The Ultimate Playbook for Safer Passive Deals with Pascal Wagner

There are three core problems that a new LP has. The first is a lack of deal flow. Second is having a strategy of how to go through that deal flow. And the third is how to vet that deal flow.

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

And I'm Clint Harris. And today's guest is Pascal Wagner.

He's a former venture capitalist who deployed 150 million at Techstars before pivoting to build a passive income portfolio generating over 250k annually.

Now the host of the best ever passive income playbook and founder of Grow youw Cash Flow, Pascal teaches investors how to evaluate alternative investments.

Like a pro, he helps high net worth individuals apply institutional frameworks like scorecards, capital stacks and risk adjusted return models to their own portfolios. For greater freedom and peace of mind, please welcome Pascal Wagner. Thank you sir, for being here. How are you today?

I'm doing well. Thanks for having me, guys.

Absolutely.

Yeah, absolutely.

This is.

I, I've been looking forward to this one for a while. You and I actually connected on a phone call a few weeks ago because I had questions about some of the challenges.

I'm personally navigating of where to put capital and risk mitigation.

Specifically, I'm looking for capital that I have, but also have money that my parents are looking to deploy and they have their own completely different set of challenges. Right.

So I, I really liked your approach of identifying the specific goals and challenges of who the individual investor is and kind of building everything out around that.

So I've been looking forward to this for a little while so that I can selfishly dig in and record your answers and go back and listen to them again when I don't get them right the first time.

So for those that don't know about you, tell us a little bit about yourself, your very extensive background, pedigree and, and how you got to where you are now. Yeah.

Well, thank you for the warm intros. It was great. So my, my story, you know, I, I would start with when I was young.

And you know, since then I, I've been buying some of these homes. I've had experience in real estate and always was kind of building a portfolio on the side.

I started a company when I realized it wasn't going to Be a venture. You know, we got it to a million in revenue. We scaled to six different cities. We built like the Uber for real estate photography.

When I realized that wasn't going to be a unicorn, we raised venture capital money. I sold, sold that business to a national photography firm, and I joined this company called techstars, where I learned a lot of what I applied today.

At techstars, I got the unique ability to kind of sit in the same room with kind of the chief investment officer and the CEO of this big, huge firm. If you're not aware of techstars, it is one of the, I think, top three largest accelerators in the world.

They invest in at least, I think, 300 companies a year. And I got to sit on the investment team and figure out which companies we would deploy additional money into after they went through the program.

And so before I got there, you know, the chief investment officer, they had had already kind of created the thesis for the fund.

Those things kind of always happen suddenly.

And, you know, my mom all of a sudden was left with a large inheritance, you know, but it was all stack stocks and cash and there was no real plan for her, as my dad was always the one managing the finances in my household.

And so it was kind of like I had to kind of step up and figure out, okay, how do I make all of the money that my dad had left my mom actually, you know, provide her enough income so that she can stay retired and kind of like, you know, live out the rest of her life without needing to worry about money. And so, you know, having been in venture capital, I kind of knew a bunch of these different.

I knew about the fund world, but I, you know, one of the first two things I did was I reached out to multiple financial advisors and asked them, hey, what do you recommend? Where should we put the money?

And, and I think when you speak with most financial advisors, I spoke with three at that time, and most of them are all compensated based on the assets under management that they have. And they're, you know, they all subscribe to this, you know, put it in the market and draw from it 4% a year. And, and that's just.

That didn't work for me. And so I pivoted to taking a good chunk of that money and deploying it within my own real estate portfolio.

So I mentioned at the beginning that I'd been doing single family homes rented by the room for over a decade and I decided to deploy a good chunk of that and build a much larger portfolio in Atlanta. And that that now is 11 homes, 94 units and provides, you know, the one half of our, our income.

But I realized in that process that, okay, I have my entire mom's kind of like cash flow and financial future all based on having this One portfolio of 11 homes in Atlanta. That is one strategy that if a hurricane comes through or whatever, like there's a lot of risk tied up in that portfolio.

And I was like, I have to diversify from this. And I'm in This group called GoBundance, kind of like the tribe for healthy, wealthy, generous men to lead epic lives as their tagline.

I've been in that for over a decade as well. And many of the people there were actually living off of the income from their investments.

And so I'm always a big proponent of like, find people who are several steps ahead of where you are that have what you are trying to achieve and learn from them. And so I would ask them like, where are you invested and what are you.

