On this episode, we welcome Brian Davis, a real estate investor who started buying rental properties shortly before the 2008 house collapse. After that expensive lesson, Brian went on to co-found Spark Rental, a platform for educating others on passive real estate syndications.

Brian walks us through his journey from investing his own money to pooling funds as a club. We discuss the club’s diversification across operators, geographies, asset classes and debt terms. Brian also shares how he designed his location-independent lifestyle, his family’s adventures living abroad, and the intentional choices they make around communities, schools and investing.

Timestamps

[00:00:22] Brian’s start in real estate and early lessons

[00:02:19] Most valuable lesson from the recession

[00:06:20] Back to fundamentals of analyzing deals

[00:08:31] Forming a real estate investment club

[00:11:19] Club’s process for vetting deals

[00:18:07] Pursuing diversification across strategies

[00:21:01] Starting the overseas expat life

[00:25:11] Different asset classes get different loan rates

[00:27:54] Dollar cost averaging over market timing

[00:34:05] Living intentionally to reflect values

Key Takeaways

  • Brian started buying rental properties before the 2008 recession, when he lost money and learned valuable lessons about analyzing deals.
  • After co-founding Spark Rental, Brian discovered syndications were an easier way to invest passively in real estate.
  • Spark Rental’s investment club pools funds to make syndications accessible to small investors, pursuing diversification across operators, geographies, asset classes and debt terms.
  • The club vets deals thoroughly, leveraging the community’s collective intelligence to ask sponsors tough questions and uncover risks.
  • Brian designed his business and investments to enable a location-independent lifestyle with his family across the world.
  • He believes in steadily dollar cost averaging into diverse real estate deals rather than trying to time markets.

Resources & Social Media

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Transcript
Neil Henderson:

Brian Davis is a real estate investor who started buying rental properties shortly before the 2008 housing collapse. After that expensive lesson, Brian went on to co-found spark rental, a platform for educating others on passive real estate syndications. Brian walks us through his journey from investing his own money to pooling funds as a club. We discussed the club's diversification across operators, geographies, and asset classes. Brian also shares how he designed his location independent lifestyle. His family's adventures living abroad and the intentional choices they make around communities, schools, and investing. Welcome to the truly passive income podcast. I'm neil henderson

Clint Harris:

and i'm clint harris today We are excited to have brian davis with us brian He started as an account executive handling investment property loans, then started buying rental properties, and later started writing. And he's writing for BiggerPockets, Inman, Money Crashers, and RETipster as a real estate expert. He's also a limited partner investor and co founder of Spark Rental, which we're excited to talk about today. And he and his family spend most of the year traveling in South America. In fact, since the last time, the first time I talked to you, Brian, was Maybe a month or so ago. And then the next time I talked to you a couple of weeks ago, you just finished a move to Peru. So you are, you are living it. You're location independent, man. You're out there. How are you today?

Brian Davis:

I'm doing great. Thank you guys so much for having me on.

Clint Harris:

Yeah, absolutely. Excited to have you here. Um, tell us a little bit about besides that brief intro, um, who you are, how you got started and, and kind of your, your journey, especially through real estate investing that led into being a limited partner.

Brian Davis:

Sure. So like so many people, I fell into a career out of college, not really having any idea what I wanted to do with my life. My stepdad was friends with a guy who owned a subprime mortgage company, which in the early to mid aughts was, was all the rage, as you guys remember. Um, but it became clear quickly, as I started working for the two guys that owned this company, uh, they did not need another. Loan officer doing subprime loans, but they really wanted was someone to do hard money loans for them personally. You know, they had this, you know, a standard normal mortgage lending company that lent nationwide, but on the side, they also lent their private money, uh, as hard money loans to real estate investors. So I started doing that and I was watching all these real estate investors making money hand over fist, you know, again, it's the mid aughts. Uh, you know, and just around the time when I had built up enough money where I was excited and I was jumping in. Investing my own personal money in rental properties, 2008 hit and, you know, the rest is history. And I, I lost my shirt on a lot of those initial investments. Uh, it was an expensive lesson. Most people at that point, uh, run away and never invest in real estate again. If I had done that, then I wouldn't have gotten anything for all of that money that I lost. Instead, I looked at it as tuition, right? It was the cost of education in real estate investing. And I went on to work for a company that, uh, offered. Online products for landlords and real estate investors. And then went off on my own, started Spark Rental with a co founder and, um, you know, that, that has been its own journey, but all, all along the way, I've been investing in real estate in some way, shape, or form. So yeah, I don't know where you want to, where you want to take that aughts.

