Raise the Bar

MDM 04 | Million Dollar Monday with Sandhya Seshadri

In this episode of Million Dollar Monday, Seth Bradley interviews Sandhya Seshadri about her journey to making her first, last, and next million dollars. Sandhya Seshadri shares that her first million came from trading stocks and options, leveraging stock options from her employer and learning to trade independently. Seth Bradley notes that while alternative investors often dismiss traditional markets, both acknowledge that liquidity remains the unmatched advantage of the stock market.
Sandhya Seshadri explains that her last million was earned through multifamily real estate investments during what she calls the golden era of multifamily, taking profits before the 2022 interest rate hikes. Looking ahead, Seth Bradley and Sandhya Seshadri discuss her plans to make her next million through a combination of stocks, oil and gas investments, and multifamily, if the market rebounds.
Bullet Points Highlight:- Sandhya made her first million through stock trading and options, including company stock options.- Seth notes that while alternative investors often overlook stocks, they still have a role—especially for liquidity.- Both agree that liquidity is a key advantage of the stock market.- Her last million came from multifamily real estate deals, selling properties before interest rates rose in 2022.- She refers to that time as the golden era of multifamily.- Her next million will come from a diversified mix of stocks, oil and gas, and multifamily investments.- She’s optimistic about a future rebound in the multifamily market.- The conversation highlights a balance between traditional markets and alternative investments.- Seth reinforces the theme of adaptability across market cycles.
Links from the Show and Guest Info and Links:
Seth Bradley’s Links:https://x.com/sethbradleyesq   / @sethbradleyesq  www.facebook.com/sethbradleyesqhttps://www.threads.com/@sethbradleyesq  / sethbradleyesq    / sethbradleyesq  https://passiveincomeattorney.com/set...https://www.biggerpockets.com/users/s...  / sethbradleyesq  https://www.tiktok.com/@sethbradleyes...
Sandhya Seshadri’s Links:  / sandhya_multifamily    / engineered-capital    / sandhya.sseshadri

T1C 04 | The 1% Closer with Sandhya Seshadri

In this episode,  Seth Bradley and Sandhya Seshadri, Seth Bradley asks what separates Sandhya Seshadri as a top 1% performer. Sandhya Seshadri shares that her resilience and fearlessness stem from humble beginnings, arriving with almost nothing, living frugally, and learning to rebuild from scratch. Sandhya Seshadri attributes her success to persistence, adaptability, and surrounding herself with positive energy.
Seth Bradley and Sandhya Seshadri discuss the importance of removing negativity, outsourcing low-value tasks, and maintaining the determination to find a way forward no matter the challenges.
Bullet Points Highlight:
Came to the country with only two suitcases and $8 per week for food.
Not afraid of failure or starting over — knows exactly how to rebuild from scratch.
Maintains low expenses and simple living (still drives an 11-year-old car).
Values persistence and finding a way forward no matter what.
If one route fails, takes another — “go off-road and make your own trail.”
Believes success leaves clues — find someone who’s done it before and follow their path.
Never gives up — persistence and consistency drive results.
Removes naysayers and negative influences from life.
Outsources draining tasks and avoids time-wasting relationships.
Focuses on protecting energy and replacing negativity with productive, positive people.
 
Transcript:
Speaker 2 (00:00.174)You're clearly in the top 1 % of what you do. What is it about you that separates you from the rest of the field?
I'm not afraid of failing and starting from scratch because I came here with nothing. I came here with two suitcases. Eight dollars a week was my food budget. I know exactly what I need to cut back if I was to lose everything and start over again. And I still drive an 11 year old car. I don't have fancy, fancy expenses other than the need to travel for which I'll always find a way. So that's the other thing is persistence.
and always finding a way to get there. So if path one fails, you know, go off road and find your own trail to get to that destination. Don't give up. There's somebody has done it before you. Just go find that person and follow their footsteps.
Is there any other mindset or habit you think that puts you in that top 1 % of performers in the field?
Never give up and delete the naysayers from your life. Sometimes it's like just freeing up your time from all the people that drain you and the tasks that drain you. So outsource the tasks, get rid of the people. Just be busy when they want to get together with you and replace them with somebody else and just that energy shift can make such a big difference.
Speaker 2 (01:19.662)Thank you so much.
Links from the Show and Guest Info and Links: Seth Bradley’s Links: https://x.com/sethbradleyesq https://www.youtube.com/@sethbradleyesq www.facebook.com/sethbradleyesq https://www.threads.com/@sethbradleyesq https://www.instagram.com/sethbradleyesq/ https://www.linkedin.com/in/sethbradleyesq/ https://passiveincomeattorney.com/seth-bradley/https://www.biggerpockets.com/users/sethbradleyesq https://medium.com/@sethbradleyesq https://www.tiktok.com/@sethbradleyesq?lang=en Sandhya Seshadri’s Links: https://www.instagram.com/sandhya_multifamily/ https://www.linkedin.com/in/engineered-capital/https://www.facebook.com/sandhya.sseshadri/

TME 18 | The Underwriting Lie: Most Capital Raisers Don’t Know Their Own Deal with Sandhya Seshadri

In this episode, Sandhya Seshadri shares how she began in corporate tech with an Electrical Engineering degree and an MBA, then pivoted to real estate, and now oil & gas. In this episode, Seth Bradley speaks with Sandhya Seshadri, who explains why she focuses on pre-drilled, proven wells for stronger cash flow and tax advantages. Sandhya Seshadri details how she underwrites energy deals, including breakevens, operator scale, and transparency, and emphasizes why trust and education are key in capital raising.
Seth Bradley and Sandhya Seshadri cover topics such as temporary GP elections for year-one tax treatment, modeling crude-price scenarios, and how to communicate LP risk honestly. This conversation provides actionable insights for anyone raising capital, helping sharpen both your pitch and your due diligence process.
Bullet Point Highlights:
- Corporate tech → real estate → oil & gas pivot
- Focus on proven locations / multi-well programs to reduce dry-well risk
- Double-digit cash flow; many investors target capital back in ~2–3 years
- Due diligence: operator scale, track record, county records, breakevens
- Year-one GP elections for IDCs/depletion; confirm with your CPA
- Raising in 2025: radical transparency, education, fewer but deeper LP relationships
- Only promote deals you’d invest in yourself; diversify and address risks up front
- Core values: integrity, health, balance, and building a business that lasts
Links from the Show and Guest Info and Links: Seth Bradley’s Links: https://x.com/sethbradleyesq https://www.youtube.com/@sethbradleyesq www.facebook.com/sethbradleyesq https://www.threads.com/@sethbradleyesq https://www.instagram.com/sethbradleyesq/ https://www.linkedin.com/in/sethbradleyesq/ https://passiveincomeattorney.com/seth-bradley/https://www.biggerpockets.com/users/sethbradleyesq https://medium.com/@sethbradleyesq https://www.tiktok.com/@sethbradleyesq?lang=en Sandhya Seshadri’s Links: https://www.instagram.com/sandhya_multifamily/ https://www.linkedin.com/in/engineered-capital/https://www.facebook.com/sandhya.sseshadri/

FBF 05 | Flash Back Friday | Why the Ultra-Wealthy Pay Less Tax And How You Can Too with Rich Dad Poor Dad Tax Advisor Tom Wheelwright

In this episode of the Passive Income Attorney Podcast, host Seth Bradley and tax expert Tom Wheelwright discuss the intricacies of tax strategies for high-income professionals, particularly in the realm of real estate investments. Seth Bradley and Tom Wheelwright explore how to leverage tax incentives, the importance of depreciation, and the benefits of real estate syndications.
Tom Wheelwright emphasizes the need for a holistic approach to taxes, focusing on long-term wealth building rather than short-term deductions. Seth Bradley and Tom Wheelwright also discuss the significance of having a strong team of advisors and the importance of education in achieving financial freedom.
Links to watch and subscribe:
https://youtu.be/rvqgik6QCtI?si=U9Rc-6cHI6Ik57QU
Bullet Point Highlights:
Highly paid professionals bear the biggest tax burden.
Investing in alternative assets can work with tax incentives.
Depreciation allows for tax deductions without cash outlay.
Real estate syndications can provide significant tax benefits.
Understanding the real estate professional status is crucial for tax advantages.
Avoiding Schedule C can reduce audit risks.
Education is essential for making informed investment decisions.
Building a team is key to successful investing.
Passive income provides freedom from traditional work.
Tax strategies should align with long-term financial goals.
Transcript:
Seth Bradley (00:10.154)
What's up law nation? Welcome to the Passive Income Attorney Podcast, the best place for learning about the world of alternative passive investments so that you can have more freedom, flexibility, and fun. If you're ready to say bye-bye billables no more, start by going to attorneybydesign.com to download the Freedom Blueprint to get started. This will also get you access to opportunities to partner with us on one of our next passive real estate investments.
 
We'd love to get you started, get you on board and get you on your way to financial freedom. All right, kiddos, let's talk about taxes, baby. Boring to some, but not to us. We're highly paid professionals and we've worked damn hard to get where we are. We make this economy spin round and round, but what's the reward? We bear the biggest tax burden. Highly paid W-2s hit the hardest with taxes because...
 
Well, that's just the way that our beautiful system is set up. On the other side of the tax spectrum though, are investors and entrepreneurs. Now you might be asking yourself, you know, why is that? Because that's the beautiful system that we have set up and it's just set up to incentivize certain behaviors that the government deems the most important things like energy.
 
things like entrepreneurship, things like housing or real estate. See, when we invest in alternative assets like businesses, energy and real estate, we are working with Uncle Sam, not against him. He becomes our friend rather than our foe. Notice that I did not mention stocks, bonds and mutual funds in that category, in those categories of things. Those traditional investments are not tax incentivized unless you lock them away in a retirement account.
 
which you can't access without penalties until you're gray. So how do we as attorneys, doctors, engineers, the friend, Uncle Sam, you got it. We just said it. You jump into tax incentivize alternative investments, but there are other tools in your arsenal as well. That's not the only game in town. You can stack these things. Have your other half become a real estate professional and we'll dive what that is into later.
 
Seth Bradley (02:30.926)
Now your passive losses can offset your active income. Set up a tax sheltered infinite banking policy. You still have access to your capital. Plus you accrue compounding tax free interest. So your money works in two places, at least in two places at once. Saving is for losers. Lazy money disappears, especially in a hyperinflationary environment like the one we're in right now. Make your money work.
 
and make it work with Uncle Sam, not against him. And no one knows more about how to create tax-free wealth than our legendary guest today, Rich Dad advisor and Robert Kiyosaki's right-hand CPA, Tom Wheelwright. Tom is a tax and wealth expert, CPA, CEO of WealthAbility, bestselling author of Tax-Free Wealth. It's part of the Rich Dad advisor series.
 
speaker, entrepreneur and host of the WealthAbility show. Tom has spoken on stage on every continent to over 100,000 entrepreneurs, small business owners and investors. His goal is to help people achieve their financial dreams faster by permanently and legally reducing their taxes. Real Right is a contributor to Entrepreneur Magazine and his work has been featured and seen in Forbes, The Wall Street Journal, The Washington Post and on Fox and Friends, NPR.
 
And the list goes on super stoked for this. If you're ready, let's jump in. This is the Passive Income Attorney Podcast, where you'll discover the secrets and strategies of the ultra wealthy on how they build streams of passive income to give them the freedom we all want. Attorney Seth Bradley will help you end the cycle of trading your time for money so you can make money while you sleep.
 
Start living the good life on your own terms. Now here's your host, Seth Bradley. Tom Wheelwright, so happy to have you on, man. Welcome to the show. thanks. It's great to be with you, Seth. Absolutely. How are we doing today? Good. about you? Doing great, man. Actually just got back from Hawaii, so feeling refreshed, feeling a little tan. We're good to go. Nice. Hawaii will do that. Yeah, for sure, man. So.
 
Seth Bradley (04:52.43)
You know, for those who've been living under a rock, tell our audience a little bit about your background and your story and feel free to feel free to brag a little bit. I appreciate that. It's been a great career. Let me tell you. So I, I grew up in Salt Lake City, Utah, a good Mormon boy. So I got to spend two years in Paris, France, learning how to get rejected in French, which was a blast. Actually. I loved every minute of it. Even, even the first week when
 
when a guy slugged me and ran off. It was great. And then I spent a couple of years at the University of Utah to do my undergraduate in accounting, another year and a half at the University of Texas in Austin to get my master's of professional accounting and tax. From there, I spent the next seven years with Ernst & Young, including three years in the international office. I was there the last time we had really big tax legislation was 1986.
 
and I was in Washington, DC at the time. So that was an amazing experience, learning from the best of the best. Then I came to Phoenix. I spent a couple of years in charge of the real estate tax practice for E &Y Phoenix. And from there, I spent another several years as the in-house tax advisor for a Fortune 1000 company. I spent 14 years.
 
as an adjunct professor in the masters of tax program at Arizona State University, teaching multi-state taxation. I bought, built, sold CPA firms for about 25 years. And for the last 15 years, I spent a lot of time on the road with Mr. Robert Kiyosaki of Rich Dad Poor Dad fame, traveling around the world, frankly, giving financial education classes like what you're doing,
 
did literally on every continent except Antarctica. The penguins haven't heard our message yet, but everybody else has. then for the last three years, have, my team and I have been building a international network of CPA firms around the US and in Canada. And that's where we put most of our efforts now. it's a...
 
Seth Bradley (07:08.654)
It's a lot of fun, Seth. That's all I can say. It's absolutely great. It's a great career. It's a great, great opportunity that I've had. Oh, that's awesome, man. That's, that's the illustrious career to say, to say the least. How did you originally get hooked up with Robert Kiyosaki? How did that come about? So that's, that's one of my favorite stories because it's, it's really the story of are you an entrepreneur or are you not? And many years ago, about 20 years ago,
 
I broke up with a partner. Most attorneys know all about breaking up with partners, right? mean, attorneys break up with partners like every two, three years, right? So we'd been partners for a few years and we broke up. About 40 % of the clients went with him, about 60 % stayed with me. All of the staff stayed with me. Might indicate why we broke up.
 
Well.
 
My new partners, I actually took one of my managers, we became partners, we've been partners ever since then. But we decided rather than let staff go, why don't we just go out and acquire a CPA firm? So I was looking, I got a postcard in the mail from a broker saying, we've got CPA firms for sale, we've got a couple in your area, I called on them. And one of them, one of the clients happened to be Robert Kiyosaki. Honestly, I'd never heard of him, I'd never read Rich Dad Poor Dad.
 
I read Rich Steadport ad because I bought the CPA firm where Robert was a client. And we got to be pretty, pretty soon. We got to be fast friends and we've been traveling and speaking ever since. That's an awesome story. Awesome story, man. Well, let's, jump into nitty gritty a little bit. Let's start general. And you had mentioned that you and your team work with, you know, a lot of people all around the world. I'm sure a lot of them are highly paid professionals, like attorneys, like a lot of our listeners.
 
Seth Bradley (09:00.594)
and we get killed by Uncle Sam. I mean, we're paying crazy taxes. yeah. So what are some of the initial best strategies for them to start reducing that tax burden? You know, I think the biggest mistake people make is thinking that taxes are transactional and they're really not. I've tried the transactional approach for many, many years and it does not work. You can't say, this deductible? You can't say, what do I do in this situation?
 
We take a much different approach. We take a very holistic approach and we include, let's look at what are you gonna do with your money? How are you gonna invest your money? What's your relationship with money, with your children, with your spouse? You really have to take a very big picture because every single activity we engage in during the day has a potential tax impact. And it's a little tax impacts that add up. It's not, you we don't...
 
Frankly, I don't like loopholes. I don't subscribe to the idea of let's look for the loopholes. And I know a lot of people do, and I think good for them. That's them. What I believe is, and you know this, is that look, the tax law is really a series of incentives. The government wants you to do certain things. They'll give you tax incentives to do it. Let's just do what the government wants done. Let's build wealth. And frankly,
 
the more and better we build wealth, the lower our taxes will go. that's the, you know, the fallacy is thinking, well, if I, you know, if I get wealthier, I'm going to pay more tax. No, if you make more income, you will pay more tax. But if you build more assets, you will actually pay less tax. Right. It's crazy how that works, right? I mean, you mentioned about the tax incentives that stimulate the behavior that government wants, right? Could you maybe dive into that a little bit deeper?
 
Yeah, I mean, let me give you a simple example. Years ago, Warren Buffett was quoted as saying, I pay a lower tax rate than my secretary. Well, why is that? Because Warren Buffett employs hundreds of thousands of people. Okay, his secretary doesn't employ any people. Well,  jobs are a major incentive. Just recently we heard Kirsten Sinema, who's in the news a lot lately because of what's going on in Congress, saying, look, jobs is what
 
Seth Bradley (11:24.556)
the government's all about. government should be creating jobs. And so the government does that in the tax law. you think about the last couple of years, we had this pandemic. If you had a home office and you were an employee, you didn't get a deduction for it. But if you had a home office and you were the employer, you did get a deduction for it. Well, that's simply an incentive to be an employer. That's simply an incentive to be a business owner. that's very simple example of it. But that's
 
You know, jobs, really, that's number one. Number two is probably housing. Right. So housing has major tax benefits to it. All real estate does. Housing has some tax benefits to it that the rest of real estate doesn't. What else does government want? Well, they want energy. So energy has great tax benefits. They want you to invest in energy, whether it's fossil fuels, their huge tax benefits for investing in fossil fuels and their huge tax benefits for investing in renewable energy.
 
So agriculture, mean, farmers frankly never pay tax. And I think they shouldn't, frankly. I actually think that's a really good policy because of all the things that we do, what do we need most? We need food to live, right? Food and water. you know, these are really simple things and you don't think about it, but if you put your money where the government wants you to, mean, the reality is Seth, we're all partners with the government. Anybody who's ever gotten a paycheck and looked at that.
 
at that checkstub and said, who's this FICA person that's taking all this money out of my paycheck, pretty quickly realizes that we're partners with the government and your choice is you get to be a silent partner, which is basically a tax mule. All right. Or you can be an active partner, do what the government wants you to do and pay little or no tax. makes a lot of sense, man.
 
Let's rewind a little bit back to that holistic approach that you take. What are some of those? How do you get started with that holistic approach? know, one of the mistakes people make is they start small and then they get smaller. And what we want to do is we want to start really big. So we want to know, very first thing we ask is something that you probably have never been asked by your accountant and that is what's your dream? What do you really want out of your life? And
 
Seth Bradley (13:46.572)
then how much is that gonna cost? What we're get at is quantifying what that dream costs, right? All right, so if that's your dream, where are you today? Well, if I know where you are today and I know where you want to go, it's pretty easy to come up with a roadmap of how to get there. And so we always start with that really big picture because the reality is until we know what you're trying to accomplish, until we know what your, even what type of assets
 
you want to invest in. I can't tell you anything about your tax situation. I'm going give you some tips, but what a waste. I mean, that's a waste of my breath, frankly. So what I'd rather do is I'd rather actually be able to set you up so that every year you pay a little less tax till eventually you're paying none. Yeah. Yeah. I'll tell you that my accountant's never asked me about my goals.
 
There you go. Yeah, but that's smart. I mean, that's smart with really anything. I mean, you've always got to figure out what's your end goal. What are you trying to get to so that you can create that roadmap to get there? Well, reality is that it's probably tougher for lawyers because as a general rule, the law profession is a transactional profession. So it looks at very specific situations and it's coming up solutions for those specific situations to really shift gears completely to looking at
 
a very, very big picture. mean, we're not just talking about for the next five years, we're talking about to your legacy and beyond, right? Because we can set things up so that your kids don't pay tax, your grandkids don't pay tax. You can actually have a legacy and do what you want. And it's way simpler than most people think it is. Yeah, yeah. I don't know why, but the whole discussion reminds me of the Donald Trump thing when they were talking about, you know, him not.
 
him not paying taxes. And it was like this big story. you know, all of us real estate investors are just thinking, yeah, of course, he doesn't pay taxes. He'd be an idiot if he's paying taxes. I used to tell people that when I get interviewed on that, that Donald Trump would have to have the worst tax advisors in the world to be paying any tax. Exactly. Exactly. Well, let's talk specifically about real estate. You know, what are some of those those
 
Seth Bradley (16:00.866)
big tax reductions for those that don't know, they're just getting started. They're like, we know we want to invest in real estate. We know there's some tax reductions we can take. What are some of those reductions and some of those advantages that investors get? Yeah, the biggest tax benefit from real estate is depreciation. my book, Tax-Free Wealth, I actually call it the magic of depreciation because depreciation is of those wonderful deductions where you don't actually have to spend money.
 
to get the deduction. You actually can build wealth and get a deduction and it's a deduction on paper, but you can still have positive cashflow and yet not pay any tax. So depreciation is really just, know, figuratively it's the wear and tear on the building and the contents of the building. But when you do a cost segregation, which is breaking down the real estate into the categories of the real estate, the land, the building, the land improvements, the contents, you know, you break it down to those into
 
those, of course, you need an engineer and accountant to do that. But when you do that, what happens is, is you find out that, wait a minute, I didn't just buy a building and I didn't just buy land, which is how most, frankly, most accountants classify. If you buy a building, typically an accountant is going to classify it. I'm going to tell you right now and you go look at your tax return. I challenge you to do this. It's going to say 20 percent of the cost was land and 80 percent was building. Well, that's only
 
part of the story because the gas, maybe 20 % was land, but part of that land probably related to the land improvements like the landscaping and the driveway and the lighting, all that kind of stuff. And then the building, it's not just the building, it's what's in the building. It includes the cabinetry and it includes the flooring, includes the wall coverings, includes the lighting, all of those things don't really make the building
 
function, they're really additions to the building to make the building easier to occupy, frankly. those things, so both the land improvements and the contents, they get faster depreciation. So the goal in tax is to get your money now. In fact, that's a goal in real estate. So I've spent my whole career working with real estate and real estate developers. I always joke because they never have any cash.
 
Seth Bradley (18:26.766)
Right? Because what they're doing is they're always investing in the next project. So they always need the money. So the idea with real estate is that I want to buy more real estate. Well, then I need to have more cash in order to have more cash. I need to pay less tax. And so I want that deduction accelerated. Well, the good news for real estate investors right now is for now and next year, 2021, 2022, a hundred percent of the costs attributable to land improvements
 
and the contents of the building are deductible the day you close on that building. As long as it's in service, as long as it's a used building, for example, and you're not building a new building. But the day you close, the day it's in service, you get that deduction. And that can be anywhere from 20 to 30 % of the cost of the building. So simple example, let's say you bought a building for a million dollars. Let's say bought a fourplex for a million dollars. And you put down 20%.
 
So you put down 200,000, you may get a $250,000 deduction even though you only put down 200,000 because the bank doesn't get a deduction. You get all of the deduction even though you put in part of the money. That's again, why it's the magic of depreciation. So depreciation is number one. There are a couple of other huge tax benefits to real estate most people don't discuss. One of them is low-income housing credits, which if you get into the low-income housing business specifically,
 
They're big credits and even under this new law, they're proposed to get even bigger. And then the other thing that we don't think about as being real estate is solar energy. And solar energy absolutely requires real estate to do solar energy. And solar energy has tremendous tax credits, depreciation, et cetera. So, I mean, the list goes on and on, but those are probably the top three.
 
Yeah, and those are the things that you don't get from investing in traditional investments. I think that's the piece that people leave out, right? They just kind of compare like, oh, I'm getting this return from my stocks in the stock market versus this is the return I would get in, let's say, some sort of a real estate investment. And they don't take into account the massive tax benefits that come along with it. Well, don't. I mean, consider why would the government care if you invest in the stock market? I mean, really, that's a derivative.
 
Seth Bradley (20:45.55)
Right? You're not investing in the company itself. You're investing in the market. And so what the government wants you to do is create productive assets. Pushing up the value of Apple stock does not create productive assets. I'm sorry. It doesn't. It's great for people who bought Apple at $10 a share, but it really doesn't do anything for the economy other than
 
It's a bellwether, know, the stock market is a bellwether for the economy. But other than that, really it doesn't do anything for the economy. whereas if you invest in the actual, let's say you actually build your own business, well, you get all these tax benefits building your own business that you don't get if you buy into somebody else's business. Yeah, yeah, for sure. For sure. Now, let's get a little bit more specific. So I love real estate syndications as an investment vehicle. So maybe walk through, you know, a typical deal.
 
Like when during the life cycle of the deal do passive investors see their returns offset by tax benefits? And at what points may they have to pay taxes? So, first of all, going to be some of this, some of how you benefit depends on your accountant. And I'll explain that in a minute, but just keep that in mind because I would tell you most people don't benefit as much as they could if they had a better accountant.
 
clear that
 
Seth Bradley (22:14.86)
So here's what happens. So syndication is really just, right. It's just a private equity deal where you've got a developer who goes out and buys or builds a commercial project like a housing project or commercial building could be retail, whatever. And what they do is of course they need investors. So they get the investors, then they get the bank, that all comes together. Typically you're gonna have anywhere from 40 to a hundred investors.
 
And the very first year, now, depending on the developer, because remember, the developer controls the syndication. Depending on the developer, they may or may not do a cost segregation. So that's number one. And I will tell you that there are a lot of developers that are very well known, a lot of syndicators that do not do cost segregation. So you should challenge. That's a question to be asking. Better investors.
 
People who are better investors just ask better questions, right? That's really, know, better questions get you better answers. So that's the first question you should be asking. Are you going to do a cost segregation? All right. So let's say I put a hundred thousand dollars into a syndication and let's say the first year I get a $90,000 loss because I've got, I put this money in, they did a cost segregation. I've got this $90,000 loss. Well, if I'm a purely passive investor and I have no passive income, that's a
 
key qualifier and I have no other passive income, that passive loss just carries over from year to year. Now it offsets any rental income, it offsets any profits and then down the road when the project is sold, that loss frees up and you can actually use that loss against ordinary income. Now some accounts will say, you know, my account, my...
 
My clients don't get these losses because they're just passive anyway. I'm going, all right. So besides you just admitted that you're an idiot, let me explain why this works. Even if you don't have passive income, because when you sell the project, you're going to pay capital gains tax on the project. But the loss that carries over is going to offset your ordinary income. So today, the difference between ordinary income
 
Seth Bradley (24:36.078)
and capital gains is about 17%. Well, when you rather pay 17%, I mean, that's literally 50 % of the tax, right? I mean, everybody I know would rather pay capital gains tax than ordinary income tax, all right? And yet you have people saying, well, don't do a syndication because you're not gonna get the losses until this thing sells. Okay, but when it does sell, and remember, I have a client, he says, this is the golden hamster wheel.
 
You just keep buying real estate and then they keep selling. And then eventually what you get to is as you go around on this golden hamster wheel is eventually you're going to get the gains and you're going to get those ordinary losses. And pretty soon, all those ordinary losses are going to be used against your ordinary income. And you're only going to be paying capital gains. Well, anybody who says I'm only paying 20 % on my income and they're making millions of dollars of income is in pretty good shape.
 
Okay, let's face it, 20 % is not a bad tax rate. Most people would be pretty happy with that. Now, I'm going to tell you, Seth, that that's only half the equation because most investors in syndications also own a business. And if you own a business, business income can be passive, okay? Frequently, you know, the businesses we own, they're active because we're very involved in my business wealth ability. I'm active in it, okay?
 
I'm working at it every day. I'm going to be treated as active. My active income cannot be offset by passive losses. What most people think is, well, I need to make those passive losses active. That's one way to do it. But the reverse is also true. If I can make my active income passive, that would also work. I've not met other accountants outside of our network that take that approach. They look at only
 
one side of the equation. They look at the equation, one side of the equation that says, well, I need my losses to be active. And we can talk about real estate professional. I need to make those losses active. Well, but what if I can't? My situation, my wife owns her own business. I own my own business. We are never going to be real estate professionals. So does that mean I don't get my losses? Of course not.
 
Seth Bradley (26:57.772)
because I can make turn business income into passive income. that's, I just want to put out that concept out there. This is the questions you should be asking your accountant is how do I not, not can I, okay. That's a terrible question. All right. Can I, or is it, those are terrible questions. Those are yes, no questions. The question should always be, can I, so how can I make this deductible? How can I use those passive losses now?
 
That's the question that I would hope you would be asking your advisors on a regular basis. Yeah. Can you do that with, say, a private law practice? Absolutely. Awesome. Let me ask you a question. I have to ask you a question to follow up. Can somebody other than a lawyer be an owner in a private law practice? It depends on state. There you go. I'll say there's your answer.
 
in those states where somebody other than an attorney can be an owner, then yes, we can do it with private law practice. Same with doctors. We have the same thing with doctors, right? Doctors, they have the same types of rules where not in not all states can a non-doctor own a private practice. But in a lot of states, they can. Accountants were a little evolved. So accountants can, a non-accountant can own an accounting firm in any state. Yeah. Yeah. I mean, that's what you got.
 
Set it right, man. You got to ask how, how do you change the passive to active or the active to passive? Get them to match up so you can offset them. Maybe we'll do a little bit of a clarification there because you maybe differentiate passive from active income and losses. Yeah, the general rule is active means 500 hours or more a year. OK, and that's you and your spouse combined. Five hundred hours or more a year. That's active. There are some other rules. are actually six other rules for it, but
 
That's the easy one. For real estate, if it's real estate rental, and real estate rental, by the way, does not include Airbnb. I wanna be clear on this. Real estate rental is long-term rental. So it includes you're renting to somebody who lives there, or it's a building rental or industrial, something like that. Real estate rental is per se passive. And I'm talking to attorneys so you know what that means. And the only way for it not to be passive
 
Seth Bradley (29:20.096)
is if you meet the real estate professional test. Gotcha. Well, let's dive right into that. What's the real estate professional status? A lot of people try to get it. A lot of people don't understand it. What is it? How do you achieve it? Conceptually, it's very simple, and it's a bright line test. You have to spend you, not you and your spouse. OK, this is different than the active test, which is the 500 hour test. That's you and your spouse. This is you or your spouse.
 
has to spend more than seven or 50 hours a year in real estate activities and more in real estate than all your other business activities combined. Okay. So it has to be your predominant use of your time that you spend on profitable activities. Okay. That's not counting hobbies, not counting personal time, but if you, let's say, for example, I have clients that have physician practices.
 
for example, and they are still real estate professionals because they only work part-time in their physician practice. They may work seven or 50 hours as a physician and a thousand hours in real estate. Okay, well, they meet the test at that point. The other thing to remember is you or your spouse. So let's say that one of you is a stay at home parent. Well, then that's really a seven or 50 hour rule, right? Because you probably don't have those other activities.
 
So it's either one as long as you're finding a joint return and it's 750 hours plus more than all the others. There are some elections you have to make. There's some details you have to follow. That's for your accountant to help you with. The IRS, by the way, will challenge that. So if you've claimed that and you get audited, you will be challenged 100 out of 100 times. And frankly, they should, okay? Because I think there are a lot of people that play loosey goosey with this stuff.
 
And I prefer not to. I think everything should be done ethically, morally and legally. And it's really easy. You just keep track of your hours. Now, remember, if you're also having another business or job, you have to keep track of both hours, not just the real estate hours. You need to keep track of your business and job hours so that you can show that the real estate hours are more. Yeah, makes sense. Makes sense. Got to keep track of everything, man. Put everything on paper and keep records of
 
Seth Bradley (31:44.87)
everything. You kind of touched on it a little bit there talking about the IRS audits, which people I think are very afraid of all the time. You know, they're scared of the IRS knocking on their door, auditing them. You know, let's let's talk about that fear. I mean, first of all, should you be fearful of an audit? Well, I definitely think you should be scared of the IRS. They are not your friends. But here, I'll give you a little trick. OK, we'll do it together, Seth.
 
so that you will never be afraid of an IRS audit. Okay, you ready? Ready. Okay. Repeat after me. I will never. I will never. Speak to. Speak to. The IRS. The IRS. There you go. That's my job. Okay. I don't care. I don't care what kind of law you practice. Unless you practice tax law, you are never to speak to the IRS. You hire a professional just like I don't ever. I don't review my own. I mean, I'm not the one who
 
who reviews my own contracts. Do I look at the contract? Absolutely. Do I have my attorney review my contract? Absolutely. They're the expert. I got to tell you, between the IRS and lawyers, I'm not sure that lawyers don't scare me more than the IRS. In fact, I'm pretty sure they do. Because the IRS, they're, you know what? They're doing a job. They have to do the job. And as long as you're prepared and you, we are very successful in the rare occasion where we actually handle an IRS audit.
 
We have been extraordinarily successful. And I think it's just because of two things. One, we don't let our accountants talk to the IRS. We don't have to, and we're not going to, frankly, because frankly, if you talk to the IRS, you will screw it up. All right. Just like if I talk to the judge, I'm going to screw it up. So I my attorney talk to the judge. I don't talk to the judge. You don't talk to the IRS. I talk to the IRS. And then what we do is we prepare a tax return. We actually, even though
 
very few of our returns ever get audited. We prepare every tax return as if it were going to get audited. So we wanna make sure that that return is as audit proof as possible. And that way when we actually sit down with an auditor, it's just not a big deal. I had a client just the other day, got a letter from the IRS and I said, don't worry about it. Said, we got all this stuff, we're all ready for it, it's not a big deal. And we just sit down with the IRS and have a reasonable conversation with them. So you don't need to be afraid.
 
Seth Bradley (34:08.802)
but you probably should be afraid if you're trying to handle it on your own. That's good advice. What are some red flags maybe that would stimulate that there increase your chance of getting audited? Let me give you the number one. You have a schedule C. Okay. You have a schedule C. So if you have a business, please, please, please do not have a schedule C because remember in our world, we have what's called double entry. Right? We have debits on
 
left and credits on the right. And double entry counting means that it's probably pretty accurate. A Schedule C is just one side of the ledger. So people cheat on Schedule C's when you hear all this talk about, the rich cheat, et cetera. No, no, It's the people between 100 and 400,000 that are 99 % of the cheaters. And the reason they they cheat, they cheat on their Schedule C.
 
They put in deductions that shouldn't be there. They don't report all of their income. That's where they cheat, is Schedule C. So the IRS knows that. They go after Schedule C's. You probably have about a five times greater chance of being audited if you have a Schedule C than if you don't. So I would not, I would recommend against the Schedule C. Now, people talk about home offices as being a red flag. That's only if you have a Schedule C, because if you don't have a Schedule C, your home office isn't even reported to the IRS, okay?
 