You know, and kind of through a lot of asking other people and trial and error, I took some of the money out from that co living portfolio and started investing it in these different alternative investments. Everything from oil and gas to self storage to multifamily. I've invested in retail, I've invested in developments, I've done equipment leaseback.

I've been in crypto, you know, like you name it, I've, I've done, I've done 23 different LP investments with over $3.3 million. And so I have, I had to like put together a process.

And at the beginning it wasn't, you know, I was kind of poking around in the dark trying to figure out where should I be investing.

And you know, slowly over time I just started to realize like, okay, I need to take what I've applied, what I've learned at techstars and apply that to my own investing. And no one really teaches you how to be an lp and you know, no one's there helping you.

How, how do you build 100k a year portfolio, which I had to, you know, do for my mom. And so that's kind of where this, this company was born of just, you know, managing a Huge amount of money.

Figuring out where to invest in the wild, wild west of alternative investments is not very easy. It's very opaque. And so that's all led to why we're talking here today.

I love that I think you're bringing something to the table that a lot of people don't traditionally see is that it's interesting, you had a, a background of single family homes and a little bit of an asset class conversion by converting to co living or rent by the room.

You always get a little bit of a bump there in terms of, you know, you, you acquire the property of what is, what would it rent for as the bricks and sticks, and then you get a premium, sometimes 30 to 50% by renting to individuals instead. So a little bit more hassle sometimes, but significantly more revenue. And sometimes if you can't find a good deal, you have to make a good deal.

And that's exactly what you're doing by, by changing the margin, you're creating a value delta there. So I love that that's a non traditional investment strategy that works really well around colleges and in cities and things like that.

And then you come from an institutional grade background of picking the winners and deploying $150 million at Techstars. That's going to be a significantly more conservative mindset that fits a very specific thesis.

And so I find it very interesting that now you're, you're kind of blending that together. You're, you're dabbling in, not dabbling. You're, you're in the, the wild west, that is alternative investments.

But you're bringing an institutional grade vision to that and that's what your pedigree is. So you're exactly right. Nobody trains you how to be a limited partner.

A lot of times we see people picking their offerings based upon what podcast they listen to, which elevator they rode in at a conference, who you bumped into, or, you know, something you have in common. And you clicked with this guy over here. So let's invest in mobile homes now because he's a cool guy. Right?

I think that you're probably coming from a position of what's the goal? What's the goal of the money? What's the risk tolerance of the person putting the money in?

What's the thesis that we can derive off of that once we know what the goal is? Okay, now let's go shopping. And I think that's backwards from the way that a lot of people do it.

Is that what you're trying to bring to the table here?

That's exactly it. You nailed it. It's, it's. Look, I mean, I think, I mean, I don't know if we've all done it, but I've definitely done it.

You know, where you, you get into deals that you never should have, you know, because you knew someone or you, you know, it was like there was no real process for due diligence. There was no, you didn't really understand anything.

And I think the risk is significantly higher in private investments than in the stock market because just the risk of losing your capital is significantly higher. There's a reason, you know, retail investors versus institutional investors, they approach the problem totally differently.

And I think the average investor would benefit from taking a structured approach to growing their wealth.

You know, we talk to investors every day who come to us and, and a lot of people are very focused on cash flow. Like, well, I want to, I wouldn't produce a cash flowing portfolio. But then when you dig a little deeper, it gets a lot squishier.

And then you tell them, hey, listen, you know, whatever deal, you know, our deals, they don't. Cash flow. This is a growth play. You know, if you're looking for cash flow, you should probably go, go find something else.

There's plenty of options out there. But often people are, they're already talking to us and they get this kind of like, whoa, whoa, whoa, hang on a second.

And it's this, I don't know, there's this FOMO almost that kicks. In fact, I'm talking to somebody and they're hearing, you know, they hear returns, all they hear is IRR and equity multiple.

And they're maybe not thinking, all right, this sounds great. Sounds like these guys know what they're doing and, and they can probably execute the business plan, but does it fit with my strategy?

And that, and that's, you know, what I love about the way you walk through it is start with what you want first. Like that's, you got to work backwards if it's just about putting your money somewhere. So it works.

It's just a such a scattershot kind of hope and pray way of putting your, your money out there.

Yeah, I'm gonna jump on top of that and then lead straight into a question about that is like, I feel we, we run a lot of meta ads, Facebook, Instagram, for our different self storage conversions. We buy old Kmart buildings and warehouses and we convert them into big box or convert them into climate controlled storage. It's a great strategy.