Neil Henderson:

So pre 2008, correct? Yes. Yes. So, so you were, you were, you were buying rental properties pre 2000 pre great recession, correct?

Brian Davis:

Yeah, probably the worst time in history to, to buy rental properties or investment properties, but some valuable lessons. All right, so

Neil Henderson:

that's my next question. What do you think was the most valuable lesson that came out of that hard lesson from investing during the great recession?

Brian Davis:

Sure. So, you know, this is going to sound very basic and fundamental, but you know, I, I didn't know how to actually, uh, forecast rental cashflow accurately up to that point. Yeah. Uh, and some of that is because of the hubris of youth, you know, I was in my early to mid twenties, I, you know, I had that, you know, I'm going to go it alone and, you know, try to figure it all out on my, on my own, instead of getting a mentor, getting a coach, getting people to sit down and say, you know, no cashflow is not the rent minus the mortgage payment. You have vacancy rate, you have repairs and maintenance and property management costs, even if you plan on. Managing a property yourself, uh, that's still a labor expense, right? So if you're comparing a rental property to say an ETF, you know, a totally passive investment, uh, you know, whether you're managing the property yourself or someone else's, it's still a labor cost. So in all of these sorts of things that You know, today it sounds so simple. It sounds so fundamental, but I just, I didn't know that at the time. Um, no one told me and I was too dumb to go out and get someone to tell me, to teach me these things. Uh, so really fundamental stuff like that. I was also investing in low income neighborhoods in Baltimore city. I'm from Baltimore originally. And I, I had to learn the hard way that in lower income neighborhoods, you have some hidden costs that don't show up on paper. Easily, um, you know, you have more damage to the rental properties than you have in say a class a neighborhood, right? Um, you have to take that into account. You have higher rent default rates. You've spent a lot more time chasing down tenants for rents. And, um, you know, these are things that again, don't show up easily on paper. Um, and until you actually dive in and start investing in some of those neighborhoods, you don't necessarily have a grasp for that. Uh, lower income neighborhoods in rental investing is really a niche. I didn't fully appreciate that as a, as a 24 year old, uh, investing. Uh, so yeah, I mean, I had to learn some of those lessons the hard way. Um, you know, I had to learn some of the section eight lessons, the hard way that every single year, the section eight inspector is going to ding you for a whole bunch of stuff, regardless of what the condition of the property is, because they're trying to prove to their supervisor that they hit every house on their rounds. Right? So you're going to have some, some maintenance and repair expenses, regardless of how perfect the condition of your property solely because of these, these external factors. Right? Um, you know, all those sorts of lessons that, you know, you certainly don't learn any of that stuff in school. Uh, you have to learn that either the easy way from a mentor who. Guides you through that stuff or the hard way, you know, learning those expensive lessons yourself. It's a long winded answer, but hopefully some, some, some nuggets there for people who are new to rental investing. That's perfect,

Clint Harris:

