Insider Secrets Podcast Episode #55

Featuring Guest: Travis Watts

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Guest Bio:

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Travis Watts is a full-time passive investor. He has been investing in real estate since 2009 in multi-family, single-family and vacation rentals. Travis is also the Director of Investor Relations at Ashcroft Capital. He dedicates his time to educating others who are looking to be more “hand’s off” in real estate.

Shownotes:

Standout Quotes:

“Something to keep in mind, almost like a con of doing this is that they’re ill liquid, your money is going to be tied up for several years” – [Travis]

“As a limited partner what I’m trying to do is figure out “how likely is it that you’re actually going to execute this business plan, and that you can do that successfully?” – [Travis]

“Double down on what’s working” – [Travis]

Key Takeaways:

  • Travis describes himself with one word ‘Education’.
  • Finishing from high school, Travis was confused about what path to take, and he had initially followed his interest in music but upon experiencing the reality of that path, he knew it wasn’t for him. Moving to another well-paying job he hated, started to give him a picture of the 9-5 rat race.
  • Going back to the education table, his interest in multi-family investing was piqued, and this spurred him on to do more research and enter fully.
  • Travis shares that he wished he had started getting educated on Real Estate much earlier rather than assuming he could just do it. 
  • His defining moment was getting to meet and interact with passive investors who were successful
  • The structure of a Real Estate Syndication: The General Partners are the people who locate the properties and opportunities for investment. They raise money for the property from other people who want to take part in the deal, these are the Limited Partners.
  • Regarding fundraising by GPs, this depends on the regulations they work under. The two types are 506B which allows raising of capital from friends and family with no advertising allowed, and 506C which involves working strictly with accredited investors but allows for advertising.
  • Comparing the Pros and Cons of Real Estate investing, Travis notes that while there is more stability and less volatility with Real Estate, there is no public market and as such funds cannot easily be pulled out at any time.
  • You can’t just raise capital for another group if you’re not a licensed broker or dealer 
  • There are 3 primary areas of risk when you’re going to be a limited partner; vetting the sponsor, or GP, vetting the market that you’re invested in, and vetting the deal. The most important of this whole process should be targeted at the General Partners to assess their capacity for the successful execution of the business plan.
  • Addressing fundraising, Travis shares that the first thing he considers is his criteria, and this depends on your “Why”
  • How you go about vetting starts with aligning yourself and your criteria with someone doing that type of business model.
  • Red Flags when vetting a deal: A team with no track record and no experience, a lack of a Private Placement Memorandum which is one very important legal document, an absence of an online presence, and other pieces that offer credibility like podcasts or books help to put the company name out there. It is also important to always note the reasons why, if the  General sponsors are not invested in the deal. You may also want to get attorneys to look through the documents and check how the deal is structured.
  • Build up some passive income whether you’re young or older or anywhere in between, we all have to have it one day, so why not start now?
  • An Insider Secret from Travis: Double down on what’s working, 80% of what we do only equates to 20% of the results.

Episode Timeline:

[01:20] Meet today’s guest, Travis Watts, a full-time passive investor.

[02:13] One word that describes you personally and professionally.

[02:43] Travis shares his backstory.

[07:28] What was the defining moment for your entry into Real Estate?

[10:18] What is a Real Estate syndication?

[20:36] How do you vet a sponsor?

[25:17] What would be a red flag that a new investor should look for in vetting a deal?

[29:52] Travis shares lessons he has learned in his journey.

[32:31] What advice would you give a new investor?

[36:02] What is your favorite book? Cash Flow Quadrant by Robert Kiyosaki

[36:33] How to contact Travis: Get a free 15-minute call with Travis to answer questions on the website (ashcroftcapital.com/Travis). Also reach out on LinkedIn, Facebook, and Instagram.

Transcript:

[00:00:00] Mike: Hey everybody, welcome back. It’s Tuesday afternoon, I’m Mike, and this is Insider Secrets. My guest today is Travis Watts. I’m really excited about today’s show. Travis, you want to tell our guests a couple of things that they’re going to hear today?

Travis: Yeah, Mike. We’re going to talk about multifamily private placements.