It's a unique strategy and we have a lot of leads that come into us wanting to connect on that. And you can, I really believe you can honestly tell where someone is in their LP investing journey by how they react.

Like when you, you pitch a deal to them and what we're going on, like, that sounds awesome. You guys seem great. That's really cool. Like, let's do it. I'm in timeline, whatever. Like, they get really excited there. You know, they.

There's the saying that there's a lot of young running quarterbacks in the NFL, but there's not a lot of old running quarterbacks because they've taken their licks, right? Same thing. There's a lot of LPs that are super excited about a new strategy or a new group or something like that.

And you don't see a lot of the skepticism that you see in some of the older investors. And it's usually because they've taken it on the chin a couple of times, right?

So the more receptive that people are, early on, they're like, yeah, that sounds great. That's awesome. Until you start asking, well, well, what is your goal?

What are you and your spouse or your partner or husband and wife or what are you talking about? The goals that you're trying to accomplish. A lot of times they don't know, like, how much. How much do you need to make? As much as I can.

That's the answer, right? It's like, okay, I think we've uncovered a blind spot here.

And there probably needs to be a conversation of, of what you guys are really trying to accomplish before you decide to invest here. Because if you get in and three years later you're frustrated, I'm still the one that has to take that phone call.

And one of the things, Pascal, from you, I know that you said that you wished someone had set you down and shown you the full passive investing landscape before you got started.

So what are some of the things you're teaching your students that maybe you had to learn the hard way that some of those people we're talking to haven't learned yet?

Oh, man, so many things.

I mean, I think one of the things that really made an impression on me at techstars was that it wasn't, hey, we're reacting to deals within our inbox. It's let's.

You know, I was specifically in charge of the follow on fund, and the mandate was we would only invest in companies that techstars had, that those companies had already went through the techstars accelerator program. And so I knew there was an ecosystem of 2,500 companies.

And so it was then like, okay, out of those 2,500 companies, which ones are we going to invest into? And that same thing is now.

So it's like, okay, if you're interested in earning cash flow from a debt fund and you might, you know, an average LP might come in and, and know of two or three debt funds and pick one and call it a day.

I just spent the last three months looking and having a phone call with over 75 different debt funds, putting them into a sheet and asking them the same 30 questions so that I could like now go in and rank them by what were their returns over the last three years. Do some of them offer K1s or some of them allow compounding? You know, how much leverage do they all have?

What are their average loan to values, how many loans are in like basically just getting a whole lowdown of everything and then saying, okay, I'm only going to look at funds that have generated at least 9% every year for the last three years. Wow, now that 75 list goes down to 7 and cool. Now I, you know, and, and that's how I think you really should be approaching it, you know.

Okay, now let's look at these seven. Why would I pick one over the other? What are the. Some of them have audited financials, some of them don't.

Okay, well, all things being equal, I would rather invest in one with audited financial. So you know, like it's, it's just a totally different way of, of approaching the problem and increasing the likelihood of success.

Debt funds is something. And I know you're, you love the DLP debt fund. I've been looking into that since you mentioned it to me as well as a handful of others.

But I've seen debt funds become a lot more popular over the last few years because the cost of capital is significantly higher. So more people are looking at, for alternative debt structures, abridged debt, loan debt.

And there's a lot of different funds out there that offer first position, low LTV debt for, for fix and flippers and things like that. And then, and some of them have like you said, auditing, some people don't. And some people offer compounding.

Some people offer monthly distribution, some it's quarterly, some there's a seasoning period, some you have faster liquidity options, some you have slower liquidity options. If you put in a larger amount, it might be locked up for longer, but if you break it up into smaller chunks, you might be able to get around.

So understanding the Rules oftentimes helps you identify loopholes and navigate around those. But you deployed over $2 million after your dad's passing. And I think that you.

One of the risks that I see is that so many different groups have had capital calls or pauses in distributions or unfortunately have gone dark over the last three to four years. That is the bloodbath of commercial real estate when the interest rate shot up higher and faster than they ever have.

Debt funds look really good right now. It's fairly safe, fairly consistent. It's a single or a double. You're kind of hitting it right down the middle of the fairway.

It's going to take a lot of the risk out that comes with a growth or an equity position on multifamily or whatever it may be. But I think it creates opportunity for concentration and a reduction in diversification.