Brian. I'll be honest with you. I feel like I'm listening to you. Tell my story. It's the same, it's the same thing. So my first foray was my wife and I had girlfriend at the time. Eventually wife, we bought nine single family homes. Luckily it was after the crash, but we were, we were picking up the same thing, the lower income properties that on paper, they pencil out really, really well. Uh, the reality is the hidden capex expenditures of that class of tenant. I wasn't in with section eight, but it was not much better. Frankly, it would have been better to have section eight and have the stability that comes along with that. But on paper, it looks like it's cashflow and grade. It's the 2% rule. You rule you're in good shape, but every time somebody moves out. You go in and they're sad situations. The kid's bedroom door is kicked in or the appliances are ripped up or whatever. And a year's worth of cashflow disappears like that. Like it's gone. Right. So on paper it pencils. The reality is, um, that I had to learn that exact same lesson. And for me, the metamorphosis was from there was multifamily property, because then you have one mortgage, but multiple rental units to kind of help out. And then that. Kind of just goes from there to larger multifamily and then self storage as well. But one thing that brought up is during that time period in your 20s, which that's the same time I started investing. My only resource was going to the library and written DVDs and books on CD. Like that was, there was no community, right? I think that that's one of the things that's so special about what you guys have done with Spark Rental and I kind of want to segue into that is that I think one of the most valuable things you can have at in your arsenal as a real estate investor is community and people to talk to. Like you said, there's mentors, there's gurus, there's people that That you can hire and save yourself years, right? Cause you're learning from their mistakes instead of making your own. But community is something that is wildly important, especially among us real estate investors that all we'd like to do is talk about real estate, right? We, a lot of times we overshare, but it can, it can be a really good thing. So tell me a little bit about. So, um, how you got invested as a limited partner into syndications, you used the word passive a couple of times. I'm sure it was looking at, okay, I'll, I'll use my capital, but other people can use their time and experience. And then how you use that to form a community and some of the values that you see come from that Spark Rental community.

Brian Davis:

Sure. So let me give you a little bit of context for how we got started with our co investing club. Um, and then I'll explain exactly what we do. Uh, so we have a course on real estate investing, uh, trying to build passive income and achieve financial independence largely through real estate, but also through other means. And what we discovered along the way is that. Most people are less interested in learning how to fish than just being given the fish. Um, I know that's, that's counterintuitive and it goes against the, you know, that, that cliche of, you know, teach a man to fish, feed him for life. Um, but as we were trying to sell this, this course about real estate investing and, you know, everything you need to know to, to succeed in real estate investing, what we saw was that people really wanted. Access to regular real estate investment deals with other people. Uh, they wanted other people to, to find them deals and, you know, hold their hand a little bit going through it. So we experimented with this idea of going out and buying single family rental properties as a group with our students and, you know, walking them through the whole process. partnered with the ground and we did a couple of those and they, they were fine. And they ended up making money, um, but it was. Way too much work. It was, it was, there was a reason why no one is really doing that. Um, it was too much work and too little money. So my partner and I, we liked the idea though, and we got a lot of positive feedback from our students and from people, you know, who weren't students, but were interested in doing something like that. So we discovered passive real estate syndications, and we thought maybe this is actually the better way to go with this. You know, you don't have all those, those headaches, uh, of actively investing in real estate, but you get all those benefits, you know, the tax benefits, you get, uh, you know, the, uh, the cashflow and all, all those advantages of direct ownership. Um, but we don't have to actually be, have boots on the ground. We don't have to be trusting a partner who is not. Vetted as professional real estate syndication, uh, syndicators often are. So I had done a little bit of passive syndication investing myself in the past, but we, we did a couple of experimental passive real estate syndication investments. As a club with our students and we just got great feedback on it. The process was relatively simple and smooth. Um, it was a lot easier than going on trying to buy properties. So we, we decided to build an entire real estate investment club around this idea. Uh, we call it our co investing club. Every month we propose a new passive real estate syndication deal. We are not syndicators ourselves. We're not raising money. We're not taking a cut of the money that's invested. We're not selling securities. Otherwise we'd be running into trouble with the SEC. Um, we're just charging a flat fee as a membership fee or opening it to our previous course students. Um, but every month. We get together on a call. We bring on the syndicator to answer questions about the deal. Uh, whoever wants to invest in that deal can do so for 5, 000 or more, uh, instead of the typical 50 or a hundred thousand dollars required for real estate syndication deal. So it makes it a lot easier to, uh, spread your money among many different syndications. It also makes it easier to invest with smaller amounts. Um, a lot of us don't have 50 or a hundred grand just sitting around collecting dust in our checking accounts. Or even our savings accounts. So that's, that's how our club was born. And you had asked about the value of community. I'll give you one very quick example of this. We, a couple of months ago, we were vetting a deal as our club. Uh, it was deal in Dallas, I think in Dallas, Texas. Uh, in a suburb and I'm not from Texas. I don't, I've never been to Dallas. I don't know a lot about the Dallas market. Uh, it turns out that one of the members of our club lived five minutes down the road from this apartment complex and was telling us firsthand about the scarcity of good rental housing in that market, uh, about the, the wait times for, uh, nice apartments in that neighborhood and in that market, it just brought such a, Uh, Such a fresh perspective, that ground level perspective to the deal and to us sitting down as a club and vetting that deal that we just never would have had otherwise, right? No matter how much you, you read about a market, it's not the same as having someone who lives five minutes down the road. Right? So, you know, she, she was saying, I know this apartment complex, I've driven past it every day for the last two years. Uh, it's a nice place to live. People want to live there. Um, yeah, we just never would have known that, you know, without that, that having that community to vet these deals together.

