Insider Secrets Podcast Episode #75

Featuring Guest: Steven Pesavento

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Guest Bio:

Steven Pesavento is a real estate entrepreneur and Managing Partner of VonFinch Capital. Investing full time since 2016, he’s completed over 200 transactions, renovated nearly 100 houses and transacted over $70,000,000 in investment real estate. Steven’s investors have entrusted him with over $11 million of investor capital, delivering solid consistent returns.


A former Management Consultant for some of the Fortune 500’s top companies, he brings his years of process improvement, marketing and sales experiences to every project.


Host of the top ranked podcast the Investor Mindset he interviews some of the smartest minds & authors like Chris Voss – Never Split The Difference, Jay Papasan – One Thing, Joe Fairless – Best Ever Podcast, Mark Manson – Subtle Art of Not Giving A F and many others.

 

When Steven isn’t focused on serving his passive investing or real estate entrepreneur clients, he enjoys running, Snowboarding, Salsa Dancing, Kiteboarding, and taking on new travel adventures.

 

Learn more at TheInvestorMindset.com the tools and strategies of the nations top investors & subscribe on your favorite Podcast app today.

Shownotes:

Standout Quotes:
“There’s something so important about getting clear on what your intention is at each moment. When you’re going into the world there’s so many opportunities for us to simply react, but if we can go into each day, and then each moment within that day, with the intention of how we want to show up, who we want to be, what is most important to us, then we can actually start attracting that into our lives.”– [Steven]
 
“It all came down to mindset and it was this belief that it’s possible to live a better life.”– [Steven]
 
“When you can change the way that you’re thinking, when you can change those thoughts, you can end up changing what you do and therefore how you experience life.”– [Steven]
 
“I don’t believe coaching is your coach telling you, it’s that self discovery thing. Because we have the answers in us. As a coach, what I really like to do is help my client find out what that is and pull it out of them.”– [Mike]
 
“As you make that decision and you push yourself forward and you start to attract what you actually want in your life, the things will actually start to show up for you. It’s wild, they don’t always show up in the way you want. They don’t always go perfectly, but there’s a lot of learning and growth. All of that ends up leading down the path to where you actually need to be.”– [Steven]
 
“Power becomes in the execution.”– [Mike]
 
“The ideal investor for us is somebody who is earning a great income. They want to create a better life, to create cash flow, or they want to create equity growth.”– [Steven]
 
“At the end of the day, I found that it’s extremely important to go and figure out who your ideal client is. Who is the person that you’re looking for to serve if you’re on the business side?” – [Steven]
 
“You do not need to come from a place of desperation. You do not need to come from a place that you need every investor. If it is somebody that you don’t mesh with, move on.”– [Mike]
Key Takeaways:
Steven is the host of The Investor Mindset Podcast and curates commercial real estate investments for his clients at Von Finch Capital.
 
Steven operated over 200 fix and flip homes in his three years prior to expanding in the commercial real estate focus.
Steven’s career path really changed by going out and finding really amazing mentors, coaches, and people to look up to and learn from, to change his mindset. 
 
We can really change the way that we think, we’re not a product of our earlier environment. 
 
The reason why Steven started the Investor Mindset Show was to really dive into the power of passive investing.
Steven owns a private equity company that focuses on real estate and buying multi-family properties. Finding properties, working with operating partners, and bringing all the capital together to put those deals together so that people can invest passively. 
 
Private equity is essentially investing capital into assets, businesses, real estate, any kind of investment type product. Von Finch Capital’s focus is on real estate private equity.
 
One of the most powerful education resources is called The Passive Investor Playbook. It’s a 52 page resource guide that talks about the benefits of diversification, how to choose an investment, what questions to ask…etc. The book can be found at investormindset.com/passive.
Episode Timeline:
[01:26] Introducing today’s guest, ‘Steven Pesavento’.
 
[03:06] A brief bio on Steven.
 
[04:23] The mindset that helped Steven jumpstart his career.
 
[05:19] Personal development and growth.
 
[06:28] Defining moment for Steven.
 