You use what's called an accountable plan. It's reported as reimbursement. It shows up on your S corporation, your return, your partnership return. The IRS is frankly, until they audit you, they're not even gonna know you have a home office. So that's not a red flag unless you have a Schedule C. So again, comes back, don't have a Schedule C. Got it. Do not have a Schedule C. That's a big takeaway there. What about Schedule E? Schedule E's a little better.
 
But not a lot. I don't like Schedule Ease either. So I like 1040s to be really clean. All they're reporting is they're reporting income from K1s.
 
Tom Wheelwright (36:12.11)
And W.
 
So that's all the reporting. It didn't come from K1s and W2s. K1 comes from an S corporation or K1 comes from a partnership. And then the W2 of course come from your employer, which may be you, maybe your S corporation, but it comes from the employer. And that keeps your personal tax return pretty clean. Yeah, that's great advice. Great advice, man. Switching gears a little bit from all your experience working with investors and entrepreneurs, what do you think separates
 
those folks who fit the bill of your poor dad and continue to work the nine to five and grind away and never take the leap into investing in real estate or small businesses and getting employees and other alternative assets and creating business. What kind of separates those two types of people? Do it yourself versus work with a team. That's the biggest difference. Employees are used to doing things themselves, right? If you want it done right, you have to do it yourself.
 
Self-employed people, same thing, tend to do it themselves. The people who are really successful build teams, right? So if you look at, for example, Robert Kiyosaki's cashflow quadrant, you know, there's four ways to make money as an employee, as a self-employed, as a big business owner, as a professional investor. Well, the employee and the self-employed tend to do things themselves. They don't rely on advisors. They don't have mentors. They don't have a team around them. Big business and professional investing, you can't do it.
 
without a team. So a lot of solo people on the left side of that quadrant, a lot of team players on the right side, and it's the team. One of the things that I love is when we do work with a client, we also do work with their attorney. So we always make sure that we're communicating with the attorney. There's too much finger pointing between the attorney and the accountant and the banker and the bookkeeper and everybody else. It's really...
 
Seth Bradley (38:08.777)
Robert said it best when he says investing is a team sport. So I think that is the biggest, I actually think that's the biggest difference between the successful and the unsuccessful. Yeah, I love that, man. I love that you said about the attorney and accountant kind of getting together and working as a team. Cause sometimes you get that with the attorney saying, oh, this is best for liability from a liability standpoint. And you've got the accountant saying this is best from a tax standpoint. And it's kind of a, you know, a back and forth, you know, with a, with the client being the middleman instead of
 
them communicating directly and finding something that works. Absolutely. So how do we go about finding a great tax advisor like yourself? Well, I give you two options. So Chapter 23 of my book, Tax Free World, actually tells you how to find a good tax advisor. in that the key to that, by the way, if you are going to do it on your own, then the key to that is to think about what questions
 
should they be asking you? Now what questions you should be asking them? Now your attorney. So as attorneys, you're good at asking questions. So you have an advantage over the average person that you're gonna ask better questions. But really I find that the most important skillset of a CPA is the ability to ask good questions. Certainly, I mean, I think it's pretty clear that's the most important skillset of an attorney. It's also most important skillset of an accountant because it...
 
your facts determine your tax. We always like to say, if you want to change your tax, you need to change your facts. Okay, well, so I need to be asking you the questions, what are your facts? And then I can help you, I can help give you the option of which facts could you change to reduce your tax liability. But I can't do that unless I'm asking the right questions. It's no different than you go to a doctor and if you're there, if you're with a doctor for 20 minutes, I guarantee you 19 minutes he's asking you or she's asking you questions.
 
And then the very last minute says, well, here's then here's what you need, right? Here's the prescription. Well, that's the same thing an accountant should be. And frankly, all advisors, think that should be the number one thing they do. I will give you a there is an easy button. OK, there's a reason we built a network of CPA firms and it's to give people the easy button. Then you just go to welteability.com. Just just contact us. We have already done the vetting. We've already done the training. We've already
 
Seth Bradley (40:33.846)
we deliver the system for reducing taxes. It's a formula that we use, it works every time, as long as the clients do what they're supposed to do and if the accountant does what they're supposed to do, it will always work. So that's the easy button. But if you want to go look for somebody on your own, that's good too, chapter 23. Got it, got it, like that easy button. All right, man, before we jump into the Freedom Four, one last golden nugget for our listeners.
 
You know what, don't be afraid of it. I think that's the biggest thing. Don't be afraid of investing. Don't think that, don't buy into the Wall Street lie that they're smarter than you are. And so you need to turn your money over to them. I think that is the biggest lie perpetuated on the American people and people worldwide, frankly, but particularly the American people ever. that is, know, invest, put your money in your 401k. That's your best tax benefit. It's not.
 
and get a well-diversified portfolio mutual funds. You know what? A well-diversified portfolio mutual funds, when you're rich, works really well. But until you're rich, it works really bad. Diversification is a way to prevent you from losing money. It is not a way to make money. You make money by being a specialist. Now, lawyers, you guys are really good at this. You're all specialists. There are very few lawyers who are generalists anymore. And you're a specialist because you get really good at something.
 
The same is true with investing. You've got to get really good at it. you know, this whole idea of diversifying or I want multiple streams of income from a lot of different types of investments, that's baloney. You look at great investors and they never, ever do that. Warren Buffett doesn't do it. Donald Trump doesn't do it. Amazon doesn't do it. You know, Bill Gates doesn't do it. They're very focused. I mean, think about Bill Gates. I mean, all they do is
 
is software. That's it. I look at Apple, all they do is consumer hardware. know, software, Apple's not good at software. Microsoft's not good at hardware. You know, they're not really competitors, but they've done really well in their niches. And that's, know, the old niche will make you rich. And I think that's the most that's so important that you recognize that you've got to focus. And you've got to make sure you've got that team around so that you can stay focused. Yeah.
 
Seth Bradley (42:59.862)
Love that man. All right, let's jump into the freedom for it's time for the freedom for what's the best thing you do to keep your mind and body healthy. I compete in triathlons. So I find that I need that target of the competition in order to keep my training up, but I love the three sports. I love the swim and I love the run and I love the bike. So it's very, it's very Zen for me. Yeah. Love that.
 
With all your success, what is one limiting belief that you've crushed along the way and how did you get past it? So, all right, so this is terrible to admit, but pretty much my whole life I've been an approval whore. So pretty much done anything for approval, right? You know, I know there are attorneys out there who relate to this, right? And really it was a matter of just, had a coach that helped me recognize that that was the issue and why that was the issue. I mean, it took me all the way back.
 
like to when I was a kid, you know, did all that, that personal development stuff. And once you realize that you've got a weakness, you know, and then it begins so much less important. So it's all that to me, that personal development is so important. would, in fact, I think of Robert and Kim Kiyosaki, they're more of a personal development company than they are an investment company. And I've learned more about myself working with them than, really even investing.
 
Yeah, thanks for sharing that. And self-awareness is such a key. It's a huge key to life and fulfillment and just success in general. What's one actionable step our listeners can do right now to start creating more freedom?
 
get educated. It's education. It's funny. Education is everything. It is. People make mistakes in investing because they don't know what they're doing. They don't have a team around them. They don't know what they're doing. haven't created a plan of action, a strategy for it. So I really think what you're doing, Seth, is critical. you know, I...
 
Seth Bradley (45:09.366)
I work, I've been on podcasts with doctors who do similar things. And I just love that there's more and more of this financial education because we're not taught this in school. We're certainly not taught in law school. We're not taught in business school. This is something that you have to learn outside of school. the more education we can get about how the economy works, how the tax laws work, how investing works, the better off we're gonna be. Yeah, agreed. I went through over a decade of...
 
higher learning and didn't learn anything about financial education. Amen to that. Last but not least, how has passive income made your life better? You know, it goes back to that previous question, it's about freedom, right? Passive income means that you don't have to go to work. A lot of us like what we do. I mean, I like what I do. I have no plans to retire because I like what I do. I feel like I'm in the very
 
almost beginning of my career. I've done all the training now. Now I can actually do the fun stuff, but I don't have to. And not having to go to work is that there's really not much more freedom than that. That it's, what? If I don't close a sale today, that's okay. I have money coming in. So I think passive income is such, I mean, if you play Robert's cashflow game,
 
game, I highly recommend to everybody play the game over and over again. It's all about passive income and excessive expenses, right? That's how you get out of the rat race. And it is true. That is how you get out of the rat race. Yeah. Once you take that necessity of having to work, you sometimes find that the work's not that bad and you actually enjoy it. Amen. It's been an absolute pleasure, man. Appreciate you coming on today. Where can our listeners find out more about you? Just wealthability.com. Wealthability is your
 
We're our job is to help you create the ability, your own ability to create wealth. So it's wealthability.com. Awesome. Thanks, Tom. Appreciate it. Absolutely. Anytime, sir. Ladies and gentlemen, Rich Dad, Poor Dad advisor, Tom Wheelwright. Fascinating. That's the first time I've heard the story about how Tom and Robert Kiyosaki met and joined forces. Man, Tom brought the fire and hopefully you came away with some big takeaways to start growing tax.
 
Seth Bradley (47:31.15)
free wealth major key. Don't think you're stuck bearing the weight of a massive tax burden. There are so many legal ways to reduce or even eliminate your taxes entirely. You just have to take the time to get educated. Connect with a tax expert and put a winning strategy together. Don't let the Wall Street lie. Win the day. You're better than that. All right. If you're ready for a change and ready to take action.
 
partner with us on our next passive real estate deal. Go to passiveincomeattorney.com and join our Esquire passive investor club. right, kids, enjoy the journey. Thank you for listening to the Passive Income Attorney podcast with Seth Bradley. Do you want more ideas on how to generate multiple streams of passive income? Then jump over to passiveincomeattorney.com for show notes and resources. Then apply for the private Facebook community by searching for the passive income attorney on Facebook.
 
and we'll see you on the next episode.
 
Links from the Show and Guest Info and Links:
Seth Bradley’s Links:
https://x.com/sethbradleyesq
https://www.youtube.com/@sethbradleyesq
www.facebook.com/sethbradleyesq
https://www.threads.com/@sethbradleyesq
https://www.instagram.com/sethbradleyesq/
https://www.linkedin.com/in/sethbradleyesq/
https://passiveincomeattorney.com/seth-bradley/
https://www.biggerpockets.com/users/sethbradleyesq
https://medium.com/@sethbradleyesq
https://www.tiktok.com/@sethbradleyesq?lang=enTom Weelwright’s Links:https://wealthability.com/ituneshttps://wealthability.com/spotifyhttps://wealthability.com/stitcherhttps://www.wealthability.com/show/https://taxfreewealthbook.com/https://www.wealthability.com/https://tfwadvisors.us/franchise/https://www.facebook.com/4wealthability/https://x.com/WealthAbilityhttps://www.instagram.com/tom_wheelwrighthttps://www.linkedin.com/company/wealthability/

TME 17 | Scorched Earth Real Estate: Why You Don’t Want a Billion Dollar Business with Gino Barbaro

In this episode, Seth Bradley sits down with multifamily investor and coach Gino Barbero for a deep conversation on real estate investing, mindset, and values. Seth Bradley and Gino Barbero discuss the reality of today’s uncertain market and why deals are still possible if you stick to timeless frameworks like Buy Right, Manage Right, Finance Right. Gino Barbero emphasizes that choosing between syndications, joint ventures, or long-term holds should come after reflecting on personal patterns, values, and lifestyle goals.
Seth Bradley shares his journey from a blue-collar upbringing to medical school, then law school, before breaking free of the W-2 mindset after discovering Rich Dad Poor Dad and BiggerPockets. Both Seth Bradley and Gino Barbero reveal how emotions like anger or a thirst for freedom became catalysts for entrepreneurial growth, and how inherited beliefs from parents shaped, and sometimes limited, their early choices.
Gino Barbero outlines his core values, People First, Unwavering Ethics, Extreme Ownership, Make It Happen, and Growth Mindset, and explains why values-based decision making is the foundation of success in business, partnerships, and life. The conversation concludes with Seth Bradley and Gino Barbero reflecting on legacy, living by values, helping families, and leaving the world a better place.
 
Bullet Point Highlights:
Market Reality, deals are harder but not dead, framework Buy Right, Manage Right, Finance Right still applies
JV vs. Syndication, JVs may better fit lifestyle goals, decide based on whether you want scale or freedom
Mindset Shift, success starts with identifying empowering vs. disempowering patterns before picking a vehicle
Seth’s Story, from coal miner’s son, med school, law school, house hacking, real estate entrepreneur
Catalysts for Change, Seth’s thirst for freedom and Rich Dad Poor Dad, Gino’s anger channeled into growth
Inherited Beliefs, parents’ caution or W-2 mindset often shape early decisions until consciously broken
Values-Based Decisions, align investments and partnerships with personal values to avoid costly mistakes
Gino’s Core Values, People First, Unwavering Ethics, Extreme Ownership, Make It Happen, Growth Mindset
Redefining Success, question vanity goals like “a billion in real estate”, align goals with lifestyle vision
Parallel Lives, closed doors in Wall Street and med school led Seth and Gino to better aligned entrepreneurial paths
Legacy, Gino wants to be remembered for living by values, helping families, and leaving the world stronger
 
Links from the Show and Guest Info and Links:
Seth Bradley’s Links:
https://x.com/sethbradleyesq
https://www.youtube.com/@sethbradleyesq
www.facebook.com/sethbradleyesq
https://www.threads.com/@sethbradleyesq
https://www.instagram.com/sethbradleyesq/
https://www.linkedin.com/in/sethbradleyesq/
https://passiveincomeattorney.com/seth-bradley/
https://www.biggerpockets.com/users/sethbradleyesq
https://medium.com/@sethbradleyesq
https://www.tiktok.com/@sethbradleyesq?lang=en
Gino Barbaro’s Links:
https://www.linkedin.com/in/gino-barbaro-03973b4b/
https://www.instagram.com/barbaro_360/
https://myworstinvestmentever.com/ep732-gino-barbaro
https://www.facebook.com/JoinGinosFamily/ 
 