Clint Harris:

And that's a, it's a two way street there. Like we, I've heard of examples that come from the same thing of somebody, something looks great on paper and then a local person will let you know, Oh, there's a major socioeconomic dividing line. From this, you know, whatever it may be, a reservoir canal going through, or like we had a property recently that the, on the map and everything looked fantastic, but there was a major creek going back behind it that people had to go a long ways around. On the map, it looked like you had direct access, but it was miles to go around. It's, it's examples like that. There's good and there's bad and there's ugly. And those, those boots on the ground is wildly valuable. Plus it's dozens, if not hundreds of sets of eyes vetting the operators and the deals.

Brian Davis:

Oh yeah, absolutely. I mean, we have. Uh, questions that come up in these, these vetting sessions that would not have occurred to me or, or to my partner necessarily, um, but they're great questions and, and they're, they're questions that are worth asking the sponsor, right? Uh, and you know, some of our community members. We'll think to ask those questions. So yeah, like you said, having more eyes on a deal, having more people asking questions, it just makes for a better vetting process.

Neil Henderson:

Well, so often I found in dealing with LPs, you know, Clint and I are on an investor relations team for Nomad Capital. And it is very often the experience that you describe, which is you would think most investors. Would ask a huge amounts of questions, but in reality the average investor, she's like, how much money do you want? What's my return? When am I gonna, when am I gonna get it back? And beyond that, that's the extent of the questions. Um, and so I think it's a lot of times you can feel as an LP investor, like you're sort of just shooting off into the dark. Uh, and you're going, well, I, I'm, I'm going to give my money to this guy. I've never given my money to him before. I hope it works. And you're, you're counting on the fact that you probably understand the asset class to some extent, otherwise you wouldn't be investing in it. But you're really relying on the syndicator to execute the business plan correctly. Uh, and so having that group intelligence with a community of investors who have maybe invested with other syndicators, the sort of know, all right. I know that I invested this guy and, and what went south was, was a reason I should ask this question. Does that make sense? It

Brian Davis:

makes total sense. And, um, you know, like you said, people who have invested in these types of deals before they know better questions to ask. And, you know, the more people you have asking those questions, the more likely you are to get to one of those questions that. You know, maybe we'll uncover an uncomfortable answer. Maybe not what you wanted to hear, uh, or maybe confirming your, your hypothesis that this is a good investment. So it makes total sense. Um, you know, I also think that at any given moment, the, the questions that people are asking tend to be what's. What's been bouncing around the, the atmosphere in the industry at that moment, um, but the, the greatest risks are usually the questions that people aren't paying a ton of attention to. You know, right now everyone is very aware of interest rate risk, right? Because interest rates been rising for the last year and a half. So people are aware. Oh yeah. You know. Rents don't always stay near zero, even if central banks would love them to, even if spend happy governments would love them to, um, but two years ago when sponsors were selling deals for record profits and, you know, everyone was super excited about, uh, investing in real estate syndications, you know, people were pouring their money into deals at that point. Maybe they should have been asking about interest rates, even though no one was talking about it then now everyone's talking about it, of course, and there's probably some other risk that no one is talking about that's that's out there right now, but the more eyeballs you have on these deals, the more likely you are to get some of those questions that maybe aren't on everyone's minds at that moment.