I’m a full-time limited partner, passive investor. I talk about financial independence, how to vet sponsors. We’re going to talk about just the industry in general, how capital raising works, how these structures work. There’s a lot of great content here, really excited.

Mike: Yeah. And you’re going to have to listen in to get the rest of it. See you inside.

Kristen: Welcome to this week’s edition of Insider Secrets. The show that turns multifamily investing into reality. Each show we interview guests who are seasoned professionals, actively closing and managing real [00:01:00] estate deals. Your host Mike Morawski has more than 30 years of multifamily, real estate investing and property management experience.

Mike is the founder of My Core Intentions. And he’s been involved in over $285 million of transactions. Focuses on helping you create short term cashflow and long-term wealth. Here’s your host, Mike.

Mike: Hey, good afternoon, everybody. And welcome back. Hard to believe it’s Tuesday again already. Holy cow. But this is Mike and I am back with another episode of Insider Secrets. And remember, Insider Secrets is brought to you by My Core Intentions. And here’s what I want to ask you, not just specifically what your why is, why do you want to accomplish that?

You know what, I’m the why guy. I want to know why you have the goals set that you have set? Why are you trying to go where you’re trying to go? At MCI, My Core Intentions, we invest in our client’s future. [00:02:00] And it’s really important that we find out and help you discover. So you’re crystal clear on what’s going to drive you.

I was on the phone with somebody this morning and they were really clear about the fact that they just want to help other people. They just want to give back. And I found it, there was such a deep desire in that conversation with them, that it really made me think about this Why thing a lot more.

So I share a lot of those principles. I invite you to give me maybe a call, let me know how I can help. Follow me on Instagram, follow me on social media, go subscribe on YouTube. Subscribe to Insider Secrets. Let me get started here today, and I just have to say that I’m really excited about my guest Travis Watts. Travis, you want to say hi real quick to everybody.

Travis: Hey, Mike. Hey everyone. Thanks for tuning in.

Mike:  Glad you’re here, Travis. That’s for sure. Let me tell you listeners a little bit about Travis. Travis is a full-time passive investor. He’s been investing in real estate since 2009 in multifamily, [00:03:00] single family and vacation rentals. Travis is also the director of investor relations at Ashcroft Capital, and he dedicates his time to educating others who are looking to be more hands off in real estate. So I am convinced just by that little bio Travis, that you’re going to be able to deliver a lot of information that really is going to be those nuggets that might help somebody move the needle in their business or their personal life as well.

But here’s one question I always ask my guests and I’d like to know. What is one word that describes you both personally and professionally?

Travis: Wow, that’s powerful question. Something to the effect of education or educator. I’m a huge advocate for just learning myself and then of course, educating others too and giving back that way. So we’ll go with education. How about that?

Mike: Okay, I love that. That’s great. And I know we’re going to talk a lot about that and I’d like to circle back to exactly [00:04:00] what that means, but meantime, what I’d like you to do is get into your backstory. Your bio is just a little brief about you, but obviously there’s a lot more to that and I’d like you to share with our listeners how you got into real estate and your progression.

Travis: Absolutely, happy to share. My story, I’ll share it in a different way that I’ve never really shared before. I’ll share it from the confusing standpoint, which is where I was for many years. Pretty confused out of high school, which direction I was going to take it. I’m a vocalist and a drummer in several bands out in Florida.

So I ended up going to school as in college for live show production for audio, lighting, visual, et cetera. And as I got an associates, I thought, I better pause right here. And go see how this industry really is. See if I really want to pursue this. I went up to New York city, worked in Staten Island on an off-Broadway theater company. And realized quickly, this is not an all what I wanted to.

I was wanting to tour with bands and I [00:05:00] just had this whole other image in my head. And so I left that industry to go back to Colorado where I was raised and I ended up getting a job in the oil field and that was a high paying gig, but I really hated it. And so this taught me a lot about the rat race and a lot about I guess we could call it the nine to five.

For me it was 14 hour work days, 98 hour work weeks away from home out of state overseas, worked in Saudi Arabia. Did all this crazy stuff. As I was doing that, the reason I was doing that I should say is to experiment with real estate. So I got involved with real estate. To answer your question in the single family space in 2009.