Transcript:
Seth Bradley, Esq. (00:00.169)but man, that's, I was like, I was being sarcastic. Like, is that volume up?
Gino (00:03.278).
No, actually, sarcasm is, I'm Italian and I'm from New York, so sarcasm works really good. So how you been?
Seth Bradley, Esq. (00:12.105)There you go.
I've been good brother, been good man. How about you?
Gino (00:18.54)I mean, on the deal front, last year or so, it's been pretty painful. I mean, everything else is great. I got no complaints. Everything else is excellent, seriously. But other than that, I'm doing okay. What are we talking about today? What do you want to touch on today?
Seth Bradley, Esq. (00:20.359)Yeah
Yeah, sure. Yeah. Yeah.
Seth Bradley, Esq. (00:30.707)Good,
Cool, yeah, man, so I rebranded, so I changed it from, and I did this because my audience is different now. My audience used to be passive investors, because I raising capital, doing all that kind of stuff. You still probably get back into that at some point when it makes sense, but started selling the shovels a little bit, and working on growing my securities law firm, and I'm chief legal officer for TribeVest, so we put together fund to funds for people to raise capital into for bigger deals. So now we're.
Gino (00:54.67)Seth Bradley, Esq. (01:01.927)So now I'm talking to active capital raisers, entrepreneurs, real estate investors, as opposed to passive investors. So a little bit different.
Gino (01:08.494)Good, let's go a little scorched earth because I'm feeling a little annoyed today, especially after this volume thing. And I want to go at it from a perspective of real estate. Like, I don't even know what data to believe anymore. I think it's all bullshit. I think the whole thing is, so for me as being an investor, I've been frustrated for the last five years because I know we've been in a recession for the last two. Inflation wasn't transitory. What about tariffs? Like nobody's telling me any of the, I'm not getting any real information. It's all politicized.
Seth Bradley, Esq. (01:13.161)Hahaha
Seth Bradley, Esq. (01:18.641)I can't. Yeah. Yeah.
Gino (01:38.262)I'm both sides, I'm so frustrated, I don't know which way to go. And I'm lucky because I've got some really great assets. I'm blessed with that. But I'm just trying to figure it out for everybody else. Like, I don't understand. The only thing I can lean on is our framework. So that's what's holding me and not making me make any mistakes. And I like to share that with everybody out there. And this AI thing is great, but AI is wrong a lot also. And I think people are leaning too much on it. So if you want to talk about that, great. If you want to talk about the current situation, what rate's gonna...
Seth Bradley, Esq. (01:41.417).
Seth Bradley, Esq. (01:59.966)Yeah.
Alright.
Let's fucking go. Let's go. Don't hold anything back, buddy. Let's get into it, man. Let's do it. Let's do it. All right. Welcome to Raise the Bar Radio, elevated conversations around entrepreneurship, capital raising, and real estate. Today we have Gino Barbero, a legendary investor, entrepreneur, and author of three bestselling books. He's the co-founder of Jake and Gino, a multifamily real estate education company founded on the framework of buy right.
Gino (02:06.478)I'm just whatever you want to do.
I'm not gonna, I won't.
Seth Bradley, Esq. (02:33.958)manage right and finance right. Gino, old friend of mine, welcome back to the show. Good to have you on today,
Gino (02:40.952)Seth, I appreciate being on because I think we're going to get a little of our frustrations out on this episode and have fun while we're doing it,
Seth Bradley, Esq. (02:46.856)Let's do it man. I don't want you to hold anything back brother I want you to to just say say what you need to say get it off your chest and let's have some fun with it
Gino (02:56.024)Well, after spending 10 minutes feeling like an idiot and not even being able to get on the show, that was the precipice. I said, you know what? I'm going to let it rip on this show. And I'm going to start off by saying that I don't know jack shit about what's going on in this economy right now. And I've been investing for over 20 years. We own 1,800 units. I don't have any syndications. It's my capital. We're printing $300 in profit per unit. So I have the track record. I have the experience. And yet, I don't know what the hell is going on.
And why is that? There's a reason why. And I think, I don't think we could really have trust in the institutions and the data that we're getting. And this is not one side. It's not politics. It's policy. First, inflation was transitory. Then we got whacked with it, right? Then there's 17 million jobs. Now, did he create any jobs? Tariffs were supposed to create this inflation nut. Now it doesn't. Now, like,
I don't even know what to believe, what not to believe. And I have to be honest, Seth, am I the only one feeling this or are there other people out there? That's the frustration that I have. But I can always lean on our framework of buy right, manage right, finance right. The fundamentals of real estate haven't changed. Maybe the strategies have. Well, maybe harder to syndicate deals right now. So you might have to JV.
or get a small group together. You can go out there and sell or finance a deal or master lease option a deal where you couldn't a few years ago. But right now, and the reason why I feel this way, and I think the vast majority of really good investors feel this way as well, is there's not a lot of deals being traded. Because sellers are still in la-la land, and buyers are like, I've already gotten burned, and if I go to the bank, they're gonna laugh at me. So it's just like this weird spot where we're at. And I'm like, how do you do a deal? I mean, we did.
300 units in 23. We did almost 200 units last year. We've done a 68 unit deal this year. Now it was phenomenal, but I mean, that was it. And it was actually from a seller who sold us two previous deals. Anything that's going online on market right now, it's just not worth bidding. There's older assets, there's a lot of work to be done. And it's stuff where, you know, they're 20 to 25 % from where they were two years ago. They need another 20, 25 % haircut. So I know usually people jump on and say,
Gino (05:14.612)I've been in business for 30 years at all and I want to skip to that and get to the meat of the conversation because I want to know how you feel. How do you feel about what's going on with the market and the economy right now?
Seth Bradley, Esq. (05:24.467)Dude, I agree. It is crazy times because everything is politicized, right? So you can't even take what are presented as facts as facts. And then when that happens time and time and time and time again, even when it's presented as facts, like, and it's proven later and you're like, just kidding. They're actually a massive job loss. It wasn't a positive. It's like, well, you just made all the interest rate cuts and or not interest rate cuts based on these things over the past year.
Gino (05:33.709)Yes.
Seth Bradley, Esq. (05:52.978)And now you're telling me that you just didn't report it right. It's just like, what the hell are you supposed to do? because it's hard to live life that way also. It's hard to have to literally question every single thing because where's the truth, right? Like you get in the data and the data is wrong. So where do you find like that source of truth? There really isn't one. So it's really difficult to make decisions. So.
Gino (05:58.127)Mm-hmm.
Gino (06:15.29)And the positive thing for us is we're in a good market. We're in East Tennessee in Knoxville. Just understand, I think to be clear, is if you can get clarity about what your goals are, if you're just starting out, you're gonna have a different underwriting template, you're gonna have a different strategy than if someone's been in the business for 20 years. Are you gonna be doing this part-time, maybe investing passively? Or do you wanna get into the GP side? Or do you just wanna start buying 10-unit deals, small deals by yourself?
There's so many different things. So before you start getting into the market and saying I gotta get a deal Don't do what I did. Don't just jump in and try to find a deal Try to really follow somebody's strategy somebody's framework that they've put together and something that resonates with you And I always say Seth I had a life before Jake and I had life after Jake before Jake I made every mistake conceivable and that sucker cuz I call him a sucker in a good way
He hasn't lost money on one deal because I was the one who lost all the money before I met him. Then I got in school, I had mentorship programs. I was fortunate enough and blessed enough that he arrived into my life when I had the experience and the knowledge and we just partnered up and I say jokingly, he's an incredible partner. He has really done an amazing job of these last 15 years. But it's interesting.
when you're running around with a chicken without a head, without a process, without somebody having the experience. And that's why it's important if you're just starting out, maybe by tipping your toe in the water, you go as a passive investor and you find out what people are doing. Log in to every person who's doing a syndication, try to get their offering memorandums, see everyone's different strategy because there's no one size fits all. There could be a syndicator raising money for self storage, ATM machines, mobile home parks, multifamily.
What is it that you like? I love multifamily because I like the customer service aspect of it. I like the fact that it's a basic human need. I like the fact that more people are renting. That's the reality. Less people are buying homes. Renting is becoming more convenient. So I think long term it has that as well. So just go out there, try to understand what you're trying to accomplish. And then once that, just pick a vehicle and learn about the vehicle. Give yourself some time to actually learn about the vehicle and grow with your experience.
Seth Bradley, Esq. (08:12.211)Yeah.
Seth Bradley, Esq. (08:39.677)Yeah, 100 % dude, there's different levels to it, right? When you're first starting out, I mean, you've gotta get yourself in the right rooms, you've gotta network, you've gotta get yourself exposed to a bunch of different things because you don't even know what you want. Like maybe you listen to a podcast or watch a YouTube video and you're like, that sounds cool, but you don't really know what's out there yet. You need to figure out what's out there first. So get kind of a general idea of like, it's not just multifamily. Okay, there's mobile home parks, there's RV parks, there's debt funds nowadays, there's oil and gas, all kinds of stuff, right?
Like get yourself exposed to what's out there first and then start formulating which one you want to go with and what's your end goal, right? Because I think a lot of people they see like, you know, see a lot of like coaching programs and things like that. I run one, you run one, but it's just like, well, what are your end goals, right? Like, do you want a lifestyle business or do you want to own a billion dollars in real estate? Not everybody needs to own a billion dollars in real estate, right? Like you hear that number all the time or even a hundred million dollars, like all these
Gino (09:35.158)great.
Seth Bradley, Esq. (09:38.666)crazy numbers, but that's not for everybody. Like you're gonna have to bring in investor capital to do those sorts of things. Like you're gonna have to make sacrifices to do those sorts of things. But you know what? You could probably JV or just buy a few smaller multifamily assets or a little retail shopping center around the corner and make some nice cash flow and quit your W-2 and just live off of that. Like you don't have to go all the way, right? Like think about like what your goals are and what's gonna make you and your family happy.
Gino (09:59.652)Yes.
Gino (10:07.855)I wanna learn a little bit about you and then I'll share my story of how what you just said really highlights the transition that I've had over last 15 years with our portfolio. But when you started, what were your goals? Were your goals, hey, I just wanna do this a little passively, figure out the real estate thing, make a little extra income, then grow the business and like, oh wow, I'm doing this fund the funds now. What did that look like for you?
Seth Bradley, Esq. (10:30.545)Yeah, I mean for me it was going, I am an all in type of guy. So I was like all in. was like, all right, how can I buy as much as I possibly can? But I also am a lawyer. So I had to kind of tippy toe first. So I invested passively. I bought a duplex, house hacked into it, bought bigger multi, like, you know, four unit, a 10 unit, a 16 unit. Then I started raising capital with operators and I started being the operator. So I kind of like stepped my way up.
Gino (10:43.737)Yes.
Gino (10:57.081)Yes.
Seth Bradley, Esq. (10:57.321)with the end goal that I wanted to go big and now I've actually kind of come back because I'm like, you know what, like I don't want to just own a few percentage points of all these deals. I'd rather just own, you know, a 30 unit where I own 100 % of it or I own 25 % of it with a couple of JV partners or try to find some trophy assets, right? Things like an awesome short-term rental in a A-plus market that's only going to appreciate over time and I can use it with my friends and family.
and go visit and utilize the property, things like that, more like kind of lifestyle type of decisions. So I think it evolves over time.
Gino (11:34.735)And what made, what was the switch? What was the epiphany of the moment in your life that you said, I don't really need to go all big. I'd rather do a 30 unit that I own all the equity instead of having 17,000 units and having 1 10th of 1%.
Seth Bradley, Esq. (11:49.643)I think it came down to operating. the bigger assets that I was actually operating on, doing the asset management, I was like, all right, here we go. This is a lot of work. Not saying I didn't know it was a lot of work. I'm a business owner and other things too. I know it's gonna be a lot of work, but I'm gonna have to build out a team, a big team. It's gonna have to grow. It's gonna have to be a massive business if I wanna own $100 million, $500 million in real estate, right?
And it wasn't necessarily something I wanted to do there. I wanted to keep things on the simple side. And that's when I started saying that, you know, I'm not gonna be to do this by myself. A lot of work. This is not necessarily what I wanna do. I got into real estate for freedom, for flexibility, for cashflow. And this is probably not gonna create that for me.
Gino (12:36.131)That's a great answer. So I'm just writing down what do you and as you're listening to this, ask yourself this question. What are you getting into it for? And that's important because you may want to get into it to make a billion dollars. And that's why what I've done over the last year and 18 months, I've transitioned from just teaching people about real estate to becoming a certified money coach. Cause it really comes down to your relationship with money. I mean, we all view money differently. Money is not the problem. Money is usually the symptom.
So if you want to hit a billion dollars, man, I want you to crush it. But really ask yourself, what's the real reason that you want to hit a billion dollars? And always ask yourself, when is enough enough? Because people always say, when I make more money, my problem is going to go away. And I realized I had 100 units, had problems. Had 200 units, had problems. Have 350 million, there's always problems. Making more money is not going to solve all of your problems. And actually,
Seth Bradley, Esq. (13:15.146)That's right.
Gino (13:36.033)I've got a spousal lifetime access trust now. I've got six kids where I've got to create estate planning. So I'm not complaining, but I'm just telling you, it creates different kinds of problems. So your story is very similar to ours. When we started, Jake and I were like, bro, if we can hit 100 units, we're gonna be like two pigs in crap. And it took us 18 months to find our first 25 unit deal. But three months after that,
Seth Bradley, Esq. (13:58.409)Ha ha.
Gino (14:05.059)We we closed on a 36. So we're at 60 units within almost two years, which may not seem like a lot, but it is a lot when you look back because what happens is you have that hockey puck curve. Cause then I remember in January, in February of 2014, after a year after we closed that first deal, we closed 136 units. So within three years of Jake and myself meeting and starting, we had 202 really excellent units. were three deals.
Seth Bradley, Esq. (14:17.258)Mm-hmm.
Gino (14:35.215)And within five years, we had a little over 500 units. And there was no syndication involved. It was refi and roll. It was a partner who had a significant balance sheet who helped us out and interspersed in that. We closed on a 200 unit seller finance deal. So people are like, well, how did you do it? A little seller financing, little JVs, refi and rolls. But then 500 units were like, holy crap, we're sort of got lint in our pockets. Where are we gonna find money?
Seth Bradley, Esq. (14:43.476)Yeah.
Gino (15:04.047)And oh, by the way, everyone's talking about this syndication thing. Let's try it. And Seth, we did. We did three deals in syndication in two in 2018, one in 2019. We saw that it wasn't for us long-term because we wanted to hold a really quality asset for the long-term. And syndications, in a lot of instances, you put money in and then all of a sudden you have to return that capital. And sometimes if you're lucky, you can actually refi it out. But as us as the GPs, we're doing all the work and we're not getting
Seth Bradley, Esq. (15:04.426)Yep, yeah
Gino (15:33.391)Compensated as much so we said to ourselves after the third one. Let's stop regroup. We've got more capital We sold those off and we continued to buy our own and one of the things I want people to focus on is When you're in business, what is the KPI that you're really measuring for us? It's PPU now. It's profit per unit. It's not number of doors It's not IRR and real cash flow. That's what we want at the end of the month. We have 1800 units and
Seth Bradley, Esq. (15:56.074)Mm-hmm.
Gino (16:02.669)How much profitability does those 1800 units are giving us? That's what we're looking for. So from a syndication model, doesn't really work. From a syndication model, you're trying to expand, you're trying to get as many units under management, you've got asset management fees, it's a different model. We didn't like that model as much. We did what you did. We put the e-brake on and we're gonna do smaller deals with our own capital and we're gonna really control those deals and we're vertically integrated. We have our own property management company.
So that's not for everybody. And I hate when people say this is the only way to do it, only buying multifamily. If you want to really get rich in the next 10 years, if you buy one single family home for the next 10 years, within 15 years of your first purchase, that house may be completely paid off. You may be able to sell that house in a seller finance node and really get mailbox money. That's a great strategy. It's not for everybody, but really getting clear on what you're trying to accomplish is really, really important.
Seth Bradley, Esq. (16:51.935)Yep.
Seth Bradley, Esq. (16:59.306)100%, man, 100%, you said so many good things there. I syndication, so I love them. I make a living off syndication. So I'm a securities attorney, I work at TriVest, it's a great vehicle, but I do think that kind of the traditional sense of it where people are like, all right, let's syndicate this deal, let's flip it basically as quick as possible. Like if we can unload it in two years, let's unload it in two years. It's like, they just turn into house flipping, but with apartment flipping, right? Yeah.
Gino (17:06.319)Yeah.
Gino (17:16.963)Yes.
Gino (17:23.449)glorified yes.
Seth Bradley, Esq. (17:25.116)And it's just like, that's not why we got into it. Or most of us, I shouldn't say everyone, but most of us got into this thing for long-term, for cashflow, for freedom, flexibility. And that's not, because that's just like, okay, well, I got to live for my upfront fee. I've got to live for the exit fee. I'm not making any money in between. I know a lot of capital raisers and syndicators got washed out in this last market because there's no cashflow, right? Like they made a little bit of money when they started. They were going to make, maybe, maybe not now.
Gino (17:32.163)Yes.
Gino (17:39.961)Yes.
Seth Bradley, Esq. (17:53.749)but they were planning on making some money on the backend, on the sale, possibly on the refi, which has gotten washed out too at this point. And it's like, there's no cashflow for these people, right? So they've had to go back and get a W-2, they went back to work. They haven't been able to sustain. So you're seeing a lot of people get washed out with that model, but you can still use that model. Just your investors have to know that you wanna stay in it for the long term, right? You have to set those expectations versus like...
Gino (18:16.845)Yes.
Seth Bradley, Esq. (18:19.284)We're not trying to sell this thing in two or three years. We're gonna keep this as long as we can. We're just gonna keep refinancing it. We're gonna keep improving it. We're gonna keep doing these things and you're gonna get your capital back and you're gonna get great returns or you might get great returns. But we're not trying to get out of this as soon as possible. So plan on staying with us for the long term.
Gino (18:23.161)Yes.
Gino (18:39.065)You said a couple of really important things there that I don't want to gloss over. The first one is know who your investor is. If you're going to create that model, and I love that part of the syndication model, it's tell your investor this is not a two-year fix and flip and we're going to sell it. We're buying this thing for tax benefits. So the longer we hold it, better it is. We want to give you some kind of IRR number, but we're really focusing on holding this asset. Why would I kill the golden goose if my goal is to really reposition this asset, really get it up the snuff?
and maybe refinance some of the capital out, distribute it back to you, and continue to hold this, operate this like a business. That's what my model is. See, the syndication model, sometimes it doesn't lend itself to really running real estate as a business. The manage right portion is so important, and operators out there, they know that, hey, asset management's important, but you need to couple it with property management. Those two components are so important for the business. And there's another thing you said in there that really caught my mind.
The fixing and flipping is so important. It's understanding what your role is and what you're trying to do. And I think as a syndicator, it could work if you put your money on the LP side as well. If you're just going in there with no money down, I think you need to start investing in your own deals. And I've seen syndicators not invest in their deals. And there's less of an alignment, in my opinion at least, with the general partnership and the limited partners. I want, as our general partnership team, to put that money
into the deal to show that there's confidence in the deal. But I love your model of going in there, looking at this asset, not saying a three-year exit. Now, if the market lends itself for you to make a ton of money after three years and you'd be foolish not to get it, and you understand market cycles, and you're like, hey, I got to hold this thing for the next 15 years to get my cash flow back if I sell this thing today, then maybe it behooves you because
you have to do your fiduciary for your investors. You gotta do what's best for them, not what's best for you. So that may preclude itself, but understanding that if you can tell them, hey, this is a business, I really wanna run this thing as a business, and I really wanna cash roll this thing and control it, I think that is a good way in setting the expectations with your investors. If you do that, I like that model with syndication personally.
Seth Bradley, Esq. (20:38.027)Absolutely.
Seth Bradley, Esq. (20:57.429)Yeah, I think people are a lot more open to it now too than they were, let's say five years ago when that was just kind of what everybody was doing, right? There's no alternative to that. It's like, great, like rents are going up so fast. The market is so good. Like we're basically just gonna sit on this for two years and then we're gonna just sell it for, and we're gonna do extra money in two years. And that's great. I mean, for investors, they're like, yeah, sure, we're gonna do that.
Gino (21:00.983)Yeah, yes.
Seth Bradley, Esq. (21:22.687)But now that it's a little bit harder to pull that off, I think people are going to be a lot more open to that. They are more open to that, to that long term kind of, I call it traditional kind of way, right? Like that's why I get into real estate for those reasons. So I think investors are more open to that. And you're actually seeing that with like other asset types too, because they want cash flow. You're seeing people get away from multifamily a little bit, get into oil and gas for the tax benefits.
Gino (21:40.505)Have you ever heard?
Seth Bradley, Esq. (21:50.39)for the immediate cash flow, if it's the right one, and like the debt fund, things like that, because people want the cash flow, they want to stay in it for 10 years, they don't want to figure out what they got to do with their money here in two years again.
Gino (22:02.137)Yes. It's interesting. Have you ever heard of a gentleman named Sam Freshman? I don't know if you've ever read his book. He's got that really thick book on syndications. I mean, it'll put you to sleep, but I mean, it's great content and he's written a couple of books for younger people. Honestly, I would be lying if I knew if he was still alive. When I had him on the podcast, he was in his late 80s and massive syndicator. Two mistakes he said he made. I mean, he'd been syndicating deals and owning deals in California and
Seth Bradley, Esq. (22:11.849)Yeah.
Gino (22:30.627)His model is very similar to what we're talking about, but his two biggest mistakes was not buying enough real estate and selling too soon. And if you think about that, it's incredible. And I can give you an illustration exactly what he's talking about. Jake and I, when our first bought our first deal, it was called the Shamrock Motel in 2013. It was a 25 unit little crappy property. Dude, I'm telling you.
Seth Bradley, Esq. (22:53.791)Sounds classy. Come on, Shamrock Hotel? Motel? Yeah.
Gino (22:56.559)I'm telling you, Shamrock went six unit, a little efficiency. It had cottages, it still hasn't. It had couple duplexes on the property, 25 units. We paid $675,000 for the property. It would have come out to about 25 a door. Rents were weak, it was weekly renters. Over the years, we were able to fix it up. We were able to refi out. We put down $87,000. We were able to refi $160,000, you know, back in 2015. We currently still own this asset. It's 2025.
the asset is probably worth $125 a door right now. We paid $25 a door. That asset would have traded hands three or four times. Now, my point is we bought it at that price point. It's still producing between $8,000 $10,000 a month in cash flow on a crappy little 25 unit asset. Now, when you talk about like wealth, that is printing money. Now that asset's probably, like I said,
Is it worth $2.5 million at $100 a door? So you can see there's a ton of equity. We can go back in the next two years, refi some of that equity out. And that's the thing with real estate. Real estate is different than businesses. You can exit an asset in real estate without selling it. The refi is so powerful, because it's basically a loan to yourself, so you're not paying taxes on that loan unless...
you end up selling it. So for us, we did the same freshman model. And the reason why we kept it, it's because it was pretty easy to fix. The basis was low. We love the area and the market that it's in. Rents are going to continue to rise in that market. It's an easy asset to manage because it's an affordable kind of asset where people want to be into it. These one bedroom cottages, they feel like homes. They feel like apartment homes. So there's very little turnover in these things. So understanding you need to buy the right asset.
to be able to hold long term. But I'm telling you, just from that 25 unit little property, it's incredible if you have that mindset of buying the right deals and giving yourself a little bit of time to be able to create wealth, it's incredible what can happen.
Seth Bradley, Esq. (24:58.027)Yeah, yeah, for sure. And how do you present kind of like all these different pathways that you can take to your coaching clients? I know that, you a lot of people will, a lot of folks out there that are teaching stuff, like they just kind of zoom in on, okay, look, multifamily syndication, for instance, right? Like that's the only way, there's no other way to do it. Or, you know, RV parks, like you have to do RV parks because you got to ride this wave or, you know, they're always focusing on like one.
very specific thing. Now know you love multifamily, but it sounds like you kind of look at the general picture for each person, investor, student, whoever it might be, and they kind of have their own, they need to figure out their own pathway. How are you able to kind of coach that out of them?
Gino (25:41.679)And that's a great question. That's why I've transitioned into this money coaching because I always see the problem and I'll give you a perfect example. Student named Ethan, 17 years old, he bought his first deal. He couldn't even sign on the docs because he wasn't an adult yet. He needed to 18 to sign on an LLC and close a contract. His dad had to buy the deal for him. Fast forward, he's 23 years old, probably owns 300 units, syndicated deals. How does that kid do it? He's only, he never went to high school.
Seth Bradley, Esq. (25:46.313)Mmm.
Gino (26:11.471)How can somebody at that age with no experience, no capital be able to do that? Then you take a gentleman who's in their 40s or a woman in their 40s, they've got a nice balance sheet, they've got seven figures net worth, and they can't close a deal. And I'm like, holy crap, how is that? It didn't make sense to me. I'm out here teaching the framework, and the first part of the answer to your question is, I'm not gonna tell you what vehicle anymore, because I don't specifically train just on real estate, but I would say is you need to learn the framework of the buy right.
the manage right and the finance right. There's little tweaks, right? Buying a multifamily, there's different buy right criteria as opposed to buying a self storage. Buying a multifamily, the management, the expense ratios and all that, it's a little different than it is in self storage. But the basic foundational principles are all the same. You need to buy it properly, you need to finance it, whether that's community, using seller finance notes, Fannie and Freddie, whatever that looks like, and then the manage portion. So I would say,
Those three pillars, you can buy a business, you can invest in any asset using that. But then let's peel that onion again. Once again, what happened with Ethan as opposed to this person in their 40s? Well, Ethan had a much better relationship with money because he had a father who was a doctor, who was entrepreneurial. All these messages that he'd heard from his dad growing up, the positivity of making money, going out there and you know what, son, I want you to go to college because I'm a doctor.
Seth Bradley, Esq. (27:13.536)Hmm.
Gino (27:38.383)But if you want to do this real estate thing, I am going to be there for you. And what does that do? All of a sudden the patterns and the behaviors and your beliefs around money are completely different. And I'm a product of that. It took me forever. I was 43 years old before I bought a deal with Jake. I mean, I was there. had a, I don't want to say terrible, but I had a challenging relationship with money. I had a lot of limiting beliefs. It takes money to make money. Money doesn't grow on trees. We've got to save for a rainy day.
Seth Bradley, Esq. (27:55.061)Yeah.
Gino (28:07.373)Be afraid, scarcity. And if you don't explore that, it's gonna hold you back because at some point there's gonna come a deal and you're gonna be like, wow, I finally got a deal, but where am gonna find the money? And how am gonna do it? And all these beliefs pop into your head and then you don't put the LOI in, you wait a week and then that deal goes off market and someone else bought it. That's really important, understanding that relationship that you have with money and fleshing out what are you doing wrong as well as what you're doing right.
Seth Bradley, Esq. (28:08.523)Yep.
Gino (28:35.831)What patterns do you have that are really empowering and which patterns are disempowering? Which patterns do you want to start adopting? And that is a longer conversation than just saying pick this strategy or that strategy. But that's really where we should start, Seth, if you're asking me what investment vehicle. Before the investment vehicle, let's figure out what's going on underneath the hood before you actually start putting the key in the ignition and driving that car away.
Seth Bradley, Esq. (28:59.884)Yeah, yeah, I love that man. I grew up in a blue collar family as well. I wasn't around entrepreneurship or buying real estate or any of sorts of things. My dad's a retired coal miner. My mom's a retired school teacher. So I didn't come from that. So it was like for me, it was like, the best job you can get, like trade your time for money. And that's just how it works. But at least try to get the best one you can. That's why I went to med school for a little bit, because that was in my mind was like, okay, what can I do? What's the best job I can get? It's going to be a doctor.
Gino (29:11.471)Seth Bradley, Esq. (29:28.1)And then I hated that got out of that and I was like, all right, I'm still in that mindset I was like, well, what do I what's the next best job? get I was like, all right, I guess I'll be a lawyer. So then I went to law school Turns out that worked out pretty well because I could leverage that skill set into the a lot of entrepreneurial things But I was still stuck in that mindset forever. I mean forever
Gino (29:41.849)Yes.
Gino (29:47.961)And what changed? What made you change that mindset? Was there any person, any group, any mentor, any event in your life?
Seth Bradley, Esq. (29:55.521)Yeah, I mean, it was pretty typical, man. I read the Purple Bible, Rich Dad Poor Dad, and that just kind of, you know, just changes, it's simple book, but it just changes your mindset a little bit. At the time, you know, Bigger Pockets is still big, but it was like really big, you know, around 2013. Like that was like the real estate thing. And then the chat forums and all those things on Bigger Pockets, and that was, my mind going. That's when I house hacked into a duplex with my wife and she was willing to do it.
Gino (30:19.971)What was the anger? What was the anger when you read that book? I'm sorry, I gave it away. What was the emotion? What was the emotion when you read that book? What was, when you read that book?
Seth Bradley, Esq. (30:26.118)Hahaha!
Yeah, it was like a thirst for freedom. don't know. think I'm like entrepreneurial to my core, but I don't think I knew it until that time. Like I don't think that I knew it because I didn't know it exists. Like I didn't know it was possible for me. And then as an attorney, I got around entrepreneurs as clients. I got around syndicators. I got around people that were buying big pieces of real estate. And I was like, man, how in the world?
Do they do that? And even then it was still a mystery. was like, even though I'm helping them close a deal, but I was like, well, that can never be me, right? Like, how can I get, they probably had a trust fund or something or, know, Donald Trump's her dad. don't know, don't know, something crazy, right? But then I realized, you know, it's not, right? It's not that hard. You just have to take a little bit of risk. You gotta change your mindset a little bit and we can all get into those sorts of things. But, you know, growing up the way that I did, it was a big mindset shift to get there.
Gino (31:20.451)Yes.
Gino (31:27.215)I'm gonna ask you another question, but my story is very similar to yours where I read the secrets of the millionaire mind and the emotion that I had was anger. I was just pissed and anger is actually really good unless it turns into resentment, right? Anger is a really good emotion if you can channel it. And I channeled it into listening to Jim Rohn, Zig Ziglar, and I channeled it into something positive, into saying, I'm gonna take responsibility. I'm gonna take some massive action. So if you could do that,
Seth Bradley, Esq. (31:35.453)Mm.
Seth Bradley, Esq. (31:47.99)yeah. Yep.
Gino (31:56.131)That's great, but then what happens is if people get that anger and they get that resentment, that's not a good way to lead the anger. Anger can be really good. If you're moving away from pain, that's really good. Then you ultimately want to move towards pleasure. But when you say you're entrepreneurial to your core, what happens is as we're younger, we either adopt our parents' identities, beliefs, patterns, or sometimes we move away from them. We do the exact opposite of what they did. And I'm wondering that, did you see your dad's job as like,
Seth Bradley, Esq. (31:59.949)Mm-hmm.
Seth Bradley, Esq. (32:22.401)Mm-hmm.
Gino (32:24.855)I don't want to be stuck in a coal mine. I want to have opportunity. I want to make money. And you saw med school, lot of money, and that's where you jumped. Do you think that affected your thought process?
Seth Bradley, Esq. (32:36.364)100%, 100 % and he even told me, he's like, you don't wanna do this. Like you do not wanna be doing this. So you've gotta do better for yourself than this. But that pathway was still kind of the W-2 mindset, trading time for money, not necessarily entrepreneurship, because my parents didn't know that. they weren't entrepreneurs, so they weren't able to give me those ideas at a young age because they didn't have them. So they're not able to pass those on.
Gino (33:02.127)And that's why it's important because if you're listening to this right now, you may be making those decisions based upon unconscious behaviors or beliefs or things that your parents were telling you like my mom would tell me, Gino, don't take risk. Stay small. You know, we're immigrants. We're little fish. That's why I had one restaurant for 20 years. How do you explain having 500 apartment units in less than five years with Jake? It really comes down to, I shattered those beliefs.
and those patterns that were I don't want to say pushed on me by my mom but when you hear these things for years and years and years that's what you adopt and I finally got sick and tired of it and I did the opposite and then from all having all these mentors and having these different things that you're listening to it's all of a sudden you're creating your own patterns and your own beliefs but if you don't at take that step or become unconscious of it I was just fortunate I became a life coach I started noticing these things but that's the difference I think somebody when they're
doing really well with money, understanding what it is and understanding how the past can help you but it can also hinder you. And you went right into med school. So anybody listening to this, just question yourself, why are you getting into the ventures you're getting? Why do you need a billion dollars in real estate? Why are you even getting into real estate? Are you getting into it because your parents did it? Are you getting into it because you hate your job and you just want to do this to make more money? That usually isn't the good result of why you're doing it. Just start questioning.
Seth Bradley, Esq. (34:07.34)Mm-hmm.
Gino (34:27.587)the things that you're doing, especially around making decisions with money.
Seth Bradley, Esq. (34:31.724)Yeah, I mean, we've gone full circle, man. You've got to pause and you got to think. Have some deep thoughts and say like, what are your goals and why? Like, why are those your goals? You're not just making up a number. Are you saying, want to own a billion dollars in real estate because you actually do? Or is it just kind of like a number? You're like, yeah, a billion dollars real estate. Cool, I'm going to own that. I want to own that. Great. But why? Like, are you going to be able to...
Sacrifice what you need to sacrifice to get there? Are you gonna be happy at the end of your lifetime and say, I enjoyed that and that was worthwhile? I don't know, maybe, it depends on what you had to do to get there. So you gotta stop and before you kinda go down a lot of these ventures, think about what it is that you want, the type of life that you wanna live, the time you wanna spend with your family. You've gotta have some introspection into that sort of thing.
Gino (35:24.855)Let's give them a little framework on how they can do that because that's important what you said. My mentor taught me a word or a phrase called values based decision making. Every decision that you make is based on your values, not Gino's values, not Seth's values. And you have to understand that values are created early on in life and they're just carried through. I was eight years old going to the restaurant, working with my dad. Values of hard work.
I would say entrepreneurship a little bit, but really being loyal, showing up, being a good provider, loving my family, growing. These are all things that I learned early on and they've come into my adulthood. So now when you're making a decision, whether it's taking a job, whether it's living in a different area, whether it's investing in an asset, does that align with what you're doing? I had the opportunity for a company to invest, partner up with us and market on our website.
Seth Bradley, Esq. (35:56.246)Mm-hmm.
Gino (36:22.881)On our podcast, it's a cannabis company. Money's great. It just doesn't align with my values. I cannot align with something like that. I've got six kids. I want to practice my faith. I'm not saying it's good or bad for anybody else. It just doesn't fit with me. So that's how you make those decisions. And once you're clear about that, you can make decisions so easy. Just like when you have a buy box. I'm buying a multifamily. 20 to 200 units. $50,000 median income. Two bedroom, one and a half bath town homes.
I like garages. If you've got washer and dryers, great. Brick exterior, anything after the 1980s, really clear. That's my buy right. That would be my values that I'm looking for in a multifamily asset. Translate that into anything. And I'll give you one last example. When I was here back in 2017, I had just moved to Florida and I was doing really well with multifamily, but I got the itch. I'm like, I'm in Florida. This vacation rental thing's going great. I met a guy down here that I really liked. He introduced me to these two other
I would call them jabronis for lack of a better word. I just didn't have the right feel Seth, but the model was good. We're buying these vacation homes. This guy was a builder and he was a property manager and we're getting them good basis, but it didn't feel right. Now looking back at it, it didn't align with my values. My values and their values did not align and that's why ultimately, fortunately, I only lost $30,000 on this venture. It could have lost more, but to me, it didn't align with the values.
Seth Bradley, Esq. (37:24.737)Hahaha.
Gino (37:51.853)the long-termism, the way the partnership, the integrity, the openness, the commitment, the expectation of outcomes, all of that didn't align and I didn't know and I could have blamed the partners but ultimately I need to blame myself and take responsibility because it wasn't aligned with my values. So just have an open mind. If you want to set goals, set goals with your values in mind that in case you value having time with the family.
being able to jump on podcasts, being able to take two weeks off a year, are you gonna be able to do that if you wanna hit a billion dollars in real estate? Now I'm not saying that you can't, but they may not be congruent, because if you ultimately do hit a billion dollars in real estate, you may be miserable as hell because all that stuff that's really important to you, singing opera, going to shoot guns, going to fish, going to hang out with the kids on the weekends, that may go by the wayside. So I'm not saying the goal is good or not, just make sure that it aligns
with your values.
Seth Bradley, Esq. (38:51.149)100 % man, I love that, I love that. What are a couple of your core values? What is the primary couple of core values that you just live by?
Gino (39:03.673)Well, for Jake and Gino and our property management company, it's people first, unwavering ethics, extreme ownership, make it happen, and growth mindset. That's why when I'm not growing, I'm annoyed. When I'm not learning something or I'm not part of something, it's bothering because I'm in transition right now, right? I'm sitting here, Jake's doing the property management, I'm still doing a little bit of the education.
but I need to be part of something and I understand that. So if there's an opportunity, if there's an opportunity for me to learn and to enjoy and have fun, that's what I love. And I think to me, people first is important. I always thought with those small businesses that I was always a part of, I wanted to have really great people. I didn't like the job at the restaurant. So ultimately I'm saying to myself, I want employees to come into work or be on a podcast with me or have a conversation or be part of the company where they're empowered, they're enjoying to be there.
That's what I want. That's why for me, People First is such an important core values. I mean, obviously, make it happen. I mean, that sounds like a little marketing thing, but man, I want to live by that because I've got a bunch of kids. I've got an amazing wife. She seems like she's always trying to make it happen, and she does. I want to make sure that I end up to my end of the bargain and do it well. And when you have a business partner like Jake, who's just incredible, he's an incredible dude. The guy never...
Complains he goes on vacation. He takes care of business. There's never any excuse So for him to be able to do that, I don't want to be the slack or anything I like once again is the responsibility. It's you know, the control it's part of my values I want to be part of that team
Seth Bradley, Esq. (40:35.852)You
Seth Bradley, Esq. (40:42.859)Yeah, yeah, those are some really good ones, man, really good. We kind of touched on this a little bit, but I'd love to hear this, because there could have been a lot of different ways you could have gone, but in a parallel universe, tell me about a different version of you. For example, for myself, told you I went to medical school, I could have easily finished that, went down that pathway, and that would have looked a lot different than where I'm sitting today. Was there a time in your life where there was that kind of one...
turning point and you could have went down a different pathway, not a bad way, but just different. What's a different version?
Gino (41:16.911)When I was younger and I graduated college in 92, there were no jobs. Job market sucked. I went to work for AIG. And I think the job market had been better and I had found the job that I liked. I actually wanted to work for a company called Value Line, which did stocks. They're probably still in business, but they're a shell of what they were. You look at these reports, they're six months old, but I love the stock market. I loved analyzing. If I had not had a tough time finding a job that I liked, I probably would not have bought the restaurant.
I would have stayed down on Wall Street, would have made a ton of money, probably wouldn't have been happy, and then I never would have met my wife, and then everything would have completely changed from there. So I think God closed that door of working down in Manhattan and said, you know what, you've gotta struggle for a few years, you've gotta buy a restaurant, you're gonna like it, it's gonna be difficult, but that's the door. And I would have been a completely different person, in a completely different venture, living a completely different life.
Seth Bradley, Esq. (41:55.33)Yeah.
Seth Bradley, Esq. (42:08.225)Yeah.
Yeah, it's crazy sometimes you can look back and there's just, there's a few things that easily could have gone the other way. And you probably would have preferred it at the time to go that way. And you're like, man, where would I have been? Where would I have been? Crazy, crazy how life works. Yeah. Yeah. All right, brother. I don't ask everybody this, but I think you'll enjoy this one. But when you're gone, what's one thing that you want people to remember you by?
Gino (42:13.133)I know, it is.
Gino (42:20.835)Yes. That's a great question. Great question. Thanks for that.
Gino (42:35.695)Well, I mean, it's interesting. You obviously saw what happened last week with Charlie Kirk. Don't know you're a friend or not, or if you know him or not. I'm not going to say I was a Rabbit fan. I really enjoyed him. But what I like most about him is the way that people are really talking about him. Like his wife said that, you know, he never raised his voice.
Seth Bradley, Esq. (42:54.477)Mm-hmm.
Gino (43:02.159)And I have to say that, you know, when I'm not here, I want my wife to be able to say that about me. I want my kids to say, dad, would take a bullet for me. I want the people that I worked with, I want my investors, I want my friends and my family to say, that dude was really cool. He lived by his values. He helped lot of people out and he left the world a better place. Now you may agree or disagree with his policies, what he talked about, but you saw what he did with a lot of young people. He helped a lot of people out that were struggling.
Seth Bradley, Esq. (43:30.327)Yeah.
Gino (43:31.833)Forget about his politics. I'm just saying there's a lot of people out there that he empowered, that he made actually become thinkers. And I think I'd like to leave that kind of legacy myself where I can help me and my wife are talking about this. Change the world one family at a time. Because I think the family is just the core of what this country should be all about. Because if you have a healthy family unit, then that family unit can grow and that family unit can help other family units. Then all of a sudden...
We don't really need to rely on other people as much. We can rely on our families.
Seth Bradley, Esq. (44:04.619)Yeah, yeah, well you're doing it man. You're doing it brother. Appreciate you. Where can our listeners find out more about you?
Gino (44:11.577)just go to jacongino.com and if you want to learn about the family company it's barbarobaro360.com.
Seth Bradley, Esq. (44:20.077)Alright brother, thanks again, really appreciate you coming on the show man, always a pleasure talking to you.
Gino (44:25.348)Thanks, Seth.

FBF 04 | Flash Back Friday | Escape the Tax Trap: Build Global Wealth with Second Residencies with Mikkel Thorup

In this episode of the Passive Income Attorney Podcast, host Seth Bradley interviews Mikkel Thorup, founder of Expat Money. Seth Bradley and Mikkel Thorup discuss Mikkel Thorup’s unique journey from a challenging childhood to becoming a successful consultant for expatriates. Mikkel Thorup shares the benefits of living abroad, the importance of financial freedom, and various strategies for obtaining second residencies and mitigating tax liabilities.
The conversation explores the emotional aspects of relocating, the rising interest in expatriation, and practical steps individuals can take to create a backup plan for their families. Seth Bradley and Mikkel Thorup emphasize the importance of personal responsibility in achieving financial independence and living a fulfilling, intentional life.
Links to watch and subscribe:
https://www.youtube.com/watch?v=J9zyPxUOrnI
Bullet Point Highlights:
Mikkel Thorup’s journey highlights the importance of resilience and adaptability.
Expatriation offers opportunities for freedom and adventure.
High net worth individuals often seek second residencies for tax benefits.
The emotional aspect of relocating is as important as the financial.
Understanding the difference between expats and immigrants is crucial.
Investing in foreign real estate can provide residency benefits.
Tax implications for U.S. citizens abroad require careful planning.
Personal responsibility is key to achieving financial independence.
Mikkel emphasizes the need for a backup plan in uncertain times.
Exploring new cultures can lead to personal growth and fulfillment.
Transcript:
Seth Bradley (00:00.206)
Hey y'all Seth Bradley here. Thank you so much for tuning in and spending your valuable time learning with us. Absolutely appreciate each and every one of you. I've got a small ask. If you'd please just take a few seconds and leave us a rating and review on Apple podcasts or wherever you're listening from. It goes a long way in landing the best new guests for our show. That's it. Thanks again. Let's go.
 
This is the Passive Income Attorney Podcast, where you'll discover the secrets and strategies of the ultra wealthy on how they build streams of passive income to give them the freedom we all want. Attorney Seth Bradley will help you end the cycle of trading your time for money so you can make money while you sleep. Start living the good life on your own terms. Now, here's your host, Seth Bradley.
 
Ladies and gentlemen, welcome to the Passive Income Attorney podcast, your favorite place for learning about the world of alternative passive investing. And today's show is spectacular. We have an incredible guest, Mikkel Thorpe. He's the founder and CEO of Expat Money, a private consulting firm started in 2017 that helps private clients to legally mitigate tax liabilities, obtain a second residency in citizenship.
 
and assemble a portfolio of foreign investments, including international real estate, timber plantations, agricultural land, and other hard money, tangible assets. He's really speaking my language there. He's also the number one bestselling author of the definitive expat book, Expat Secrets, and he's the host of the popular weekly podcast, The Expat Money Show. All right, folks, without further ado, let's jump in. Michele, what's going on, brother? Welcome to the show.
 
Very happy to be here, Seth. think this is going to be a fun conversation and an amazing program you have. So I'm very happy to be here and hopefully share a little bit about my experience and hopefully some insights for your audience.
 
Seth Bradley (02:06.222)
Thank you, appreciate that. Yeah, this is gonna be very interesting, really unique background and really unique how you help people out. So excited to get started with all that. But first, let's jump a little bit into your background, your backstory, take it back as far as you'd like, man.
 
Sure, absolutely. For my story, I do have to go quite far back in time, but I will try to make it as concise as possible. So Seth, what happened was when I was a child, I was actually diagnosed with a learning disability. And what happened was one day a teacher pulled me out of class and sat me down in a little room and said, Mikel, something doesn't work quite right in your brain. And what we want to do is we want to send you to a special school, special school for special boys.
 
So that's what I did every day for three years. I got on a little white bus and I took a little white bus across town and I went to this quote unquote special school. Now the only problem Seth was it was actually not a special school. It was a regular school with a special class. So you can probably imagine what happened. I got in tons of fights. I got picked on, I got bullied and all around a pretty crummy experience. Now this is no woe is me, poor Mikkel victim, victim type of story. Certainly not. mean,
 
I got hit and I hit back. And if I could, twice as hard. Like I would never claim otherwise. Like I absolutely went for it. But I went to this quote unquote special school for three years. And I thought, and I hated the experience all around. But after three years, I got to go back to my neighborhood school. And I was so excited, Seth. I was so stoked. You know, I thought, wow, all my friends will...
 
be missing me and looking forward to see me. And you can probably imagine what happened. Day one of school or the first week of school, I show up and everybody starts gossiping and whispering. And, I remember Mikael, he went to some retard school. Thanks, guys. Very politically correct. You know how kids can be. They're just such gentle souls. But yeah, it left a very bad taste in my mouth for public education.
 
Mikkel Thorup (04:15.318)
So I stopped going to school. And then when I stopped going to school, I would begin to fail all my classes and fail all my things. And they'd ship me off to summer school and I would fail that. long story short, I stopped going to school when I was 12 years old and I officially dropped out when I was 15. And when I dropped out, a couple of years after that, I started traveling and I started traveling internationally.
 
And I started meeting all these incredible people who were living their lives totally different than anything I had ever seen in Southwestern Ontario. I'm Canadian, I was born close to Toronto. And I started to meet all these amazing people and they were like learning things differently and they were building their lives differently. And I felt like, wow, these are my people, these are my peeps. And I decided that I wanted to explore the world.
 
And fast forward, that's what I've done for the last 23 years straight. I have been traveling the world. I've visited 110 countries. I've lived in nine different countries. I've circumnavigated the globe over 400 times. And throughout this process, I have learned a lot about how the international markets work. And I have been very fortunate to be, to be a mentee, to mentor under
 
different attorneys and accountants and work directly with some of the smartest people in the world and really have hands-on knowledge about my work. And really what I do is I help relocate people overseas and we deal with all of their tax issues and their immigration issues and their legal issues. And as you can tell from my story, I myself am not an attorney. I have full-time attorneys who work for me. I have attorneys that I partner with to do different types of work.
 
And I have attorneys who are clients of mine who actually hire me to do a lot of the work. So it's a very different type of thing than the traditional education. But I think that what you will see from today's conversation, although I don't have a university background or traditional education, it doesn't mean that I'm not educated about these things at all.
 
Seth Bradley (06:27.466)
Sure. What an incredible story, man. First comment is kids are ruthless, right? They don't care. Kids are ruthless. I grew up in West Virginia. I don't look like I grew up in West Virginia. So that was an interesting few years there in elementary school and middle school before you kind of start figuring things out. Was in quite a few fights myself. So we share that similar background.
 
So you understand what I'm talking about for sure.
 
Absolutely. then having a bad taste in your mouth from public education for sure. You know, my gripe is a little bit different than yours. My gripe is financial education. We don't get any of that growing up. you know, they teach you maybe well, back in my day, they used to teach you how to write a check. People don't really write checks anymore. And that was about the extent of it. And then we've to go out and get that all on our own. But
 
Yeah, and traveling as well. That's incredible that you got to travel that early in your life. I had a similar awakening when I studied abroad in law school in Spain, and I hadn't traveled outside of North America, really. And then when I traveled abroad and studied in Europe, I was like, wow, this is incredible. All these different people, all these different cultures are so close together and everybody's got a different way of doing things and it's still successful. There's more than one way to do it.
 
Typically when you grow up in the US, you think there's one way to do it. It's the way the US does it. there's other ways to be successful and to have a culture work. So it's mind blowing. And like you said, you met people that were traveling. I did the same thing and as usual, Australians. But you see them all, like you're like, what are you doing? They're like, well, we're just traveling the world. What do mean you're traveling the world? This is my first time out of North America and they've been traveling for months or years and they just keep moving and moving and experiencing the world.
 
Seth Bradley (08:18.926)
It was certainly an awakening experience for me. It sounds like you had the same experience.
 
That's amazing. Absolutely. That's so cool that you got a chance to study in Spain and go to school over there. What a gorgeous country. mean, it's just so beautiful over there.
 
Yeah, yeah, absolutely. So let's kind of dive into this business that you have here. mean, what, know, who is your, who is your avatar? Who's your ideal client? Like who, who can use your help?
 
Good question. So I mainly work with high net worth individuals. So I'm looking at mostly helping families. I'm a family man myself. I got two gorgeous kids. I have a wife who I love and adore. A lot of people who come to me have a family. They've built up a business, whether that be a brick and mortar business, a practice, a professional practice, or even some type of online thing. And what they're doing is looking at restructuring the business overseas. The business...
 
themselves and their investments, their wealth. So most of my clients are Americans and Canadians. I do have some New Zealanders and Australians and some Europeans, but the majority of my people are North Americans. And we go through the whole gamut. I run them through four major tracks of everything that we're doing. So it is the immigration. So building out a matrix of the different countries that they could live in.
 
Mikkel Thorup (09:42.37)
you know, and then comparing them. And this is from all fronts, you know, the tax situation, the lifestyle, the family where the kids are gonna go to school, all of these types of things. So that's kind of track one is the immigration where they're actually gonna be. Then is the restructuring. So if we have to restructure their businesses using LLCs, IBCs, trusts, foundations, essays, whatever structure.
 
Then it's the tax situation. So tax situation of their home country, whether that be the US or Canada, then the tax situation of the country that we're moving to, and then the tax obligations of the country that we're restructuring things in. So making sure that we're staying legal and compliant on all of these. And then we're dealing with their investments. So that might be the real estate or it might be precious metals or just anything from the investment side of things.
 
So as I said, I'm not a lawyer, I'm not an accountant. You can think of me as a coach or a consultant. What I do is I help liaise the whole thing. I help create the plan. And then I outsource, you could say a lot of the legal work to either my own staff or partner law firms around the world. And it's a pretty intense program. It's a 12 months worth of consulting. My fees are...
 
are very high. don't, this is not a race to the bottom. This is not Walmart by any means. So, but add to all of that, not just the financial advice and analytical type of insights that I'm able to give. Also, what I'm able to do is help with a lot of the families. So the emotional attachment and the emotional situation of leaving your home country, of saying goodbye to friends and families.
 
of relocating the kids and dealing with the kids' issues, making sure that they adapt in the new country that they're in. So there's a whole bunch that goes into my work. I always thought at the beginning it was very much an analytical type of thing. And after years of doing this, I actually realized it's a very heart thing. There's a lot of heart that has to go in there, a lot of compassion and a lot of understanding and listening and...
 
Mikkel Thorup (11:54.668)
a different piece of the puzzle than what I actually expected my work to be like at the very beginning, if that makes sense.
 
Yeah, that makes sense. And what would actually make a person want to do this? Why does someone want to, you know, upheave their family and go to a different country rather than just visiting? I mean, is it like a sense of adventure? Is it because there are these major tax advantages? Like, what is it exactly that makes them want to go?
 
So this is a good question. Now, for expats in general, and maybe it's useful to make sure we have the lexicon correct here. So an immigrant would be someone who goes to a new country, leaves everything behind, they set up in the new country, and they plan on being there forever. So we might think of someone who comes from the Middle East or comes from Eastern Europe or Asia or something like that to the US or Canada. They're an immigrant, they're now American, they're going to spend their entire lives there.
 
An expat is usually pretty different. An expat is gonna go to a new country for either work or for opportunity, but they're different than an immigrant in that they most likely will not stay in that country for the rest of their life. So they'll either return back to their home country or move on to another country. So I consider myself an expat. I've been living overseas for 23 years. As I said, nine different countries.
 
I've moved to different countries, but I always knew that I would move on to another country. So I'm in Panama right now. I've been here for about four years and I love Panama and it's a great place, but I don't know that I'll be here for the next 50 years. mean, I also have residencies and citizenships in other places. So kind of going back to your original question, a lot of people will become expats because either mom got a new job or dad got a new job. You know, that's kind of...
 
Mikkel Thorup (13:41.666)
for work reasons, especially like I lived in Abu Dhabi for eight years next to Dubai in the UAE. And a lot of people who came over there worked in the oil and gas industry, engineers and executives and people like this who would earn four times the salary working there than they would in their home country. But there's another set of expats who also like to move overseas because they want a bit more freedom in their life. They want more adventure like you mentioned.
 
You know, if somebody doesn't agree with a lot of the divisiveness which is happening in North America right now, you know, I'm not here to come on your program and talk a left, right, like honestly, I don't care. From my perspective, I'm freedom minded. That's everything is freedom. It's not a left, right type of thing. It's I want freedom in my life and the majority of my clients, it is a absolute very big driver for a lot of these changes is to have more freedom. So that's kind of a, you know,
 
I broad answer different types of people that I work with, but everybody has their own reason, I suppose, at the end of the day for going through this.
 
Yeah, yeah, that makes sense. Are you seeing more of that or have you seen more of that search for freedom lately, let's say, with all the divisiveness that there has been? And again, we don't want to dive into politics, but there has been quite a bit of divisiveness in the U.S. specifically over the last few years. You know, what are you seeing more of an uptick of that when people are searching for that?
 
100%. My business has probably maybe not 10x'd, but not far off over the last three years. I have a lot of people who are very concerned what's happening in their home countries, concerned what is happening in the world, and really see the work that I do of being an expat and having a plan B and a backup really as political insurance. So that's how a lot of people think of it.
 
Mikkel Thorup (15:36.28)
Some people might stay in Canada or the United States, still have their normal business, but at the same time, want to have a residency or another passport, an offshore bank account or a corporate structure overseas, just in case things don't go that the way, you know, the direction that we want them to, that they're still kind of, you know, protected. I think that it's important for, to people to hedge their bets and to look at all sides of this and understand that the world is not always sunshine and rainbows.
 