Clint Harris:

So I got a question about we're doing this call. You're in Peru and. Have bounced around, had an extensive travel experience. I'd love for you to tell us kind of about that, where you've been and what you do. But also, I'd like to know what your diversification strategy is for the community that you've built in terms of, I know that that's an important component of what you're doing. And that's why you guys are actively looking for operators and different geography, asset class, et cetera. I'd love to hear about that. And if you don't mind me asking about what your personal Kind of goals are and what for the things that you're specifically investing in, what you're looking for and how that fits in with the lifestyle that you've created, you know, pursuing financial independence, but also doing it in a way that creates time and location independence.

Brian Davis:

Sure. So diversification is actually the number one goal of our investment club. Um, you know, alongside making these investments available to. Non accredited investors, you know, mom and pop investors, people who aren't super wealthy, the typical, uh, you know, millionaires who are investing in these deals. Um, and fortunately we can, we can serve both of those goals at the same time by pooling our funds, reducing the amount of money that you have to invest per deal. Um, you know, if you have 50, 000 to invest, you could either plug it into one deal by yourself, or if you invest with a club. At five grand a piece, that's 10 different deals, right? So you can spread your money among many more deals. So as far as pursuing diversification within our club, we aim for every type of diversification with these deals. So we try to work with as many different sponsors as we can. Right. We try to invest in as many different geographical markets as we can. We try to invest in as many different. Property types as we can. So, I mean, obviously the bulk of these deals are multifamily because that's the bread and butter of real estate syndications. But we also try to invest in other types of properties, too. We've done a deal. There was an industrial property deal Where the property itself was actually a minority of the investment. The company was the broader investment there We've invested in retail properties. We have not done any self storage yet, but we are very excited to invest in self storage. And that's actually what connected the two of us in the first place, Clint. Uh, that's why we reached out to you. Cause we love what you guys are doing with self storage. Uh, we would love to invest in mobile home parks. So yeah, we want to diversify in every way that we possibly can across the board. Um, so, and that is. Critical to our mission. Um, you know, one, one sponsor can make a mistake when one city, one market could have a correction. But if you spread your money among enough sponsors, enough cities, enough types of properties, you're going to build in some protection there. Um, just by having your, your fingers in so many different pots, as it were. Um, and you know, if, if the market does crash, then having money in all of these different deals on different timelines means that, you know, maybe one of these deals or two of these deals might run into some interest rate risk, if that's a problem at that moment, when that deal needs to refinance or needs to sell, but it's not going to impact some of your other deals that maybe have a different timeline, right? Maybe those have loans that are good for another two or three years. And you can wait out the interest rates. Uh, you can wait for lower exit cap rates. So, uh, it's a long winded answer there, uh, but to, to get to your, your other question, um, as far as us, my, my family and I living around the world, we, we started our overseas, uh, our expat life in 2015. We moved to Abu Dhabi. We thought it would just be a two year stint. Um, my wife is a school counselor. She helps. College or, uh, high school juniors and seniors get into colleges and she was doing that in the US and she knew that I really loved international travel that I wanted some adventure. So she unbeknownst to me, she joins a headhunting firm for international schools and, uh, and started. Interviewing with these schools, we found a school that we were intrigued by and Abu Dhabi. She got a job offer. So we decided, ah, let's go have a little two year adventure and then we'll move back home to Baltimore. And of course, that's been over eight years now. We never looked back. We just fell in love with the lifestyle. We get great benefits through her schools. We get Paid furnished housing, uh, or, you know, free furnished housing. We get paid flights home to the U S every year. We get full health benefits for the whole family. Um, our daughter gets to go attend some of the best schools in the world for free. Um, So, yeah, we spent four years in Abu Dhabi. We spent four years in Brazil, uh, in Brasilia, the capital. Uh, we just left there, uh, you know, six weeks ago. So, um, yeah, and just moved to Peru. So it's, it's been fun. It's been an adventure. Uh, I get to, uh, operate a company that is a hundred percent telecommute. Uh, that was not an accident that was very much by design, uh, to help, you know, to help enable us to live anywhere in the world. Um, and it's, yeah, it, it's, it's been fun. It's, it's something that I would not have guessed that I would have done a decade ago, but, uh, but here we are.