[07:51] A few of Steven’s favorite books.
 
[10:08] The day Steven decided to go into real estate.
 
[13:56] Moving on to the next step.
 
[16:31] Private equity & Von Finch Capital.
 
[18:39] Raising capital for deals.
 
[21:10] The ideal investor.
 
[22:30] The Passive Investor Playbook.
 
[26:21] Steven’s Secret to success.
 
[28:27] Bonus question round.
 
[31:03] Final remarks from Steven.

To get in touch with Steven visit investormindset.com/success or contact him @StevenPesavento on any social media platform.

Transcript:

[00:00:00] 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 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. It’s Mike, your host of Insider Secrets brought to you by My Core Intentions. Geez. I got tongue tied there for a minute, usually thinking about being a co-host on Saturday morning with my my co-host there. [00:01:00] Welcome, glad that everybody’s here. 

Let me ask you, and I ask you all the time. What are your intentions? Did you get up this morning? Did you think through what you are going to accomplish? Who you were going to talk to? What property you are going to go look at today, how you are going to underwrite a deal? Who you were going to talk to about raising private equity? So I want to just make sure that you’re thinking about those intentions every day, that when you’re getting up, that’s really what you’re digging into. At My Core Intentions, I’m really committed to helping people learn how to create short-term cashflow and grow their long-term wealth, really by empowering them to execute sound real estate principles. And today, I’m joined by a guest that I’m really excited about, Steven Pesavento. Steven, you want to say hi real quick?

Steven: Hey guys. Excited to be here, Steven Pesavento of the investor mindset and grateful to be able to dive in to some of my favorite topics with you today.

Mike: Steven, I’m really glad that you’re here. Before we dive in and get into your bio here. I just want people to think through about living a [00:02:00] really balanced lifestyle. We all get running so fast and this business can really overtake us a little bit. I just want people to think that through and have an intention about really focusing in on the things in life that are most important. What might that be for you? Might that be your wife or your children or your husband, your family, however that works out in your own life. Really make sure that you spend some time thinking about that. Steven, go ahead. You gonna say something?

Steven: I think there’s something so important about getting clear on what your intention is really in each moment. Because when you’re going into the world is so many opportunities for us to simply react. To simply just be in this reactive mode, but if we can go into each day and then each moment within that day, with the intention of how we want to show up, who we want to be, what is most important to us, then we can actually start attracting that into our lives. So I think the fact that this is such a core intention of yours Mike is really powerful.[00:03:00]

Mike: Hey, you know what? I didn’t even have to pay you for that, but that’d be a great clip. We should have done that as a clip, it could chop. I couldn’t have said it better though. I appreciate you being here today. And Steven, you’re the host of The Investor Mindset Podcast. And I want people after this to be able to go there, follow you like you and love you too. Just as much as I want them here to like me, love me, help our ratings here on Insider Secrets and at My Core Intentions. But Steven curates commercial real estate investments for his clients at Von Finch Capital. He’s raised over $10 million, which he successfully cycled through multiple assets beginning in single family and operated over 200 fix and flip homes in his three years prior to expanding in the commercial real estate focus.

Steven, I am really glad that you’re here. And I don’t think that we could go into your Bio and really cover your experience and knowledge. I know what I’d like you to do is [00:04:00] tell us, fill those gaps in for us and tell us about yourself. But the one question that I always ask my listeners in the beginning is, what is that one word that fills you out that says, this is who I am personally and professionally.

Steven: Yeah, I think that’s such a good very good question. Just to clarify, raised tens of millions of dollars. And what’s interesting and surprising about that is that when I look back at how I got to where I am, there’s one thing that always comes back to being that driving force. The thing that allowed me to go out and first start out in management consulting and go that traditional path and work the W2 and experience that, oh, maybe there’s something missing here to then leading me down the path to technology and then eventually to real estate, it all came down to mindset and it was this belief is this belief that it’s possible to live a better life. It’s possible to [00:05:00] create a better life.