And we have responsibility to our families to take care of them. And I think it's only prudent at this point, but definitely to your original question, yes, we have seen a massive uptick in new people being interested in this.
 
Yeah, I can see that. And let's dive into that, that second residency sort of thing. And also just generally that backup plan, that safety plan, because some folks are concerned about the way that things are going in their particular home country. What does that look like? mean, from a, they come to you, they hear you on this podcast and they say, cause a lot of folks might do that. They might be, Hey, we were high net worth individual. We're concerned about what's going on with the economy and with politics in the U S.
 
We want to have a backup plan. What does that look like?
 
Yeah, absolutely. So it's definitely important that you understand more about me and the work that I do. mean, you guys can learn and read about my stuff at expatmoney.com. But for the plan itself, usually, as I was saying before, we work through four different tracks. So let's take one of the easy ones, having a second residency. So second residency is the legal right to live and work in another country. You might think with your...
 
Mikkel Thorup (17:20.245)
American or Canadian passport that you can just jump on an airplane and go to another country and set up shop. And you can probably go to most countries as a tourist, but after 30 days or 60 days or 90 days or whatever it might be, you got to leave. I mean, you have, you would be illegal in the country at some point. And even when you go there, you don't have a legal right to live in that country or work in that country or generate funds or anything like that.
 
So what we wanna do is get you that residency. Now there's many different types of residencies in the world. You told us earlier in our conversation about how you had a student visa and you went to university in Spain. Okay, that is a type of visa, a type of residency. Another one would be a work permit, know, domestic help. Like at the moment we're sponsoring our nanny for our kids.
 
She's Colombian, we're doing the immigration process, we're getting her a work permit and she's gonna stay and live with us and take care of our kids. Those are a couple of examples of residencies. I don't do those types of residencies. What I do more is investor residencies. So these are for high net worth individuals. You make an investment in the country and in return, they give you the opportunity to live and work in that country. And now why is this is very different?
 
Say for a student visa, when you went to school, you had your certain amount of terms that you would have went a couple of semesters. And then when that is over, you have to leave. With a work permit to go over, you have that job and the nanny has a job with us. And if she quits or she loses her job, her visa is terminated. I don't like things like that. I like permanent visas, permanent residency visa. So as long as you keep up with the obligations that are set by the immigration department,
 
You get to keep that visa for ever. So I can give you a concrete example. I live here in Panama. There's two major residency programs here from the investor side. There's what's called the friendly nations visa, which is open to anyone from 51 different countries around the world. Basically countries that have strong economic ties with Panama and it's a $200,000 real estate investment. There's a couple other ways to do it, but the best way is certainly the real estate. So.
 
Mikkel Thorup (19:37.644)
You make a, you purchase a property, you get the title deed, you know, a very strong legal document, you own the property. Now you apply for your residency. You go through what's called a two-year provisional visa. After the two years, you apply for your permanent residency. Now you can have your permanent residency forever for the next 50 years. As long as, and this is the only caveat, as long as you visit the country one day every two years, your visa is active. That is a
 
very small amount of time to keep your visa active. So what usually happens is my clients will come down for a long weekend. I take them out for dinner. We drink a bottle of red wine. A couple of days later, they go home. Easy peasy, not really a huge time commitment or financial commitment. And I should also note Panama's a gorgeous country. mean, amazing beaches on the Caribbean, beaches on the Pacific. There's mountains.
 
It's tropical weather, it's a safe country, organic food. It's really a fantastic place to spend time. So that's the Friendly Nations Visa, $200,000 real estate, two-year temporary, then permanent residency after that. There's a new visa that came under this administration, the current administration here in Panama, which is called the Qualified Investor Visa. It's a $300,000 real estate investment. However, instead of the two years of provisional,
 
You go straight to permanent residency. Everything else is the same. One day every two years, gorgeous country, et cetera, et cetera. And a lot of people like Panama as a plan B location and to have it as a second residency. Because Panama is a territorial tax system. So there's no tax inside the country if it's deemed foreign source income. So you can think of you have a...
 
You have a law practice and you consult with your clients through zoom and your clients are around the world. Great. There is zero tax for you here in Panama. You have an online business, you sell widgets. There's no tax for you here in Panama. You trade stocks or you take real estate income or you have crypto or anything like that. Capital gains, dividend distributions, anything like that. There's no tax here in Panama. So.
 
Mikkel Thorup (21:55.374)
Panama is a great place and there's a couple of great solutions. Now we can get into the obligations if you're an American citizen based on worldwide taxation. You know that's a separate piece and we do deal with that. But I think that that's probably a good explanation of the residencies the program the country and the advantages.
 
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Mikkel Thorup (23:51.723)
you
 
Yeah, I love that. there other, so are other countries similar in that way? Is there just kind of a financial barrier? I need to invest X dollars and able to get that, to be able to get that.
 
Yes. there is, okay. So pretty much every country in the world, if you take out, okay, let's put it this way. Every free country in the world, which the majority of the world would be considered free countries, there is some type of an immigration plan to enter that country. Now they're going to have it in two different fronts. It's either going to be a lot of money and very little time or a lot of time and very little money. know, usually because my people.
 
Yeah, exactly. So it's a, it's a give and take like anything in the world. you know, I can migrate you to a place, but if you have to spend more than 183 days in that country, then that's the bright line test. Now you're a tax resident of there. So maybe there's not an investment amount, but if you end up spending, I don't know, a hundred thousand dollars on taxation, it's not exactly a free visa. You know what I mean?
 
So I like to work with a lot of them where you make the investment on the front end, the time requirement on the back end is not too much. And I specialize in the tax-free type of zones. So there's about 40, 42 countries that kind of qualify under this umbrella, know, politically stable, favorable tax situation and favorable legal stage and asset protection laws in your favor. It's about 40 or 42 countries. That's what I focus on. I don't...
 
Mikkel Thorup (25:29.078)
I don't relocate people to Germany with a 60 % tax rate or Sweden or Finland or something like this with huge amounts of taxation. It's more Caribbean countries, Latin America, certain European countries, Middle East, GCC type of countries. But definitely there's more than just Panama. It's big world out there for sure.
 
Yeah, what are your top three? Is Panama up there?
 
Panama is definitely up here. I really like Panama for the reasons that I mentioned before. I also really like Uruguay. I've taken groups of clients down to Uruguay. I actually have a small group there right now. Uruguay is an amazing opportunity because although it is not a tax-free country, what they have for foreigners entering into the country, they have a 10-year tax holiday. So there's no tax on foreign sourced income for the 10 years. But it's actually the year you arrive,
 
plus 10 full years. So it's kind of a 10 plus one. So almost 11 full years of tax-free in the country, which is very nice. And Uruguay is not a developing country. It's not a third world country. It is a fully set up country. All the infrastructure, very well educated people. English is prevalent. Amazing opportunities there. Food independent, water independent. Some of the best Seth, some of the best meat you will ever eat in your entire life.
 
If you like beef, is unbelievable. It's like, it's fantastic. You have the ocean and then like a town and then behind that is rolling green hills and pastures and stuff. It's, so wild to be down there, but it's really, really gorgeous. So I definitely put Uruguay on, on the top there. And then there's different countries that I like for, other reasons. you know, I do a lot of work in Columbia. do work in Brazil. do work in, Portugal and Cyprus and.
 
Mikkel Thorup (27:23.596)
lots of countries around.
 
Yeah, incredible. I'll have to check out Uruguay. Haven't been. I'll do some research now. Since this shows a lot about investing as well, what are some of the countries that you see that are in that top list but are also great investments? Maybe investing in that country is just as big of a benefit as getting that second citizenship.
 
Sure. So I don't look at investments anymore, just the investment itself. I try to pair things. So I want to make sure that I get an investment and on the back end, I'm getting the visa or eventually the citizenship, you know, because there are ways that when you spend enough time in the country, you go through a process called naturalization where you can actually become a citizen of that country. Now I'm doing a citizenship by investment program right now and
 
It'll cost me well over $200,000 just as a donation to a government, and I'm getting a citizenship in return. For me, that is money very well spent. But if you think about a country where you can make a real estate investment and you get that for free on the back end, that's pretty spectacular. So for example, in Turkey right now, you can do a real estate investment anywhere in the country. It doesn't have to be a government approved project.
 
It can be a condo, can be land, can be commercial real estate, anything like that. And they will give you citizenship on the back end. It has to be at least $400,000 and the investment can't have been previously owned by someone who's doing the citizenship by investment. It has to come from a Turkish citizen, but it's definitely an option. And we're seeing okay returns over there. I mean, is this not gonna make you a million dollars tomorrow, but it's...
 
Mikkel Thorup (29:10.584)
you know, say 5%, 6 % cash on cash return and you get a citizenship on the backend. mean, better than a kick in the teeth, I'll tell you. you know, there's a lot less, you know, sure programs out there. So I like things like this that I can kind of double up and do a value add on it. We mentioned Uruguay, okay. To enter into Uruguay, there is not an investment to get residency. But if you don't do an investment, then the time on ground is about six months to get your residency.
 
But if you purchase farmland or a condo or something like that, they take that into consideration when doing your immigration. And they see that as an economic tie as one of your strong ties. So can either have time in the country, which is a strong tie or an economic tie. So I've seen it as low as about a month of being in the country to get your immigration there with an investment. I've actually seen it less than that, but I don't want to go on record with some of these things because I can't promise it.
 
But those are some really good options how making an investment, which should be a sound financial decision, will also give you a bit of a bonus. I don't deal with stock markets. I don't deal much with hedge funds or certainly not mutual funds or these types of financial accounts. I'm very much a tangible assets kind of guy, agricultural land, timber, real estate.
 
precious metals, things I can touch and smell and taste and, you know, I like that kind of stuff.
 
Yeah. that's personally speaking, that's appealing to me. It's like if you can present to me a great investment or at least a really good investment, and then you get that secondary benefit to it. I mean, that's a win-win situation where, you you're making a sound investment, especially in like real estate or precious metals or something like that. And then you get that, you know, that added citizenship benefit or visa benefit.
 
Seth Bradley (31:11.852)
You know, it's a win-win. So you're accomplishing two things at the same time.
 
Exactly, exactly. And we see this with a number of different countries. And, you know, it's really fantastic when you see that governments actually have to compete for us. We're entrepreneurs, we're business owners, we're professionals. We bring a lot to the table. And really, that's why these programs exist. What they want to do, what governments want to do, is bring in productive members of society, people who are going to build something and create something and add to the overall economic prosperity of the country.
 
So this is kind of their way to do that. And in reward, you can have the residencies, can have tax benefits, you can have lot of safety and stability. And it's just, I don't know, it's fun. I like enjoying like this. I like investing like this. I think it's really, really interesting. It scratches a certain itch for me. And you gotta do a little extra paperwork and you gotta...
 
You got to figure things out. It's certainly not a trial and error type of thing, but definitely that's why people work with me because I've been doing this for 23 years. I have the full network. I've helped hundreds of clients go through it. We transformed their entire lives. And at the end, you watch someone who's stressed out or hangs anxiety about what's happening in the world. And we take them through all of this and they start the conversation with their shoulders like way up like this. then...
 
You know, as the weeks go by, everything kind of drops and, you know, they feel good about it and they know that they're taking care of their family. And it's amazing. I love this type of investing and I love this type of work.
 
Seth Bradley (32:56.216)
Cool, very cool. Are there any kind of tax benefits that US citizens could take advantage of by having a second residency in whatever country it is?
 
So with the U.S. tax situation, you have to understand that there's only two countries in the world that tax based on citizenship. So as a Canadian citizen, I am taxed on my residency. So if I live in Canada, I pay taxes there on my worldwide income. I haven't been a Canadian tax resident in many, many years. I did all my separation. Now I don't live there. I have no tax obligations back to Canada. With the U.S., it's only one of two countries that tax on residency and citizenship.
 
The other country is Eritrea in North Africa. It is known for blatant human rights violations and is a very abusive system. So I will let you take ties, comparisons from that, whatever you will. But what happens is even if you move overseas, so let's say Seth, you relocate overseas and you never step foot in the United States again for the rest of your life. You don't even look in that direction.
 
You still have a legal obligation to pay taxes, to file and pay taxes on your worldwide income, no matter what. Now saying that there are a couple of tools in the toolbox, which will help us to legally reduce that. So the main one or the first tool that I would always reach for in the toolbox is called the foreign earned income exclusion, FEIE. And what this does is allow you to exclude the first $120,000 of
 
earned income and you're not paying tax on that. Okay. Now there are some caveats. Okay. So as I said, you need to, you need to live in another country. This is not something you can claim and still live in Florida or New York or Los Angeles or something. You actually have to physically live somewhere else. So there's two tests. There's one that's called the physical presence test. And the second one is called the bona fide residency test. We always do the physical presence test first.
 
Mikkel Thorup (35:01.292)
and it is 330 days in a foreign country. So this means that if you are jet setting around the world and you're flying from one country to another, it doesn't count. If you are in international waters and you got a big, beautiful yacht and you're going through these international waters, it doesn't count. What counts is your feet physically on the ground inside of a foreign country for a minimum of 330 days. Okay? So that is the physical presence test. Now...
 
Year two and going forwards, we do what's called the bonafide residency test. So physical presence test is subjective. I'm sorry, it's objective. Okay. It is mathematics. The substantial presence test is, or the bonafide residency test is subjective. So what we're going to be doing is looking at your overall ties to the country. So do you have a residency there? If you like to exercise, do you go to the gym? Do you have a library card? If you're religious, do you go to synagogue or mosque?
 
or the church, the cathedral, you know, we want to show relationships. Do you have a property there? Do you have a rental agreement? Do you own real estate? Okay. So this is the, bona fide residency test. And what this allows you to do is spend slightly more time in the United States. This doesn't mean that you can just go back to the U S and live there full time, but to go back and see friends and family and go on vacation and Christmas and
 
birthdays and things like this, you don't have to be as anal retentive. What you need to do is really prove that your house is not in the United States anymore, it is overseas. Now, so that's how we deal with a lot of the things from the US side. So as I said, it's $120,000. But here's the cherry on top, Seth. If you are married and your spouse is also an American citizen, it's a doubling effect.
 
So now we're talking about the first $240,000 of earned income. $240,000 of income in Panama, you are King Seth. Like, I mean, you are living like a fantastic life. I don't know how you would physically spend that amount of money down here in Central America. Like it would be grossly irresponsible for you to spend that amount of money here for your lifestyle, okay? But let's say that you really do.
 
Mikkel Thorup (37:21.538)
There's other tools in the toolbox. There's housing allowance, there's tax credits, there's other things that we can do that follow the IRS programs to try to legally reduce this stuff. So these are the types of programs that I work with a lot of my clients on and make sure that we do it legally and compliantly. We file everything that needs to be filed. We count the days, we make sure we have the subject of ties. You know, we get into the nitty-gritty.
 
All I'm talking about today and nothing I am talking about today is individual tax legal or financial advice. This is just general advice and you can go to the IRS website and read about it. But people who work with me, we get into the nitty gritty and I have my lawyers sign off on all of it. I have my accountant sign off on all of it and it's all very kosher.
 
Man, that's an awesome overview, man. I really appreciate that. And I think I'm gonna move to Panama.
 
We'll be neighbors, my friend. We'll be neighbors. It'll be awesome.
 
Alright brother, before we jump into the Freedom 4, what's one last golden nugget for our listeners?
 
Mikkel Thorup (38:26.038)
No, I just think that, you know, if you're listening to this conversation and you go, wow, this is amazing. You know, there's so much to this. Well, first of all, I guess you can reach out to me at expatmoney.com. There's a ton of resources on our website. We do daily email newsletter three times a week. There's a new blog article. We do weekly podcast episodes, weekly YouTube episodes, monthly webinars, quarterly.
 
scripts for private clients, annual summits. I mean, there's a lot of stuff to go through, like a ton of free resources at expatmoney.com. So definitely subscribe to that. But my other piece of advice for you would be if you're listening to this and this sounds interesting, then go and try it out. Like come down here to Panama, come to Costa Rica or Uruguay or Portugal or whatever countries we've been discussing today. Go and see it. mean, see, do you like it? Is it?
 
Is it interesting? Do you like the challenges of a new language? Are you meeting interesting people? Like I love this type of lifestyle. You know, it's from the work side, the hobby side and my personal side. Like a quick side note, I'm Canadian with Danish heritage. My wife is from mainland China. We met in Germany. We got married in Africa.
 
Our daughter was born in the middle East. Our son was born in Brazil and now we live here in Panama and we have other citizenships, real estate and investment and probably in other dozen countries. So like I really like live and preach this stuff. I'm not just an armchair person, but definitely if you get out there and explore the world, there's a lot to see.
 
That's incredible, man. I'm not jealous of too many people, your diverse background and how you've traveled the world, it gets the wheels spinning, man. Appreciate you sharing that. All right, let's jump into the Freedom 4.
 
Mikkel Thorup (40:25.854)
It's time for the Freedom Form.
 
What's the best thing you do to keep your mind and body healthy?
 
You know, my daughter is six years old and I take her for martial arts to private lessons a couple of times a week. And while she's doing that, they have a fantastic gym there. So I spend a couple hours in the sun and then I do a big workout and then I swim. And the whole time I get to watch my six-year-old get private lessons. She's like a little ninja. So it's like, it's everything. you know, it scratches.
 
psychological, physical, everything. And I get a big kick out of that every time I get to do that.
 
Yeah, nice. With all your success, what is one limiting belief that you've crushed along the way and how did you get past it?
 
Mikkel Thorup (41:13.742)
Wow. Well, know, alluding back to my original story about how I was told that something didn't work quite right in my brain. And a side note, it's dyslexia. Like I have dyslexia. Okay, now in 2023, it's not a big deal. 1980s, it seemed to be the end of the world and to rip me out of school. So I definitely.
 
grew up thinking that there was something wrong with me because I didn't learn in the same way or I didn't see things in the same way as everyone else did. What I have done is figured out ways that I can learn. So I'm a voracious reader. I've read well over 2000, probably close to 2500 books on my subject matter, on business and economics and tax and anything business related, well over 2000 books.
 
but a lot of that was done through audio books and audio type of programs. I'm very much an audio person, hence why you and I are doing a podcast today. Hence why my podcast, the Expat Money Show has been going for seven years and is so successful. I'm very much an audio type of person. So I kind of thought growing up that I had to fit into a certain model, which public education says that you need to learn things. And actually if I just...
 
or if I just looked at it from a different angle, actually, I'm a fantastic learner. I can learn anything and I have a great ability for it, but I just had to tweak it a little bit.
 
Yeah, yeah. What's one actual step our listeners can do right now to start creating more freedom?
 
Mikkel Thorup (42:51.586)
take responsibility for yourself. I mean, I think that a lot of people in today's day and age really wanna look at politicians or governments or government organizations and really think that they're gonna be solving all of these problems. Government in most cases, they've caused the problem. They've caused the problem with the Fed, they've caused the problem with these banks, they've caused the problem all over the place. And you can't look to them for solutions. What you need to do as...
 
husband and wives and parents and as business owners and responsible adults is take care of yourself, learn about these types of things and actually take action on putting them into play. And that's why, you know, my work is not theoretical. Like I don't talk just about the theory about these types of things. I talk about the practical steps. This is how you do it. A, B, C, D, you know, and piece by piece, we move the
 
the ball down field to have more freedom in your life. But definitely it comes down to you. The first thing, which is personal responsibility.
 
I love that, love that. Yeah, accountability and taking back control of your life and your situation and not blaming it on something else that's out of your control.
 
You got it exactly.
 
Seth Bradley (44:09.07)
All right, last but not least, how was passive income or entrepreneurship made your life better?
 
In all aspects of everything that I do, I can't think of anything more dangerous, especially in today's day and age, as having a boss and working for a company. That's all your eggs in one basket type of thing. I'm a consultant. have many clients around the world who pay for my expertise. That gives me a lot of stability in everything that I do. Now I...
 
whole money out of my business and I'm putting it into real estate around the clock. Like that's all we're doing right now is just, just buying real estate. bought three houses cash over the last year and it's great. You know, now, even if I'm not like, don't worry about stock market. can make 12 % or 15%. You are just as likely to lose it all. You know, I'd rather put it into a real estate deal that I can actually see.
 
I can actually touch and it might be 6 % or 8%. I'd rather have that stability and the passive nature of a lot of it. And just, just makes me feel a lot better, but definitely being an entrepreneur and investing like this is mental, mental health insurance for sure.
 
Preach into the choir, man. I love that. You got to take what you're earning from your active income, whether that's, you know, an entrepreneurship venture or business, or even if you're in a W-2 and put that put that income to use, put it in a hard asset by real estate, buy precious metals, whatever that might be instead of the being on the stock market roller coaster. You got to get off of that. Got to get off.
 
Mikkel Thorup (45:53.12)
Exactly. as we've seen over the last, well, I mean the last year, but more specifically the last couple of months, what a nightmare. Like, my God. No, I'll, I'll, I'll, I'll enjoy my beach house and, and take my kids out there and then rent it out when I'm not using it and pay for the whole thing lifestyle. I mean, there's just so many other, much better benefits for doing it this way.
 
sure. Mikael, this has been incredible, man. Really appreciate you coming on today. We're going to let listeners find out more about you.
 
Perfect. Yeah, I really appreciate the opportunity, Seth. If you guys want to find out more about what I do, as I said before, go to xpatmoney.com. There's links to everything on there. Add to that whatever platform you're listening to our conversation on. If you go on that platform and type in xpatmoneyshow or Mikel Thorpe, M-I-K-K-E-L-T-H-O-R-U-P, my podcast should come up. We've been going, as I said, for seven years, you know,
 
250 episodes, just under 250 episodes. Big names, small names, lots of content to go on. There hundreds of hours of good stuff for you there. So expatmoney.com or search expatmoneyshow.
 
Alright brother, appreciate that man. Enjoy Panama.
 
Mikkel Thorup (47:07.692)
Thanks so much. I'll talk to you soon,
 
Mikael Thorpe, what an incredible journey he's been on. What an incredible story. Once again, I'm not very jealous of too many people, but wow, I can't help but be a little bit jealous of the life that he has led and the things that he's seen and the things that he's experienced. You know, he's really just living that free life.
 
meeting cool people and doing cool things. That's what life is all about, right? And he has taken that to a whole new level. Even while having an incredibly successful business and a family, he's able to travel all over the world, live in different places and just experience the best that life has to offer. That's incredible. And that's something that we can all look at and try to replicate at least on a small scale and experience great things.
 
All right, folks, until next time, enjoy the journey.
 
Thank you for listening to the Passive Income Attorney Podcast with Seth Bradley. Do you want more ideas on how to generate multiple streams of passive income? Then jump over to passiveincomeattorney.com for show notes and resources. Then apply for the private Facebook community by searching for the Passive Income Attorney on Facebook. And we'll see you on the next episode.
 
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TME 16 | The Main Event | Build a Bigger Life, Not a Bigger Lifestyle: The Real Path to Freedom with Adam Caroll

In this episode of Raise the Bar Radio, Seth Bradley welcomes Adam Carroll, who shares his journey from being a traveling professional speaker to building sustainable wealth through passive income strategies. Seth Bradley and Adam Carroll discuss how, after realizing the limitations of trading time for money, Adam Carroll developed The Shred Method, a cashflow reorientation system that minimizes debt interest and frees up capital to build liquidity and invest.
By leveraging lines of credit and algorithm-driven cash deployment, Adam Carroll explains how individuals can rapidly pay down debts and reallocate savings into passive income streams such as real estate syndications, intellectual property, and other alternative investments. Seth Bradley and Adam Carroll highlight that most high-income earners don’t have an income problem, but a liquidity problem tied up in low-access retirement plans and excessive spending. Finally, Adam Carroll shares his philosophy of "building a bigger life, not a bigger lifestyle," urging professionals to align spending and time with their values to achieve fulfillment and financial freedom within 10 years.
 
Links to watch and subscribe:
https://youtu.be/TAyai9li9dU
Bullet Point Highlights:
Trading time for money is limiting. Adam shifted from paid speaking gigs to building passive income streams for true freedom.
The Shred Method minimizes interest expenses. By using cashflow more efficiently through lines of credit and optimized algorithms, debt is paid down faster, freeing liquidity for investing.
Passive income is key to wealth. Adam focuses on real estate syndications, ATM tranches, intellectual property, and digital products to generate consistent, diversified passive cash flow.
Most people have a liquidity problem, not an income problem. Money is often locked in 401(k)s or spent wastefully — instead, creating accessible liquidity allows for opportunity-based investing.
Building a bigger life requires intentionality. Aligning spending and actions with core values (like family, freedom, growth) leads to fulfillment — not just more stuff.
The game becomes fun. Once passive income starts flowing, investing becomes strategic, diversified, and compounding — eventually replacing active income and creating financial independence.
Anyone can implement this. While you can DIY, Adam recommends coaching to fast-track understanding and execution of the Shred Method.
Transcript:
(Seth Bradley) (00:02.094)
What's up, Builders? This is Raise the Bar Radio, where we talk about building wealth, raising capital, and all in all, raising the bar in your business and your life. This is the No BS podcast for capital raisers, investors, and entrepreneurs who are serious about scaling their business and living life on their own terms. I'm (Seth Bradley), securities attorney, real estate investor, and entrepreneur, bringing you world-class strategies from the best in the game.
 
If you're ready to raise more capital, close bigger deals, build a better you and create true financial freedom, you're in the right place. Let's go. Adam, what's going on, brother? Welcome to the show.
 
Hey Seth, thanks for having me, man. I'm excited about our conversation today.
 
Yeah, dude, super stoked to have you on today. It's going to be an awesome show, man. Let's dive right in. Tell us a little bit about yourself, your background. Take it back as far as you want to. Yeah.
 
Well, for the last 15 years or so, almost 20 now, guess, I've been making my living, opening my mouth and just speaking on stages all across the country. Had the opportunity to do a couple of international gigs, which was a blast. And in the midst of all that, making my living as a professional speaker, I realized that if I was very similar to your audience, if I wasn't doing the deal, doing the gig, doing the engagement, I wasn't getting paid.
 
(Adam Carroll) (01:26.184)
And so a mentor of mine said, the goal is not to go to work and get paid. The goal is to go to work and get paid, get paid, get paid, get paid, get paid, get paid, get paid. And so I started figuring out that what I really wanted to do with the messaging that I was delivering was turn it into sort of a mediapreneurship where I was a mediapreneur creating content, but then I'd get paid for the content over and over and over again. And that today looks like I've written a bunch of books.
 
I've got a documentary that I produced that aired on CNBC. And now we're starting to get into more of a SaaS business, which I'm sure we'll talk about. That's the shred method. But I, you what I do when people ask me, I tell them, I love to educate people about new and different ways of building a bigger life, not a bigger lifestyle. And I would say you and I have that in common, because I know you're doing that on the show.
 
Yeah, absolutely, man. I gotta ask, how do you become a professional speaker? I bet a lot of people are thinking about that.
 
The origin story is kind of interesting because I was a clothier at the time in Denver, Colorado. And I was literally going out and meeting with high level executives in their offices, selling them custom made suits and shirts and sport coats and pants and whatnot. And it occurred to me in the middle of a meeting at one point, an appointment with one of my clients that I didn't want to measure in seams for the rest of my life. And I'll keep it PG but
 
This guy was one of my favorite clients. He was irreverent and funny and wasn't afraid to spend money on clothes. But this particular day, he confided in me that he wasn't wearing any underwear. And I was just like, dude, JP, what? You knew I was coming here today. He's like, I know, I just forgot. I'm sorry. I'm sorry. And I walked out and I went, I don't want to do this anymore. I just don't want to do this. And the company that I worked for is a fairly well known clothier. But
 
(Adam Carroll) (03:22.55)
Every day I would drive around in my car listening to motivational messages. You know, they were on CDs at the time. I'm going to date myself, but I would listen to like Mark Victor Hansen and Jack Canfield and Les Brown and Zig Ziglar. I would listen to all these CDs in my car. And Mark Victor Hansen said on one of the CDs that public speaking is one of the most noble professions because you get to travel the world. You get to change people's lives and you make a lot of money doing it. And I remember thinking.
 
That's what I want to do. All three of those things rolled into one. And so I reached out to a buddy of mine and said, dude, I don't think I'm in the right job. I need to be doing something else. He said, what do you want to do? And I told him, and you know how the universe kind of works in mysterious ways. He goes, well, Anne, who used to work with us, she works for a company that that's all they do is hire speakers. And so I sent in a tape, I auditioned, I got the gig.
 
And I was a W2 employee of theirs for about two years and then realized that I was being underpaid for the work I was doing, that I was actually probably one of the top 10 % of speakers on the roster. And then I realized that when you can make anywhere from a thousand to $5,000 an hour doing that, it was a pretty good paying gig if you were out on your own. I took the jump and have been doing it ever since.
 
Interesting man. I didn't realize that you could have a W-2 as a speaker I thought everybody that was speaking was getting the speakers that were getting paid, you know They were kind of doing it on their own. I don't realize there was kind of a there was a way to do it where there's a company that pays W-2 wages to speakers to speak it events. Yeah, it's interesting
 
It is interesting because there are companies that will hire you as a speaker to go and it may be sell their product or service. Or in this case, I was working for a company that was a division of monster.com, the job search company. And I was, I was speaking to high school and college students all across the country. And I probably presented to like 200,000 people in, two years time. So it was just a great practice run and a great way to cut my teeth on a very difficult audience. Because.
 
(Adam Carroll) (05:36.814)
I don't know if you've ever been around a freshman in high school or a sophomore in high school, but they're like the most apathetic human beings on the face of earth. They don't want to be there. I could have lit myself on fire and they'd been like, cool, what else you got? And then when I realized that there were speakers like me that were out who basically just said, this is my topic. This is my specialty, if you will. And here's the rate. And the more they spoke and the...
 
we have a theory that the more you speak, the more you speak. So once you get out, you hang your own shingle and say, I'm a speaker in this topic, people begin to know you as that person. And then word gets around and obviously you have to not suck on stage. That's part of it. But if you're great at keeping audiences attention, and I really studied NLP, neuro-linguistic programming to use the right words, I studied comedians to figure out what was funny and what wasn't, and it just worked.
 
Over time, I had more more bookings and at the peak of my career, I was doing like 70 or 75 gigs a year.
 
Wow, wow, that's incredible. Definitely didn't realize that was your background. I remember those folks coming to like the office and selling suits and doing that sort of thing. So that's pretty interesting. I'm sure a lot of listeners out there are familiar with that process as well.
 
Yeah. Yeah, it was, it was a great, it was a great gig. mean, I met all sorts of really phenomenal business people. And I think for me, it was, it was like confirmation that I had this desire to, to impact people. And my boss at one point, he was like, Hey, these people love you. They want you to come around. They love the discussion and the conversation. They need to buy stuff from you. And, and there was a.
 
(Seth Bradley) (07:01.639)
sorry, go ahead.
 
(Adam Carroll) (07:26.574)
It's kind of a realization for me that I didn't necessarily want to have to sell. wanted people to buy. And speaking makes it real easy to do that.
 
Hmm. Yeah, makes sense. Let's jump right into it, man. Let's talk about the shred method. A lot of folks will find this very interesting. I know that I do. What is it? And let's just start there. What is it? Tell us a little bit about it.
 
Yeah, the shred method, first of all, thank you for asking. it's, it's, for me, I don't say this lightly, but nothing has built more wealth for me and my family than following this model. And the reason for it is there are two great expenses that everyone has in life. And I'm sure all of your listeners, be they attorneys, doctors, other professionally degreed folks.
 
If you're in a W-2 job, you know this to be true. The two greatest expenses we have in life are taxes and the interest expense on debt. Those are the two greatest expenses. And a gentleman that I had met years ago who helped me with tax situations, just a brilliant, brilliant strategist, he said, Adam, if you focus on minimizing your tax liability, that will get you halfway there. And it's very easy to do, buy real estate, have depreciable assets.
 
you know, make personal expenses, business expenses, etc, etc. But he said, if you can focus on minimizing the interest expense on debt, this is like a video game that you can't lose. And so when I learned about the shred method, and this is known by a variety of different terms, some people call it an Australian mortgage, it's called velocity banking, we've taken those concepts and turbocharged them.
 
(Adam Carroll) (09:09.474)
almost like putting nitrous oxide in a gas tank, you know, in terms of making it go faster. But the shred method is a unique tool and a way of reorienting your cash flow through your household so that it is being used to the most efficient use possible. And to kind of qualify that, Seth, if you were to leave your home in the morning to go to the grocery store, as an example, and you came back home, emptied the car out,
 
knowing you had to go to post office at like 4 p.m., would you leave your car idling in the driveway all day?
 
(Adam Carroll) (09:46.284)
Nope. No, and why wouldn't you?
 
Wasteful.
 
Yeah, wasteful, you'd burn gas, it'd be hard on the engine. It's just inefficient, right? And yet what most people do is they get their income, their income gets deposited into a checking account, and it sits there for days, weeks, months, sometimes years on end. And we never really use it to its highest efficiency. Meanwhile, we might have debts, commercial debts, primary mortgages, might have student loans yet. And all of those are accruing amortized interest.
 
right? And you might say it's compound interest working against you to a certain extent. But at the very least amortized interest means that the majority of the interest you're paying on that debt is upfront, it's in the first one to five years. And so the shred method teaches people how to take that income that is being super inefficient in an account, and instead begin to apply it through a process that allows you to blast away
 
the highest interest or highest payment debts that you have, freeing up cash flow, building equity, and ultimately, and this is the key, creating liquidity to go buy passive income properties, if you will, or other passive income plays.
 
(Seth Bradley) (11:02.058)
Interesting. Yeah, and we actually haven't had anyone on the show to speak about this method, whatever nomenclature you might use. So let's go in a little bit more detail. mean, what is the vehicle? What is this flow of money that you're talking about?
 
