Financial Freedom with Real Estate Investing

No question, the hospitality industry is among the hardest hit by COVID-19. And yet, Josh McCallen is thriving. The distressed Renault Winery Resort he bought in December 2018 is sold out for 2021, and revenues are up 200% from last year. So, why is Josh doing well while others are struggling? Are there opportunities for investors in the hospitality space right now? And what can we multifamily syndicators learn from Josh’s others-focused approach to business?

Josh is the hospitality investment expert behind Accountable Equity, a firm specializing in resort value-add and turnaround projects, and VIVÂMEE Hospitality, the management company that operates those assets. In the past two decades, Josh has led over $100M in luxury residential and hospitality construction projects, growing the revenue of the resorts he manages by 10X in less than six years and increasing the appraised value of those properties by 70%.

On this episode of Apartment Building Investing, Josh joins cohost Garrett Lynch and I to share his journey as an entrepreneur and discuss how helping flippers during the boom evolved into the work he does now. He explains how his company’s focus on resorts (not hotels) has helped them thrive despite the pandemic, describing how his team’s expertise in sales drives the kind of distressed assets they buy. Listen in for insight on the opportunities available to investors in the hospitality space right now and learn how a service-based, ministry model helps Josh serve both his guests and investors well.

Key Takeaways

How Josh got his start as an entrepreneur

  • Sold cotton candy to classmates in grade school
  • Paper boy at 12 (collect pay from customers)

When Josh got into real estate

  • Bought duplex with wife in late 1990’s
  • Started helping flippers in 2006

What Josh does in real estate today

  • Runs hospitality development company
  • Acquire distressed resorts for rehab + repositioning

What differentiates VIVÂMEE as a management company

  • Start with core values (dignity of every person)
  • Loyalty and recurring business model

Why Josh is doing well despite the pandemic

  • Focus on resorts (multiple revenue streams)
  • Sell experience, i.e.: wedding at winery
  • Earn revenue now for 2021 and 2022 reservations
  • Room revenue = trailing indicator

What Josh looks for in a property

  • High volume of inbound calls for weddings
  • Older/tired owner losing money, just breaking even

What makes Josh a good operator

  • Experience of taking over for management collapse
  • Treat hospitality as ministry, make guests feel loved

How Josh’s others-focused model extends to his investors

  • Treat investors as guests
  • Apply hospitality to fundraising

How Josh structures a resort deal

  • Charge asset management fee
  • Zero split until investors fully repaid + preferences
  • 50/50 split moving forward

Connect with Josh McCallen

Accountable Equity

Capital Hacking Podcast

Resources

Join the Nighthawk Equity Investor Club

Learn More About Michael’s Mentoring Program

VIVÂMEE Hospitality

Rich Dad Poor Dad by Robert T. Kiyosaki

Renault Winery Resort

Renault on Instagram

The Real Estate Guys

Cashflow Ninja

Podcast Show Notes 

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

Direct download: ABI_246.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

As syndicators, we’d love to work with 1031 exchange investors more often. But the rules make it really, really difficult! It means taking on co-owners (rather than passive investors) and big bucks in legal fees. What if there was an EASIER way to work with 1031 exchange investors? A way that allows them to invest passively in syndication deals, defer their taxes and earn a stable return?

Paul Moore is Managing Partner at Wellings Capital, a firm dedicated to helping high earners and high net worth individuals protect and grow their wealth through commercial real estate investing. A two-time Michigan Entrepreneur of the Year finalist, Paul has founded multiple investment and development companies and co-managed a successful multifamily development. He is the cohost of The Art of Investing and How to Lose Money and a regular contributor to both Fox Business and BiggerPockets.

On this episode of Apartment Building Investing, Paul joins cohost Drew Whitson and I to discuss the disadvantages of the 1031 exchange and explain what makes the strategy incompatible with syndications. He introduces us to the Delaware Statutory Trust (or DST), describing how it solves the problems associated with bringing in 1031 exchange investors and allows them to invest passively in multifamily deals. Listen in for Paul’s insight on what kind of investor is attracted to the DST and learn how YOU can use it to defer taxes and earn a long-term, stable return!