Neil Henderson:

Brian, uh, one, one child.

Brian Davis:

Yeah, we our daughter just turned three last week. She was born in Brazil. She has dual citizenship, has two passports, uh, an American and a Brazilian passport. Uh, she speaks just as good Portuguese as she does English, and now she's... Learning Spanish here in Peru.

Neil Henderson:

That's great. And is your plan to, is she going to go to local schools there or is the plan to homeschool? What's the plan?

Brian Davis:

Uh, no. So she, she gets full free tuition at the school where my wife works. Uh, and that was one of the reasons why we chose this school. Um, it's pre K through 12. So it does have, you know, so Katie can work, you know, with the high school juniors and seniors, uh, and our three year old daughter can go to the, you know, the, the pre K program there. Um, but as she gets older, so my wife loves to work at, uh, international baccalaureate schools, IB schools, which are, is one of the most rigorous. Um, curriculum programs in the world. And, uh, so our daughter Millie will get free tuition to some of the best schools in the world, including this one where we're working now. But if we were to move elsewhere, we would be choosing. An outstanding quality school that would be quite expensive or difficult to find in the U S wow.

Clint Harris:

I love that you're so intentional with the life that you built for yourself, the company that you built with knowing that it gave you the opportunity to be location independent, uh, and, and doing that from wherever in the world you want to be. You're very intentional about the schools that you're choosing, the life you created for your daughter, the languages that she speaks same way. You're intentional with. The type of diversification you guys are looking at, uh, and you're kind of picturing the life that you want and building it backwards, right? Starting with the destination in mind and kind of building those steps out. You said something earlier that jumped out to me as well. When you were talking about the diversification, um, was talking about the difference, different interest rates as well, and I think that. Especially talking about diversifying across asset class, geography, and operator, one of the beauties of syndication is also gives you the opportunity to diversify across time because you have different properties that are maturing at different times, right? 1, 3, 5, 7, 10 year holds, whatever it may be, that's a fourth dimension there and you just mentioned interest rates. And obviously that's all the rage right now, especially anybody with variable rate debt. There's a ton of that coming around. Anybody using bridge debt for multifamily, there's, there's obviously some risk there. But one of the things is that different banks have different amounts of money they're willing to lend for different asset classes. And we're getting interest rates. So I think another aspect of the diversification that is really special besides the ability to diversify, like we said, across location operator asset class and time with the different graduation periods of the project is that you mentioned. Uh, the interest rates and the variable rate debt that's out there that's maturing for especially bridge debt and multifamily apartment complexes and things of that nature. One of the things that is really evident right now that's kind of rising, cream rises to the top for us is that different banks have different amounts of money that they're willing to lend for different asset classes. And you're getting different interest rates. Commercial interest rates are fairly significantly high. I was really happy that the project that we are closing on in a matter of weeks, we just got 6. 175% on our interest rate. And it's wildly different than what we would get if we were taking the same amount of money and going to a multifamily apartment complex or a mobile home park or whatever it is. There's various levels of risk and there's various. You know, risk is associated with the interest rate that the bank is willing to lend at and different banks have different buckets of money that they're willing to put into different asset classes. So that's an added benefit of your diversification strategy. The different asset classes, even in a tight interest rate market, like we're currently in, allows you to have diversification among the debt terms. I think that's kind of, that's a fringe benefit that people don't talk about very much, but you guys really, honestly, are diversified across five different strategies there. And for most people, they only ever think about three of those. So that's pretty neat. And I, and I think it is very intentional the way that you're doing it.