So, know, logistically, here's how it works. Money typically would just get deposited into checking. You pay everything out of checking your mortgage, your car loan, your credit cards, living expenses. And the gurus would tell you that anything extra should really go towards savings and investments, right? And for most people, it goes to Costco, Target and Dining Out. That's where it goes. You know, it doesn't stay in the account, doesn't go into savings. If it does, it goes there for a small period of time. I think that most people
 
don't really have a savings account, they have a put and take account, because they put a little bit in, take a little bit out, put a little bit in, take a lot out. So the way this works is the money instead of being deposited straight to a checking account gets deposited into what we call a shred account. And the shred account could either be a line of credit, or it could be just a side account of money that you have sitting there that has not been accessed in some time. And what we tell our users is that
 
you really want to have either a line of credit or a shred account that is one and a half to two times what your monthly net take home is. So if you're bringing home 10 grand a month net, then ideally you want either a line of credit or a shred account of 15 to 20 grand. And the magic of this is the money is going to flow into that account. But the shred method is powered by a piece of software that is based on an algorithm that's tracking your income.
 
your expenses, the interest that you're paying on all your debts, and how much discretionary money you have available at any given point in time. And essentially, we're leveraging that in really short bursts of time against your largest debts, which could be, again, student loans, could be your mortgage, could be commercial properties. And in doing that, what we're doing is we're saving copious amounts of interest, like literally tens to hundreds of thousands of dollars.
 
(Adam Carroll) (13:11.122)
And in the process, we're freeing up a ton of equity. So people that are saying, hey, I'm paycheck to paycheck. It's hard for me to figure out how am I going to invest more money? We're telling them the money is going to come from the equity that you're creating in your properties by paying them down rapidly.
 
I love that because I can see where this is going to potentially free up some extra cash to invest. A lot of folks out there, including myself back in the day, we got caught up in this thing we call the golden handcuffs where we're just spending everything. Like you said, we're spending it on Target, on eating out, on things that we really don't need. mean, there's a time and place for spending money on having a good time and enjoying your life for sure.
 
But we just we tend to overdo it as our income grows our expenses grow right along with it And a lot of people that I talked to about investing they're like, you know I don't have fifty thousand dollars to invest in this real estate deal or a hundred thousand dollars in this real estate deal and it's like well Well, why don't you you know make three hundred thousand dollars you why don't you have fifty thousand dollars to invest in this awesome deal? Right or to you know, put aside for your emergency fund. Like why don't you have these things set up?
 
So, you know, we always have to walk them through, you know, the expenses is the issue. Really, it's what are you spending all this money on? we try to find how they can save on those expenses so that they can invest in these assets that are really going to set them financially free.
 
No doubt. And I think you hit the nail on the head. If somebody's making, and honestly, I tell people if you're making six figures plus $100,000 plus, and you don't have 10, 20, $50,000 ready to go, there's something fundamentally wrong. And here it is, we're sending too much money to our banker, and it just goes up in smoke. Right? We like to refer to it as the interest to income ratio, which is if you take how much income you make,
 
(Adam Carroll) (15:11.694)
and you back out how much of that income is actually going to pay interest expense, it'll probably blow your mind. If someone's got a multi-six figure home or mortgage that they're paying on, and they've got student loans, and maybe they're driving a $50,000 to $100,000 vehicle with a payment attached to it, you're probably burning 50 to 60 grand a year in interest and not really thinking twice about it. So what this does is it starts to claw back some of the money that you're sending to your banker.
 
Which by the way, they make plenty of money. They don't need your money. That is the most profitable business out there is banking and lending. mean, literally, Seth, if you drive two miles around your property there, how many banks would you be able to stop at, do you think? Ballpark best guess.
 
Right, half a dozen.
 
Easily, right? And they're probably $10 million buildings minimum. Out there, they're even more, right? So, so this is the deal. They're profitable business ventures. And what we have to remember sometimes is we are their compound interest vehicle, right? Us making our payment every single month is what makes the banks all the money. And if we can game that system, if even for 12 to 18 months at the very beginning of our debt,
 
we can strip away a huge chunk of the interest that we would normally be paying them over the course of a decade or more. To your audience, that's how I'd say this is how you find the extra 50 or 100 grand because you do have it and it should be in the equity of your property and easily accessible as a liquidity tool. It just isn't because you haven't challenged the banking system.
 
(Seth Bradley) (16:57.073)
Yeah. Now, is this something you can set up yourself or is this something that you need an expert to kind of walk you through? I'm sure if you could probably do it either way. It's just like anything else. You want to take the shortcut or not. But yeah, I just like to know your thoughts on that.
 
You're exactly right. I I could build a deck on my house if I wanted to and had three months to learn how to do it. Anybody can learn how to do this. My question to most people when they say, I do this myself? I'll say, yes, why haven't you? And for that, the investment with us is very minimal, mainly what it is is coaching and being able to help people get the logistics right. Because once they get it, it's very simple.
 
but there requires a little bit of retraining the brain in terms of how to handle your money and where the cash flow goes, because it's so, it's like so ingrained in us to live in the banker's business model, put money in checking, pay your bills, anything leftover goes over here. And if you look at it critically, the two groups that are really making money using the existing platform are bankers,
 
and any advisors that are accepting your money and then turning around and doing something with it. A friend of mine used to call it the helper class. So when the helper class has your money, they're making a ton of money, probably more than you are. And that's our goal is to begin to start to pull back some of the money from the helper class to keep it for ourselves to build those massive passive permanent streams of income.
 
Yeah, yeah, that makes sense. We tend to bash a few of those helper class folks. I mean, they're not all created equal, including some financial advisors and folks like that that, you know, they're okay people, but their interests aren't necessarily aligned with yours.
 
(Adam Carroll) (18:51.576)
That's right. I would agree with that. I don't want to villainize them, but I think that personal finance is personal. The challenge that I have with anyone out there who espouses a certain way, mine included, is it has to be for the right kind of audience, the right avatar. From our perspective, the people that we help out are the ones who do want to break free from the W-2. They want to create massive passive permanent streams of income.
 
Over time, they'd like to build a bigger life, not a bigger lifestyle. So if someone's chronically overspending, got to have the newest of the new every single time, they may not be a perfect fit with our strategy because the goal is to continually increase your income while either keeping your expenses similar or even trending down over time, which is not to say that you can't expand where you're spending. Your income is increasing exponentially relative to your expenses.
 
we do that through the model that we're teaching people. So, you if you're a new car every six months or 12 months kind of person may not be a perfect fit. But if you're somebody who's like, hey, the debt's kind of oppressive, I want to get rid of it. And I want to build, you know, massive wealth for future generations, then generally speaking, we're a pretty good fit for for those folks.
 
Yeah, yeah, that makes a lot of sense. And I feel like there's, there's probably, it's probably a math equation, right? Like we can't necessarily do it on this show because it's, everybody's taking it in by audio for the most part. there's gotta be an algorithm and you could probably, you know, set those expense numbers and interest numbers that you're paying on your mortgage and other debts and what you're going to pay on that through the shred method and kind of see the savings and how you can grow that wealth year over year.
 
You're exactly right. It is super fluid. So if your income changes, your expenses change, we plug all that data in and hit recalculate and the thing automatically adjusts to whatever your expenses are. So one of the things that I would never fault anyone for is taking awesome vacations or buying a new car, whatever your choice is. Again, we're not going to villainize anyone for living their life.
 
(Adam Carroll) (21:06.67)
But what we can do through shred is to say, hey, if you're going to drop 10 grand on a vacation, it's going to change your payoff by a month or two months or six months, depending on your income and discretionary income. And if someone knows that and they're planning on it, at least they're armed with that information as opposed to, gosh, we shouldn't do this, but we did or should we buy this $50,000 card? Does it make sense? Or 80 or 150 or whatever your number is.
 
We can show you exactly do it, just know this is what it changes in the process.
 
Yeah, yeah, I like that because you can just show them this is the impact it's going to have on paper before they do it and then you can make a better decision on whether or not you want to do that or not.
 
Absolutely. And furthermore, and you'll appreciate this, I know you're of this mindset, you'll get to a point where it's like, if you want the new car, then invest the money in a syndication or another property that puts enough money in your pocket, you can go pay for the car. But let your assets pay for your liabilities. And I think that's the main thing that many people, I'm sure your listeners, certainly folks that we engage with.
 
They don't have a lot of assets. They work hard, they make good money, but that is the sum total of their income, is active income. And our goal is to increase passive income over time where it supersedes your expenses because at that point you're financially free.
 
(Seth Bradley) (22:36.758)
Right, right. What are some of the passive investments that you're involved in or that you recommend to people once they've implemented this system and they're trying to build those passive income streams?
 
Yeah, there are a number of them and I keep getting introduced to more and more all the time, Seth. I mentioned that, you know, that I was a mediapreneur and that the goal was to work, do the work and then get paid, get paid, get paid, get paid. So I started looking for other passive income streams. I really do love real estate. I've been invested in real estate for a long time. We divested of personally held real estate about four or five years ago. And
 
You know, I think I was too early to the party, but I thought the market was peaking and I thought I could get the max amount out of my properties. And I think I did at the time. And then we were introduced to syndications and we started really appreciating the fact that you could own a piece of a 350 unit apartment complex in South Carolina or Houston, Texas, or some other growing city and get a couple things, either monthly or quarterly income. You could get bonus depreciation.
 
And you basically got a K1 at the end of the year, which allows you to claim some of those expenses. And so we love syndications. We try and stack syndications on top of each other. they're coming due. They're selling every three or four or five years. So we'll put an amount of capital in knowing that it's going to turn over in short order. And we'll have another amount of capital to put in. And generally speaking, that capital amount just keeps going up.
 
So we love syndications. I've been introduced and we haven't pulled the trigger yet, but on ATM tranches where you can buy, have you heard this investment? Yep. So you can buy, you know, an amount of ATM machines where you're basically compensated on whatever the fee revenue on those are. There are many advantages to those. There are some drawbacks to it, but it's again, a passive income stream and one that's fairly consistent.
 
(Seth Bradley) (24:25.798)
yeah, for sure.
 
(Adam Carroll) (24:44.59)
Then I really like intellectual property plays. I will tend to invest in a business that has some IP and it may not cashflow right away, but I know that in two or three years, the IP is probably going to be worth something. It's more of a long-term play for me. I'm not going to put as much in it, but we have a couple of 25 to $50,000 investments in those kinds of deals as well. That, in addition to books and
 
documentary is still selling and things like that I'll keep doing. For me, the process of creating passive income is kind of a game. And so whatever the next thing is, I'm digging in, I want to learn it. total sidebar, but I'm trying to teach my sons and my daughter, this is the way of the future. It's not about working a nine to five and getting W2 and staying with the company for 30 years, it just doesn't happen anymore. It's about setting up
 
just perpetual income streams that allow you to live the way you want to live. And that, you know, I think that answers your question, hopefully.
 
(Seth Bradley) (25:52.174)
Pardon the interruption, but we don't do ads. Instead, know that if you're raising capital for real estate, my law firm, RaiseLaw, is here to give you the expert legal guidance you need to raise capital compliantly and structure and close your deal. And if you're looking for a done-for-you fund-to-fund solution, Tribest is the industry's only all-in-one setup and fund administration solution. Visit Raise.Law and Tribest.com to learn more.
 
Yeah, yeah, that's right. You're preaching to the choir here, man. That's awesome. And you're kind of pretty deep into it. A lot of people will invest in a syndication and it is expensive to get involved, right? I mean, it's 50 grand or so or more to get into one of these things. And they're like, okay, I'm done. But you can't be done. You have to keep saving, keep investing. And you're in it to the point where past investors start really start accumulating wealth because they start stacking.
 
They start coming due every two, three, four, five years. You put it back in another one and they just compound on each other. And you're really accumulating this tax free if you stack them correctly. So it is an incredible vehicle once you get going. And it does turn into a game. I mean, you can look at your bank account or look at your personal P &L and just see how it's growing over five, 10 years. It's incredible. And you're not doing any work. You're vetting the sponsor, the market and the deal and really just the sponsor once you get really good at it.
 
and you keep reinvesting with the same sponsors that you like and there's no work involved, no tenants, toilets and trash, none of that.
 
Yes. Yes. And I think you hit the nail on the head when you find a sponsor you really like and you jive with, it's easy to roll the money over to them because they're constantly looking for the next deal. their reputation, their personality, everything is based on their success. they have a very, very vested interest to make you money. And so I don't think I fully realized when I was younger
 
(Adam Carroll) (27:50.35)
the power of having the ability to write a 50 or $100,000 check. And once you get there and you can do 50 or 100 or get to a point where you can write a $500,000 or a million dollar check, things change drastically because there are syndicators out there that will take a million bucks. They'll pay you $90,000 a year guaranteed on the investment. You'll get bonus depreciation and write-offs and all of that. And you'll have like a...
 
200 % return on it within four or five years, three, four or five years. That's where you can buy a new car every year or two or three, because you need like a $75,000 or $80,000 write-off to your business. So you need a truck or you need a heavy vehicle,
 
Yeah, yeah, that's right. I mean, that's a good point. mean, people that have $500,000, a million dollars or more liquid, I mean, you can just look at a simple math and you get an 8 to 10 % return on that in cash flow, just in cash flow. You know, if you're living reasonably, you can live off of that. So, yeah, so you can be, you you don't need $10 million, $20 million to retire off of this if you invest in the right deals.
 
Totally. Totally.
 
(Seth Bradley) (29:03.926)
and kind of spread it across, diversify in different deals, different sponsors, different geographies, different asset types. You can be retired if you want to. It's closer than people think.
 
I would agree. We have a theory that nearly everyone and certainly your audience could be free, done, done completely in 10 years or less. Absolutely. We call it a 10-year freedom plan. the challenge, think, Seth, and I would be curious your take on this, but I think the challenge for most people is not necessarily an income problem. It's a liquidity problem. So you make good income, right? And we talked about it. It's the expenses that factors in.
 
But where the majority of your investments go are probably in qualified funds. They're sitting in 401ks and Roth IRAs. Unless it's self-directed, you can't really access it till you're 59 and a half. And even then it's 59 and a half to 70 and a half, you have free rein access. Otherwise the government's regulating how much you take out without fees or penalties. That's a liquidity problem. And so the shred method takes that into account and starts to build
 
pockets or buckets of liquidity that you can draw from. The first is your home equity, or it could be equity in a commercial property. And then the next would be building a bank of money that you're borrowing from at some point in time, just another bucket. And the more buckets of money that we create, the more liquidity you have and the more investments you can get into, thereby increasing your passive income. So to your point, you do this well, it's like a video game you can't lose over time.
 
Yeah, yeah, that's right. And we've been programmed to think if we have a high paying job, we just put as much as we can into a 401k and we're doing the right thing and we're doing everything that we need to do and we're not and then everything that doesn't go into that 401k we're spending. So we're not saving anything else. We're not keeping anything else liquid. And we're just assuming that we're going to be okay because we put this money in the 401k. Well, like you said, you can't access it until you're 60 years old. That's right. Unless you take it out with a major penalty. So
 
(Seth Bradley) (31:10.062)
You know, one way to do that obviously is to roll it over in an SDIRA or self-directed, I'm sorry, 401k, the self-directed, something that you have some control over. And then it does become liquid in the sense that you can at least invest it in things that you want to invest in rather than a financial advisor or just stocks, bonds and mutual funds. And then as you said, there's different ways that you can free up liquidity, a HELOC.
 
something like that borrow against a life insurance policy we've talked about infinite banking policies things like that there's there's creative ways to do it you just need to be aware of it most people just aren't aware of how to how to do that
 
Yeah, I think that's what's so valuable about your show too, man, is that we only know what we know. And there's an enormous amount that we don't know we don't know. So when I got introduced to syndications, and I got introduced to the ATM tranches, and I'm looking at these going, you know, there is risk, there's risk in everything. But the risk is so mitigated. And you don't realize that if you're writing $100,000 check, and they're saying, yeah, we're going to pay you 9 % guaranteed.
 
And these are some syndicators will promise an interest rate based on what class of investor you are, A, B, C, D, whatever it may be. But when I looked at that and I go, if I'm striving to get eight to 10 % in the S &P 500, and I have zero control over that, where would I rather be placing my money? That was something I didn't know I didn't know. And it's always fascinating to me to begin sharing this with people because
 
When I share the shred method, a lot of folks go, not too good to be true. If it's so good, why isn't everybody doing it? And what I'll tell them is because of human behavior and because the bank's lobbies and their marketing engine is so powerful. But it's not magic, it's math. We're taking mathematical principles, risk-based principles and applying it to real estate or finance and figuring out how to make an amount of money that will supersede what you're.
 
(Adam Carroll) (33:13.782)
your W2 job is pretty simple. That's right. Yeah.
 
Yeah, pretty simple. It's math. Just got to get it down on paper, right? Yeah. All right. Let's switch gears a little bit. I want to quickly get into, you know, this concept that you preach about building a bigger life at work because I think that's, you know, inspiring and that sort of thing and really life in general, right? Tell us about that concept and kind of dive in a little bit.
 
Yeah.
 
(Adam Carroll) (33:37.964)
Yeah, you know, this started, it would actually started from a conversation I had with a recent college graduate, and they had gotten an advanced degree, they were going into a high paying job. And I think they'd been at it for maybe nine months or so. And we were having coffee and this person said to me, I'm just not satisfied. And I said, Well, what what is it you're not satisfied with? And they said, Well, the issue is that I thought at this point in time after graduating, he'd be traveling the globe.
 
You know, that was what he had always romanticized was just tons of travel and do whatever he wanted to do. And I said, well, what's keeping you from that? And he goes, well, you know, I just got into this long-term lease apartment. go, okay. And he said, and I bought a bunch of furniture that I financed. And, and then it's like, okay. He goes, I have a couple of gym memberships, not one, two gym memberships, you know, each probably 80 to 120 bucks a piece a month had a car payment because he needed a fancy car. And I said,
 
Dude, it sounds to me like you're building a bigger lifestyle, not a bigger life. And what you're asking for is a bigger life. And that became almost a deep dive search for me on what would building a bigger life mean for me and my family. And what I did, Seth, was I started digging into what are my core values? How can I live according to those core values, not according to my neighbor's core values, you who may be drastically different than mine? And...
 
I ended up writing a book called The Build a Bigger Life Manifesto, which breaks down how do you do this step by step. And there are 10 core tenets. And the first one is you got to build on a strong values foundation, like understanding what is it truly you value in life. And if you're doing more of that, then your life should be fulfilling. And mine are family, freedom, love, growth, and connection. And if I'm fulfilling those five buckets on a weekly basis, generally speaking, I'm really fulfilled.
 
And so the second is have a bigger vision and a bigger vision for your life might mean I'm not going to stay in this job for the next 20 years and hopefully make partner. then hopefully, because we all know that as you get promoted in a W-2 job, it doesn't mean you work less. It means you work more. And so my bigger vision was I want to make my vocation, my vacation. I'm going to speak, but I'm going to speak in cool places that I can take my family to. People are going to pay me really well to do it.
 
(Adam Carroll) (36:03.368)
and I'm going to do it X number of times a year. And then I started asking, and this is the third step, asking bigger questions. And bigger questions look like, okay, so if I wanted to do that, how would I get better at speaking? How would I get so good that people will pay me 10 or 15 or 20 grand to go do what I do for an hour? What would that look like? I started asking not how would I pay my house off early? How would I pay my house off by the end of this year?
 
And when I asked that question, answers started coming and we were able to do it. So this is kind of the layout of how we walk people through this process. And for me, a bigger life today is just that, you know, I live for my family. I want to travel with them. I want to have tons of fun with them while they're still in the house. I have two teenagers and one in college. And soon, you know, eventually they'll be gone and it'll be my wife and I going and living the life that we most want.
 
Our lifestyle right now is pretty locked in. We have a beautiful home, we drive nice cars, but everything's paid for. And at this point, the goal is just to continually create massive passive permanent streams of income that afford us the ability to be generous, to live the life we want. And ultimately for me to be able to go share that message with other people.
 
And something so simple that you did there, it's just, you know, ask yourself what's important. A lot of us don't take the time to think about why we're upset, why are we not happy. And a lot of it comes down to not filling those buckets that are important to us on a regular basis. to be able to figure that out, you've got to take a few moments to think deeply about what it is that's important to you.
 
100%. And I'll give you a great example, Seth. One guy that we worked with, he realized that one of his core values that was not being fulfilled was adventure. So he loved his job and he goes, I don't know what it is, I'm just dissatisfied. And we went through the values assessment and adventure was on there. I go, well, where are you getting adventure? And he said, you know, that's the problem. I'm not, I haven't had an adventure in two years. I said, so maybe in building your life,
 
(Adam Carroll) (38:21.538)
we need to figure out where are you carving out adventure for yourself or your family to make sure that you're doing it. For him, community was a big part of it. And he was getting some of that in his day-to-day client interactions. But what he really wanted was to build a community of friends that would go do stuff together. And I said, that's on you, man. If you really want that as part of your life, you got to build whatever that looks like.
 
And what if you combine that and adventure? So you get a whole group of adventure seekers that get together three times a year to go skiing in Aspen or, you know, go skydiving on a weekend or whatever it is. What would that look like to do that? And he lit up and you know, I could do this right now. So to your point, I think we're all very, very close to having a fulfilled life and building a bigger life. But you do have to take time to figure out what does that look like for you.
 
For sure, for sure. And a lot of the folks listening are attorneys and doctors and they tend to have high suicide rates, all these crazy things, substance abuse. people from the outside looking in think, why? Because you're making all this money. You have this high profession that everybody looks up to and you're not unhappy. And that's why, because those folks...
 
folks like us, we're just really focused on just that occupation. And that's it. And we don't focus on some of the other things that would fulfill us and make us happy. tons of attorneys I talk to try to get, they're like, how do I start investing as quickly as possible? Make as much money as quickly as possible so I can get out of this job because I hate being an attorney or I hate being a dentist or whatever it is. But really, that might not be the issue. The issue is that you're not filling up those buckets outside of your
 
career. And if you were to start filling those buckets, start paying more attention to those things, you might not be as unhappy in your career. And you might actually find that you enjoy what you're doing because you're good at it. You worked really hard to get there and you're making a good bit of money doing it.
 
(Adam Carroll) (40:22.06)
No doubt, no doubt. I would add to that, that I think the majority of professions that you just listed, dentists, doctors, lawyers, et cetera, what they really want is they want to maintain professional status, do what they do, they've gone to school, they've learned how to do it. But over time, they want to work less and less, not more and more. And if you're doing what you recommend on the show, and if you're leveraging something like the shred method to create it, you can get to a point where
 
half or more of your income, ideally all of it, is replaced by passive income. But it requires that you get really focused on working for the right reasons and not filling in the lack of fulfillment or unhappiness with a new car or the next do-dad or spending a fortune on something. Instead, decide, I'm going to go get into an investment this year that will begin the process of creating passive income for me to start building the life that I truly want.
 
And it is, it's pretty transformational once you figure out how to do it and what the next steps are.
 
Yeah, it's like the matrix. mean, you start kind of, as soon as you start, it becomes a game, how you said it earlier in the show, and you just start seeing things that you didn't see before. You start being presented with new types of investments and businesses that you can invest in that you never saw before, but they were right under your nose. It does turn into a fun game, a money game.
 
Yeah, no question. I was at a conference not too long ago and they were calling me Morpheus because I made a reference to the red pill or the blue pill. And they were like, dude, you're Morpheus. I just took the red pill. Now I'm going down the rabbit hole. So beware. Are you ready to take the red pill?
 
(Seth Bradley) (42:08.374)
Love that, love that. All right Adam, before we jump into the freedom four, what's one last golden nugget for our listeners?
 
A golden nugget for your listeners is that money today is abstract. It's not a concrete thing. Several decades ago, you would be given cash or you'd pay for things in cash. And today, virtually everything is a cashless transaction. And when we're not using cash, it doesn't feel real. If we're using Apple Pay or we're swiping our card or tapping our card,
 
It doesn't feel real. In fact, there's no pain sensor that triggers when you do that. The opposite is true on Amazon. When you hit one click ship for $47, a pleasure sensor actually is activated because you're in anticipation of that thing coming to you. So we also have to realize that the more money you make, it feels like, well, the more you have to spend. But because money doesn't feel real, you're spending way more than you think you are.
 
because of the abstract nature of it. So some of that is like reigning back in and understanding these are real dollars that you're putting on a card or swiping on your phone or whatever it may be and deciding is this the best intentional use of this money or could I be using it to build the life that I truly want? And I will add to that Seth that it's very short. There's a short amount of time that it requires you to function just a little bit differently.
 
order to get there where all the passive income covers your wants. So just like intentionality for the next 12 to 24 months will make a massive difference in your life.
 
(Seth Bradley) (43:48.502)
Yeah, that's all it takes. All right, let's jump into the freedom four. What's the best thing you do to keep your mind and body healthy?
 
I am part of an exercise group called F3 and it stands for fitness fellowship and faith. There's like 75,000 guys all over the world that do this every morning. And we get up, you know, rain, sun, sleet or hail. I mean, we were working out in like eight degree Fahrenheit weather this winter outside. It's always outside. And I love it. I do it four or five, sometimes six mornings a week. But for me, just getting up the first hour of my day will
 
will dictate what the rest of my day does. And so my F3 brothers and I, that's the right way for me to get started.
 
awesome. With all your success what is one limiting belief that you've crushed along the way and how did you get past it?
 
you know, this is, this is going to sound a bit like an oxymoron statement, but a limiting belief is that, man, there's so much opportunity. And for me, I'm a bright, shiny object guy. for years, my wife was like, just pick one opportunity, please just pick one. And so for me, it's, you know, it's the fact that there is so much I can do limits me because you can really get very, very good at one thing.
 
(Adam Carroll) (45:08.078)
But I'm a big fan of James Clear and the book Atomic Habits. And he'll say that it's hard to get traction when your focus is divided. And so I've been really intentional about zeroing in on my focus and knowing that this is what I'm setting out to do. And it may be for 12 months or 24 months or five years. And I'll reevaluate along the way. But I've got one thing and I'm really focused on that. So that's been a limiting belief I've had to get over.
 
Awesome. Awesome. What's one actionable step our listeners can do right now to start creating more freedom?
 
Well, go to the shredmethod.com not to do a self plug, it is. Go watch the masterclass, see what we do and how we do it. If you are already intrigued by this and are wondering like, what should I do with a HELOC or should I have a HELOC? My answer to everyone is everyone should have a HELOC, everyone. If you have equity in your home, why do you not have a line of credit? If for nothing else to have that is an emergency.
 
of some kind. So point blank, the first thing you ought to do is go access a line of credit, be it a home equity line, a personal line of credit, a P lock, or a B lock, a business line of credit. can also do a cash value line of credit. But I think you got to have one of those because when you understand this method, this process, that's a linchpin to making this work.
 
Great. How is passive income made your life better?
 
(Adam Carroll) (46:42.698)
you know, I like to call it mailbox money and, man, love mailbox money. When it shows up, I celebrate and I've, I've had a mantra for years that I'm a money magnet, that money comes easily and frequently, that I get more checks in the mail than I do bills. And I just repeat those mantras over and over again. So every time I set up another form of passive income, man, it's just like a win.
 
that you feel deep down inside. And it doesn't matter, Seth, if it's 50 bucks or 15 bucks or five bucks or 5,000, right? Total sidebar, real quick story, but I was sitting with a buddy of mine at a conference and he kept showing me his phone and he was clearly showing off. But every time he'd pop up his phone, was like another sale was made. And it'd be like $27, $170, $300. And I go...
 
Dude, how are you doing this?" And he said, I set up these funnels and it's just a little digital product I created and we're doing ads and we're putting all the people towards these ads. And I said, so how many of those do get a month? He goes, I don't somewhere between $9,000 and $10,000 a month is coming in. And I remember feeling giddy for him and giddy about the idea that this could be possible, that you could just do whatever you want to do every day. Go fishing, go surfing, be on a sailboat somewhere and pull up your phone and be like, well, this is cool. just made...
 
$800. So for me, we have started to build that into what we're doing. I now get alerts on my Apple Watch. It's a Slackbot. So every time a sale is made, it pops up. we went to Mexico over spring break and the vendors on the Mexican beaches, they bless themselves every time they make a sale. And so now when a sale pops up on my Slackbot,
 
I'm like, all right, I made a sale. This is awesome. So how has it changed my life? I'm more grateful. I sleep well at night. I have peace of mind. And I know that, you know, future generations are going to be taken care of by the wealth that my wife and I are creating.
 
(Seth Bradley) (48:45.29)
I love it, All right, Adam, this has been incredible. We're going to let listeners find out more about you.
 
Well, you can find out more about me personally at adamcarroll.info. It's two R's, two L's, adamcarroll.info. And again, if you want to check out the Shred Method, we have lots of free resources. So you can go and do a ton of research. We have a savings analysis there that you can plug in your numbers and see how much you could save and how quickly you could be out of debt. All of that is available at theshredmethod.com.
 
All right, brother. Appreciate your time. Thanks again for coming on the show and we'll to have you on again soon.
 
Love it, Seth. Keep doing what you do, man. This is super important stuff.
 
Alright brother, talk soon.
 
(Seth Bradley) (49:28.578)
Thanks for tuning in to Raise the Bar Radio. If you enjoyed today's episode, make sure to subscribe, leave a review, and share it with someone who needs to hear it. Keep pushing, keep building, and keep raising the bar. Until next time, enjoy the journey.
 
Links from the Show and Guest Info and Links:
Seth Bradley’s Links:
https://x.com/sethbradleyesq
https://www.youtube.com/@sethbradleyesq
www.facebook.com/sethbradleyesq
https://www.threads.com/@sethbradleyesq
https://www.instagram.com/sethbradleyesq/
https://www.linkedin.com/in/sethbradleyesq/
https://passiveincomeattorney.com/seth-bradley/
https://www.biggerpockets.com/users/sethbradleyesq
https://medium.com/@sethbradleyesq
https://www.tiktok.com/@sethbradleyesq?lang=en
 
Adam Carroll’s Links:https://www.threads.com/@adam.carroll?xmt=AQF0nwaIL6JD_GK94lbTvHphHOmWwlUyt3TkeHLav-vXU_E
https://www.instagram.com/adam.carroll/
https://www.linkedin.com/in/adamcarrollspeaks/
https://www.facebook.com/AdamSpeaks/
https://x.com/adamcarroll
https://open.spotify.com/show/1fPEUnWdnbcOcbYdksY1Yi
https://www.youtube.com/channel/UCJREGkPP6UwMucJMPvDS8xg

FBF 03 | Flash Back Friday | Capital Raising is the New Superpower: How to Win in Any Economy with Hunter Thompson

In this episode of the Passive Income Attorney Podcast, host Seth Bradley engages with Hunter Thompson, a prominent figure in the world of passive income investing. Seth Bradley and Hunter Thompson discuss the current economic landscape, including rising interest rates, inflation, and the inverted yield curve, and how these factors impact real estate investments.
Hunter Thompson shares his entrepreneurial journey, emphasizing the importance of diversification and capital raising in passive investing. The conversation also covers strategies for navigating the current market, as well as the significance of education and mentorship in achieving financial freedom, with Seth Bradley providing insights and guidance for listeners seeking to grow their passive income portfolios.
Links to watch and subscribe:
https://www.youtube.com/watch?v=g9QZ1WTVLUE
Bullet Point Highlights:
Passive income allows you to practice when you want, not because you have to.
Rising interest rates and inflation are significant factors in real estate investing.
Diversification is key to mitigating risks in real estate investments.
Capital raising can be a hybrid approach to passive investing.
Understanding economic indicators can help predict market trends.
Real estate is a hedge against inflation, benefiting from rising rents.
Investors should focus on net operating income (NOI) when evaluating properties.
Education and mentorship are crucial for success in investing.
Speed in decision-making can lead to better investment opportunities.
Having a virtual assistant can help manage time effectively. 
Transcript:
Seth Bradley (00:10.42)
What's going on law nation. Welcome to the passive income attorney podcast, the best place for learning about the world of alternative passive investing so that you can practice when you want to and not because you have to. So if you're ready to kick that billable hour to the curb, start by going to attorneybydesign.com to download the freedom blueprint, which will also get you access to partner with us on one of our next passive real estate investments and
 
We have a live deal right now. It's a 506 C opportunity for accredited investors only with a target preferred return of 15%. Yes, 15%. You heard that right. So jump on that. If you have a chance today, let's talk about when and what to invest in. There's been a lot of chatter about waiting for the right time to jump in over the last, I don't know. I'd say five years or so.
 
because everyone has their own prediction on when the next 2008 might happen. But well, other than the blip caused by the recent global pandemic, we haven't seen that natural correction yet. And who really knows when that will be? Nobody does. But what we have seen are very strong influences that could impact the real estate market in the very near future. And you know what I'm talking about?
 
I'm talking about rising interest rates. I'm talking about a highly inflationary environment that we're all feeling combined with, you know, an under supply that's creating a high demand and skyrocketing prices. So with all these different factors culminating right now, what does it all mean? What can we predict after factoring in all these things? Well, you're about to find out.
 
In this episode, one of my favorite investing personalities, Hunter Thompson shares his expert insights into this economic melting pot that's happening right now and how you can capitalize on it before you get left behind. Hunter is the founder of ACM Capital and who has acquired over $150 million of mobile home parks, self-storage retail office, ATM machines and cryptocurrency assets.
 
Seth Bradley (02:29.868)
Hunter is also the host of the cashflow connections, real estate podcast, which has received over 1 million downloads. He's also wrote raising capital for real estate, which hit number one on Amazon in real estate sales and selling really stoked for this guys. Let's go.
 
This is the Passive Income Attorney Podcast, where you'll discover the secrets and strategies of to make Start living the good life on your own terms. Now, here's Seth Bradley.
 
the ultra.
 
Seth Bradley (02:57.475)
y'all
 
Seth Bradley (03:09.518)
Here's your host.
 
Hunter Thompson, what's going on? Rather welcome to the show.
 
Hey, thanks a lot. Our honor to on.
 
Absolutely, man. You're someone I personally look up to a lot and holding high regard in this industry. So super stoked to have you on the show today, man. Thanks again. Absolutely, man. So look, you've been on a ton of podcasts and you know, you're the host of your own successful show, cashflow connections. So I got to ask who's the real Hunter Thompson.
 
and mutual.
 
Hunter Thompson (03:38.894)
So, I mean, you know, someone asked me like, if I had to say one word that identify it's entrepreneur man. And I think everyone listens to that. That's probably that speaks to them because anybody listened to the show, they take an entrepreneurial approach to reality and to their lives. Like we were not born passive real estate investors, right? In fact, we had to find this stuff out on our own to a large degree. And
 
A lot of us were kind of taught a lot of myths about investing, you know, save only invest in the stock market. For some reason, dividends can pay off your expenses at some points. Like you have to have a $40 million net worth to do that, you know? And so that feeling of like, man, I may have been lied to about some of the most important things in life kind of inspired me to go down a cool path and, you know, break some rules along the way, but here we are.
 