Key Takeaways

The disadvantages of the 1031 exchange for investors

  • Deadlines pressure to overpay/buy wrong asset
  • Difficult to find cash match, total price match
  • Requires co-ownership vs. passive investment

Why 1031 exchanges are incompatible with syndications

  • Tenancy in common agreement to keep control
  • High legal fees, syndicator doesn’t control capital

The fundamentals of the Delaware Statutory Trust

  • Management group acquires asset
  • Sells fractional shares to investors

The benefits of investing in a DST

  • Allows for passive investment
  • Match any amount of money
  • No debt in name
  • Extremely stabilized asset

The disadvantages of investing in a DST

  • Communicate with broker vs. syndicator
  • Broker gets high commission (6% to 9%)
  • Limited upside, very little appreciation

How Paul’s DST addresses the usual disadvantages

  • Invest direct = talk to syndicator
  • Don’t pay up-front commission
  • 10% to 12% projected returns

How Paul is compensated as the operator of the DST

  • Property management fees
  • Acquisition and liquidation fees
  • Scrape (keep returns above 6%)

What kind of investors are attracted to the DST

  • 1031 exchange investors
  • Capital gains, passive depreciation recapture

The limitations of the Delaware Statutory Trust

  • High legal fees for operators to set up
  • Limited upside (structured to be stable)
  • Illiquidity = can’t cash out early
  • Accredited investors only

Connect with Paul Moore

Wellings Capital

Paul on BiggerPockets

Resources

Learn More About Michael’s Mentoring Program

Join the Nighthawk Equity Investor Club

Starker v. United States

Inland Investments

Podcast Show Notes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

Direct download: ABI_245.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

Despite the chaos and uncertainty of 2020, we have a lot to be grateful for here at The Michael Blank organization. We have helped 113 people do 128 deals for a total value of $321M. And 22 of our mentees have quit their jobs, thanks to the financial freedom that comes with multifamily real estate investing.

On this episode of Apartment Building Investing, I take the time to reflect on 2020, looking back on our key accomplishments in The Michael Blank organization and sharing our top lessons learned over the past 12 months. I discuss our theme for 2021 and explain what steps we’re taking to better serve our followers and turn them into raving fans. Listen in for insight on the multifamily market outlook for 2021 and learn how YOU can use our resources to achieve financial freedom and help us make a positive impact in the world!

Key Takeaways

Our key accomplishments for 2020 in The Michael Blank organization

  • Right team in place, key hires in marketing and tech
  • Pivot to take Deal Maker Live virtual
  • Hit 10K subscribers on YouTube channel
  • Launch Platform Builders program
  • High-profile guests on podcast (Pat Flynn, Amy Porterfield)
  • Raise $20M for 2 deals in last 4 months
  • Full-time asset manager, director of investor relations

Our top 3 lessons learned in 2020

  1. Team is EVERYTHING
  2. Stick to your underwriting
  3. Be grateful every day for everything

Our plans for 2021 in The Michael Blank organization

The disconnect between the headlines and our market experience

  • Real estate = local business (gateway cities vs. Sun Belt)
  • Rents flat but not decreasing in our target markets
  • People move south + west with freedom of remote work

My predictions around the market outlook for 2021

  • No radical changes to real estate tax law
  • Unemployment benefits will cover rent collection issues
  • Fed will keep interest rates low and flat
  • Continued demand for affordable multifamily housing
  • Drop in value of US dollar (real estate = inflation hedge)
  • Unprecedented buying opportunities in next 12 months

How you can help us make a positive impact in the world

  • Sponsor student through UCSS nonprofit
  • $25/month covers education and healthcare

Resources

Join the Nighthawk Equity Investor Club

Get Michael’s Ultimate Guide to Apartment Investing

Learn More About Michael’s Mentoring Program

Sponsor a Student with Uganda Counseling & Support Services

Get Your Priorities Straight on Apartment Building Investing EP230

Deal Maker Live

Platform Builders

Pat Flynn on Apartment Building Investing EP210

Amy Porterfield on Apartment Building Investing EP212

Podcast Show Notes 

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

Direct download: ABI_244.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

Do you have what it takes to be an entrepreneur? If you’re in the early stages of building a multifamily syndication business, Gino Wickman wants to leverage his 30 years of experience to help you determine what kind of enterprise is right for you and accelerate your path to success.