So my first property was a house hack where I rented a spare bedroom out and I lived there myself. It was a two bedroom, one bath with a Jack and Jill type setup. And college town kind of thing. And ended up going into fix and flips, vacation rentals did all kinds of this active [00:06:00] single family.

And by 2015, I had burned myself out because I was trying to go too hard, too fast. I didn’t see that being a very scalable model. Like I had hoped it would be. And obviously working in the oil industry that many hours didn’t give me exactly a lot of time to focus on it and get good. So in 2015, I joined, act to the topic of education.

I joined a bunch of meetups. I listened to a lot of podcasts. I read a lot of books. I went back to the education table, so to speak okay. Which I had been out of for several years. That’s where I discovered multifamily syndications and private placements. And I had this epiphany, this light bulb moment of what I could be hands-off in real estate.

I could actually just partner with people. Doing it the right way, so to speak, at a higher level. And I could just share in the profits with them. And that made a lot of sense to me. And there’s a lot of folks out there I’ve come to find who fit this dynamic, not [00:07:00] necessarily oil industry, but Dr. Dennis lawyer attorney, folks who were very busy with what they do full time. They want to be in real estate, but maybe being the weekend warrior and fixing flipping houses Saturday and Sunday, isn’t exactly their cup of tea. And so that’s what I help educate others on now, that I’ve become a full-time LP, a limited partner in these private placements.

And yeah, I think that’s just basically our conversation today is more on the multifamily stuff.

Mike: Never miss not being a roadie?

Travis: I never got far enough in that industry, to really make that happen. I had a buddy that ended up doing that and I still pick his brain to this day and kind of get the stories. I live vicariously through him.

Mike: It’s funny you bring that up, because it made me think about when I was younger. I’m in Chicago, and I had a buddy who worked for one of the biggest lighting companies. And he always talked about journey, and yes, and being on these [00:08:00] crews and showing up.

You made me think about it. I haven’t thought about him in years. It’s fun. Listen, I don’t think you’re the first guy to come out of high school or woman to come out of high school confused. I think that’s natural progression for just growth in our life, right?

Coming out of high school. Go back and talk about that defining moment though. What was that defining moment that took you from what you were doing in a multifamily? You said you discovered multifamily, but what was that? What really made it like a lot for you to go, man, that’s an opportunity?

Travis: Yeah, that’s a great question. And that transition was actually quite interesting because, unfortunately I should have hit the education stage a little sooner in terms of finding mentors, coaches, programs, podcasts, books, et cetera. I didn’t. And I just thought like a lot of people think, I can do this.

I’m going to do this on my own. I’ve got the willpower to do this, let me push through and make it happen. And, I certainly did that, but [00:09:00] it certainly had its consequences too. And I certainly wasn’t quite frankly, that good at it. And so what happened was, I think this actually started to unfold after a conference that I attended.

 I forget if it was a real estate guys conference or something similar, but they’re talking about syndication. And so that kind of opened my mind initially. And then I thought, and I’m only thinking of it from the standpoint of being active. I’m like, I don’t really want to be a general partner.

I don’t really want to go, raise capital, put deals together, work relationships with brokers. Like I just don’t enjoy it and I don’t have the time to do it. And then I met a couple of folks that are still in my network today, who were in their sixties and seventies, who had been LP investors for like nearly 20 years, maybe even a little bit more.

And they opened up to me about what that experience was like, what their portfolio entailed. And they were mostly in the real estate space doing these LP deals. And I think [00:10:00] that is just what made it real for me to actually talk to a real person. They weren’t selling me anything. They weren’t trying to get me into a deal.

They were literally just passive investors like I am today. And so that light bulb was really it for me. And what resonated was I wanted out of the oil industry, cause I didn’t like it. I wanted to get out via cash flow through my investments, but I didn’t have extra time to dedicate to doing a lot of work on the active side.

And so this was like the solution to everything. It’s like, you could be hands-off, you can be passive, you can remain in real estate, you can still have cashflow. So that’s really what painted the picture for me is just meeting those couple individuals early on.