Nice. I love it, man. So dive in a little bit deeper. Tell us a little bit about your background and your story, and then we'll jump into it.
 
Sure, so I think for a lot of people when they talk about real estate and like their history in the space, 2008 is gonna come up. And that's the same for me. But I was very insulated from that risk. So was in college during 2008, but I saw what took place and I had a background as an entrepreneur and a poker player. And so I wasn't really like investing in the stock market, but when 2008 happened, saw flood was in the streets and I heard the quotes from the billionaires that said, that's when you should be buying.
 
And so I basically went all in on education. I was obsessed with CNBC. Jim Kramer was like the biggest fan of his, just reading everything from Warren Buffett, Charlie Munger, all those guys and started to follow financial markets, even dabbled in day trading a bit. And then something happened, started to have success as anybody that did that started in 2008, by the way. But it wasn't really until 2010 that something happened that like completely shifted my perspective.
 
Hunter Thompson (05:33.194)
on everything I had learned up until that point. And people don't talk a lot about 2010, but for me, that was the big moment because after all of this research about quote diversification and hey, you got to get Apple and Johnson and Johnson and also some cash and maybe some gold and these types of things out of nowhere, the European debt crisis happened and it created massive challenges with volatility in the US markets.
 
And all of sudden everyone was focusing on some obscure economic data point, which was the Greece bond yields and the German bond yields. And it was like, Hey man, all this research I had done never suggested that something as ridiculous and obscure. I'm talking to every single person on CNBC was watching the
 
German bond yields. And the quote at the time was, if it goes above 7%, the S &P 500 is going to dive. And they were correct. And every day it would go above 7%, below 7%, and the S &P would go up and down and five, like over and over again. And I was like, I've got to find a way that a small firm or myself can conduct due diligence on an asset class that is, the performance is directly tied to supply and demand, not the German bond yields.
 
And so I was actually not really interested in real estate specifically. I just ended up doing a lot of research on everything that was out there and found real estate was extremely predictable in terms of wealth creation and had the opportunity to create some asymmetric returns. So that's what led us to this conversation today.
 
Yeah, yeah. So I know your story pretty well. So fill the audience in a little bit, but I know that Jeremy Roll, who's been a guest on our show before, is a mentor of yours and one of the first people kind of got you into the space or got you interested in the space. And he's well known for taking a fully passive approach, right? He's one of these guys that's just fully passive. That's kind of his thing. How have you kind of adapted that approach and made it your own?
 
Hunter Thompson (07:29.038)
So yeah, you're right. going back to like 2010, I moved to California, which is one of the most decimated States in the country in terms of the recession, right? And so that's where I started my real estate career. And so I would go into the networking events, sometimes four or five a week. And it was honestly like going to, mean, it was somber to say the least. People had lost their shirts, people that created $10 million of wealth. If they were all invested in California, some of them are wiped out.
 
And I found that there was a couple of strategies that really struggled and there's a couple of strategies that didn't struggle. And, you know, some people don't talk about this, the default rate for multifamily apartments, 150 units or more like Fannie Fannie financed 1.5 % during 2008.
 
I mean, it's just, that's the reality of quality assets with a lot of checks. If you got a lot of checks and they keep coming in because rental income is not really volatile, you just didn't have that big of a problem. So I was very sympathetic to finding out how to do this. And the first person that really introduced to me to this was like you said, Jeremy Roll. And the thesis was this.
 
I'm very, I want to be focused on diversification. I don't want to be hyper allocated to one particular niche, but if you study economics, you know that in order to have a market advantage, you must be focused on doing one thing better than everyone else. But that is not conducive to building a portfolio that is diversified. Like you probably have interviewed a lot of like, let's say self storage.
 
Operator that's like all in on cell storage and Florida's the market and everybody knows the demographics are super favorable. got their whole $30 million net worth all in the East coast of Florida. And it's insane. All the baby boomers are moving there. It's amazing. And then once a year when it's hurricane season, they can't sleep for months because they got $30 million on the East coast of Florida. And it's like, man, the East coast of Florida is awesome, but maybe I should have a little bit in Georgia. Maybe I should have a little bit in senior living in Wyoming. You know what I mean? So.
 
Hunter Thompson (09:33.698)
That's the only way to accomplish that from my perspective is to have a diversified passive approach. And I do know Jeremy very well, he doesn't just go to Mexico and drink Mai Tais. I mean, he works 50, 60 hours a week trying to allocate his portfolio appropriately. And I do a similar kind of thing with my portfolio and also have an active side of the business as well, which is where I raise capital for other people's deals.
 
Yeah. That's the beautiful part about passive investing is you can diversify across different asset classes, different geographies with different sponsors, all that sort of thing so that you can diversify within the realm of real estate or business or whatever it might be. Rather than if you are an active sponsor, you're operating those properties. That market advantage is knowing the market, knowing the market being boots on the ground and knowing all those intricacies rather than, but you know, if you're that person, it's very difficult to diversify.
 
Perhaps you can pass it invest in somebody else's deals. But again, you're, jumping into the passive investing space. Yeah. So you're very well known as, know, a great capital raiser. Do you consider that a passive approach or is that an active approach?
 
That's exactly right.
 
Hunter Thompson (10:44.142)
Well, it's a hybrid, right? Because what I do is I still find and aggregate active owner operators in their respective niches. It's just that because I have a little bit of expertise in this and a due diligence process and some economies of scale, because we've invested very significantly over the years and because we have hundreds of investors and thousands of people on our list or tens of thousands on our list, we can do the level of due diligence that most passive investors can't.
 
even if they knew exactly what to do, it's not economically viable. So I'll you an example. There's a lot of passive investors that listen to the show. And I'm sure that if you had the time and infinite resources, you would want to go visit these properties in person on every single deal. Spend probably a hundred hours on due diligence on each deal. know, not only talk to the sponsors themselves, but their CPAs, their contractors, their property managers. You want to review their software. You want to run criminal checks, background checks.
 
If you had infinite time and resources, you'd probably do all that stuff. But if you do all that and you're investing 50 grand, your return profile is gonna be deteriorated by that due diligence process. And so I feel like there's need in the space for that extra layer of due diligence, but it's not economically viable unless you're pulling capital together, aggregating investors. And so that's why I founded Asim Capital to do that exact thing. We provide that service and...
 
usually investors aren't really paying anything out of pocket. We get our economics from the sponsor because we can show up with, hey, $5 million in 30 days, $10 million in 60 days, these types of things. And that's a great skill to have in the business of real estate.
 
Yeah. And you just laid that out perfectly. You know, why some people ask, why don't you just go straight to the operator to invest in rather than someone who might be mainly a capital raiser or an aggregator of capital. And you just laid that out perfectly. It's, you know, that's an extra layer of due diligence, time, effort, money that you as the passive investor don't have to do. And if you do do it, it just stops making sense. I mean, there's only so much you can do. Even if you take something simple.
 
Seth Bradley (12:51.022)
It's certainly not simple, but something like, you know, looking at a sponsor's underwriting model, there are so many things to look into that and you won't be able to pick that apart. I mean, you just won't from the past investors per second. Even if I go grab somebody sponsors, some sponsors underwriting model and look at it, I don't know what equations they've changed. I'm not going to check a thousand different equations. But what we do bring value wise is that we know these sponsors. It's a really small industry when you get to know everyone in it.
 
And we know their reputations. know how their deals have gone. We know how they treat their past investors. So that's just an extra level of due diligence that the past investors at the retail level might not be able to do. least not.
 
Exactly right. That's exactly right. And something else, think that I obviously I've mentioned economics a couple of times in the show. Like this is the lens through which I view the space. And if you are an owner operator, you want to kind of play lip service to economics. So the reality is you've got your head down because you can't adjust your business accordingly. Like if you're a retail owner operator and then retail centers get
 
closed in 2020 and you cannot go to retail. You can't just go, all right, we're doing hotels now. You can't, I mean, you've built up a business around that, but as a passive investor, you can be nimble and aggregate capital and allocate capital based on your view through the lens of economics or otherwise.
 
Yeah, absolutely. Yeah, you're not going to if you're a retail operator, you're not going to say in tanks, you're not going to be like, OK, well, retail sucks now. Don't don't invest with me. Forget about it. Exactly. That's the more else you've got to come up with reasons why to invest in. It might not be the best for those investors.
 
Hunter Thompson (14:29.516)
That's exactly right. That's exactly right.
 
So a lot of our listeners are attorneys, they're doctors, they're W-2s. Is raising capital something they should be interested in getting into? Should they take that next step?
 
depends. So, I mean, we do a webinar about raising money. And the first thing we say is like, Hey, look, this is like the third slide in the presentation. And I say like, are you actually ready for this responsibility? If not, should leave now because you know, what we talk about is turning on the faucet, turning on that thing. It's like the X factor of every business. And I don't want you to 10 X. I don't know what I'm doing. You know, so it's, take the responsibility very, very seriously. And,
 
If you haven't done a deal, for example, you shouldn't raise money for a deal. What you should do is go all in on education. And I know you've done just a tremendous job kind of educating your base, but you can go all in. I'll put this, this is like a really powerful way to put this. So in 2010, when I started going to real estate meetings, everyone was saying like, honor, this is the opportunity of a lifetime. I've been in this business for 30 years and never seen anything like it. This is the back the truck up moment. And I was like,
 
back what truck up? Like, don't know what I'm doing. Like, I don't know what a cap rate is. You know what I mean? But here's the crazy thing. They were absolutely correct. The market dynamics was so favorable that it was probably more favorable than any time in history, especially when it comes to commercial real estate. But four years later, I had developed more confidence, more knowledge, more network that the deals I solved then were better than the deals I saw in 2010. And that is why this game is amazing.
 
Hunter Thompson (16:05.794)
because if you can expand your network and knowledge and confidence faster than even the most pronounced recovery in the history of real estate. And so all those people that if you ever hear someone saying like, now's the opportunity of a lifetime, go all in, like maybe they're right, but it might not be the right time for you. So just take your time, stay away from people that are pushy. The reason this game works is that it works all the time. So you never miss the opportunity of a lifetime. That's the whole point.
 
Love it, man. Yeah. So they already have the network, right? If you're an attorney or doctor, you probably know other attorneys and doctors. So at least you have that network established of high net worth individuals that you might be able to aggregate some capital with. But you're right. I mean, the education piece is imperative and everybody goes through that learning curve and it takes some time. And there's a lot of responsibilities to come with raising capital and investing in real estate in general. So you've got to make sure that you get that education piece nailed down.
 
Totally. Actually, do you mind if I, so like something that's been just like on my mind recently is, and so many past investors need to understand is that there's been a lot of discussion around the yield curve inversion and all of that. Do you mind if I talk about that? I'm sure that the lot of listeners are going to be interested. Okay. So recently, you know, there's been a lot of discussion around economic indicators and recessions and such, and what that may mean for us as investors and
 
Absolutely, let's jump into it.
 
Hunter Thompson (17:30.328)
Part of this is because of the inverted yield curve. And I'll break what that down means just really quickly. So typically speaking, bond yields slope up into the right. If you think of the X axis as time and the Y axis as the yield, you would think that the yields would slope up into the right because the longer the time, the more time risk you're incurring, the higher the return you would want on your bond. So that's typical.
 
But every now and then there's this economic phenomenon that takes place where short-term bonds can produce higher yields than long-term bonds because people are concerned about short-term risk. And so bonds, the long-term bonds, people flood into the long-term bonds, which reduces the yields and also increase the yields of the short-term bonds. And so this unique phenomenon takes place. And historically speaking, this has been a very good predictor of recessions, typically 18 to 22 months after the inversion.
 
of the two year and the 10 year bonds. Does that make sense before I go forward? Yeah. Okay. So I think that this is a good indicator of recessions, generally speaking, but I am very bullish about the current environment and I can give you some data as to why, but most importantly, 2008 is a really significant aberration. Recessions do not typically trigger
 
significant pullbacks in real estate. mean, a 10 % pullback in real estate, especially commercial real estate or multifamily apartments in particular, that is pretty a historic. mean, it takes, you got to look back decades to find these types of examples. And I just want investors to understand that. But we saw something in 2008 that this was confirmed in 2020. That is just a holy crap type of moment, even in the face of that potentially challenging information.
 
which is in 2008, for the first time to this scale, the federal government, know, printed trillions of dollars. And this was basically the Pandora's box, which was open in terms of quantitative easing. And I believe it set the precedent that anytime something catastrophic or borderline catastrophic or could be catastrophic, could happen, they're gonna smash that button. And I've been talking about this for a decade and then 2020 happens.
 
Hunter Thompson (19:51.252)
And boy, were we right. And they smashed the trillion dollar button harder than they've ever smashed it before. The United States government printed about a $6 trillion. Federal governments all around the world, the central banks printed another $4 trillion. So there's 10 trillion extra dollars in the system slushing around the financial sector searching for yield. And I believe
 
that what's going to happen is that yield, that search is gonna go into the bond markets first, because it's the only place you can place trillions of dollars quickly. And then it's gonna work its way to United States real estate, which I think still is the most favorable risk adjusted investment in the world. And I'm not the only one that thinks that. So imagine this trillion dollar tsunami set to crash on a very limited amount of supply in the United States.
 
in the wake of enduring an affordable housing crisis in an environment where every bond in the industrialized world is negative, the United States positive interest rates and positive cap rates are here to provide that yield. And this is a crazy, crazy moment. I want to talk about interest rates in a second, but like that tsunami, that visualization of that tsunami, I think is creating a situation where it's like, are you going to surf that tsunami?
 
Or are you going to sit back and watch that crash and watch equity prices rise without participating?
 
Yeah. Yeah. So how did the other things kind of layer onto that? I mean, we're not just hearing about the, you know, the inverted yield curve, but also, you know, the interest rates that the feds are hiking up and inflation is through the roof that everybody's feeling the effects of that. I mean, how do all these different factors, you know, what are they resulting? What is the result or, know, what is your prediction of the results?
 
Hunter Thompson (21:39.278)
So first of all, I'm glad you asked this because I'm working on a summit right now where we're having 22 experts in different niches talk about their perspective on this exact topic. And so I'm in the middle of these sessions and like they have been crazy. So if you want to get access to that, it's a free summit, by the way, you can go to 100ktoinvest.com and it's for people that have a hundred thousand dollars to invest. you you want to look at different niches through this economic lens. So someone I just interviewed on my show, Dr. Peter Lindemann talks about this and
 
very well-known economist. Basically these rising interest rates, dude, this is serious. I mean, this is not some like economic indicator. This is actually happening right now. I know a $40 million deal that just got blown up because the bank basically underwriting changes if the interest rate increases by a hundred basis points, that's significant. But we got to put this in context. So when interest rates rise,
 
typically it's because of concerns around inflation. And that's the case for now as well. And inflation is typically thought of, or I think I should say, real estate is typically thought of as a hedge against inflation. I mean, you've probably said that a million times, I have too, but I think out of this conversation, you maybe will both start phrasing it slightly differently. It is true that it is a hedge against inflation, but I think that doesn't even come close to stating.
 
how favorable inflation is for real estate owners. Because when we think about real estate being a hedge against inflation, I think it's like this. We think about the equity prices, the prices of real estate rise proportionally as inflation takes place with is true. But there's something else that's taking place, which is there's a distinction between equity prices and consumer prices. So when consumer prices rise, you have inflation working its way through the monetary system and the consumers feel it.
 
from top to bottom, right? But in real estate, we trade the assets on a multiple of net income. So I know you bought some multifamily apartments. have I. Most deals look something like this. We're buying from an owner that doesn't know what they're doing for some degree or another. We're going to buy the property, raise rents, cut expenses. We'll probably raise rents by 15 % year one, maybe 8 % year two. And then from that year going forward, we're probably going to track along with inflation. Does that make sense?
 
Hunter Thompson (24:02.572)
Yeah. If you're being conservative. Yeah. So I would expect rents after the business plan is implemented to simply track along with inflation to be conservative. And then expenses will also track along with inflation. Now, most people, when they hear that, they think, it's a wash. You know, the top line is increasing by 5%. The expenses are increasing by 5 % and no one's really going to benefit. But that would only be the case if it was a one-to-one ratio of gross to expenses.
 
Absolutely.
 
Hunter Thompson (24:31.98)
or net to expenses and it's not. Like most of the assets you and I look at, we're talking about 45 % operating expense ratio and self storage, for example, you can see 35 or even 30 % operating expense ratio. So it's disproportionately impacting the top line compared to the bottom line, because the bottom, the expenses are so much smaller. So the net is actually increasing significantly every year you have five, six, seven, eight,
 
percent inflation. And I'm sure you've seen a lot of people that say it's really 15. That's even better for owners because the net isn't going to increase, increase and increase. There's one other piece of this inflation discussion that I want to talk about, but it's a little bit confusing. Are you, did I explain that in a way that's clear?
 
No, that was perfect. Very clear. Complicated subject, very clear.
 
Okay, good. So it's not just a hedge, right? The hedge is like, sure, the asset values excluding this discussion around NOI. That's the first part. The second part is the NOI situation is very favorable for investors. The third piece though is like this almost no one's talking about this. And I think it's probably the most powerful and conceptually it is the most powerful, which is if I go to buy a $15 million piece of property, I put $5 million down.
 
I borrowed $10 million. The bank is now on the losing end of basically compounding interest because of inflation. If I borrow $10 million in today's purchase power, by 10 years, if inflation continues at 8 % per year, by 10 years, the purchase power of that $10 million has been cut in half by inflation, meaning the purchase power of the dollars, I will pay them in 10 years,
 
Hunter Thompson (26:18.104)
Half is valuable to me. And it's the same dollar amount that I ended up paying them, but the purchase power has now been cut in half. So what this means is that while there is so much chatter about interest rates rising, the reality is they're net negative in real terms. The bank is paying you to borrow their money, to buy an asset, which value will increase and also in a while will increase and also likely the multiple on which that in a while is.
 
rated will increase. This is why this is a back the truck moment for these real estate owners. And, you know, that's what we're doing right now. Yeah.
 
So based on that, do you think when you're looking at different asset classes, the more disproportionate the income is to the expenses, maybe the more favorable that investment looks like nowadays?
 
Really good question. Um, I do think there's some merit to that, but I gotta say a caveat. So we have some self store, excuse me, some, assisted living properties and those actually are like 70 % operating at expense ratios. So you can hear this and say, Oh, those maybe we're going to get hammered. Senior living is dealing with some challenges because of COVID, but the top line is not increasing at inflation. The top line is increasing at like 10, 15 % nationally. So.
 
I don't know exactly what's going on, but there's obviously there's more to this conversation than just the inflation discussion, but it isn't the case that we're losing money because of this. It's a challenge because of like move in certain States are still locked down. There's challenges, all that whole thing, but the demographics and everything I think make up for that. But to your point, I think your argument can be made all things being equal. Meaning I think that let's say class A apartments start to make a lot of sense. Self storage start to make a lot of sense.
 
Hunter Thompson (28:07.234)
You can make the argument that new development could even make sense. So that's not something I do and have ever done, but you can start to make that argument for sure.
 
Yeah. So maybe give us a preview. I don't want to give away the whole thing. I know you've got the a hundred K to invest summit coming up, but what are some of those investments that start making sense in this environment? We've kind of touched on it a little bit, but maybe make it a little bit more clear.
 
my gosh. I'm so okay. So I'm such a nerd. So I'm like literally nerding out, but let me give you a couple of examples. So we have like a big broad view of things that we're going to talk about because there's a lot of things that I invest in. There's a lot of things that I don't invest in, but generally speaking, when it comes to wealth creation, the summit's broken down into three days, protect, grow and multiply. And like in that order. So protect is like downside protection, focused real estate, know, stabilize multifamily apartments.
 
sell storage assets, things like that. Then in grow, we're gonna talk about, know, development, maybe something with like real estate and blockchain, you know, the tokenization of real estate, for example. Then in multiply, we're gonna talk about Bitcoin mining. We're gonna talk about Dow funds. We're gonna talk about buying existing businesses. One of our clients owns the company acquisitions.com. And he's gonna come and talk about like buying businesses that are cash flowing. I try to put them on the spot and be like, what sector is your favorite sector right now? He's like,
 
He's like French Canadian. He's like, I don't really care about the sector. He's like my friend that just bought the company is a billionaire. did yogurt. So I don't want to say that yogurt is the best sector. He's like, he's going big on yogurt, dude. so anyway, it's going to be a cool summit.
 
Seth Bradley (29:43.284)
That's awesome. Yeah. It sounds like it's going to be like really diverse, right? It's not just, okay, a multifamily summit. You're kind of going to give this broad swath of lots of different ways to invest in different risk profiles as well.
 
Totally. That's what's cool. Okay. So this is what you and I like kind of have in common. Like we can actually be open and honest about our views because of the position that we play. And this is why I don't think I've ever seen a summit quite like it because it wouldn't be good for business if all you did was multifamily and you go, Hey, go invest in Bitcoin mining. So, but you know, we're just trying to do the right thing for the past investors. Like I said, hundred K to invest.com.
 
Yeah. I love the concept, man. Cause a lot of people are thinking that they're like, okay, well I've got, I've got a hundred K to invest. Like what is the best place to put it? And especially with all these different crazy factors that are going right now, going on right now, that's, that's awesome. Very timely. All right, man. Before we jump into the freedom for let's jump on to one last golden nugget for our listeners. got one.
 
Yeah. Just go spitball. Cause I have got a bajillion. Okay. didn't know you did the freedom for that. So crazy. do a freedom Friday thing. We're on the same page in so many ways, dude. That's awesome. So, here's a golden nugget for sure. you know, speed beats pretty much everything. So what this means is that, the difference between like college sports and professional sports, basically that everyone's faster. In fact, you can be smaller, but if you're way faster, you can still move up through the ranks from high school to college to professional.
 
Spitball man.
 
Hunter Thompson (31:08.832)
And the same is true of business. Now, some people might hear that and go, like you're rushing through due diligence. No, it means rush to conduct due diligence, rush to start. But it doesn't mean go quickly and rush through it and do it sloppily. It means get to it. And one of the best ways that I've found to get to it is to find mentors, is to find guides and not try to figure it out on your own. know, of cool things that I've done, you mentioned some.
 
cool things I've done in this industry. It's awesome, but dude, I didn't make any of this stuff up. That's not my lane. I want to find someone that has done exactly what I want to do. And I want to model it as closely as possible. And by the way, when you do this, you'll find a place where you feel like your gut wants to go right. And they went left. And sometimes you can feel like, okay, now I got to go on my own. I'll you a perfect example. You mentioned Jeremy Rohl. He's a passive investor, right? And there was a moment where I was thinking my skills are not
 
completely used. Like I've got this excitement about like building websites and marketing and email content, which Jeremy doesn't do, you know? And I'm like, I need to find someone that's done that. I looked left, found someone that went that direction and then model, model, model, model. And I'm sure there's going to be a moment where I have to do the same thing and model, model, model. So I'm never going like, Hmm, how can I use my raw intelligence to figure this out? By the way, if I had done that, you know, I still would have been like struggling to get C's in college. You know what I mean? So like it's all because of just finding good mentors.
 
Yeah, absolutely. It's a way to accelerate your growth. A lot of people, they'll look and say, look, I don't want to buy this course or this mentor or this coach because it's expensive and it might be expensive, but think about like what people pay for their undergraduate degree or their law degree. I mean, it's ridiculous. And it's a fraction of that.
 
That's exactly right. probably shouldn't made a joke about making season college, given your audience, but, you know, here's what I can say about your audience in particular. Everybody kind of values things differently. And it's like your audience has a high demand for time. Cause it's what they lack. When I started my career, I had all the time in the world. Nobody cared about anything. I couldn't get my calendar to get filled up, but all of sudden after years of working the skills that I have developed now, the sense is very difficult for me to get 15 minutes.
 
Hunter Thompson (33:24.342)
So when I think about how can I expedite whatever this is, my need for money is low. My need for time is high. So it's like, if I can pay to expedite whatever it is, trust me, you tell me it's $5,000 to get 30, okay, done. I'll get the result in 30 minutes. Boom, here's the five grand. so, but that's a balance, right? So there's a lot of people listening to this right now that are kind of going down this path and perhaps they have a lot of time. So then what the opportunity is, is that's your leverage point.
 
Find someone that has a high demand for time, low demand for money, and you can exchange.
 
Yeah, definitely. Most of our listeners definitely don't have time. mean, I'll be like, Hey, make sure you get a workout in or meditate in the morning. Like I don't have 15 minutes. don't have an hour. Billing, Billing 3000 hours a year. It's ridiculous, man. I've been in that world and it's, it's tough to carve out some time. So that's why I passed investing is really the way to go. mean, I did the fix and flips and, and did all that kind of stuff to start out with. And it's just, it's not a good business model for.
 
So tough.
 
Seth Bradley (34:23.15)
You know, an attorney at a big law firm or a doctor that's running their own practice. It's just really difficult to balance those things. All right, man, let's jump into the freedom for let's go.
 
Totally.
 
Hunter Thompson (34:33.454)
It's time for the Freedom Form.
 
What's the best thing you do to keep your mind and body healthy?
 
you already know. you know, I'm constantly working on, like kind of like athletic inspired things. have a gym. It's probably the most baller thing ever. I'm not like the typical flashy person, but I do have a home gym is pretty dope. and so right now when I'm working on is a 1,000 pound total for the three powerlifting lifts, the squat bench and deadlift. I'm not there yet, but I'll check in maybe in three months and I'll probably be there.
 
Woo, sounds good, man. With all your success, what is one limiting belief that you've crushed along the way and how did you get past it?
 
dude. Okay, I'm not gonna do like a 30 minute thing on this one, but you know, I think a lot of people...
 
Hunter Thompson (35:21.432)
get the impression that the higher you go up in the success ladder, the more it's about tactics and strategies and nothing can be further from the truth.
 
Hunter Thompson (35:35.326)
I've paid $50,000 to be in a room with some very successful people. And the reason that room is so exciting is because you start to realize that there is no ceiling. It's a mental thing. It is not the tactics and the strategies that I wanted to learn. I wanted to know what they move like, how they think. And that's a lot of money to pay. But the higher you go up in that ladder,
 
The smaller, the little tweaks, the, that realization that, I should do that. I can do that. That stuff. It's crazy. Right. Because when you start, you're like, there's a certain point, like at different layers, again, there's a certain point where you go, I'm sick of hearing about this mindset stuff. get it. I just want results. But then you realize later, that's all that's holding me back. So like, that's my thought.
 
Yeah, it's a lot of money, but at the same time, that's something that sticks with you forever. Once you get over that, not that mindset hurdle, it's with you forever. What's one actual step our listeners can do right now to start creating more freedom.
 
Totally.
 
Hunter Thompson (36:40.28)
So funny that you have these dude, this is so cool. I've like, respect this so much, cause it's what it's all about. One strategy they can implement. I would say leveraging technology to save time. First eliminating a lot of tasks that you don't need to be doing, but leveraging technology as opposed to people, especially you. And then as you first eliminate, then automate and then delegate. So.
 
Everyone on here, and this is going to hurt a lot of people, but every single person listening to this right now should have a VA or an assistant of some kind. Like if you're making six figures, it's absolutely inexcusable to not have someone doing some of the tasks that you shouldn't be doing. If you Google the term unique ability by strategic coach and Dan Sullivan, it'll give you some insight in terms of my views on a lot of that stuff.
 
Perfect. Yeah. Sometimes it's hard to let go, but you got to do it. That's right. Last but not least, how has passive income made your life better?
 
dude, that pro come on. mean that these are great questions. Okay. I mean it is my whole life. It has made my whole life, but just real quick, a story about this. So a lot of people listening to this show, when you get started in this path, the main goal is to have your passive income exceed your expenses. And that's was my goal when I got into this business as well, until I was at a conference and someone at the back of the stage, back of the room said that they had a cool announcement.
 
because they had accomplished their number one financial role. And they come up there and of course I assume he's going to say that. And he goes, so I achieved my number one financial goal was that my passive income is now 10 times my expenses. I was like, what? Like mind blown situation. Like I didn't even know that was possible. I didn't know that's legal. Like, what are you talking about? I never heard anyone say a multiple of that. Like, you know, he's probably.
 
Hunter Thompson (38:27.402)
Super frugal guy, by the way, $10,000 a month in expenses, $100,000 a month in passive income tax deferred dude. So that's possible in this game. you keep going.
 
Love it, man. All right, Hunter, this has been awesome, man. We're going to find out more about you.
 
Yeah. One thing, 100k to invest.com. That's it. You guys are awesome. Thanks.
 
That's it. Go check it out. Thanks again, Hunter. Hunter Thompson, ladies and gentlemen, you can see why I like him so much because well, there's a lot of the same ideas that I have. have the same political views. We have a lot in common and well, he's just a lot like me and who doesn't like someone that's like them, right? So anyways, major key, they say the best time to plant a tree was 20 years ago and the second best time is now and
 
The same thing goes for investing. There's no better time for you to take action than right now. There are always opportunities in every part of the cycle. You just have to get educated and make the right moves. All right. If you're ready for a change and ready to take action, partner with us on our next passive real estate deal, which is live right now. Go to passiveincomeattorney.com and join our Esquire passive investor club. All right, kiddos, enjoy the journey.
 
Hunter Thompson (39:43.544)
Thank you for listening to the Passive Income Attorney Podcast with Seth Bradley. Do you want more ideas on how to generate multiple streams of passive income? Then jump over to passiveincomeattorney.com for show notes and resources. Then apply for the private Facebook community by searching for the Passive Income Attorney on Facebook. And we'll see you on the next episode.
 
Links from the Show and Guest Info and Links:
Seth Bradley’s Links:
https://x.com/sethbradleyesq
https://www.youtube.com/@sethbradleyesq
www.facebook.com/sethbradleyesq
https://www.threads.com/@sethbradleyesq
https://www.instagram.com/sethbradleyesq/
https://www.linkedin.com/in/sethbradleyesq/
https://passiveincomeattorney.com/seth-bradley/
https://www.biggerpockets.com/users/sethbradleyesq
https://medium.com/@sethbradleyesq
https://www.tiktok.com/@sethbradleyesq?lang=en
 
Hunter Thompson’s Links:
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TME 15 | Inside the Secret Network That Billionaires Use to Pay Zero In Taxes with Alex Sonkin

In this episode of Raise the Bar Radio, Seth Bradley welcomes Alex Sonkin, founder of the Due Diligence Project, to discuss the massive blind spot in tax strategy among CPAs and how his peer-reviewed CPA community addresses it. Seth Bradley and Alex Sonkin explore how traditional CPA firms, even those servicing ultra-high-net-worth clients, are often unaware of the many advanced tax mitigation strategies available. Alex Sonkin explains that his platform introduces vetted tax strategies reviewed by hundreds of independent CPA firms, creating an experience similar to an Amazon or Netflix model for financial services.
Rather than relying on static, siloed in-house teams with limited solutions, Seth Bradley and Alex Sonkin discuss how the Virtual Family Office model empowers CPAs and family offices. This approach allows affluent individuals, not just billionaires, to access world-class, peer-reviewed tax and financial planning strategies while maintaining their trusted CPA relationships. The conversation emphasizes humility, proactive due diligence, and massive action as critical principles for success in both tax planning and entrepreneurship.
Links to Watch and Subscribe:https://youtu.be/v8RSrMRslHU
Bullet Point Highlights:
Most CPAs, even in top firms, are not deeply versed in advanced tax mitigation due to limited time and exposure.
The Due Diligence Project functions as an independent, peer-reviewed network, allowing CPAs to tap into the collective knowledge of hundreds of top professionals.
Traditional large CPA firms and Wall Street structures are siloed and don't provide open-source best-in-class strategies.
The future CPA firm is a Virtual Family Office — proactive, advisory-driven, and built with world-class independent specialists instead of static in-house teams.
The Virtual Family Office model brings elite wealth management strategies to affluent individuals (e.g., $10M-$50M net worth), not just billionaires.
Humility, curiosity, and willingness to collaborate are essential for CPAs and advisors to truly serve clients at the highest level.
Success requires massive action and consistent pursuit of better solutions — complacency kills innovation and wealth creation.
Transcript:
(Seth Bradley) (00:02.094)
What's up, Builders? This is Raise the Bar Radio, where we talk about building wealth, raising capital, and all in all, raising the bar in your business and your life. This is the No BS podcast for capital raisers, investors, and entrepreneurs who are serious about scaling their business and living life on their own terms. I'm Seth Bradley, securities attorney, real estate investor, and entrepreneur, bringing you world-class strategies from the best in the game.
 
If you're ready to raise more capital, close bigger deals, build a better you, and create true financial freedom, you're in the right place. Let's go. Alex, what's going on, brother? Welcome to the show.
 
Seth, thank you so much for having me. It's a pleasure.
 
man. Fellow San Diegan. So, appreciate that and appreciate that you you love the weather like I do.
 
best weather in the world, All of San Diego County, even if it gets like 10 degrees hotter, it's as good or as better anything else on the planet.
 
(Seth Bradley) (01:05.698)
Yep, yep. Sometimes you gotta go outside of San Diego for a little bit to appreciate it because you forget that every single day is fantastic.
 
We're not going to get into the June gloom and the May gray because people outside of San Diego, don't want to hear that. uh, know, we get to complain between each other. everyone outside of San Diego, were like, we don't want to know about any of your problems.
 
Right, Exactly, exactly. All right, man. Well, let's just jump right in, Tell everybody a little bit about your background, about your story, and take it back as far as you like.
 
Sure, graduated University of Michigan Business School undergrad and became an options trader in Chicago as a member of the Chicago Board of Trade, the Mercantile Exchange, Chicago Board of Options Exchange was a market maker down there for many years and came up with a couple ideas and moved to California. What we do now is we have the largest independent peer review community of CPA firms in the country. We support
 
hundreds of CPA firms who basically introduced their favorite resources, favorite tax attorneys, favorite strategies. And then as a community and independently, everyone independently vets out every strategy, every resource. And we rank and rate all of the strategies, all of the resources. Very similar to what you'd experience in Amazon or Netflix or the streaming services when you watch a movie or you buy a product on Amazon.
 
(Alex Sonkin) (02:35.534)
you're going to go look for the 4.9 out of five stars and do a quick price comparison. So what we did is we've created essentially an independent peer-of-view ranking and rating system for sophisticated tax strategies and then cost mitigation strategies because the tax code is just way too big. No one knows how many pages there are in the tax code. It's constantly changing. we basically, we didn't even know we were doing this at the time because all we were doing was
 
putting together advanced tax planning institutes, filling them up with CPA firms, bringing speakers, specialists on to present their ideas. But the magic was happening in the hallway conversations between these tax attorneys and the CPAs in these Q &A sessions. And what we realized was that traditional CPA firms really have no clue how many pages are in the tax code, have no idea how many strategies there are that are available to them that have been fully vetted.
 