And that it’s possible for me to have all of the things that I’ve dreamt of and the same is true for everyone else. And where it really came down to for me, was going out and finding some really amazing mentors, some coaches, some people will be able to look up to and learn from, to change my mindset. At the core, I see mindset as your thoughts and beliefs that end up leading to the actions you take and therefore the outcomes that you experience. And when you can change the way that you’re thinking, when you can change those thoughts, you can end up changing what you do and therefore how you experience life. And for me, mine has been that core foundational piece. It’s not a silver bullet, it won’t solve everything, but usually it can be one of those first places that you go back to start evaluating understanding where am I off here? 

And early on in my career in my life, I got introduced to personal development and growth and this idea that we can really change the way that we think. That we’re not a product of our earlier environment. And that’s exactly [00:06:00] the reason why I started the investor mindset show is to really dive into the power of passive investing and how investors think about investing. With the anticipation of a return, but also at the anticipation of all of those benefits that ended up coming out of it. And so we dive into all kinds of topics just like this. But it’s really because I found this passion in seeing how much I could change and how much I could grow. And I’m excited to be able to share that same kind of concept and idea with everyone else here.

Mike: God, I love that. And I don’t know that on my show, I’ve had anybody take their words and really explain it like you’ve explained it and I think that’s great. And I’m going to ask you another question before you even dive into your background. I want to know what was the defining moment in your life that caused you to say, Hey, I have to do something about my mindset because I don’t believe any of us grew up or woke up one morning and said, oh, I have this great mindset. I think something happens along the line, along the way for each of us. What was that defining moment?

Steven: [00:07:00] I can look back and there’s a number of defining moments, but I remember specifically I was working on a new business. I had gone down this path of dreaming about entrepreneurship for so many years and had so many fears about doing it. I jumped in and we were running this startup, we had bootstrapped it. We had a number of customers, we are pre-funding, and we had a lot of folks who were looking to invest directly in our company. And I remember sitting down and listening to an audio from Tony Robbins called Personal Power II, I went through this 30 day program and what I ended up came out the other side with was a whole level of clarity about what I actually wanted and why I wanted it.

And it made it really simple for me to change that direction. And in that moment, decided to sell off all the assets of that startup, not take all the investor money that was being handed out to us because we realized it wasn’t in alignment with what we actually wanted to create longterm. But that moment for me was [00:08:00] huge because what it ended up doing was allowing me to realize the power of just sitting down and getting clear of not getting caught up in that cycle of unsuredness, that cycle of not making a decision, that cycle that we all get into or we just taking action, we’re just working, but something’s not right. And so that was really one of those big moments where I completely changed my whole view about the power. 

Now early on in my life, I definitely read books like “Rich Dad Poor Dad” and “The Four Hour Work Week” and “Think and Grow Rich” and “How to Win Friend and Influence People”. And those things were definitely foundational. But if we’re talking about a moment, that was a moment that I changed my whole direction, just based on some personal development.

Mike: Yeah, how awesome is that? So here, I want to know how many times you’ve gone through that Tony Robbins set, because I know how many times I’ve gone through it. And it’s been a while and that old material I wonder what it’d be like to do that today after all the growth and [00:09:00] where you’re at today in your life, but that’d be interesting.

Steven: I went through it about a year ago. I find I’ve gone through it many times, and I find that every time that I go through it, I end up really making a big change. And the core of it is just because there’s a process there. And it’s one of the really big benefits of working with a coach. Folks like us don’t have the opportunity to work with Tony Robbins one-on-one, but we can go to some group events. We can go listen to a program that he’s recorded and you can self coach yourself. But when you have a real live coach that can hear what you’re going through, that can ask you really powerful questions and that you can come up with the answers, you end up making some big shifts. So of course I have multiple coaches and I also coach folks on a personal development level to help get more clear. But at the core of that, it’s through these powerful questions that we end up getting the answers. And sometimes we’re looking for those answers externally, but surprisingly enough, we have those answers inside. Sometimes we just have to be asked and directed in the right track.