And so you realize when you're placing capital that you were concentrated in one market. And so what's your approach on diversification across different assets, different asset classes, different geography and different operators?

That's fairly common. But outside of that, I know that you're looking at debt structure. You're probably looking at, at financing variable rate debt.

You're looking at time cycle. What's your diversification strategy that's come into play when it becomes easy?

When everything's doing poorly and one or two things seem like they're doing pretty well, it's really easy to kind of fall in line. And that can put you in a position where you're not really well diversified. So what's, what's your take on that?

Especially going through such a volatile time in the market.

Oh man, all these things are so personal, right? I think it very depends on, you know, okay, are you a business owner and 90% of your wealth is tied up in your business?

Are you, you know, a senior that has, you know, a couple million bucks in the stock market and, and you are now trying to transition to fixed income. Are W2 executive that has some in the stock market and they're in a bunch of different equities.

I think it's how you choose to diversify or, or what you choose to go in is so variable based on your fears or your needs or, or items like that.

But I think when we're talking about like, you mean maybe aggregating all of your stuff, maybe into debt funds, like, like, are you thinking about, is that too concentrated? Is that the question?

Yeah, I think that maybe there's a barrier to entry of like for instance, the DLP fund. It's a $200,000 minimum. Right. Now if people invest, I think you have access to a fund where people can come in for a $50,000 minimum.

And you're doing the job of grouping that capital together to reduce those minimums. And so things like that can create more opportunity.

But there is this phenomenon where operators are trying to push people to put in larger amounts of money and incentivize. Right. It makes total sense for them to do that.

But that creates a scenario where maybe you want to put in 100, but it makes sense to put in 250 because you jump up to a bigger return profile. And so next thing you know, you are planning on diversifying across eight to 10 different operators, different assets, different geography.

But to get a return profile that matches your goals, maybe it makes sense to diversify to 3 or 4. It's a give and take because otherwise that 10% return might be 8 or something like that. So it creates pressure.

Totally. I think that's very common. I mean you're making all these trade offs, right. And you're, you're doing those decisions in real time.

You know, I, I kind of just went through this process with my brother. My brother's a, like a CEO at a hundred person architectural firm in San Francisco. And, and he's five years out, five, 10 years out of retirement.

And so we're talking about what is his plan and, and what is he investing in.

And you know, I think we actually just talked through that exact scenario of okay, hey, we're gonna put 500k in the DLP fund because we think it's a, that's a good, just initial place to park cash and then over the next couple quarters we're gonna pull money out slowly from that and diversify it into other deals. And yes, maybe we've put more money in a certain fund because they've offered us higher returns, but in the end we're okay making that trade off.

I think all of that, you know, I think that's all just part of the game of when you're trying to pick, build a portfolio, right?

Like ultimately what you're trying to do is build a portfolio that you, that helps provide you the income you need and also is not too concentrated that it allows you to sleep at night.

Well, and it seems like that also would come down to timing.

As someone gets closer to retirement, they're probably going to be want, they're probably going to want to be more diversified because you have less time to recover if one deal goes bad. If you're highly Concentrated as you, you know, as you get older, you know you've got less time to recover.

If you've got somebody who's 35 and, and conceivably could have another 30 years of, of meaningful work life, they can probably be a lot more concentrated early on.

Yeah, you build wealth through concentration and you preserve your wealth through diversification. It's. You nailed it.

Yeah.

So you have been very outspoken about the importance of deal transparency. I know that you're, you're a real stickler for digging into loan tapes and things like that. It's probably a lot of thing.

It's the kind of thing a lot of people don't do. Investing in debt funds. What are some of the most common red flags that you see that you look for when you're evaluating a deal or a sponsor?

I like answering this question because I, you know, I think it's very popular for, you know, whenever you go on any podcast, people say, oh, look at the sponsor's track record and make sure you do your due diligence. And these are very like broad and vague terms.

And many people focus a lot on like, okay, maybe I'm looking at the pro forma and I don't know what I should be looking for or, you know, how do I make sure I'm not missing all these flags? And I think that misses a lot. It gets in the weeds before tackling some of these higher level things that are what I believe filter out most deals.

So really what I am looking for is that the operator has provided everything that I'm asking for or proactively that I would want to know and that all the data points match up. Right. And just by doing that exercise, you'd be shocked how many people get weeded out.