Mike: You sparked a couple of questions that I think are informative first, there might be some listeners on the call that really aren’t familiar with what an LP is.

Travis: Yeah.

Mike: Explain that, then explain what that is and how you do that for [00:11:00] people?

Travis: Yeah, exactly. So a real estate syndication or a private placement would be the legal jargon behind it. Imagine this, so you want to go buy a large property, okay? Call it a 400 unit apartment building. If you do that individually, you may have to come up with 20 or $30 million for down payment and for the rehab budget, et cetera.

If you don’t have that kind of money, it might make sense to raise that money from other people so that you can close that larger asset. And then you can share and split in the profits, via the cash flow and the equity upside potential, et cetera.

So the way that structured could be structured in different ways, a lot of them are structured like a limited partnership. So you have the general partners or the sponsors of the firm or the team there’s interchangeable names there. They’re the ones finding the property and underwriting it, locating these opportunities saying, Hey, here’s a great deal. You want to participate in it? And they’re going to be more like [00:12:00] an asset manager, not always the property manager, but the asset manager to make sure that they put a team together and they can actually execute this business plan to buy and hold or to buy and rehab, or to essentially flip over a period of years.

So they’re raising money from other people who want to put in to that deal, they want to participate in that deal. That would be me. And I would be a limited partner in that instance. So maybe I give this team $50,000 or a hundred thousand dollars. And now I have some equity ownership in that 400 unit apartment building.

Maybe I’m only like a 1% owner or a half a percent owner, or what have you. But I do have some ownership in it along with maybe a hundred or 200 other folks too. And so we’re all collectively investing in this project too, and helps that it goes up in value and that we collect cashflow along the way, et cetera. Much like you would do with any smaller project, just on a larger scale.

And back when I [00:13:00] got started in real estate, if you had said. Who is a buyer of one of these types of properties, these 400 units, I would have said you’re either a billionaire or it’s some institutional capital. Some REIT or something that’s on the stock market, I don’t know. But I didn’t realize that I could actually participate in these as a limited partner. So that’s what the structure is in a nutshell.

Mike: Nice. Thank you. That was a great explanation. You opened a door for a number of things here. So one of the questions that I have right now is, you mentioned there could be a hundred or 200 limited partners in a deal like that. So you’ve got the GP or the sponsor puts the deal on. How does that sponsor find a hundred or 200 people? How do they bring those people together on one platform and raise that capital?

Travis: That’s a great question, there’s different ways to go about doing it and certainly a highly regulated industry. So it depends on what kind of regulation you’re going to operate under. There’s two common ones. There’s [00:14:00] more than this, but I’ll go into two common.

You have a 506B regulation. You have a 506C. With a 506B, these general partners can raise capital from folks that they have a preexisting relationship with. They know these people, they know their risk tolerance, they know their goals, maybe it’s family, friends, or someone that they’ve just known for a while.

And they know that information. Well, what they can’t do though, under that regulation is publicly advertise their deal. They can advertise their companies saying, we’re real estate investment firm, we buy multifamily, et cetera. But what they can’t do is meet a stranger on the street and say, Hey, we have an opportunity today.

Do you want to put in $50,000? Here’s the potential returns. They cannot do that. So with the 506C offerings, you can only accept accredited investors who are high net worth high income individuals. Individual or married, it’d be a million dollar net worth excluding primary residence and any debts owed that’s one way to qualify or you can [00:15:00] qualify via income.

So if you’re single, it’s 200,000 per year gross income for the last couple of years, expectations to meet the same in the current year. If you’re married, that bumps up to 300,000 combined income, gross for the last two years, expectations to meet the same in the current year. Other ways now, they’re always changing this definition, recent changes have come out.

If you’re holding a series seven or 63 I think it is license, in other words, you’re like a broker dealer. Perhaps you could qualify as accredited. So not going to get in the weeds with it, but basically there’s that the requirement to partner on one of these deals under a 506C offering.

And the advantage to doing that, is that general partner can publicly advertise or solicit their offerings. Whether that means through YouTube, Facebook, social media, through email. In that case, you can actually meet a stranger and say, Oh, you’re an accredited investor, interesting. We actually have an opportunity if you’d like to know more about it.