Mike: That’s funny cause that’s what I always say. People [00:10:00] say, why coaching? What are you going to tell me to do? I say, I don’t tell you to do anything. I don’t believe coaching is your coach telling you, it’s that self discovery thing. Cause we have the answers in us. And as a coach, what I really like to do is help my clients find out what that is and pull it out of them. Listen, Steven let’s jump into your background here a little bit, and I know we really want to get into some private equity stuff, but tell us how you got into this space to begin with and what’s your little journey has been?

Steven: Yeah, it’s funny because growing up as a kid, I wanted to be one of two things. Either want to be a chef like Emeril Lagasse, or I wanted to renovate houses like Bob Vila. And after a career in management consulting and then, like I said, technology, I finally made my way to real estate and I can remember that moment. And it was a very defining moment after many years of having the desire and drive to want to move into the real estate space. I finally remember I was sitting with my girlfriend at the time and I jumped up off the couch and I said, you know what, not another day, I’m doing this now. And I [00:11:00] decided then and there that I was going to be a real estate investor.

And within that week I had found an event to go to. I found a community to be a part of. I had convince somebody to be my coach. I didn’t have money at the time, but I was able to bring a lot of value to their business. And the coaching was a very small reciprocal opportunity in return. But within that decision, it really changed my whole direction really, and all that HGTV eventually paid off because I ended up going forward and flipping over 200 houses in about two and a half years in two different states and about a hundred of those were heavy renovations. And so what I learned in that process was as soon as you make that decision and you push yourself forward and you start to attract what you actually want in your life, the things will actually start to show up for you. It’s wild, they don’t always show up in the way you want. They don’t always go what you might call as well or perfectly, but there’s a lot of learning and growth. And all of that ends up leading down the path to [00:12:00] where you actually need to be.

And so today I own a private equity company that focuses on real estate. We go and buy multi-family properties and we find properties. We work with operating partners to operate those. Bring all the capital together to put those deals together so that people can invest passively. And it’s been amazing. And I got to this point as a result of going through the process of flipping all of those houses, working with clients that did not match my ideal client and then discovering and realizing the power of getting super clear on who you want to serve and then building a business around those people.

Mike: Geez, there’s so much there to unpack. I like your path, right? Because you did this fix and flip business or this wholesale business or this single family real estate business that I think so many people get caught up in and they think that’s the only thing out there. But then all of a sudden they wake up one day and they go, what’s this multifamily thing?

And how do I get involved in that? It’s the [00:13:00] economies of scale. It’s the ability to really see more results than what you’re seeing on the single family side. And I talk about that a lot. And so two questions I have for you that day you jumped up off the couch, how’d your girlfriend react? And then the second one is what was the defining moment for you that you jumped off the couch again and said, Hey, I’m going to go into multifamily.

Steven: The moment while I was sitting there, the first time I was in a place where I had this immense level of clarity, I’d gone through almost a spiritual experience where I came out of having about two and a half years of immense pain. Where I had these terrible migraine headaches that were on a three to five pain scale out of 10. And I just said, thought that maybe this was going to be the way that it was, I was searching for answers left, and center. And eventually something came into my life that ended up really clearing that out. And I can’t really explain it well, but in that place of relief in that place of clear mind, I had this vision of what it [00:14:00] was possible and that now’s the time to move forward into real estate. And I jumped up off that couch and I said, you know what, I’m doing this. And thank goodness that I had a very supporting partner at the time.

And she said to me, that’s amazing. She looked at me a little bit crazy. She was a W2 type person. She’s a person that is not or was not at the time going to go start businesses. But she’s believed in me. And I believed in myself and I was defiant in the fact that I was going to make that happen. And the next moment that happened for me when it came to multifamily was, after I had flipped all of these houses and I had essentially established the business that was at the top of my peer group. I was doing all these houses every year. We had the vanity metrics and numbers. We had the actual metrics and numbers. We were making good money but we weren’t getting rich. We were working hard and we were making great money. But I felt like there was something more. I felt like I was going to solve all [00:15:00] of my problems by building this business and company. And then I realized that I’m going to carry those problems wherever I go.