So, for example, if, if I'm talking to, to you guys, what I would want to know is I would come in and I would say, okay, can you guys send me a list, like a real estate schedule that shows me all of the properties that you currently own and previously owned? I'd love to know what the returns in the IRRs and, you know, what you bought it for and what you deposed it at, or. Yeah, on a sheet.

And I'm just looking for that. Do all of these stories line up okay?

You know, in your historical deals, like the deal that you might be promoting now, you're projecting a 15 or 20% return. How did the previous deals that you guys have done that followed that exact strategy perform? Do they match up or are they poor? I'll give you A story.

You know, last week I had a student who came to me and she was looking at an operator that buys shopping malls. And when you look at their track record, they are, you know, there are two types of projects.

They would do a development style project and then you know, a buy and hold type project. And when you looked at the returns, the buy and hold projects did actually significantly better than any of the developments they did.

And when the student came to me, they would say, oh hey, look at their track record, it all looks great. And then I would look over the same track record sheet and I'd say you're missing the point. You're investing in a development deal.

You should be only looking at the development deals that they have done previously. And as you can tell, the returns on those didn't do well in compared to what's being projected in this deal. So to me there's a mismatch.

Like this isn't rocket science to figure those things out. Right? Hey, can you send me a couple examples of communications on your last three deals that you've sent investors? Great.

All I'm doing is looking for is how much are you telling in these updates? Like do you share the good news, the bad news? How forward are you about sharing what's happening?

And does what's in that communication match what I see in the track record or in those other files?

These are very simple things and you'd be shocked how many operators are not willing to provide that information, don't have that information or the information doesn't match up. And like that's before, like before getting into the weeds really at all on, on a deal.

It's funny to me, excuse me.

In my pursuit of different opportunities for my parents recently I was looking into a debt fund that has, I'm not going to say their name but they have over a hundred million dollars raised. They have over 30 different fund to fund managers that have kicked in in some capacity. And I was connecting with them.

Ultimately I haven't done anything with them yet because they don't have third party auditing.

But when I asked for the, the lending tape of all the, the list of loans that they put out there, there was a big pause and then he said, honestly, you're the first person to ever ask me for that. I don't know where to get that information from. There's a hundred million dollar plus fund with over 30 fund to fund managers. Nobody asked for it.

It took them a week to get the information. Now when they did, it looked great. I pulled up I got on Google Earth, I looked at a lot of the properties, they looked great.

I saw the before and afters. It checked out. But the fact that it was, you're talking about nine figures of cash that people have invested there and no one has asked for that.

I was like, that's a story I would call bs.

I would say there's no way that you have ever, that no one's ever asked you this. You know, also, how do you track your own loans?

Right. Yeah, it was, I had the face of the company. He had to go behind the scenes to get it.

But like this was the guy that was leading a group of 30 fund to fund managers. And I was like, that's terrifying. That means you people are investing with a fund to fund manager. Who hasn't asked for that?

If that's, if that's the case, that's a, that's a little bit scary. So let me ask you this.

Because of your background, are there any tools or tricks that you're using that come from your VC background that you think the average LP isn't thinking about or anything from your. I know that you guys are big on risk assessment and things like that.

Like any of the tools that you've learned from your previous life that you think bring something really unique to the table the average person can learn from and kind of have as a tool in their tool belt.

I really think it's this framework or lens or way of viewing the world of, of let's look at everything and let's look at the entire landscape and filter and only look at the deals that we want. Most people don't do that.

And it's most people, what happens is they get an email in their inbox and maybe if they're an earlier lp, maybe they get it once a month or maybe they don't even get deals in their inbox. So when they do get a deal, they're really looking over it and trying to figure out, oh, is this deal for me? You know, can I make this work?

But that totally changes if you have a hundred deals coming into your inbox a month. You know, at that point you're overwhelmed and you're like, how do I, I have so many, so much deal flow. How do I pick the best one?

And that's the position that you want to be in. If you are not in that position, I don't think you should be investing because you don't, you don't even really know what's out there.

I love that. Let me shift the conversation A little bit. I want to make sure I understand and we're articulating what you are offering to the listeners out there.

Right. So let's say that I am coming to you as someone that is, I want to become an LP investor. I frankly don't know where to start.

And it's worth it for me to engage with you because we're talking about a lot of money. Like people's definition of a fortune is going to be different for everybody. I think it depends on how long it took you to get there. Right.

If someone spends 20 years to save $50,000 and that $50,000 is a representation of a fortune to them, right. That's them trading their life energy to get that amount of money. For some people, that number might be ten million or a hundred million.