So that’s how it works. It’s the [00:16:00] biggest thing to recognize about what we’re talking about I think is these are all private placements, meaning there’s no public market for these types of securities. Like stocks, bonds, and mutual funds, where you can go put 50,000 in today and tomorrow hit the sell button and get your money back. Things like that.

Some of that keep in mind almost like a con of doing this really is that they’re illiquid, your money is going to be tied up for several years potentially in these types of offerings. Pros and cons to them, like I don’t like the volatility in the stock market, for example.

So these private placements often have a little less volatility, a little more predictability, perhaps they’re a bit more stable, generally speaking.

Mike: Okay. Good stuff by the way. Because I think that there’s some listeners that listen into Insider Secrets from time to time that might not have all this detail and what you’re providing today is priceless.

So thank you for your knowledge and bringing that to the table.

[00:17:00] Travis: You bet.

Mike: I want to frame this and ask you this question. Obviously, there’s people that can’t afford to put hundreds of thousands of dollars into private placements on their own all the time. By hundreds of thousands of dollars in real estate through that.

So take an individual that maybe makes, that’s an accredited investor. Let’s just call them an accredited investor. And he wants to or she wants to invest more money in than what they currently have themselves. Are they allowed to, I think there’s a whole gamut of questions here. Bring other people together in their little niche and place that money with a sponsor.

Travis: Yeah, absolutely. So the question, just to make sure I understand is could they be a general partner themselves and do this model? Is that the question?

Mike: Yeah. What would they be a general partner or at that point, or would [00:18:00] they be a limited partner still just facilitating some other limited partners?

Travis: Got it. Yeah, there’s different ways to go about it. See of the individual ownership, which is what I used to do. I bought my own single family homes. You could buy multi-family yourselves, smaller, duplex, quads, et cetera. You could get into the JV, joint ventures where you and some other folks are collectively coming together to buy perhaps a larger property.

And it’s not going to be a syndication structure because each of these partners that’s bringing something to the table in terms of probably equity is also going to have some active involvement or some active role in the partnership. So that’s one option that you could do too, you and a few buddies by an eight unit or something.

And then one person’s in charge of this and the other’s in charge of that. And then to your point, could you facilitate bringing limited partners together for either someone else’s deal or for your own deal? Just be aware, there’s a lot of [00:19:00] regulation in the space around it, such as you can’t just raise capital for another group, if you’re not licensed to do or you’re not a broker dealer and you can’t be rewarded in terms of how much you bring to the table or being paid a percentage of the deal if that’s your only active involvement, is just the capital raise aspect. So how folks structure that then is that they could be perhaps a general partner where it’s their own syndication deal, but they’re doing investor relations. They’re doing reporting. They’re doing underwriting.

They’re making decisions and they’re also raising capital in addition to that would be fine. And again, I’m saying all this by the way from an LP perspective, I’m not a licensed attorney or anything like that. So please do seek a licensed advice on that. But generally speaking, I’m just giving a high level understanding of, that’s my interpretation of it. We’ll put it that way.

Mike: And that’s a good point. I like people to know, Hey, I’m not an attorney, you’re not an attorney. [00:20:00] From time to time, I do have an attorney on as a guest. I’m not an accountant, you’re not an accountant and we’re delivering knowledge and information that we’ve used ourselves and know best that works for us.

So people need to disseminate that and figure out how it works best for them. So let’s go here. How do you vet a sponsor? So if I’m a limited partner and I want to get in a real estate deal, how do I go about bedding a sponsor?

Travis: That’s a great question. There’s generally the way I look at it from my perspective, there’s really three primary areas of risk when you’re going to be a limited partner.

So it’s vetting a sponsor or a general partner, it’s betting the market that you’re going to be invested in, and then it’s vetting the deal itself. And the way that I started was, I would say the wrong way, and that was vetting the deal almost exclusively and then almost discrediting the team as if they almost didn’t [00:21:00] matter, it’s all about the deal. And so I was getting all caught up in the spreadsheets and the Excel underwriting, and trying to push my perspective. I don’t agree with this or why that, and it’s important to vet obviously all three areas.