And everyone does that. And this is actually one of the biggest misnomers about going out and making a lot of money. Is that every time I’ve doubled my income or doubled my salary or doubled the size of my business, it’s fun, it’s exciting. But it lasts some moments. And so I was actually sitting at an event because I’m a big believer in growth. And one of my mentors was talking about the power of working with your ideal client and getting a vision of what your business will look like in five, 10 and 20 years. And I realized that the client that I was serving, wasn’t the client I wanted to. It wasn’t the client that I wanted to serve for the next 20 years.

And so what I noticed was that serving a client that we were able to bring a lot of value. They were very happy. We were buying houses for 60 cents on the dollar. But those folks aren’t necessarily growth oriented. There’s not a repeat business opportunity available. People only sell their house one time at a discount. They’re only going through a [00:16:00] situation in their life one time where they’re ready to get rid of the house most of the time. And I wanted a business where I could keep working with the same clients over and over to build deep relationships, to be able to see massive growth as a result of the work I do today exponentially. And so I started looking at how I can change my business. And that’s when I really stumbled on the multifamily. And after changing multiple things in the single family space and holding onto property and changing who we were really serving. And we realized that in order to build the business that was going to serve the most people and the most effective way, and really create the lifestyle and life that I wanted, I was going to need to change this direction. 

So I left the top of one mountain peak realizing that there was another mountain peak to climb and went through that hard challenge of going down the mountain. Losing that ego of being the top dog of having your whole identity connected to your business and then climbing a new mountain and believing that you’d be able to get there faster than you really can. But then finally feeling that [00:17:00] momentum happen and our business has been quite successful. But that’s one of the things that you do when you make a change is you’ve got to step into that uncertainty.

Mike: Yeah, boy. And there’s that growth along the way, right? There’s those stepping stones and here’s what I like about what I’m hearing you say is I might not know how to do something, but I’m willing to take the risk to number one, success leaves clues, go find somebody who knows how, figure it out and then go do it.

 I think the power becomes in the execution. The knowledge is only the potential for power. And if you understand how to do something, but now the execution of doing it. So listen, I want to dive into private equity. I want to know here’s what I’d like you to talk about is talk about what private equity is and how you get in that world. How did you get in that world? And what does that look like in your business today?

Steven: Yeah. So private equity is essentially investing capital into assets, businesses, real estate any kind [00:18:00] of investment type product. And so what we do at Von Finch Capital is we really focus on real estate, private equity. We specialize in the multifamily space and we may expand into other verticals. I really believe that when you have ultra focus in one area, it allows you to grow the most. And once you have growth in that area it’s easy to expand into other sectors. And the reason we chose multifamily was because it’s one of the strongest asset classes in real estate. It has one of the most secure from a risk profile stamp point. 

Some of the best returns over any 10 year period, going back as far as they’ve been tracking. So we invest in multifamily because it’s something we understand. Everyone needs a place to live. It’s a core human need and it makes it much simpler process for really understanding what is the asset that we’re investing in. And that’s important when you’re working with retail investors. And so in the private equity space, you have your institutional investors, you have your family offices, these are ultra rich, ultra wealthy individuals or companies. [00:19:00] And then you have your retail investors, which is people like you and me, people who making a couple hundred thousand or a couple million dollars a year. And we’re making these investments individually. 

We’re making these investment decisions ourselves and we love working with retail investors, because it gives us the opportunity to teach and educate as well as to make a huge impact. Because in this space, in private equity, in real estate in particular, when folks start seeing the benefit, they can start seeing these return profiles that are really strong when you’re seeing 12 to 15% or potentially even 20% returns, annualized, or on an IRR basis for those who understand what that means. What’s so cool about that is you see how much growth you can experience in your portfolio, how much cashflow you can create and how much more secure it feels than in paper assets, like the stock market. And so private equity in a nutshell is just taking capital, investing into an asset. And that’s what we do with our clients.

Mike: When you first [00:20:00] started in that private equity world, where did you start to raise capital for your deals?