It's different for different people, but it has a representation of significant value for that person. And so I think it makes sense to engage with a professional like you.

So that experience of when someone is coming to you is the assumption that there's going to be a lot of questions asked about what their goals are, what their timeline, what their risk tolerance is, what they are trying to accomplish.

And once you are establishing what the purpose of this money is for and what you're trying to accomplish that you're building a framework around that and then working backwards to get to the point of finding the offerings that fit the goals of the investor. Is that right?

Yeah. So I would think about it in this way. I think there are three core problems that a new LP has. The first is a lack of deal flow.

Second is having a strategy of how to go through that deal flow. And the third is how to vet that deal flow or an operator. And so when you come into my world, I help you solve those three problems.

So the first thing is if you go to passive investing starter kit, I have every single.

You join my email list, you get my starter kit that has at least, I think, 25 of the last deals that have been added to our database, and you just get to see them all. And I put out an email every Friday. And you. I'm actively looking for deals, right?

And so I'm an LP investor like you, and I just have a team where whenever I come across a deal, we put it into this database so that it makes it easier for me and the LPs that are on my list to filter them. So the first is, is the deal flow. You get that for free. Most people then ask, how do I Pascal, there are so many deals on here.

How do I know which one is right for me and how do I vet these deals? And so that's where this cash flow academy was born. So that's where I personally walk people through, one on one, how to create a plan.

Like, let's build a treasure map. Where are you trying to go? And let's figure out the rough steps that it would take to get there. We narrow down your thesis.

What are you actually looking for? Like what asset classes meet your objective, what kind of liquidity do you need? What lockup periods are you okay with?

And then I help you apply that strategy, those filters to the database. And then we go through all of those deals together.

I help you understand what flags, you know, you're telling me what you like about the deal, what you don't like deal, and then I'm your second opinion. I'm telling you, oh, this is what I would look for. These are the questions I would ask. These are the concerns I have based on the deck.

And then I give them my, my checklist, my 100 point checklist to then take one of those deals that they're most interested in, fill it out based on the webinar or the deck, maybe schedule a call with the operator. And then we come back together and we review all of their answers and figure out, is this a red flag?

Should I be asking for this additional documentation? And so really a handholding step by step so someone feels confident enough in the next 90 days to make an investment.

And then lastly, the vision is that when you come through my door, I have, I've vetted all of these investments with the framework that I am teaching you.

And so if you'd like to, if you think that's all a lot of work, you can skip that process and invest in some of these deals that have already gone through that vetting process.

It sounds like your vetting process is pretty extensive.

And in my experience, there is a, there is a balance between when you're a, an LP dealing with a sponsor of, you know, you know, vetting the sponsor versus putting them through a tax audit.

And it's probably easier now because I think it's harder to raise capital and you're probably getting more sponsors or maybe not quite so choosy anymore, but there was a time, and there maybe will be a time in the future again where, where, you know, there would be a sponsor that's just like, hey, look, I appreciate you want to invest your $50,000 with me, but like, I don't have time to sit here on a On. On a call with you for two hours. Is there a b. So my question is, is there a balance? Or it's like, hey, listen, you're just not.

You're not the sponsor for me if you're not. If you don't have time to answer those questions.

Yeah. So I think this is where having a mentor or just, you know, in the beginning, I didn't know what documents I could ask for.

I didn't even know that a loan tape existed, let alone that, you know, I could ask for it. I, you know, I felt afraid to ask for it because I didn't want to look stupid or didn't.

I didn't know what was acceptable or, you know, and now having the experience I have, it's like, I know that there are so many where. Where I just won't invest without it. And so I think having some of that knowledge related to that.

Look, I think the worst thing as an LP that you can do is say, is like, have a list of questions, like, hundred questions, send them to the GP and say, can you answer all of these? Right? That's incredibly lazy. And I think that's where I think it'd be fair for the GP to say, look, you're not my investor.

I think it's very different if, you know, here's how I approach it.

It's like, I can watch the webinar, which should take me about an hour, or go through the deck, and I should be able to fill in 30, 40% of the questions. And then the other things, I should be able to hop on the phone and answer most of them in a half an hour.

It's like, okay, who's running acquisitions? How big is your team? Like, these are all, like, layup questions that. That shouldn't take that long to do.

I think where the issue is, is when the professional way to do it would be okay. Like, I have my list of questions. The.