But if I had to put maybe a weighted average to those three. I would say personally speaking 50% would be on the team. It’d be on the general partnership. It’s their track record, their ability to execute the business plan that they’re proposing, they’re going to do. So as a limited partner, what I’m trying to do is figure out how likely is it that you’re actually going to execute this business plan and that you can do that successfully.

That’s really what it’s about. So to answer your question, for me, it starts with criteria. So I know my criteria and I’m a big advocate for helping people understand their own criteria because everyone’s going to be different. So that comes down to as you mentioned at the beginning of this episode, your why, what are your goals?

What are you really trying to [00:22:00] accomplish? And then you’re having to reverse engineer. You’re trying to say, okay, I want more time with my family and friends and travel or something, okay. I’ve got a 10 year time horizon. Okay. How much money is that going to take in terms of maybe passive income?

20 grand a month and I’m just throwing out numbers. Okay. So then how much are you going to have to invest to have 20 grand a month in yield or cashflow from real estate. Okay. And then how much per year and all of this kind of stuff. What my criteria just for example purposes would be, as I like class B multifamily, 1980s, 1990s, early 2000s built pre-existing product. I like stabilized cash flowing product. So these are apartment communities that are already performing today. We’re just going to be buying it and making it better. So that would be a value add business plan.

So not new development, new construction, not opportunistic, but just buying [00:23:00] preexisting cashflow basically. And then trying to lift that up by cutting expenses and then adding to the revenue side and raising rents. I like monthly distributions because I live on my cashflow because I’m a full-time LP.

That’s a personal thing that doesn’t have to mean a thing for anybody else. I’m just sharing pieces of my criteria. I have States that I like to invest in more than others. On and on, right? I could go on with 50 pieces of criteria. But how you go about vetting starts with aligning yourself and your criteria with someone doing that type of business model.

So I’ve made it my mission, through networking, through conferences, through word of mouth, through my connections to find people doing value add B class monthly distribution, cash flowing plays. And so that’s mostly what I’m in because that aligns with my goals and my why.

Mike: Hey, I hope my listeners rewind this whole piece right now, because [00:24:00] I talk a lot about building a strategy, buying a criteria, and you just talked about that. When you talked about B class deals, 80, 90, early 2000 products. You working force housing, build that criteria. Because when you build that, when you look at a deal, if it doesn’t fit in that box, then maybe it’s not the right deal. Now I’m all about being flexible and I’m all about, Hey, if it’s not a pitched roof or an asphalt roof, that might be okay, that’s my criteria.

So I’m about building that criteria. So that was really good. Thanks Travis for sharing that like that. And let’s talk about some red flags. So what would be a red flag for you or a red flag that a new investors should look for embedding a deal?

Travis: Sure, there could be so many, this is another topic that would be highly individual, but I’ll give you some examples.

From my perspective, things that I’ve come across [00:25:00] would be a team that has no track record, no experience, right? Maybe they just went to a conference, they read a book on how to syndicate a deal. Now they’re raising capital and they’re going to give it a shot. I don’t want to discourage anyone who’s new to this business to not get started, but there are models that may help you get started in other ways, besides just starting from complete scratch with no reputation, track record, et cetera. You could be maybe like a co-partner a Co GP with someone and kind of work yourself up through it.

Having no PPM as a private placement memorandum that’s just part of the legal docs that go along with these types of deals. So if anyone’s just asking you to just go ahead and wire money to us, and you’re in the deal, don’t worry about scary. I always look for some kind of online presence.

Obviously you probably have a website or whatnot but even further, are these folks out there in the industry, are they doing any speaking events? Do they have a podcast? Are they an author? Did they write a book?  [00:26:00] These are just pieces of credibility that puts your name out there to make sure you’re not someone’s not operating out of a basement somewhere trying to fraudulently raise capital that way. If the general partners are not investing in the deal at all themselves. I always ask. I’m not saying that’s an absolute I’m out for sure.

But I’d like to know why that is because most general partners are going to invest as an LP just like you. And I kinda like that model, because if the ship goes down, they’re going down with it, with you. Unlike, maybe some of the traditional financial models from a broker or something that’s saying buy these stocks and then are you in them?