Steven: Yeah, so we started in our fix and flip business. So we had capital invested directly into our business. That investment was often made us debt. That was often made as debt directly into the business for operational funds, or it was made directly into a property to execute the business plan on an individual flip. Majority of the projects that we did were all bet based when we started out flipping houses, mostly because there were short-term projects and it was simpler to explain to our investors what that return profile that they were going to get. And as we moved into the multifamily space, we recognize the power of investing equity. Not only for ourselves, but also for our investors. And so oftentimes investors will make a debt investment. And the benefit of debt is that it’s usually secured to a property, or maybe it’s secured by a personal guarantee.

And oftentimes debt carries a [00:21:00] lower risk profile than equity. But it also doesn’t have the upside that’s available with equity. And so with equity, when an investor invests into a deal, oftentimes they’re getting 60, 70, 80% of the upside that is available. And as an operator, we’re able to go and buy much larger deals. And as we moved to the multifamily space, we recognize the power of really partnering with investors. And when we’re buying a property, usually we’re putting on 20 to 40% equity down onto the table. The other 70 to 80% of that is coming down as debt coming from the bank. And the rest of that is the renovation costs or closing costs or anything else necessary to close that property. And then we share in that upside.

Mike: What’s interesting is partnerships today, right? J Paul Getty said years ago that he’d rather have 5% of a hundred businesses than a hundred percent of one. And it just makes [00:22:00] sense. So when you mentioned something interesting that, Hey, we can buy these apartment assets, but then we can buy bigger ones and we can scale higher, which the scaling is where the power in the business comes in the ability to grow that. So who’s your perfect passive investor today?

Steven: Yeah, so I think you’re absolutely right. And I love the power of diversification. It’s something that we often talk about at Von Finch, because we invest in different markets, Denver, Dallas, Jacksonville and some other markets that we’re entering currently. We invest with different partners where we bring on these experienced managing partners, these experienced managers who have that local expertise, and it allows us to be able to have seven to 10 years of experience immediately in a market. And which allows us to do more deals and scale and take advantage of that network, which is great for our investors.

But the ideal investor for us is somebody who is earning a great [00:23:00] income. They want to create a better life. They want to create cashflow, or they want to create equity growth. They want to create some kind of return in their portfolio, and they don’t have the time or interest of being an expert operator from day one. There’s somebody who wants to have real estate in their portfolio. They want to own it privately because they want to get that benefit, the upside that’s available on the private market. And they are earning a great income. And so we’ll often see our investors are business owners. They’re high income earning real estate agents or teams, they’re doctors or lawyers, they’re CPAs, they’re technical professionals, they’re project managers.

They are people who are earning great income as a professional, and they see the benefit of being totally hands off of being able to leverage experts experience. Experts access to capital their time. And they’re interested in letting go of [00:24:00] control so that they can get a better outcome through partnership. What we often find is a lot of the folks that we work with have experience. They’ve invested in syndications before they really understand the value that we bring. But there’s a portion of folks who have never invested in syndications. Maybe they’re actually interested in being active at some point in the future, but they really want to invest passively to learn to be able to get up to speed, to see how we do that.

And we do a lot of education. One of our favorite, most powerful education resources is actually something called The Passive Investor Playbook. It’s a 52 page resource guide where we dive into the benefits of diversification, how to choose an investment, what questions to ask all kinds of things. And if it’s okay, I’d love to share with the audience it’s available at investormindset.com/passive.

Mike: And we’ll have that in the show-notes too.

Steven: Okay. Great. So that’ll be in the show notes for folks. So you guys can just go download that and you can immediately get access, [00:25:00] it’s complimentary, but we put it together because we found that the more that people know and understand, the better decisions they’re making from an investment perspective. And my mission and therefore Von Finch’s mission is people live a better life through real estate. And one of the key and best ways to do that is to get up to speed so you can make smart investment decisions.

Mike: As we’re starting to wind down here, I have a couple more questions around private equity. So let’s make sure that we tell them again how to get the five success principles before the end of the show. What is your passive investor today look for in a return? Now, I don’t mean the institutional investor, but let’s talk about the passive investor, the private equity investor.