The poor way to do it is you ask 20 questions over email, you get the response, the LP shoots back, another 10 questions you get. And then, you know, it's like, okay, how much longer is this going to keep? Are you going to keep asking me? And that's.

I think there is, like, an LP etiquette that also needs to be talked about. Like, I think that's. There is a line.

I think, of how you approach it, and I think it is very real of, you know, LP does need to learn that they can't just, you know, hey, I need you to fill out all these questions for me to Consider investing in your deal.

Yeah, it's a, it's a partnership, right. And nobody wants to be in the situation. It's, it's the 80, 20 rule. But it's really like 95, 5.

It's like 5% of your investors can cause 95% of your headaches if you got that squeaky wheel.

And that's why it's worth it upfront for operators to do the due diligence and make sure that they are meeting the goals of the investor and they're not accepting money from the wrong people because that only leads to heartache down the road. Right. So it's, it's a two way street.

You have to remember, yes, you are interviewing the operator, but if they're good, they are interviewing you as well. And it has to be a good fit for both sides or it's destined to cause frustration.

Yeah. And look, I think the best operators, or maybe not the best, but I think the ones that are the most sophisticated are the ones who have data rooms.

Right.

Where the situation you as an operator I don't think you want to be in is where an LP is constantly asking you for all these documents and you need to go into your drive and like add them to the emails. Whereas, you know, when I approach an operator and they're like, hey, this was a great talk. Here is a link to our data room.

It has everything that you could ask for. And then there's, you know, as an lp, you're like, oh, they're not hiding anything.

They're showing the purchase agreements, they're showing the deeds, they're showing like there are operators that provide all of those things.

And then as an lp it's like, yeah, I don't need to ask as many questions because I feel like they're, they're willing to provide any and everything that I could need for people that.

Are not sure of if they are where they need to be to engage with you and get started, whether they're not sure they're far enough along, they think maybe they're too far along.

Why don't you describe to us your perfect avatar and the person that you're looking to help with your business model so that people feel comfortable reaching out to you and know where they fit in with, with what you're offering.

It's pretty much W2 executives or business owners that are between 45 and 65 years old that are slowly trying to figure out how do they have a put together a plan to reach $100,000 a year in passive Income so that at some point they can become work optional.

Many of these people are in their prime earning years and want to keep earning, but it's very difficult to switch from one day to the next of leaving your job and then all of a sudden having a hundred K in passive income. Right. Very risky to do it all in one go as well. And so those are the people that come through my door that, that get the most value out of it.

Usually people that have done less than five deals in as an LP and likely are not in real estate or a real estate operator themselves.

Well, Pascal, we, I think we could probably go on for another two or three hours and not even get close to covering this all. So in the interest of time, we're start wrapping up here. We always ask one question that I'm going to ask you.

Is there a book that you find yourself recommending to friends or colleagues or aspiring LPs? More often than not?

Oh, he had to look over at the bookshelf.

You know, the one that comes to mind is the Hands Off Investor by Brian Burke. There are all, all different types of books that are very helpful.

You know, there was someone where I read like they had the 17 mistakes of LP investing and I think those are all great resources.

Brian was, we interviewed him about two months ago. That was a, he was a great interview and I think that's a great recommendation. You're the first person. Yeah, he's super sharp.

He's been doing a long time, which is, I think that's so much more valuable than just being intelligent, is having gone through some cycles. Right. You got the more cycles that you've gone through.

It just creates this level of calm and ability for people to zoom out and see the macroeconomic shifts in a way that I think is really impactful. You're the first person on our show, 135 episodes to make that suggestion. So good for you. Way to stand out.

That's awesome. Brian deserves it.

Yeah, for sure. Well, listen, Pascal Wagner, we appreciate you being here. Thank you for your time. You've been very generous with me with your time.

Thank you for being generous with our guests as well.

So if anyone wants to hear more about what you're up to or find out how to connect with you in a meaningful way, to use your coaching and program going forward to help impact their lives in a meaningful way, what would be the best way for them to do that?

Yeah, I think that the two places I would point people is one, you can find me on LinkedIn. That's my primary platform. I post there almost every single day about, you know, how to be a smarter lp.

And then if you're interested in deal flow and learning more about our world, I would encourage you to sign up@ passiveinvestingstarterkit.com that's great.

Well Pascal, thank you so much. We appreciate your time. Thank you for being so generous with your knowledge.

Thanks guys for having me on. It was great to be here.

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

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