Brian Davis:

Well, it is. And you know, I am one of those evangelists who goes out and tells people don't try to time the market. You know, it's true for stocks. It's true from real estate. You know, the most. Informed people on the planet, you know, the, the best analysts on the planet can't tell you exactly how the market is going to move. And again, that's true for stocks. It's true for bonds, it's true for real estate. So if they can't do it, it's total hubris to think that you can do it, right? I mean, it's just the height of arrogance. So, you know, I'm a big fan of dollar cost averaging. So every month. I invest the same amount in real estate, but it's different projects. Like you said, on different timelines and different asset classes with different operators. Uh, so yeah, I'm a huge fan of dollar cost averaging. It's what I do with my stock investments. It's what I do with my real estate investments. You know, like I said, every month we propose a new deal in our club every month, I'm investing my in that deal, uh, knowing that. Over time, I'm going to have the benefit of the, uh, the average market performance there, which in these real estate syndications deal is quite strong, right? And same with stocks, you know, over, over the course of time, stocks perform pretty well. Doesn't mean that in any given moment, the stock market will perform well, or that any given syndication will perform well. But if you just keep investing money slowly and steadily every single month. You're going to come out ahead in the long run.

Neil Henderson:

Uh, you, you literally stole my question, Brian was, I was going to bring up dollar cost averaging, and that's essentially what you're doing. You're, you're diversifying across asset class, geography, and sponsor. And then we all Clint brings up time and that's essentially dollar cost averaging. Because you don't know, you know, is multifamily going to be really strong over the next five years? Maybe, maybe not is self storage going to be better. Well, if you're, if you're taking your money and you're seeding it around a different operators, different asset class, different geographies at different times, chances are, you know, you're not going to have to sit there and figure out whether or not you're investing in multifamily at a good time. Uh, just like you're, you're not deciding whether or not you're investing in the stock market at a good time. Just, you're just putting your money in, you're getting their return. Um, and so I love that. That's really great.

Brian Davis:

Yeah, you know, um, is it Darbar? I think it's Darbar. They, they release a report every year on comparing the average mom and pop investors returns to the market at large. And the average investor is usually earning around half the returns that the overall market is returning specifically because people are, they're trying to get cute, right? They're trying to get clever, trying to time the market they're in and out. Um, and that is a recipe for disaster. So. You know, save yourself the trouble, save yourself the time, just keep investing slowly and steadily practice dollar cost averaging. Um, and you know, you don't have to, you know, there's less of that frantic running around, right. And, and trying to, to, you know, outsmart the market, forget about all that, just invest your money.

Neil Henderson:

Brian, one more thing I wanted to ask you about, you know, when you, one of the things we love about location independence is that it's, it's a sort of double leverage when you are. Investing in real estate, one of the power, true powers of real estate is you're able to use leverage. And once you become location independent, where you're, where you're earning your dollars is divorced from where you're spending your dollars. It allows you to, it allows that double leverage. Are you, have you experienced that? I mean, obviously you're. You are, you know, you're in Latin America where I imagine the cost of living is probably lower than Baltimore, correct?

Brian Davis:

Well, Baltimore is probably not the perfect example to use because Baltimore is a, uh, a particularly affordable East coast city. Uh, but your, your broader point is absolutely correct that, uh, regionally speaking, uh, Latin America has a much lower cost of living than the United States. Um, And I mean, I can give you the perfect example. We just moved into an oceanfront apartment. We're on the 13th floor of an apartment building. We have a balcony overlooking the Pacific ocean and we're paying 1, 300 a month for our apartment. I would challenge you to find. Any probably anywhere in the U S but especially any major city, uh, where you can rent an oceanfront apartment with a, a water view of the sun setting over the ocean for anywhere close to 1300 bucks a month. So yeah, you're, you're a hundred percent right. Uh, geo arbitrage, you know, is the technical term that people throw around, uh, where, yeah, you're earning money in, in one currency or, you know, at one, uh, income rate. And spending money for your lifestyle at a location with a much lower cost of living. So, uh, yeah, it's, it's definitely something that we take advantage of and, um, and have been doing so really since we moved abroad. What are the drawbacks? Uh, the biggest drawback is this personal, uh, it's being so far away from family and friends back home. Um, you know, we try to go back home twice a year, um, you know, both for my wife's summer break, or at least somewhere in the northern hemisphere, um, and, and at her Christmas break, um, doesn't always work out that way. Um, You know, my, my daughter does not get to see her grandparents or her cousins or her aunts and uncles nearly as much as we would want her to. We don't get to see our, our family members, our friends as much as we would like. Um, that's the biggest drawback to what we're doing. Um, and I would say it's, it's really the only major drawback to what we're doing. Um, but you know, you can, you can go home as often as you want, if you're willing to pay for it. And if you're willing to have the inconvenience to do so. Um, one of the reasons why we. Chose Lima is that it's relatively easy to get to Baltimore from here. Uh, it's about a five hour flight to Miami and then another two hour flight from Miami to Baltimore from here. Significantly easier than getting back and forth from Abu Dhabi or even from Brasilia, which didn't have great international, uh, flights, at least to, to Washington, DC, Baltimore. So, yeah, you know, again. It's all about intentionality. Um, it's, that's something that I'm really big on. I'm really big on lifestyle design and not everyone likes that term. Some people find it pretentious. I do like it. Uh, I think it is important to be intentional about everything you possibly can in your life because it's, it's your life, right? I mean, and you want it to reflect your values, your goals. Um, and that is what we're trying to do ultimately. Again, probably a long winded answer, but that's what we're up to.

Clint Harris:

That's perfect. I love that. And in fact, I don't think I have anything else to add on that. That, that's exactly what I, I mean, I see everything that you're doing, the community that you've created, the decisions that you're making for your personal life and for your family, the amazing life you're creating for your daughter and how well traveled and well rounded of the person she's going to be. Like, I can only imagine the type of emotional intelligence that comes from just being surrounded by so many different people. Thank you. around the world. And yeah, of course, there's drawbacks, right? Like there's always going to be pros and cons to everything, but the world is also more connected now than it ever has been. Right. So I think it's, it's, it's the life that you choose. You clearly have been very intentional about that choice and the way that you're choosing to invest and also bring other people along with you and help in that process of investing in education, which is really what I see. You're doing more than anything is educating other people that giving them the tools to be able to make those intentional choices for their themselves and like pick the financial velocity that they want to have for the rest of their lives. So that's excellent. I'm really glad you ended with that thought. I don't have anything else. Neil, how about you?

Neil Henderson:

Brian, thank you so much for sharing with the audience today. If any of our listeners want to reach out to you and find out what more about what you're about, where, where would be the best way for them to do that?

Brian Davis:

Sure. Uh, come to sparkrental.Com. Uh, we have all kinds of free stuff on there. And like Clint, Clint mentioned, we are huge on education. We have. Over 400 articles on our blog, which we update regularly and published irregularly do a weekly podcast where you have a free class on syndication, investing and how that works and the pros and cons. Um, yeah, we, we are big on education. You can reach out to me personally at any time over email. Brian@sparkrental.Com. Uh, you can also reach us at support@sparkrental.Com. Uh, we're on all the major social media platforms at spark rental. So. Please don't hesitate to reach out anytime. Uh, you can check out some of our free tools at sparkrental.com/free. Uh, if you want to start there and like I said, don't be a stranger. Reach out anytime. We're, we're very accessible and available.

Neil Henderson:

Excellent.

Clint Harris:

Well, Brian Davis, Spark Rental, thank you so much. Really appreciate your time, especially in such a different time zone, uh, I'm assuming maybe, maybe not. Um, is it, is it the same, is it July 3rd there at, uh, let's see, what time is it?

Brian Davis:

Uh, no, we're, we're on central time this time of year. When you guys change the clocks, we switched to Eastern time.

Clint Harris:

Well, excellent. I appreciate you making time for us today. Thank you very much. I'm excited to be connected with your community now and see what you guys are doing moving forward. So thanks so much for making time for us.

Brian Davis:

Thank you guys so much for having me on. It was a pleasure.

Neil Henderson:

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.