Steven: Yeah. Great question. So we really have three different types of investment opportunities that we do, but I’m going to talk about the main two. So we have two types of investors. And what they’re looking for is either one of these two, they’re either looking for equity growth, [00:26:00] or they’re focused on what that overall return number is for their portfolio. Or they’re looking for a hybrid. They’re looking for cashflow income, that’s coming in every month or quarter, and they’re looking for what that overall backend is going to be. So we call that cash growth. And so for those equity growth investors, the people who are focused on what’s the biggest or best or strongest return that I can get, we’ll often do investment opportunities that have a lot of renovation.

We’ll buy a smaller property and we’ll go in and we’ll renovate all the units very quickly and we’ll drive up the value of that property within one to three years. And when we’re doing that, we’re often seeing investment returns between 17 to 23% on average. Different deals have different opportunities. And versus on the cash flowing deals where people might be able to get 8% cash flow, they’re getting paid this 8% dividend every single month or every quarter every year. On those deals, they’re often seeing something between a [00:27:00] 12 to a 17% IRR, 12 to 17% return. And so it depends on what you’re looking for and what the purpose is.

And that’s why it’s really powerful to download that passive investor playbook. Because once you understand what you’re actually looking for as an investor, you can start to choose, which is going to be the best fit. If you’re looking for cashflow and you’re looking to live off of that investment, or you’re looking to replace your income, then you might be willing to take a lower overall return in order to make sure you’re getting that versus many people, they don’t need that back end. So that’s where that range typically ends. Somewhere between 12 to 17% is the average and on those deals that have a lot of upside, sometimes it can be higher.

Mike: Yeah. Interesting. This show’s called Insider Secrets. And I always like to ask my guests one secret that you might not share with somebody else, or if you do what that is. But I want you to answer that question around where [00:28:00] are you finding today? How are you reaching out in marketing to those passive investors?

Steven: Yeah. So I think if I’m speaking to an operator and I’m speaking to a passive investor about how do the two of you guys get connected? How do you find great passive investors? How do you find great sponsors? The core of that is knowing what your intention is, what are you looking for? And at the end of the day, what I found is that it’s extremely important to go and figure out who your ideal client is. Who is the person that you’re looking for to serve if you’re on the business side? Who is the person that you’re looking for to partner with if you’re on the investor side? Figure out what that looks like, figure out what the experience level needs to be, figure out what it is that they have from a values perspective, and then go out searching.

Just start getting to know people. I’m a big believer in spending time on due diligence at Von Finch. Before we bring on any of these managers, any of these [00:29:00] folks with a lot of experience that help us really enter a market very quickly. And they’ve got a seven to 10 year track record, we spend a lot of time getting to know them. What have they gone through? What failures have the experience? What losses have the experience, what has gone on in their business? What’s gone well? What do they care about? What are their values? So when you can really get to know somebody, it allows you to make really smart and prudent decisions.

And what I always recommend is spend that time on due diligence. Listen to podcasts that they’re on, read their materials, download their trainings, look at their deal offer memorandums and get familiar with that material so that you can get comfortable because what you’re really doing is you’re going to invest in a person. The person is the one who’s going to make that investment something great. The person is the one who’s going to choose a great investment in a great location that’s going to offer great returns. In that process, if enough about deal structure, cause you’re getting educated through some of this material and you’re spending that time getting to know the right people and choosing the [00:30:00] jockey’s not the horse.

You’re going to end up being in a great position and that’s true from the sponsor side, from the operator side as well. You want to choose investors that are going to serve your business for the long-term. You want to choose folks that you actually want to work with and you want to repel folks that aren’t going to. We say no to investors quite often, if they don’t have the right attitude, if they don’t talk to us with respect, if there’s some kind of major issue we see up front, we would rather build a business with people that we love to work with than with a bunch of jerks. And so that’s some of the things that we do and we’d recommend you guys do this as well.

Mike: That is, and listen, I just want my listeners right now to key into that. Listen, you do not need to come from a place of desperation. You do not need to come from a place that you need every investor. If it is somebody that you don’t mesh with, move on. Henry Ford said when he was trying to build the V8 engine, he said some will, some won’t, so what, someone’s waiting. And we don’t need to hang with everybody. So I love what you said about [00:31:00] being able to say no. And I think so many people in our world and in our environment, can’t say no. But you have to learn how to do that. So awesome.