No, but you should buy them though. So a little more of alignment of interest. I dunno. Gut check goes a long way. I like meeting people face to face. I know that we’re in the midst of COVID, so maybe a zoom call. Something like that. Get to know these folks, have conversations, it’s pretty much free to do that, even if it’s just a simple phone call.

[00:27:00] Last thing I’ll say I partnered early on a deal where this general partner bought a preexisting LLC and did not form a new entity to own the property. And there was some pending litigation that we were not aware of that popped up later. And so we had to handle that litigation, even though that wasn’t our fault, it actually started under that LLC name previously.

And so something to look out for is how they’re structuring the deal. And of course always reach out to attorneys and whatnot, to look through the docs and anybody in your network that can help you make a decision on these deals, even if it’s a financial advisor or what have you.

Mike: Great advice, I will check you go on the comment about starting in the basement, because when you look at inland real estate, it’s true.

Inland is one of the largest REITs in the world today, right? For high school teachers out of their garage. Crazy story.

Hey, everybody starts somewhere, you start with that first deal and you grow from [00:28:00] there. So it’s a great business model. And the reason I got in it was, I was in the construction business. I did a lot of work for inland, for Sam Zell’s company equity trust over the years. I did a lot of construction work for them. And I kept the model. I was like, so you mean they go over here to this guy and they get private equity money. Somebody gives them money to go buy a real estate deal and they put this whole thing together. When I first really understood it, it was like, wow, this is crazy. I could do this.

And it just festered with me over the years till I went and syndicated my first deal. So it’s interesting. Tell me about some of the lessons you’ve learned over the years in real estate and maybe even zone in on what do you know today that you wish you would’ve known when you first got started?

Travis: Yeah, that’s a great point. And I guess if we take a zoom out real quick, what my [00:29:00] underlying philosophy is really around passive income, cash flow, monthly dividends, interest, these types of things. Just to understand what I’ve been teaching my nephews, for example, who are approaching college age is I helped them open up a brokerage account.

We’ve been having conversations about REITs, real estate investment trust, high dividend yield stocks, et cetera. Not to recommend which ones they should buy, but to paint this picture that even if they have $10 to invest potentially. You could potentially buy a share of one of these companies and have a little dividend clipped.

And then if you can add to a hundred bucks and then do a thousand, and then to 10,000, they could start achieving financial freedom starting at an early age. They don’t have to wait to become an accredited investor. They don’t have to wait until they’re a multimillionaire before they start thinking about this stuff.

They could start their journey now. And so to me, it’s the overarching [00:30:00] goal here for me anyway was if I have more passive income rolling in every month and I have lifestyle expenses from rent, mortgage, car insurance, cell phone, et cetera. Then I have financial independence.

Now it may not be at the level that I ultimately want it to be at, but once you cross that threshold, it gives you a lot of options in your life. For me, that first option that was so life-changing to me, was to be able to leave the oil industry, which was ultimately just a job I didn’t want to do. I didn’t like it.

I didn’t enjoy it. I didn’t want to grow in it. I was just uninterested. And so I was able to leave that to go pursue things that I was more interested in. And ultimately it wasn’t a money thing. It was a flexibility of lifestyle thing. And so that’s my message to the world is just that build up some passive income. Whether you’re young, whether you’re older, whether you’re anywhere in between, we all have to have it [00:31:00] one day. So why not start now.

Mike: Great advice. Thanks for that. I think that was some really good nuggets there. So this show is called Insider Secrets, and do you have any secrets or insider thoughts that you might want to share with a new investor? What advice would you give a new investor?

Travis: Sure. Yeah, this came from one of my mentors years ago. And I’ll share with you the quick backstory here. So from high school years for me, up through about two years post-college, I had launched approximately 25 small businesses of all different shapes and forms, audio rental, lighting rental, clothing lines, all kinds of stuff.

All of them failed. Except there was one that succeeded and that was real estate. And my mentor, I remember him telling me this. Double down on what’s working. And that sounds so obvious and so simple, but man, so [00:32:00] powerful because I could have doubled down on any of those other businesses that just kept failing over and over trying to make them work and trying to force things to happen.