Gino is the creator of the Entrepreneurial Operating System, the practical method for helping businesses achieve greatness used by 100K companies worldwide. He is also the bestselling author of Traction: Get a Grip on Your Business and Rocket Fuel: The One Essential Combination That Will Get You More of What You Want from Your Business, among many other groundbreaking books on entrepreneurship. Today, Gino is devoting his time and energy to Entrepreneurial Leap, a new book and online platform designed to help entrepreneurs-in-the-making find clarity and create a customized roadmap for their startup.

On this episode of Apartment Building Investing, Gino joins cohost Garrett Lynch and I to share the experience that inspired his work with entrepreneurs, explaining how he defines ‘true entrepreneurship’ and what characteristics successful business owners share. He walks us through the most common mistakes entrepreneurs make, offering advice on knowing what you want, hiring the right people and firing the wrong ones. Listen in for insight on whether or not you’re a ‘partner person’ and get Gino’s eight tips for increasing your chances of success as an aspiring entrepreneur.

Key Takeaways

What inspired Gino’s work with entrepreneurs

  • Turned around struggling family business at 25
  • Discovered knack for helping entrepreneurs

What makes EOS such a successful system

  • Simple and time tested on 50 clients over 5 years
  • Frees entrepreneur to take business to next level

Why Gino wrote his new book Entrepreneurial Leap

  • Help aspiring entrepreneurs build better startup
  • Teach what he needed most at start of journey

How Gino defines true entrepreneurship

  • Build business with lots of people (vs. freelance)
  • Only 4% of population has what it takes

The 6 essential traits of a true entrepreneur

  1. Visionary
  2. Passionate
  3. Problem-solver
  4. Driven
  5. Risk-taker
  6. Responsible

The 8 critical mistakes entrepreneurs make

  1. Not having vision
  2. Hiring wrong people
  3. Not spending time with people
  4. Not knowing customer
  5. Not charging enough
  6. Not staying true to core
  7. Not knowing numbers
  8. Not crystalizing roles/responsibilities

Gino’s advice on hiring the right people

  • Hire based on core values + skill set
  • Be slow to hire, quick to fire

The 8 disciplines for increasing your chances of success

  1. Clarify vision
  2. Decide if ‘partner person’
  3. Bigger problem = more success
  4. Get feedback early and often
  5. First plan will not be final plan
  6. Work hard (really hard)
  7. Take criticism with grain of salt
  8. See it every night

Gino’s insight on the two types of ‘partner people’

  1. Equal partners
  2. Give equity but maintain controlling interest

Connect with Gino Wickman

Entrepreneurial Leap

Entrepreneurial Leap: Do You Have What It Takes to Become an Entrepreneur? by Gino Wickman

Resources

Learn More About Michael’s Mentoring Program

Join the Nighthawk Equity Investor Club

Garrett at Nighthawk Equity

Traction: Get a Grip on Your Business by Gino Wickman

Entrepreneurial Operating System for Business

Rocket Fuel: The One Essential Combination That Will Get You More of What You Want from Your Business by Gino Wickman

Entrepreneurial Leap: Do You Have What It Takes to Become an Entrepreneur? by Gino Wickman

Entrepreneurs’ Organization

Gino’s Entrepreneur Assessment

Books by Napoleon Hill

Books by Dale Carnegie

Books by Jim Collins

Podcast Show Notes 

Michael’s Website 

Michael on Facebook 

Michael on Instagram 

Michael on YouTube 

Apartment Investor Network Facebook Group 

Direct download: ABI_243.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

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