Steven, this has been great. You’re a wealth of information, I’m going to consider having you back out again, sometime down the road here. As we keep doing this because as we continue to grow, I know there’s going to be more. But let’s get to that bonus round to those few fun questions about some things in your life that you really like. First question I always like to ask is, and you’re out in LA, correct?

Steven: That’s what I’ve been. I’ve been staying out in LA for a while. I’m actually in salt lake right now. I live in Denver, I’m all over the place these days, but that’s one of the benefits of real estate. You can do deals and live wherever you need to be.

Mike: Our world has become such a global platform, so it’s kinda cool. Hey what is the best tourist attraction that you’ve been to?

Steven: The best tourist attraction that I’ve been to, that’s such a interesting question. I think one of my favorite travel experiences that I’ve had [00:32:00] was going to Columbia. It was living in Metagene, Columbia and living locally, and really being able to see this beautiful country and this beautiful place.

And it’d be able to leverage the American dollar which is much stronger down there and just meet all these amazing people. It’s wild when you go to a place and you hear all these stories. Danger and risk and all these things. And you go, and it’s some of the kindest people I’ve ever met in the world. So I highly recommend getting out of your comfort zone and going to a place that maybe you haven’t thought it was on your map of places to go and visit.

Mike: We all know Chicago is a war zone, when you coming here?

Steven: Yeah, exactly. I actually feel like I’d feel less safe in Chicago than I would walking around Columbia.

Mike: In Columbia, that’s funny. Best book you’ve ever read?

Steven: There’s so many great books I’m going to name two. One, that’s an absolute favorite is a book called “The Go-Giver”. It’s a book about giving without the expectation of receiving. And when you can do that, you actually end up receiving the most in return. The [00:33:00] second book is a book called “Awaken the Giant Within”. And the reason I share that book is because it really opened up my mind and mindset to these ideas and beliefs, which ended up leading me down this way. To really diving into that personal development space.

Mike: Tony Robbins and Bob Burg, both great authors. Yeah. Good books, thank you for that. And best food, best restaurant, what do you enjoy?

Steven: Yeah. I’m a big sucker for a really good taco, let me get some, a really great street tacos. Let me get some authentic. We’ll love going to any kind of authentic little taco spot, but give me a street taco any day and I’ll be excited.

Mike: Listen. I have a friend who loves tacos and every time I get off an airplane in LA, he’ll pick me up and he takes me to this little place in an alley in east LA, where we get street tacos and they are the best tacos you’ll ever have. So I agree a hundred percent with you that’s for sure. Steven, any closing words or thoughts, and please tell people how they can get ahold of you and your five success principles?

Steven: Yeah. Thank you guys so much [00:34:00] for being here. It’s been a powerful opportunity to be able to serve you. Obviously, we talked about grabbing that passive investor playbook. You can do that at investormindset.com/passive. We didn’t get an opportunity to talk about it, but if you’re interested in learning what are the five success principles, learn from interviewing and studying some of the most successful investors and entrepreneurs.

We’ve got another great resource and that’s available at investormindset.com/success. But the thing I’ll leave you with is if you enjoyed what we talked about, definitely subscribe to The Investor Mindset, but more importantly, ask yourself this question. What did you learn today? What did you learn that you can take away and apply in your life and decide right now in this moment to take some action on something and go run with it. And then shoot me a message on social media on DM Steven Pesavento on your favorite social media. And let me know what you did. And let me know you listen to this episode.

Mike: Perfect. Thank you, Steven. I appreciate you being here today. Like I said, you’ve been a wealth of knowledge and I encourage [00:35:00] my listeners to reach out and have a conversation with you one-on-one. Thanks again.

Steven: Amazing. Thank you.

Kristen: Thank you, Mike, and thank you for joining us for another great episode of Insider Secrets. As always, Insider 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 and property management.

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