But at the end of the day, I had some that was working. And I put a lot more time and energy into it. And I grew, and I expanded on that concept. And that’s made all the difference.

Mike: Yeah, I like that double down idea. So if you’re doing something and it’s working, it goes back to the 80 20 principle, right?

80% of what we do only equates for 20% of the results. So if you look at the 20%, which is equating for 80% of the results, how do we do more of that? So it’s good philosophy in no matter what you do. I’m gonna have to agree with you about the oil business was never attracted to me and no matter what it did.

Hey, we’re getting down to the end. There’s a few questions that I always like to ask people. Did you have any last thoughts before we go to the next part of this question?

Travis: No, I think we’re good. We covered a lot of [00:33:00] territory.

Mike: Hey so where are you calling from today?

Travis: Denver, Colorado.

Mike: Okay. So is that the real background behind you?

Travis: It’s not, no, this is not a real office unfortunately. It looks similar.

Mike: It looks beautiful though. That’s why I brought that up. So you’re in Denver. Tell us your most favorite tourist attraction.

Travis: Oh man, big fan of the mountain. So I grew up in Fort Collins about an hour North outside Denver.

And so we always, my dad and I taken off on the weekends going up to camp, going up to explore, these no named roads and stuff. So I’m just a huge fan of just getting away from the city, ironically the city that I live in full-time. But yeah, so you got to see the mountains if you’re ever out in Denver, Fort Collins as far as inside the city, and there’s a lot to do in Denver, a lot of great restaurants. My wife and I love this restaurant called Snooze. And the line’s going to be out the door and then some, no matter what day you’re going. But it’s an amazing eatery. [00:34:00] It’s like a breakfast brunch kind of place. So if you’re ever in Denver or Fort Collins for that matter, check them out. They’re called Snooze.

Mike: Nice. That was my next question. I remember, I’d been to Denver a couple of times, but I remember being in Vail and mountain biking in the fall.

Travis: Oh yeah.

Mike: Nothing like that. That was really great. Favorite book you’ve ever read?

Travis: Oh God. I think that the one that was most life-changing to me was “Cashflow Quadrant”, Robert Kiyosaki’s book. Just understanding I really want to be in the I quadrant, which stands for investor and a lot of tax reasons for that, but just a lot of lifestyle reasons for that as well.

Mike: Yeah. Awesome. Thanks Travis. Hey, I really appreciate you being here today. You’ve been a real gift to my listeners, and I know they appreciate that. If anybody should want to get ahold of you, pick your brain on any way that they can reach out to you.

Travis: Sure, yeah. So what I do week to week is I have a calendar link and I connect with people on 15 minute calls, no [00:35:00] upsell, just a Q&A, anything that we talked about here.

So that’s it. ashcroftcapital.com/travis. You can sign up for my calendar. There’s also a PDF there called “Understanding Real Estate Private Placements”. Feel free to download that, it’s about 20 pages long. Industry terminology, how to vet deals, markets and sponsors, et cetera. A lot of the stuff that we covered here, but in a lot more depth, so that’d be the best way. I’m on LinkedIn, Facebook, Instagram, bigger pockets, so reach out. Happy to connect.

Mike: Nice. Thanks for that. And all that information will also be in the show notes. So people will be able to get that and it’ll be on our website. Travis, again, thank you very much for being here.

I appreciate the information. You’ve been a wealth of knowledge. It’s been a lot of fun. And listeners, we’ll be here next Tuesday. You’ll have to probably rewind this a couple of times, I’m sure. Because, I always talk about successfully include and obviously Travis has been successful and has left a lot of clues here today.

[00:36:00] Thanks Travis.

Travis: Thanks Mike. Thanks everyone.

Kristen:  Thank you, Mike, and thank you for joining us for another great episode of Insider Secrets. As always, Inasider Secrets is brought to you by My Core Intentions. Join us on social media and visit mycoreintentions.com where you can get expert coaching on all things, multifamily investing in property management.

We’re looking forward to having you back again next week for more Insider Secrets.

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