's a long conversation.

So getting to your point, you know, having them understand this is super important. And then being good stewards, right? So being good stewards of the money that they have and having rules in place when it comes to that.

And that's something that I'm working on building out here.

But a lot of that is built into the verbiage in our trust and how that money, if something happened to us today, what requirements that they would have to do that?

Because I would just say you can look at the Rockefellers and they still have a lot of wealth, or you can look at the Vanderbilts and I can actually see at the top of the hill here, Biltmore.

And that's a reminder because they lost pretty much all of their wealth because they didn't teach their generations not only about money, but also how to be investors and good stewards of money. So that's the biggest thing that I'm doing is teaching them how to be investors. And that all starts with how do you make money?

And I tell my boys, if you want to make money, you just have to figure out how to help people. And the more people you help, the more money you're going to make.

And if you want to invest and make money, figure out how to invest in something that's going to help people get what they want. And if you follow those rules, you're always going to be able to make money.

And your investments on a whole should always continue to make money as well.

Love it. Perfect way to end. Chris Larson Always, always fantastic to spend time talking to you.

You're@next levelincome.com Is there a better place that people can find you?

They could probably find me at my house, but I'm not going to give out my address. So let's leave it with nextlevelincome.com Neil.

All right, that sounds good. Well, Chris, always great talking to you. Thanks for spending some time with us and educating our audience.

Thank you, Chris.

Oh, you guys are awesome. Thanks for having me. Always good to see you both so much.

Have a great day.

You too.

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

If you liked the show, if you think it would be useful for someone else, the greatest compliment that you could give us would be to share the episode. Leave a comment down below or leave us an honest review. If you have any questions, don't hesitate to let us know down below.

And remember, with Truly Passive Income comes freedom of time, place and the freedom to pursue your higher purpose.

Sa.