And they don't have the time and the resources to fully vet those strategies out. So we just realized we were onto something and we kept building and building and building. And we just had an event. Our last couple summits, diligence project summits had close to 700 CPA firms on one, close to 847 was our largest summit.
 
The more eyeballs, the more tax-focused CPAs are looking at the strategies and vetting out the strategies, the more refined the due diligence is and the more new resources they're able to introduce to our network. So we're able to go deeper, wider, and more refined in our due diligence when it comes to tax planning.
 
Yeah, that's awesome. So you you analyze and put a score on the actual strategy itself as well as the firm.
 
(Alex Sonkin) (04:25.76)
Yeah, everything, right? Because you and I both know there's so many moving parts in our business. And when a CPA firm is dealing with their most, their highest net worth clients, billionaires, centi-millionaires, multi-millionaires, and they have, they're selling an appreciated asset, whether it's real estate or their company or shares in another company they've invested in, they want that sale to be tax efficient. Then they might want that money to be invested in other
 
parts of their portfolio. want that transition to be efficient. They want all the estate planning to be efficient asset to all these different moving parts. But the area where most CPAs and attorneys are the weakest is in the income tax mitigation part. There's a lot of decent estate planning out there, asset protection, other planning. It's really the income tax mitigation part where very few people are excellent at this.
 
Financial advisors, attorneys have very little experience with tax court, with audit. They should really not be involved in income tax planning. The CPA firms are the ones who are signing the tax returns. They have the experience with audit. They have the experience with tax court. But they're spread so thin just trying to produce tax returns and financial statements and meet all of the deadlines that they have to meet throughout the year. There's actually very little time for them to do proactive tax planning.
 
and to complete due diligence and even start the due diligence on a tax strategy. Where do we start? Who do we call? How do we find out if the client's going to go to jail? If there's issues with this? They really need to get their confidence level up at a very high level before they call their clients that you really need to look at the strategy and do this. So that's where we really live is we really there to support the tax focused CPA or the family office that's supporting that.
 
that ultra high net worth family that's led by a tax focused advisor, hopefully a CPA with at least 10,000, 50,000 hours of experience in auditing tax court, where they could look at the notes, look at, part of, join the due diligence project community, look at the notes, look at the strategies, meet the specialists, communicate with other CPAs in our network to really understand the risk reward of.
 
(Alex Sonkin) (06:48.088)
the strategy when it as how it compares to other possible strategies or combination of strategies to bring to their client.
 
Yeah, yeah. I mean, I love the overall idea of kind of this Amazon marketplace for CPAs and tax firms and tax strategies. It's like, you know, I know when I'm looking for a new accountant or a new CPA with a different group, with a different real estate group or something, you know, I might have done some good business with one CPA and then some that I did not. And I don't have a consistent person to go to at this point. And it also depends on what we're talking about, right? This, the, the speciality of it. it's a
 
if we're talking W-2 tax mitigation or we're talking about real estate investment or we're talking about some sort of high cash flow entrepreneurial venture, it really depends. One CPA can't necessarily do all that. Maybe a large CPA firm that has all that stuff in house for sure. But when we're talking about your one CPA that you know that's been filing your tax return for the last 20 years, they're not very specialized in these sorts of things.
 
Here's what's interesting, Seth. You made some interesting points here. Here's what's interesting. Traditionally, people say, I need a CPA. My current CPA firm is not doing the job. That's kind of par for the course. They don't know what's wrong. They know something's wrong because they know that a lot of billionaires aren't paying any taxes. They're paying this 30, 40 % of their income in taxes. They feel something's wrong. So, I need a new CPA firm. So, what do they do? Hey, can you find me a great CPA firm that's local to me? Why is that important?
 
Why do you need someone that literally that is that's local to you right away? The business owner is already messing up. That is not the most important thing. Okay, then they'll want someone Okay, forget distance. I'm okay with just meeting them virtually. They need to be a specialist in real estate. That's fine Okay, you've got a real estate portfolio there, especially in real estate, but really That's that's a that's another that's a good question, but it's not the best question. It's not gonna get you to the promised land
 
(Alex Sonkin) (08:52.366)
How fluent is that CPA firm in tax strategies? Are they plugged into a network like ours where they have hundreds and hundreds of independent CPA firms, former partners of KPMG, Deloitte, PWC, Ernst & Young, all proactively vetting strategies and introducing, unless you're part of a due diligence network like ours, you might be part of a very, very large CPA firm.
 
that also is part of other groups, other associations and none of them know, you know, three, four, five different strategies that would be perfect for mitigating taxes in a specific situation. So going to a large firm that has lots of in-house resources, are those resources the best? Do they have access to the best tax attorneys in the country? If those attorneys are in-house working for a CPA firm,
 
Or let's just say they're working for Jeff Bezos and Jeff Bezos' family office. Seth, do you think the best tax attorney in the country wants to be W-2 working for a CPA firm or working for a family
 
Right, right.
 
No, no. So right away, you've already discounted. You are not going to work with the best tax attorneys in the country. You're going to work with a static, the best attorney that's willing to be W-2, working for a CPA firm, working for a family office. If you look at the top 1000 tax attorneys in the country, you might now be working with number 945. Is that what you want to be like? No, no, no, we're fine. Our tax
 
(Alex Sonkin) (10:29.484)
Our tax planning is done by my CPA and they've got this tax attorney that's the 945th best tax attorney in the country in their space. It's like saying, I'm building this orchestra and my trumpet player, instead of getting the very best trumpet player in the world, I have the 945th best trumpet player playing trumpet. You want to put that on your website? You want to market that? think your client's going to be like, this is going to be awesome. I'm going to have the 945th best.
 
You
 
(Alex Sonkin) (10:59.138)
Resource in that space giving me planning ideas. Whereas I'm a business owner I've had to get to this point to have a tax problem here to overcome all these challenges and now you're gonna bring me a tax planning solution. That's like D minus That's what's going that's puts par for the course. This is what's going on. What we know is 18 % of Fortune 500 companies are zeroing out their tax returns Okay, just listen to this 18 %
 
of most profitable companies in the world have a team of attorneys and CPAs that zero out their tax return. That means 82 % have no idea what they're doing on a relative basis. those 82%, we're talking about 82 % of the most profitable 500 companies in the world. What we're saying is their tax planning from our vantage point, it's not that it's not good.
 
It's like average to below average, whereas their revenue and income is off the charts. That's like a big problem. It's like saying, you know what? We have a basketball team where our point guard, our forwards, and our two guard are really good, but our center is like garbage. You know, we've got like a high school level center, and then we have all-stars at all the other positions. That's not gonna work.
 
Yeah, yeah. mean, why is that? I mean, it's like, you know, they should have access to the best resources. They should be getting advised by the, you know, the top experts in the industry. But, you know, they're just not. Are they not putting the effort? Do they not have access? Do they not know, like, what's the...
 
Because the difference is when you look at Amazon and you look at Netflix and all the other streaming services that are providing an independent peer-review because back before Amazon and Netflix we had Blockbuster video and we had Barnes and Noble right and we did do diligence very differently going to all the different Blockbuster videos going into Blockbusters and Noble trying to find a book to buy right it's very different experience now we live in this very different world now with
 
(Alex Sonkin) (13:09.196)
independent peer review and all these things. However, the financial services world was created by who? It was created by people like Bernie Madoff. It was created by Wall Street, right? So everything in the financial services world is really created by Wall Street, people like Bernie Madoff. And so Goldman Sachs doesn't want you to know what Morgan Stanley is doing. Morgan Stanley doesn't want you to know what JP Morgan's doing. And so really the financial services realm is
 
is kind of built in silos. No, come into the Goldman Sachs silo. Come into Ernst & Young. You don't need to worry about what our competitors are doing, what these other CPA firms are doing. We're Ernst & Young, we're Goldman Sachs, we're JP Morgan. You can have the products and services that we have in our back room. So essentially, when you look at JP Morgan, Ernst & Young, Pricewaterhouse, all these huge shops, they're just stores with back rooms. And it's like shopping at a store.
 
It's like going to Toys R Us. What do we have in Toys R Us? Well, what do we have in our back room? Whereas when you walk into Amazon, what do you have? When you walk into Netflix, you have the full scale universe, open source. So what we've done is we've basically taken the financial services industry and we've created this open source peer-reviewed model. And we started with sophisticated tax planning because that's where most people are really, really bad at it.
 
And then we've added cost mitigation and other resources. You know, we're not trying to compete with asset management and money managers and all those other, know, certainly we vet those people out. But, you know, there's millions of people that manage money and our financial advisors. And certainly we do our vetting and due diligence on those people. Where we really differentiate ourselves is the income tax planning resources and solutions. Because what we found is the top biggest
 
most profitable, most famous CPA firms and law firms, that's their blind spot. That's where they're really, really bad because they don't know how many are in the tax code. They don't have the time and the resources and they don't know who to call to actually start and complete a successful due diligence process for sophisticated tax structure.
 
(Seth Bradley) (15:29.708)
Yeah, yeah. So when you say independent peer review, what exactly does that look like? mean, walk me kind of through that and how that works.
 
I'll show you like this is what you and any let's say if you're a real estate investor right and you're about to sell let's just say a 10 million dollar asset that has nine million dollars of gain in it you're gonna do the same thing that we've done if you're smart what are you gonna do you're gonna go out there and be like what are all the tax strategies that are possible to help me mitigate this huge tax liquidity event right then you're gonna get a bunch of ideas and then what are you gonna do
 
You're going to show those ideas to your most trusted financial people who are probably your CPA, your lawyer, your advisors, all these other people that you think are financial gurus and really most of them are not even qualified to comment on the tax structure except your tax-focused CPA who has at least 10,000 hours of experience in audit and tax courts. So really you should only bring this to your CPA. But now you brought it to your attorneys and your advisors.
 
So they're all going to comment on it because they're financial experts even though they have almost zero experience in auditing the tax court. So what do these people do with this idea? Some of them will like, oh, I don't know, just pay your tax. So you're going to get all sorts of answers. Now, you're the business owner. You have no idea how to quantify these answers. So you're really the tax expert trying to manage all this information and trying to be like, what do I do? And what are you going to do?
 
you're gonna basically go with what your CPA kind of tells you that they're comfortable with. Now your CPA doesn't know all the strategies, so they might know 10 % of the possible strategies. So you're gonna go with the most comfortable strategy that your CPA is comfortable with, that they've completed their due diligence on, which may be strategy number 443 out of the possible thousand strategies that are out there. And now you have the 443rd best idea.
 
(Alex Sonkin) (17:35.522)
that you're implementing and your ROI on that is going to look just like that. Meanwhile, it's taking you all this effort to create $10 million of asset and it's going to take you just like this to completely give away the tax on that because your CPA is not plugged into an independent peer review environment where they can work with other CPAs who have experience with other resources, be able to ask your questions, get your questions answered, maybe ask another round of questions.
 
But really at that point, you really need to be dealing with the thought leaders in that space, not some local attorney or other CP that also has no clue what's going on. It has no idea how many pages there are.
 
Got it. So when somebody comes to, you know, they have that issue, right? And they're trying to find the right CPA that can help them with that specific situation and find that number one best tax strategy. You know, what do they do? Do they come to your website to try to find someone in the network? Because anybody in your network can tap into everybody else in your network and find that optimum strategy.
 
There's really two ways of doing it. They either find a CPA in our network, which is one of the easiest things to do, or they have their trusted CPA plug into our network and complete their due diligence. That's probably the best way because they are this way. This gives them another warm and fuzzy. Hey, I've had this relationship with my CPA for 20, 30 years. I really like them. I understand the challenges that they're under just because they haven't plugged into the network doesn't mean they're a bad CPA or bad person.
 
It's like having a, you know, I just bought a gold plated cell phone. It's the greatest cell phone iPhones ever produced. But if I don't plug it into Verizon, if I plug it into Bob's telephone network that only works in four locations in America, I'm gonna have this $5,000 cell phone that's basically just a brick that I could just use as a paper holder. But if I have a normal cell phone, I plug it into Verizon and I can make a phone call from anywhere.
 
(Alex Sonkin) (19:43.298)
That's a much better experience. it's not the quality of it. It's partially the quality of the CPA, but it's more so the quality of the network. and certainly these, the CPAs that really are attracted to us are the ones who have these huge hearts that want to do the very, very best for their clients. And they know that they need to pick up every rock and flip over because they know their clients don't want tax returns and financial statements.
 
They need those. They don't want any of that. What they really want is proactive tax planning ideas. And what the CPAs don't have time for is that. So they have to create time. And we show CPAs how to create that time. We eliminate all, 95 % of the time. It takes them to complete the due diligence because we just show them the notes. We get them 90, 95 % there. Then they take the notes. They take the resources.
 
They jump into the tax code and then they complete the last 5-10 % of the due diligence process on their own because they're going to have to actually do a little bit of work to get this done. But we've reduced their time and increased their confidence level in completing this project by a factor of 10x, which is a huge value to them because they don't have the time and they don't have the resource to get this work done, but they want to get it
 
(Seth Bradley) (21:07.616)
the interruption, but we don't do ads. Instead, know that if you're raising capital for real estate, my law firm, RaiseLaw, is here to give you the expert legal guidance you need to raise capital compliantly and structure and close your deal. And if you're looking for a done-for-you fund-to-fund solution, Tribest is the industry's only all-in-one setup and fund administration solution. Visit Raise.Law and Tribest.com to learn more.
 
Right. Yeah. And I can imagine it takes a certain degree of humility, right, from those CPAs to say, I don't know everything. I'm not just going to make up something. I'm not going to make it up. But I'm not going to do kind of half-assed research for a few minutes and tell you I know everything about the subject. Right? Like, I can admit that I don't know everything. I'm not an expert in every single tax strategy.
 
You nailed it. mean look we do a whole program about the ten pillars of extraordinary due diligence Curiosity is one of them independence is independence versus group think and you nailed one of those pillars. It's it's it's it's humility and You know being curious being humble when you're the tax expert as you know CPA that's been around for 30 years you like I've seen everything right? That's kind of how you feel
 
But if you have that idea, I've already seen everything. I already know everything. How many people, by the way, how many pages are there in the tax code? I have no idea. Well, that is that's not congruent. What's congruent is I've been in the industry 30, 35 years. Do I know the tax code? I don't know the tax code. It's constantly changing. I'm humble, but I'm working hard. Yeah, there are sections of tax codes that I know, but it would be awesome to be part of independent peer community of hundreds and hundreds of other tax geeks like me.
 
where we're chewing, know, we're eating this elephant one bite at a time and working together as a community. That's hard working humility. And if you think about it, those are the kind of people that are winning in every, in your profession, in my profession. Think about a basketball player. It's like the best basketball players, they are working to improve their game every day, every month, every year. As soon as you think, oh, I'm the best. Nobody does that. Kobe, Michael.
 
(Alex Sonkin) (23:25.034)
Everyone was constantly improving their game every offseason even though they were achieving they were the grace of the world So when you see a CPA going, I already know everything. I'm not humble run for the hills You're in big trouble
 
Right, right. So I mean, I can see where this is. This could actually just change everything, right? I mean, it can change. Like if you get enough CPAs on this network and it's kind of the authority, the accepted way that things are done, it could really just change, you know, set the bar, right? So like, you know, where do you see the CPA firm or the future going? What does it look
 
Yeah, you know, we started out as the virtual family office hub. We're still the virtual family office hub. What we do is the due diligence project. So we've had a vision, you know, more than 15 years ago where the CPA firm of future, the CPA firm of today is no longer just a CPA firm, right? They're not just an accounting firm looking backwards. What does a CPA firm mean now? They're a proactive looking firm. So they're really
 
providing advisory services. They're bringing ideas to the table. That is not what accountants traditionally do. So right away, the CPA firm of the future in our world is a virtual family office led not by a money manager or an attorney or a financial advisor. It's led by a tax advisor who really has a tremendous amount of experience with audits, with tax court, with income tax planning.
 
that's plugged into this community. really let's build Wall Street underneath an elite tax advisor and let's give them vetted best in class peer reviewed resources for estate planning, money management, all the different resources underneath them. And let's make sure all these resources are trained to be part of a team that's led by the captain, which is the head of their family office. But in this case, it's a virtual family office because in our opinion,
 
(Alex Sonkin) (25:30.732)
Like we said, the best people in the world don't necessarily want to be W-2 static living next to the family office or living next to the CPA firm that they support. These resources could be anywhere and everywhere. And it's like Lego pieces. Let's build out a custom build, a virtual family office with your favorite advisors, with your favorite CPA, plug them into due diligence project, and then maybe replace some of the resources with best in class peer reviewed.
 
I'm going to keep my estate planning attorney. I'm going to keep my CPA, but then let's build out the rest of my virtual family office with resources, specialists, specialized attorneys that my two estate planning attorney and my CPA need to help me do what I need to do and get from point A to point B.
 
Yeah, yeah, I love that. Let's let's unwind that a little bit. What what exactly is a family office? We have a lot of listeners that are, you know, high net worth individuals, wealthy, probably a high paying job of some sort. And, we still don't know what a family office is. Like, what is a family office? We hear about it all the time. People talk about it. You know, what is it? Is it just, you know, the Trumps and the Bidens that have them or what?
 
Well, look, when we first started doing this, we had to educate everyone. What is a family office? And there's still people that don't know what a family office is, and that's okay. So traditionally, what a family office is, is when a family or a business owner sells their business, and now they have a big pile of money instead of running their business where they don't need CFOs and C-level executives and marketing people. Now they have a big pile of money. Maybe they're building a real estate portfolio, private equity, various investments.
 
They, instead of having to make 17 phone calls, hey, I'm gonna call my CPA, I'm gonna call my attorney, I'm gonna call my advisors, they make one phone call to the head of their family office and their family office is gonna house their entire financial team. So their CPAs, their attorneys, their advisors are all part of a family office and there's usually a CEO of that family office.
 
(Alex Sonkin) (27:36.814)
So that structure traditionally can cost anywhere from $250,000 a year up to $2,000, $3,000, $4,000,000 a year if you're dealing with very high net worth billionaires. our idea was to rebuild that structure and make it a virtual family office instead of a single family office or a multi-family office with everyone working W2 in a static place, was let's create a virtual family office environment where we can have a world-class tax attorney support
 
multiple virtual family offices led by CPAs around the country. And based on what their clients want and need, they may not need a full $250,000 or a million dollar yearly cost. Maybe they can have a family office with $50,000 worth of yearly expenses and they just need, you know, two, three advisors, six meetings a year, get their hands around what you're doing.
 
And they don't need check writing. They don't need a lot of these other services that maybe a ultra high net worth family needs where they just want to make one phone call instead of 17 phone calls and say, take care of this for me. In the virtual family office model, it's the same one phone call, except now the team underneath that person that's getting the call are vetted best in class peer reviewed resources who might be all around the world who will all get together on a virtual meeting.
 
to support the client when the client has, hey, I have a liquidity event or I have a tax event or I want to update my plan. Hey, let's bring the team together and let's look at all the moving parts and let's rebuild your plan. But now we're going to take advice and ideas from the smartest people in the world. We're all working together as part of a team.
 
Got it. Yeah. the virtual family office, makes it seem like that it offers wealth management, the best wealth management, more, it makes it more accessible to more people, right? Like not just billionaires, but maybe lower than that, right? Like maybe we've got $10 million or something like that and we can still get the best of the best.
 
(Alex Sonkin) (29:42.068)
Exactly. And so our idea was, you know, you have these people who are worth $50 million and they can't afford a family office, but they want to, you know, the $50 million, they want to live life too. They want to be able to go play tennis. They want to give time to their synagogue, their churches. They want to do something else besides actually running their own, you know, basically overseeing their $50 million portfolio, which is a full-time job. the problem is they're not qualified to be doing that work.
 
Yet can they identify investments that they like? Sure. Can they identify the best planning around those investments? They're not schooled in that. So they really should not be involved in their family office. should identify a tax-focused CPA, have them build out a virtual family office for them. And then now they have the benefit of making one phone call instead of 17, which saves them lot of time. And they can now trust the fact that they have best-in-class peer-reviewed resources to give them the very, very best ideas.
 
So now what happens? Their confidence level goes up. So their time and planning goes down, confidence level goes up, the quality of the solutions goes up, and they're all of a sudden out, they can create a lot more wealth by doing world-class planning because we're seeing a lot of wealth just go away to state and federal governments and unnecessary taxes simply because the team does not know and has not completed their due diligence on all the possibilities.
 
That's we want.
 
Yeah, that's incredible, Alex. You know, I want to have you back on the show to maybe get into some of the more of nitty gritty stuff, right? Like what are some of these tax strategies that we might not know about or we might not hear about every single day because we tend to hear about the same ones over and over. And you've probably seen some pretty exotic ones, some very specific ones that people have never even heard of. But, you know, we're running out of time today. But, man, I would love to have a whole episode just kind of based on that.
 
(Seth Bradley) (31:40.91)
But before we jump into the freedom four, you have one last gold nugget for our listeners.
 
Yeah, you know, just work hard, write your goals down, read your goals and update your goals. You know, there's a magic formula of being able to just writing down your goals, looking at your goals and just updating your goals. Be grateful. I know you get a probably get a lot of people just with gratitude and hard work and all that stuff. writing down your goals is something that very few people do. And of the people that write their goals down, a very high percentage of those people actually achieve those goals. So
 
simple way of getting successful and I do it and I recommend that little idea to every one of my friends and family.
 
Yeah, absolutely. you know, I think people sometimes they get caught up in, you know, the the mental stuff, they don't want to jump into that. But goal setting is more of a tangible thing. And all those things you hear about, like whether that's a vision board or affirmations or visualizations or setting goals, like it's all kind of the same, right? It's just even if it's like,
 
I want to update my tax planning. I want to have a better tax planning team. know, write that down. And every day you look down at all your goals and make them balanced. You know, some of it is they'd give back to the community, have strong relationships with my family members or have no relationships with certain families. I don't know, you know, what the goals are. But balanced goals where you're constantly reviewing those goals and then you're updating those goals. And every day you do something to take a step.
 
(Alex Sonkin) (33:15.278)
towards achieving those goals. Those are little things. It's not a huge deal, but when you do that over time, there's a compound effect to it that is incredible that people just can't appreciate. It's been said, we think we can do a lot more than we do in a year, but we don't realize how much we can do in a five or 10 year period. It's incredible.
 
much we can do in a five or ten year period if we're just consistent every day for that period of
 
Absolutely, you get some momentum going over time. All right, let's jump into the Freedom 4. What's the best thing you do to keep your mind and body healthy?
 
I do strength training six days a week and I actually prefer using a rubber band training. This X3 bar program that's out there. There's a bunch of different competitors now, but it's like a 20, 30 minute training.
 
Nice, nice. With all your success, what is one limiting belief that you've crushed along the way and how did you get past it?
 
(Alex Sonkin) (34:18.968)
Great question. You know, I think everyone experiences fears, fear of failure in different areas. And I think you have to attack your fear of failure. Whatever you're scared of, whatever's on your radar that's popping up as a fear, you have to literally identify it and attack it and just prove to yourself that you're really not scared of it.
 
Love that. What's one actual step our listeners can do right now to start creating more freedom?
 
They can take action. Action is the key. The real problem is people just sit around, they get in front of themselves. They're too much thinking, too much analysis. What I've seen is people who have achieved incredible, let's just say business success, those people weren't smart enough to know.
 
that how hard that business was actually going to be to build. They were actually not, if they were smarter, they would have never done the business because they were like, the odds of me actually achieving this business and creating it are so small. I'm just better off not doing it. They weren't that smart. So they just went ahead and jumped into it. And so what I found is just taking massive, massive action. Even if it's a failure, that massive action creates a pattern because it's going to
 
Success is going to require massive action. And when you have a pattern and know this is going to take massive action and it's okay if it doesn't work out, I'm going to go for it anyway. I'm just going to assume it does work out. So being positive, massive action. If it fails, boom, you learn something and you go do something else and you just keep taking massive action.
 
(Seth Bradley) (36:10.402)
Perfect. Last but not least, how's passive income or entrepreneurship made your life better?
 
You know, I've been very blessed. 20 years ago, I came up with an idea based on a diet that cured cancer for my aunt, my mother-in-law. And I suggested to my wife and my mother-in-law that they start selling my mother-in-law's cookies that were based on a diet that cured cancer for my mother-in-law. And so now today, we have a company called Go Macro, MacroMars, that my wife and my mother-in-law built based on an entrepreneurial idea that
 
you know, that I had over 20 years ago. And as soon as we had a little bit of success in the beginning, I knew this was bigger and better than we had even thought of. And I just continually supported my wife and really just in every way I could to watch this opportunity grow. So to me, that's been my my passive, even though, you know, I'm married to this business owner, you know, supporting her and watching this idea grow and flourish into a really
 
Successful health food company called comacro where we sell these macro bars. They're super delicious
 
Yeah, that's awesome. Yeah, it's passive for you, maybe not quite as passive for her. I have the same issue with the gyms. You know, they make really good money and it's passive for me, but my wife is running those things, so no.
 
(Alex Sonkin) (37:31.174)
Exactly, well you know she's had to be there to support you so yeah so for her it's passive and it's a great story for her and it's a great successful story for you as well. know how hard it is to build.
 
Yeah, awesome Alex. The list has been incredible, man. We're gonna let you find out more about you.
 
DoDiligenceProject.com or info at DoDiligenceProject.com. You can introduce your CPA to us or you can reach out to us if you hate your CPA and want us to recommend a great CPA for you that's already plugged into our...
 
Easy enough, man, easy enough. All right, brother, thanks for coming on the show.
 
Seth, it's been my pleasure. Thanks so much for having me.
 
(Seth Bradley) (38:09.986)
Absolutely.
 
(Seth Bradley) (38:13.944)
Thanks for tuning in to Raise the Bar Radio. If you enjoyed today's episode, make sure to subscribe, leave a review, and share it with someone who needs to hear it. Keep pushing, keep building, and keep raising the bar. Until next time, enjoy the journey.
 
Links from the Show and Guest Info and Links:
Seth Bradley’s Links:
https://x.com/sethbradleyesq
https://www.youtube.com/@sethbradleyesq
www.facebook.com/sethbradleyesq
https://www.threads.com/@sethbradleyesq
https://www.instagram.com/sethbradleyesq/
https://www.linkedin.com/in/sethbradleyesq/
https://passiveincomeattorney.com/seth-bradley/
https://www.biggerpockets.com/users/sethbradleyesq
https://medium.com/@sethbradleyesq
https://www.tiktok.com/@sethbradleyesq?lang=en
 
Alex Sonkin’s Links:
https://www.linkedin.com/in/alexsonkin/
https://encoursa.com/presenters/alex-sonkin
https://www.facebook.com/asonkin/

FBF 02 | Flash Back Friday | From Hustle to Holdings: The Smarter Path to Passive Wealth with J. Scott

In this episode of the Passive Income Attorney Podcast, host Seth Bradley discusses the importance of transitioning from active to passive income with guest Jay Scott, a seasoned real estate investor. Seth Bradley and Jay Scott explore various investment strategies, the significance of due diligence in syndication, and the differences between house flipping and multifamily investments.
Jay Scott shares his journey from tech to real estate, emphasizing the need for teamwork in multifamily projects and the importance of understanding market conditions. The conversation concludes with Seth Bradley and Jay Scott providing actionable insights for listeners looking to create financial freedom through passive income and strategic real estate investing.
Links to watch and subscribe:
https://www.youtube.com/watch?v=V26Rze2S9TM
Bullet Point Highlights:
Active income is trading time for money, while passive income allows for financial freedom.
Investors should focus on the highest and best use of their time.
Flipping houses can be tedious and may not be the best use of time for high-income earners.
Transitioning to multifamily investments can provide more control and cash flow.
Market conditions can significantly impact investment strategies and outcomes.
Due diligence is crucial when vetting syndication sponsors and deals.
Understanding the underwriting process is essential for passive investors.
Building a strong team is vital for success in multifamily investments.
Investors should seek to understand the risks associated with their investments.
Passive income allows for a lifestyle centered around family and personal interests.
Transcript:
Seth Bradley (00:10.188)
What's going on, law nation? Welcome to the Passive Income Attorney Podcast, your favorite place for learning about the world of alternative passive investments so that you can practice when you want to and not because you have to. Now, if you're ready to kick that billable out of the curb, start by going to attorneybydesign.com to download the Freedom Blueprint, which will also get you access to partner with us on one of our next passive real estate investments. All right, let's talk about
 
the highest and best use of your time. We've talked about active versus passive income and for good reason, they are completely different. They're on opposite sides of the spectrum. When we talk about active income, we're talking about your job as an attorney, as a doctor or a business owner, where you trade your time in for money out. Depending on your skill set, background, education, work ethic, et cetera,
 
You know, this could be a great use of your time or it could be a terrible one. But when most people think about getting into real estate investing, they're torn. Should you do a fix and flip like you saw on HGTV? Should you invest in a REIT like your financial advisor and Charles Schwab told you to do? Should you buy a single family rental or invest in a syndication? There are endless options so I can understand why it's so confusing. Well, start with this.
 
ask yourself, what's the highest and best use of my time? If you're thinking about doing an HGTV fix and flip and your partner at a big law firm, for example, is that flip really the best use of your time? And don't be mistaken, a flip is transactional and it is active. So will you make more per hour on that fix and flip than you would at your job?
 
After you factor in the learning curve, the deal sourcing, the headaches, what it takes away from your job and everything else, it's not even close. Unless you truly love doing it, which some people do, it just doesn't make sense for high income earners. You should be focusing on transforming the income you earn actively into passive income streams. At different levels on the passive scale, that could very well be a single family rental or an Airbnb.
 
Seth Bradley (02:34.26)
or could be passive investments into commercial syndications. But if you truly want to obtain financial freedom as quickly as possible, don't create more time consuming activities that aren't as fruitful as the active income stream that you already have. Focus on passive investments until you are financially free. And then you will have the freedom to transition or not into any
 
active activity you have a passion for. Today, we have a very special guest, Mr. Jay Scott of Bigger Pocket fame. Jay is an entrepreneur, investor, advisor, and the co-host of the Bigger Pockets Business Podcast. He has bought, built, rehab, sold, syndicated, and held over $70 million in residential property, and currently owns several hundred units. Jay is the author of four bestselling books on real estate investing,
 
with sales of over 300,000 copies. Get really excited for this, folks. You're in for a treat.
 
This is the Passive Income Attorney Podcast, where you'll discover the secrets and strategies of the ultra wealthy on how they build streams of passive income to give them the freedom we all want. Attorney Seth Bradley will help you end the cycle of trading your time for money so you can make money while you sleep. Start living the good life on your own terms. Now, here's your host, Seth Bradley.
 
Jay Scott, what's going on, brother? Welcome to the show.
 
Scott (04:09.196)
Thanks. Appreciate you having me here Seth.
 
Absolutely, man. Appreciate you taking the time out of your day, We've got a little bit of history, but let's jump into your history, man. What's your story? Tell us about your background. Take it back as far you'd like to.
 
Yeah, I'll keep it short because nobody really cares about what I used to do. So I'm a tech guy by education and former trade. I worked in Silicon Valley for a long time, spent about 15 years doing the engineering thing and the product management thing. 2008 decided to get married. My wife and I, she was in the tech world also. We decided to leave and do something different so we could start a family.
 
focus on our family. Basically, we were both working ridiculous hours and it just wasn't sustainable if we wanted to start a family. So put our jobs in 2008, moved to the East coast, ended up flipping houses. Long, boring story about how that started, just kind of serendipitous. We didn't really plan it, never really considered real estate, but fell into flipping houses. Over the next eight years or so, we flipped about 400, 450 houses, was great. It ended up being the,
 
next career we were looking for, it gave us the flexibility to kind of raise our kids and never have to miss a soccer game or a piano recital, which was fantastic. But then around 2017-ish really got burned out on flipping houses and that's when I started to look for some new stuff to do. and that kind of leads me into what I've been doing the last few years.
 
Seth Bradley (05:41.742)
That's awesome, man. That's a ton of houses you flip, man. think that that's, know, a lot of the folks who've been in the game for a long time, they've heard you speak on, you know, on bigger pockets and all of that. So, you know, what attracted you originally to house flipping rather than, you know, buy it holds or anything like that?
 
So I'll be honest, I don't love real estate. I love business. I'm a business guy. like when I was even when I was in the tech world, I got my MBA and I did some business development and I moved from the engineering side to the product side where I could be more involved in the business stuff. And I'm a business guy by heart. And that's what I love doing. So when it came to flipping houses,
 
For me, was, I could have been buying and selling anything. It ended up being houses. And again, not an exciting story. mean, literally the story was my wife was watching a show on HGTV with some people flipping houses and she said, let's give that a try. Just as kind of like a fun thing to do on the side while we were waiting for our wedding to come up. So it wasn't something that I ever thought about or planned to do. It just kind of happened.
 
And so if it weren't flipping houses, it would have been buying and selling something else. would have opened a restaurant or I would have opened a retail store or who knows what I would have done. But for me, the challenge was in the business. It wasn't the real estate piece of it. And so I've always enjoyed the scaling part. So yeah, flipping a house is great. Flipping five houses is great. But I always wanted to know, how do I go from flipping five houses to flipping 50 houses in a year? What are the systems and processes I have to put in place?
 
how do I build that type of business? That to me is what's exciting. And so for me, it's always been about not the real estate part of it, but about the building the business part of it.
 
Seth Bradley (07:25.248)
I love that man. I don't think I've heard anyone just come out and say that, even though a lot of people are probably in the same boat as you that, you know, you don't have to love real estate to recognize that it's a great business. Right. Yeah. So that that's awesome. So tell me a little bit about your, your transition and what you're doing now, your current business, how you kind of progressed from house living to what you're about to tell us about.
 
Yeah, so 2017, I just got really burned out on flipping houses. It was good to us financially. We got good at it. I wrote a bunch of books on it, but I'll be honest, it was never fun. And as the years went on, it just ended up getting more tedious. I felt like I wasn't learning anything new. It was revising processes and creating new systems. it was fun, but I needed some new challenges.
 
So 2017, I decided, okay, done with flipping, actually went and started doing some business stuff. So I do some advisory work for some tech companies. I do some angel investing. And so for a few months, I actually considered getting out of real estate altogether, focusing on other business pursuits. But I actually, what I realized was that I didn't like the nuts and bolts of real estate. I liked the mechanics of real estate.
 
I loved the negotiation piece. I loved the asset management piece. I loved the putting deals together piece and I was good at it. And so while I really didn't wanna be flipping houses, didn't want to be involved in the day-to-day aspects of managing the projects. I enjoyed the deal part of real estate. And so in addition to that, after I stopped flipping, I had all this cash.
 
And I was like, okay, what am I going to do with this cash? I was using it to flip houses. We were doing 50 houses a year. It's put a lot of cash to work. Now I had all this cash. I'm a control freak. do invest in other people's syndications, but I don't sleep well at night when all my money is being managed by other people. So I said, how do I kind of take back control of my own cash as well as kind of get back into real estate? What can I do in real estate that I would enjoy? And now I can also deploy a bunch of my own cash. And what I realized was multifamily.
 
Scott (09:38.648)
That was a great opportunity. And I had been thinking about multifamily for a long time. But what I realized was from the syndication side of multifamily, could, one, I could have the control. could be a general partner. could control the deal. I could put the deal together. I could manage the deal. But also I could come in on the limited partner side as an investor. And it was a great place to deploy my capital. So I could deploy my capital in deals that I had full control over. So 2017, I decided I wanted to get into multifamily, probably wanted to get into syndication.
 
I reached out to a friend of mine, Ashley Wilson, who managed a company called Barred Down Investments. She and her husband had started the company a couple of years earlier. They were doing exactly what I wanted to do. And so I reached out to Ashley and I said, hey, I would love to learn multifamily. I don't expect you to like just take all this time and teach me so I can often be your competitor. But here's what I am willing to do if you're willing to do this. I will come work for you for a year.
 
And in that year, you've got all my time, you've got all my energy, you've got all my knowledge, you've got all my contacts, I'll put money into your deals, whatever it takes. You mentor me for a year, you've got my commitment for a year. After a year, we can figure out if like, there's a place for me on the team or if I'll go off and do my own thing. But basically, let's work together for a year. And she loved that idea. mean, I think she liked the fact that I was really good with the systems and the processes and the operation stuff.
 
And I obviously loved the fact that I could jump into a team that was high functioning, already owned a lot of properties and was doing deals. So for the next year, I worked with her team. It took about a year and a half before we finally did a deal. But 2020, just before COVID, we started putting together a deal. That deal went really well. Ashley and I realized that we were like, just we made a great team.
 
We had a bunch of complimentary skills, the things that she was really good at, I wasn't, the things I was really good at, she wasn't, it was just a good partnership. Around the same time, her husband decided that he didn't really want to be doing real estate anymore. He kind of wanted to be a stay at home dad. He liked helping with the business. He ran the underwriting team and he did a lot of the analytics, but he didn't want to be a partner in the business anymore. So about a year and a half ago, Ashley came to me and said, Hey, would you want to join me and be a partner in the business?
 
Scott (11:57.678)
2020, 2021-ish. Ashley and I joined forces. She and I now run bar down investments and we do value add multifamily all around the country.
 
That's great man, said you weren't having fun anymore, you having fun now?
 
I'm having a ton of fun. And I think the big difference between then and now is when you're flipping houses, flipping houses is a very, it's a solitary venture. Yeah, you have contractors around you and you have eight real estate agents and you have closing agents and lots of 1099 people, lots of vendors and people that come in to help you. But at the end of the day, you're running the show. You're doing the four big things that you do when you flip houses.
 
you're acquisitions or you're running acquisitions, you're doing the rehab or you're running the rehab, you're doing the disposition or managing the disposition and you're raising the money. mean, all four of those things, you don't generally have a big team to do those things because it's just hard to scale a big team when you're flipping houses. The profits aren't there, the margins aren't there. Unless you're doing real high-end houses, the deal size isn't there. But in multifamily, the thing I love about multifamily is it really is a team sport. When you're doing it,
 
$10 million deal or a $50 million deal, it's not something that I could ever do myself. It's not something anybody or very few people can do themselves. Typically you have to be part of a team because things are very specialized. mean, the acquisitions piece, you need some of the best acquisitions people in the world to be finding deals in this market. The renovation piece to be renovating a 200 or 400 or 600 unit apartment complex, it's not like flipping a house. You need to have really good systems and processes. need to...
 
Scott (13:36.448)
really know the renovation side of things. Managing the property, I mean, you have to know the asset management side. You have to know how to carry out a business plan. You have to know how to increase and reposition rents. You have to know how to decrease expenses and improve the efficiency of the management. And then on the sales side, that's a whole other world where you have to really know the market and be able to work with the brokers and know how to position the company for sale. And then finally, there's that raising funds piece.
 
And that's a whole world by itself, whether you're dealing with raising debt through a broker and you're going like just typical, like getting loans, or you're going out to private investors or institutions and you're raising equity, people that come in as partners. And I mean, that's a full-time job in itself, those two things. So when you do multifamily, you really need to figure out what are you great at? And then you need to surround yourself with people who are great at everything else. And so that's what I loved about multifamily. It allowed me to focus on what I was really
 
and then bring in people who are literally the best in the world at all the other stuff. And now it becomes a team sport. It goes from playing tennis to playing basketball. It goes from being yourself reliant and you have to do everything and be the best versus you have to be able to put together the best team and manage that team in a way that not only is everybody fantastic, but working together, they're better than the sum of their parts.
 
Yeah, yeah, that's fantastic, man. The whole team game part of multifamily and commercial real estate. It's really interesting because when you get into other businesses, it feels more competitive and kind of like if you if you have the secret sauce, you keep it close to your vest. You don't you don't tell everybody about it. Whereas when you're in this commercial real estate world, everybody's sharing ideas. Everybody's trying to partner. Everybody's trying to see how they can help you rather than just looking about, well, how can you help me kind of?
 
I call it, I'm gonna get in trouble here, but the Hollywood mentality where it's like, what can you do for me? Oh, you just drive a three series, you probably can't help me. So it's a different attitude.
 
Scott (15:41.294)
Absolutely. I like to refer to it as co-op petition. It's like there are deals that you're going to do with other people and then there deals you're going to do yourself and you may come back to those people later. You may never come back to them, but everybody kind of looks out for each other because you never know when you may end up in a deal with somebody that previously you were competing against. And so anytime that you're not in a deal with somebody, you're still treating them as if, the next deal we could end up being partners. And the deal after that, we could end up being partners.
 
because it really is, it's a small industry, everybody knows each other. we really, again, going back to the sum of the parts is greater than the parts themselves. mean, working together, we can really do a whole lot more than if we just are purely competitive and try and take each other down.
 
Yeah, absolutely. And I think kind of going back, there's a lesson to be learned about how you were transitioning from house flipping and you were the best at it. And then you're like, okay, I want to go into multifamily and a syndication. You went and you sought out someone that was already in the game that knew what they were doing, that had the experience. And you said, what can I do to help you? What value can I bring to you to help you so you can teach me what you've done? And there's a lot of value to be found in that lesson for folks that are trying to
 
you know, get into the active side. A lot of listeners out there are passive investors already and they're, you know, maybe thinking about, maybe I want to do in the active side. And they're like, well, what can I do? Cause a lot of attorneys, especially in doctors and folks like that, they think they have this one track mind. They're only trained to do one thing. And they're like, what value can I provide as somebody else? But there are a lot of skills that you've learned in your W2 profession that you can apply to help other folks that are already in the industry.
 
Absolutely. I mean, I talk about it a lot, but even outside of real estate, I do a lot of advisory work and I'm still pretty active in the tech world. And I find companies that kind of bridge that gap between technology and real estate. all know about the Zillows and the Airbnb type companies. There are a lot of startup companies in that space too called property technology type companies. so...
 
Scott (17:46.998)
I love to use my experience, my knowledge, my relationships to go into those companies and help them grow their companies. In return, I'm not an employee. I'm not even a 1099 contractor. In return, I'm getting equity so that if I can help make them successful, ultimately my equity is gonna be worth something. I'm gonna be successful as well. And so what I like to tell everybody like figure out what you're good at and then figure out who needs that expertise.
 
and then figure out how you can offer that expertise in a way that isn't trading necessarily hours for dollars. Figure out how you can trade your expertise, your knowledge, your Rolodex, your whatever it is for equity or potentially passive income so that you can grow potentially many fold as opposed to I charge $200 an hour or $300 an hour. mean, everybody loves $300 an hour, but the minute you stop working, you stop making that money. But if you can get equity, that equity can work for you for a while.
 
Yeah, absolutely. And it's tough for a lot of the WTs out there listening, they're highly paid professionals. It's tough to get off of that treadmill. For some folks it's easier because they're not making as much money, but for the lawyers, the doctors out there that are making a good amount of money in their profession, it's tough to try to see, you know, to stop trading time for money. But you've got to kind of see through the weeds there.
 
Yeah, well, what I tell people is, there's two types of income. There's your active income. That's the stuff that you're trading your time for, whether you're a doctor or a lawyer or an engineer or you're a house flipper or you're a consultant or you're a small business owner, whatever it is, that thing that when you stop working, you stop making money. And then there's a passive income. It's the thing you trade money for money. So you put your money out there and hopefully it continues to come back to you for the rest of your life or at least the next several years.
 
And so what I like to tell people is don't think about those the same. Those are completely different. figure out for your active income, figure out what the highest and best use of your time is. If you're gonna make more money as an attorney than you are flipping houses, don't flip houses just because you eventually want to retire on real estate. You can always use real estate for the passive side of things, but if you're gonna make more dollars per hour as an attorney or a doctor or a consultant, then do that because you wanna get out of that active income as quickly as possible.
 
Scott (20:05.9)
And the way you do that is you make as much as you can and you move it over to the passive side. So focus on whatever it is that's generating the most dollars per hour for a shorter period of time so that you can then start moving that money over to the passive side and start building up the passive side. don't, people ask me all the time, should I flip houses or should I buy rentals? And I'm constantly telling them that's not the right question. Flipping houses is your active income. Compare that to all the other.
 
potential active incomes you can have. And rentals is passive income. Compare that to all the other passive investments you can make. And so don't say flipping houses or rentals say, should I be flipping houses or should I be an attorney? And don't say, I be flipping houses or rentals say, should I be doing rentals or should I be investing in syndications or dividend generating stocks or something else? And think of them very differently. then secondly,
 
Make sure as much of that active income as you can, move it over the passive side so that you can start that snowball rolling. I compound interest is the key to financial freedom. And the sooner you can put more money to work, the faster it'll compound and the sooner you can start to live on.
 
Yeah, I love that man. mean, lot of folks, you know, calls that I take, they're like, hey, they're attorneys. Should I quit my job or how do I quit my job? I'm like, if you want to quit your job, don't be hasty about it. First of all, you're probably making a good amount of money in your active income. You just need to figure out a way to transition that active to passive income and don't just quit your job. It's very difficult to flip houses, to do an HGTV fix and flip while you're working at a big law firm or something like that full time.
 
I tried to do it, I didn't do it very well. You're not even gonna make it nearly as much money as you would as a doctor, as an attorney, unless you get to level like you did, Jay, but that takes time and that takes a buildup of accumulation of skills and money to be able to get to that level.
 
Scott (22:05.826)
Yeah, I mean, at the end of the day, it's a math equation. mean, your passive income or your ability to build up enough income to be able to retire, whatever your number is, is based on how much can you put in per month into that wheel, that passive income growth machine? How much are you generating every year on what you're putting in? So what do your returns look like? And three, how long do you have to compound it?
 
And so everybody can go out into a compound interest calculator and say, okay, I have $5,000 a month that I can invest passively and I can return 12 % per year and I need $6 million to retire. Well, based on those three numbers, you can now figure out that fourth variable, is how long is it going to take? And so figure out how much do you have per month to put in? What's the rate of return you can generate and how much do you need? And that'll tell you how long it's going to take or
 
figure out how much you have to put in, how much your return is gonna be and how long you wanna spend. And that'll tell you how much you'll end up with at the end, either way you wanna look at it. But again, it's a pretty simple math equation, but too many people don't actually do that equation where they don't think about it until too late and they think, I wish I would have taken that $5,000 a month that I was spending on my second home in the Bahamas and put that into real estate so that I could have been.
 
compounding it and so now I could buy that home for cash five years or 10 years later.
 
Absolutely. Attorneys hate math, but I think they can handle that little equation. I want to take a step back for a minute because you got into house flipping in 2008, which is kind of like around the big crash. And now we're kind of at the height of a market. We don't know where that height is going to end, but we're definitely in it. Right. So can you maybe compare and contrast getting into, let's say,
 
Seth Bradley (24:01.652)
one real estate venture in the middle of a crash compared to getting into another venture kind of towards, towards the upswing.
 
Yeah, so it's one of the reasons I like multifamily and I like commercial and I like syndication. Anytime you're doing purely transactional deals, buying something and then selling it, not generating any cashflow in between, you run a risk. If the market turns in the middle of the transaction, you're gonna lose money and you don't have a lot of ways to mitigate that risk.
 
Whereas if you're buying something like an apartment complex, or even if you're buying a rental property, or you're buying a self-storage complex, or you're buying anything that cash flows, the nice thing is if the market turns, you may not be in a great position. You may not be thrilled with what's happening with the value of your assets, but if you're still generating cash flow, you can weather that storm. Maybe it's gonna take, the average recession lasts about 18 months. And so if you can make enough income that you can keep yourself afloat for 18 months, or maybe
 
it's a horrible recession and it lasts three or four years. If you're still making income and you can keep yourself afloat for three or four years, the market's gonna come back. And so when we do our multifamily deals, yeah, we typically say we're planning to hold three to five years, but we also do all the underwriting to ensure that if we have to hold for six years or eight years or even nine or 10 years, that the numbers still work because.
 
Again, who knows what's gonna happen three years down the road, we could have a major recession that lasts four years and now we're seven years down the road. I wanna know that my multifamily investments in seven years, they're probably gonna be producing more cashflow. We're probably gonna see more growth in terms of population. We're probably gonna see more growth in terms of employment. Hopefully we're gonna see more wage growth once we come out of that recession. So all the economic indicators that kind of lead towards value growth in multifamily,
 
Scott (25:58.486)
are going to happen over those seven years if I can just get my property seven years and not lose it. With a flip, well, I'm not generating any income. So if the bank calls the loan due or if my two-year loan comes due and I can't refinance, I'm screwed. But in a multifamily, I just waited an extra couple of years and I'm probably in a better position than I was anyway. So that's one of the reasons I love multifamily because we can't predict
 
what the economy is gonna do in the next couple of years. But I do know that whatever the economy does, it's probably gonna come back in the next five or 10, and I'm still gonna have the problem.
 
Yeah, yeah, that's great. That kind of rolls into this next question. How does a passive investor that's kind of vetting a sponsor, how do they check kind of the boxes to see if their sponsors are taking the extra measures to look into those risks that you just mentioned, to mitigating those risks, to taking those risks into account in their underwriting and things like that. How can they best vet the sponsor to make sure that they're thinking of those things?
 
So I invest in a lot of other people's syndications as well as my own. And so when I do that, I kind of look at five areas for due diligence anytime I invest in a syndication. Number one is the team. And that's probably the most important thing. For a lot of people, I have been pleasantly surprised that a lot of our investors have recognized that team is the most important aspect of the deal. I know in the flipping world, everybody was concerned about the deal. Nobody cared about
 
what was my experience, but in the multifamily world, a lot of investors recognize that the team has to be great. So number one is the team. Number two is location. Location is often overlooked, but at the end of the day, the thing that's gonna drive value for multifamily and for commercial real estate in general is gonna be population growth. So you want more people coming into an area, employment growth. So you want more employers coming into an area that will bring more people in. You want wage growth because that will ultimately drive rents up.
 
Scott (28:06.082)
and you want employment diversity. You wanna know that if one industry takes a big hit, so for example, we invest in Houston, but we won't invest in the energy corridor of Houston because it's so reliant on oil and gas, that if the oil and gas industry took a big hit, the real estate around there would probably take a big hit. So we wanna see that there's good employment diversity. But at the end of the day, location is that next big thing. So team, location, number three is the deal itself.
 
So you need to know that the deal is gonna stand on its own. I wanna know that if I took a deal and I handed it to pretty much any other indicator, they couldn't mess it up too badly. Obviously, again, we're gonna go back to the team is super important, but I want the deal also to stand on its own. And I wanna know that the business plan for the deal, the hold period, the numbers and the underwriting, the pro forma for the property makes sense. So team location deal.
 
Number four is the returns. So obviously when I invest with somebody, I'm in it for the money. And so I wanna see that the returns are commensurate with the risk. I wanna know that the returns, if somebody tells me I'm gonna get 10 % returns in this deal versus 20 % returns in another deal, I wanna know, well, why am gonna settle for lower returns? I want the answer to be because it's a lot lower risk or because you're gonna get your money back a lot sooner, which is gonna allow you to compound it or whatever the answer is.
 
I want to know that the returns make sense given everything else. And then finally is the risks. At the end of the day, I'm always going to sit down with the syndicator and I'm going to say, what are you most concerned about here? Like where, if I'm going to lose money on this deal, where am I most likely going to lose money? They say, there's no shot of losing money. walk away because we all know every deal has risks and every syndicator knows what those risks are. And they're thinking about those risks. I just want them to tell me.
 
So if I'm gonna lose money on this deal, where am I most likely? Why am I most likely to lose money if I'm going to lose money? So those are the five things that I look for. Talking about each individually a little bit more. the team, I like to know that one, I wanna see how many deals the team has done together because again, like a basketball team, you can put the best basketball players in the world together. And if they've never played on the court together,
 
Scott (30:31.672)
they're not gonna be necessarily the best team out there. You can find another team with five inferior players who have been playing together for 20 years and they're probably gonna be better because they know each other better. So I like to see teams that have worked together for a while. I like to see teams that have gone full cycle in deals. So it's easy to buy 10,000 units. It's hard to buy 10,000 units and also sell 10,000 units for a profit. So I wanna see that if a team has bought a lot of deals, they've at least sold some for a profit.
 
I wanna see a team that's putting their own money in the deals. So I want people that have skin in the game. If they don't have skin in the game, and I've seen plenty of syndicators that don't like to put money in the deals, well, they need to sweeten the pot for me somehow. So maybe they're saying, we're not gonna take any profits until at least year three, or we're gonna give you a better preferred return, a better split than you would get if we were putting money in the deal. I wanna know if you're not putting money in.
 
that you're at least giving me something that aligns our interests and ensures that you're gonna be working hard even though you might not have as much financial risk. So those are the types of things I like to see in the team. I like to see things like at least one or two people working full-time. If everybody's part-time, that's kind of a little bit scary. Obviously not everybody has to be full-time because there are a lot of jobs on a GP team that aren't full-time jobs. There are a lot of jobs that might stop the day you purchase the property. Like the person that's raising money, job's
 
pretty much done other than communicating status when the property's been purchased. But I do want to know that whoever's managing the asset is doing it full time. So that's kind of the team stuff. Location, again, population growth, employment growth, wage growth, and employment diversity. So those are the four big things I look for. Next is the business plan. So I want to see the biggest question when somebody goes in and...
 
does what I do, which is a value add multifamily. Basically they buy it, they raise the value of the property and then they sell it for a big profit. Where is that profit coming from? Generally the profits coming from raising the rents. There's also some lowering the expenses, but at the end of the day, raising the rents is kind of the big thing that's gonna generate the big profits in multifamily. And so I wanna know how are you raising the rents? And two, when you tell me that you're raising the rents from X to Y, where is Y coming from?
 
Scott (32:55.182)
Show me the comps that tell me that why is a reasonable new rent, market rent for this property after you've done the renovation. So I wanna see the comps. So that's kind of the deal. The returns speaks for themselves. I wanna see like the structure of the deal. So when's the money coming back to me? Is it paid monthly? Is it paid quarterly? What are the returns look like? What's the preferred return? So is it a low preferred return, which means
 
that the syndicators are getting paid sooner, whereas at a higher preferred return, which means the syndicators have to do more for me before they take anything home. So that speaks for themselves. And then for the risks, I wanna know both the catastrophic risks. So what's the thing that's like going to make me lose all my money? Is there something out there that can cause me to lose all my money? Hopefully the answer is no, but there are probably some risks that are bigger than others. So we do a lot of deals in Houston. If somebody were to say to me, what's the biggest risk on your deals?
 
The answer is generally going to be weather. If we have a really bad hurricane, if we're in a flood zone, we probably have flood insurance and we have hurricane insurance. But if it's in a place that's never experienced the negative impacts of a flood or a hurricane, and we are not required to have flood insurance, but there's still a massive hurricane that wipes out that property, that's not going to be good. We're going to have to pay for that ourselves. So what's our mitigation there? We don't have a great one. Luckily.
 
the risk is really low. We don't buy in areas where there is that risk. And if there is, we're gonna get flood insurance. But I do want my investors to know that no matter where you invest, whether it's a risk and especially in Houston, if we see a storm bigger than anything we've seen the last 50 years, some of our properties could be at risk. And then there are the smaller risks. So maybe there's five other complexes being renovated all around us. Maybe there's class A, brand new class A being developed.
 
all around us. So basically our absorption of units is going to slow down because there's so many more units. Maybe there's one big employer in the area. Amazon just built a warehouse that's employing 8,000 people. Well, what happens if Amazon has a bad year and has to lay off 4,000 of those people? How's that going to affect us? So, so risks is the next thing. And the way I approach it is I literally sit down with the, with the syndicator and say,
 
Scott (35:15.554)
What keeps you up at night? What are the biggest things you're concerned about? And so those are the things that I do. I have no problem basically saying to a syndicator, I need 15 or 30 minutes of your time to ask these questions. Typically the good ones will either find the times themselves or have somebody on their team that will sit down and answer these questions. If they're not willing to answer those questions, well, that's probably a good indication that that's not a good team.
 
Yeah. For our listeners out there, that breakdown was incredible. Rewind that, listen to those five items again. That's a quick, but thorough and awesome rundown of what you need to do. Just as at least the starting points for your due diligence. And that's, that's great that you said if they won't book a call with you either themselves or an investor relations person on their team, then it's time to, you can just walk away and look at the next, look at the next deal. One question I had on the deal.
 
So a lot of folks, it's kind of overwhelming to see an underwriting model or something like that. And being a passive investor, I don't know how much you even want to dive into it. Some people do, some people want to nerd out on it. Most people don't. And we don't generally have access to the T12 or the rent roll or anything like that. What are maybe some quick tips on how to maybe proof through that pro forma to make sure that the assumptions are reasonable and the pro forma is generally
 
a reasonable prediction of what we might expect from that investment.
 
Well, let me start, me take a step back before I answer that particular question and just say that even for you and me, mean, you know how to do an underwriting, I know how to do an underwriting. If you or I were gonna invest in somebody's deal, Joe Smith's deal, we're probably not gonna have enough information even though we know this business really well and we know the underwriting models really well, we're probably not gonna have enough information.
 
Scott (37:08.908)
that we're going to be able to know for certain that Joe Smith's not trying to scam us out of money. So if Joe Smith is really smart and he could probably put together an underwriting that could fool us because we're just not gonna be putting in as many dozens of hours underwriting as he and his team are. So the number one thing I would say is make sure you trust your syndicate. This goes back to why team is so important.
 
because there's two types of things that Joe Smith can do. One, he could do a bad job of underwriting and come up with bad numbers. That's not good, but that's not nearly as bad as Joe Smith wanting to scam us out of money. So number one is make sure Joe Smith's not the kind of guy who wants to scam us out of money. And so work with people who are reputable. And that's why I would invest with you before I would invest with 95 % of syndicators out there because you're an attorney, you passed the bar.
 
you know that if you go and somebody finds out that you're trying to scam somebody, well, you're putting your entire career at risk. And so what I tell people is, so what do you have that really proves that this person is on the up and up? And maybe it's a track record. Maybe it's 10 or 15 years of doing deals. Maybe it's, I like to think with me, I've been doing this business for 15 years. I've done thousands of deals with hundreds or thousands of people.
 
And if you go out on the internet, nobody's gonna, you're not gonna find anything that's written negatively about me. So that's a good sign. But make sure that there's something out there that gives you faith in that syndicator, even if it's just somebody else that's invested in a couple of deals with them. So that's number one. So that's the way to rule out that catastrophic, they're trying to scam you risk. Then there's the more likely, what if they just didn't do a good job of underwriting risk?
 
And so for that, would say for people that have very little knowledge of how the underwriting works and how the numbers work, it can be really difficult. And so what I like to do is, or what I recommend people do is sit down and ask to do a Zoom call for 15 minutes with the investor relations person and say, hey, will you kind of walk me through the high level underwriting? And at least force them to go through and then just ask questions.
 
Scott (39:30.958)
when they say something, even if you have no idea what you're talking about and they say, well, it looks like we're gonna be able to reduce expenses by implementing a rub system, blah, blah, blah. Oh, okay, well, what is rubs and how does that work? And at least make them explain it to you. At least then you'll get an idea that they're not making it up as they're going along, or at least you'll get that confidence that it sounds like they know what they're talking about. But the biggest thing that I would say is that whole comps thing.
 
And this is a question that a lot of people don't like to ask. But I actually, and when people ask me this question, it always makes me nervous because it's the hardest part of the business, but it impresses me when people do. to the underwriting or the investor relations person, what are the comps that you used for your post renovation market rents? So again, the thing that drives values in multifamily is after the renovation is completed, in theory, you should be able to bring your rents up higher.
 
and your rents, those higher rents, you should be able to figure out what they are by looking at other units that have already been renovated and seeing what their rents are. So if I buy one, two, three Main Street, and I know I'm going to put $8 million into it, well, now that property is going to comp out to 678 Main Street. And well, what are the rents at 678 Main Street? And so by asking, hey, so you're buying one, two, three Main Street, what are the comps for the rents after you renovate?
 
and they tell you, it's going to be 678 Main Street and 123 Smith Street, whatever it is, you can then go look up those properties and say, okay, well, it looks like a two bedroom at those properties is renting for 1200. Now I go back to the investor relations person or whatever information they gave me I see, oh, okay, after renovation, they have their rents at 1200. Makes sense. If that's a reasonable comp, they now have the rents at kind of where they should be.
 
If he says that six, seven, eight main streets, a comp, and you go look in a two bedroom at six, seven, eight main streets, 1200, but their underwriting tells you that after they do the renovation, they're going to be charging 1500. Well, why are you now $300 above this property that you said was a comp? And so that to me is kind of the first thing that I look at or the biggest thing I look at is what are the comps that they're using and does just a kind of first pass.
 
Scott (41:57.762)
jumping on apartments.com or calling the complex and asking them what different things rent for. Does that coincide with what they're telling you their post renovation rents are gonna
 
Yeah, I love that man. I mean, it's not as simple as just going into an old dilapidated apartment building and saying, I'm to put granite countertops and hardwood flooring and stainless steel appliances in there. And then I'm going to triple the rent or double the rent. It's not that easy. If it's not in the right area that could support those, those market rents or that have potential tenants that want those types of things, it doesn't work. So that's why that's so important to check those comps to see what's around those apartments that you're going to be investing in to see if, they can achieve those.
 
those proforma rents. All right, man, before we jump into the freedom four, what's one last gold nugget for our listeners?
 
Absolutely.
 
Scott (42:45.634)
Yeah, so again, what I would tell people is figure out your highest and best use on your active side. And then for the passive side, figure out how you're gonna scale. And I know a lot of people like to invest in a whole lot of different things, but I'm a big fan of doing some work so that you don't have to diversify as much. Diversification is great, but diversification,
 
is for people who aren't really an expert in anything. If you want to get your best returns, the way to get your highest level of returns is not to have to diversify. And the best way not to have to diversify is to get knowledgeable about whatever you're investing in. So if you decide you wanna invest in all your syndications, just cause that's what you and I do. So it's an easy example. If you want to invest in syndications and that's how you wanna grow your nest egg, my recommendation is,
 
get as much information about syndications as you can. Pick up a good book on syndications. Go find somebody that does syndications and say, hey, I'd to pay you a thousand bucks for five hours of your time. Or you just to walk me through what a typical deal looks like or what the underwriting looks like. Or go sit in on a hundred multifamily syndication investor videos, presentations. So you can see all the different things they're talking about and become as much of an expert there as you can. So that way you're reducing your risk without having to do a lot of the.
 
diversification. So focus on whatever your highest and best use of time is on your active income and then become as knowledgeable as you can for whatever you're investing in passively. What I like to say on the passive side is it's not truly passive. Nothing's truly passive. But the best investments are the one where all the work is done upfront. You do your due diligence and then it becomes passive.
 
Yeah, that's awesome, man. And then what you can do though is diversify within that strategy, right? Absolutely. Yeah, different asset types can have different business strategy, value add, or maybe you're dealing with just a class A where you're chasing yield or across different cities, different geographies, or across different sponsorship teams. There's other ways to diversify within that same type of investment strategy. Yep. All right, man, let's jump into the Freedom 4.
 
Scott (45:05.598)
It's time for the Freedom Four.
 
What's the best thing you do to keep your mind and body healthy?
 
So for me, it's admitting when I need a break. I know so many people that it's a badge of honor to work 80 hours a week, 52 weeks a year, never take a vacation. I'm just the opposite. If I wake up one morning and I'm tired and I don't feel like working and I don't feel like I'm gonna be productive, I will grab a book. I might even turn on the TV. I might say to my wife, hey, let's go to breakfast or let's go spend the day, let's go to a movie.
 
And I have no qualms with just saying, I need a break today. Today's not gonna be a productive day. I don't need to pretend to work just so I can have that badge of honor that I work hard. And so, yeah, and that's one of the nice things about real estate. mean, I don't have a hundred percent flexible work-life balance. I can't do anything I want any time I want, but if I wanna take a couple hours off, I normally can. And so I'm not scared to do that.
 
Yeah, yeah, that's a great answer. With all your success, what is one limiting belief that you've crushed along the way and how did you get past it?
 
Scott (46:15.734)
Yeah, I still have a lot of them. I think we all do. But I'd say the biggest one is that doing a big deal is not that much harder than doing a little deal. I'm not going to say a hundred million dollar deal is just as easy as a hundred thousand dollar deal. But if you're smart enough to do a hundred thousand dollar deal, you're smart enough to do a hundred million dollar deal. And the people that are out there doing those hundred million dollar deals, mean, we have, we now have a hundred million dollars assets under management.
 
I remember a couple of years ago, looking at the people that had nine figures under management and thinking, they're different. I can't do that. These are people, went to some school that I will never go to, or they were born into something that I was never born into, or they know people I don't know, or whatever it is. No, they're normal people. And the only difference between them and me was I wasn't thinking big enough.
 
and I wasn't willing to take some risks and I wasn't willing to acknowledge the fact that doing again, a hundred million dollar deal is certainly within my capabilities. So that to me has been probably the biggest one and it's made it a lot easier for me now to say, okay, $50 million deal, let's go do it, not think twice.
 
Yeah. I had a similar experience working in, in, big law, doing house flips, doing single family rentals, things like that. And even though my clients are doing 50, a hundred million dollar deals and I'm helping them close those deals, it was just like the mindset shift that, a minute, I can do those deals too. I'm actually giving them advice on how to, how to do this thing. I need to step up my game and, and, take some.
 
Exactly, it's the difference between people doing a hundred million, a hundred thousand, it's all mindset.
 
Seth Bradley (48:00.866)
Yep, absolutely. What's one actual step our listeners can do right now to start creating more freedom.
 
take action. So the biggest thing that I see stopping people is just this fear to take the first step. And I know this doesn't apply to a lot of your listeners, but I talked to a lot of people who want to get into house flipping or they want to get into rentals and they've been thinking about it for years and they just never take that first step and then they end up giving up. One of the the few truisms I see in this business
 
is that there are two types of people I meet. Number one, I meet people that have never done a deal. They've done zero deals. And maybe they're still working on it. Maybe they've given up whatever it is, but they've done zero deals. And then the other type of people I meet in this business are people that have done a lot of deals. They've done five or 10 or 20 or 50 deals. There's one type of person I never ever meet in this business. And that's somebody that's done one deal. Because if you get that one deal, you're gonna get the second and the third and the fifth and the tenth.
 
Nobody does one deal and then says, okay, that's it, I'm done. can't do this. So what I like to tell people is, and that applies to a lot of things in life. If you can get over the hump and do it once, you're gonna get that snowball effect and it gets easier the second time. It gets even easier the third, it gets even easier the hundred. So don't give up until you achieve that first step or that first iteration of whatever it is you wanna achieve because that's gonna get that snowball rolling.
 
Yeah. Yeah. We preach that on their show all the time. Just like, you know, just do a deal, just invest in a deal so you can get that experience and it'll just kind of open up your mind to other opportunities. You'll just see opportunity all around you. Once you just do one deal last but not least, how it's passive income made your life better.
 
Scott (49:51.886)
Passive income has given me the ability and the confidence to raise a family. Before this, my biggest concern with raising a family was I didn't want to be, I had, my parents were great, but my parents were always working. And I didn't want to be the same type of father that my parents were. Again, they were fantastic, but I wanted to always be there. I wanted to be at every soccer game, every piano recital.
 
I wanted to be able to go into school for the parent-teacher conferences. so passive income has really given me the ability to build my life around my family as opposed to building my life around
 
Love that, love that. It's been fantastic, brother. We're gonna listen and find out more about you.
 
Yeah, anybody wants to get more info, go to www.connectwithjscott, just letter J, Scott, connectwithjscott.com, and that'll link you out to everything you might wanna find.
 
Awesome man. Talk soon.
 
Scott (50:54.945)
Awesome. Thanks,
 
All right, Mr. Jay Scott from Master House Flipper to multifamily syndicator. He's a master of creating profitable, well-oiled business machines. I've been reading Jay's bigger pockets books for years and it's awesome to have the opportunity to have him on the show today. Major key, focus. Focus on transitioning your active income to passive income and don't get distracted. All right, if you're ready for a change, you're ready to take action.
 
partner with us on one of our next passive real estate deals. Go to passiveincomeattorney.com and join our Esquire Passive Investor Club. All right, kiddos, as always, enjoy the journey.
 
Thank you for listening to the Passive Income Attorney Podcast with Seth Bradley. Do you want more ideas on how to generate multiple streams of passive income? Then jump over to passiveincomeattorney.com for show notes and resources. Then apply for the private Facebook community by searching for the Passive Income Attorney on Facebook. And we'll see you on the next episode.
 
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