Our guest for today is an international investor from over the Atlantic Ocean. He has gone from working and networking in 58 counties to landing his ideal job in I.T. While loving and working his W2 job, he is on a mission to help those high-wage earners and or retirees invest in their right vehicles.
Let’s dive right in and learn from Billy how we can get investing!
[00:01 – 05:49] Opening Segment
- We introduce our guest, Billy Keels
- Billy talks about his background
[05:50 – 16:14] Billy Keels
- Billy talks about his background
- What’s their worst investing advice?
[16:15 – 26:20] Are Sleeping Well At Night?
- Billy shares his investment parameters
- He talks about investing time and learning
- Discovering what you don’t know, reading the private placement memorandum
- Getting in sync in the beginning
[26:21 – 38:02] Investment In Diverse Assets In Different Geographical Locations
- Active and Passive Investing
- Asking the difficult and tough questions
- Creating non-active, i.e passive income
[38:03 – 41:43] Closing Segment
Billy Keels book recommendations:
Connect with Billy! See the links below.
Final thoughts
Tweetable Quotes:
“So, I do real estate. I love real estate. I will continue to love real estate. And I just wish I would have known about it much sooner.” – Billy Keels
“I’m always looking for cash flow, like just predictable cash flow. And I really love tax benefits.” – Billy Keels
Go to his LinkedIn, Facebook, and Instagram pages to connect with Billy. Visit his Website, YouTube, and Podcast.
LEAVE A REVIEW if you liked this episode!!
Keep up with the podcast! Follow us on Apple, Stitcher, Google, and other podcast streaming platforms.
To learn more, visit us at https://invictusmultifamily.com/
**Want to learn more about investing with us?**
We’d love to learn more about you and your investment goals. Please fill out this form and let’s schedule a call: https://invictusmultifamily.com/contact/
**Let’s Connect On Social Media!**
LinkedIn: https://www.linkedin.com/company/11681388/admin/
Facebook: https://www.facebook.com/invictuscapitalventures/
YouTube: https://bit.ly/2Lc0ctX
Billy Keels
Anthony Vicino: [00:00:14] long-distanceHello and welcome to Multifamily Investing Made Simple, the podcast, it’s all about taking the complexity out of real estate investing so that you can start taking action today.
Dan Kreuger: [00:00:23] I am your host, Anthony Ticino of Invictus Capital, joined as always by the one the only man who no longer has covered Diane Kruger.
Dan Kreuger: [00:00:34] Over it. Over it. It was three weeks ago.
Anthony Vicino: [00:00:37] I love this, guys. You just just just moved on. Yeah. So today we got a very special episode for you guys at home. You might hear another voice on the line, and that’s because you’re not hearing things just, you know, out of thin air. There is actually another person here. And this is going to be a fantastic conversation because we have Billy Kiehl’s with us today. And this guy is pretty fascinating because he’s doing something that I think a lot of people find overwhelming, which is investing and all sorts of different hard assets.
Anthony Vicino: [00:01:05] But he’s doing it from overseas. So just adds another layer of complexity here. So let’s go through his bio real quickly and get you psyched on this guy. Billy Kills is on a mission to help those high-wage earners and or retirees that have been forgotten about by so many in society. He’s determined to help you feel comfortable and confident going against conventional wisdom by being OK with investing real assets and doing that beyond your backyard. As a long-distance real estate investor, Billy is utilizing the skills that he’s developed over the last twenty-three years as a happy, successful corporate employee as some of the world’s largest market, leading it multinational companies to becoming an entrepreneur. As part of his journey, he’s hyper-focused on consistently helping you to create new alternatives for your life so that you can be happy about going into your job or not.
Billy Keels: [00:01:52] So without any further ado molecules, how are you doing, man? Anthony, thanks so much for that nice warm introduction then. Thank you very much as well. I’m glad you’re back in one piece, man.
Dan Kreuger: [00:02:04] It’s great, mate. It’s made it. Yeah. Thanks for having me. Thanks for coming on. We really appreciate it. It’s going to be an especially interesting one for us to chat about because you have such a diverse focus, I should say. It sounds kind of like a double negative almost, but you do a lot of different things, but you’re still somewhat focused, which we can kind of dive into as far as what you’re doing with all these different projects. But super excited to hear about it.
Anthony Vicino: [00:02:31] The first thing I want to point out here, which is really interesting, is that a lot of people get into real estate investing because they want to supplement their W-2 income and they want to get away from their W-2 job. Right. But you you kind of like what you do. You’re happy with it. And so you found this this way of blending the two. Tell us a bit more about that, because I think it flies counter to what a lot of people think about when they think about I’m going to go invest in real estate and for their reasons for doing so.
Billy Keels: [00:02:58] Yeah. You know, and also to Dan, I want to come back to that to what you just mentioned in the beginning, because it’s really interesting because I feel like I just do one thing, but I’ll come back to talk about what I mean when I say that I just do one thing versus doing multiple things because I think this is also key in terms of one of the success factors to help others. And it ties into Anthony’s question. And so, you know, I have been very, very fortunate. I buy when you’re working in some of the world’s largest, most profitable I.T., meaning that we’re working in it, which is an industry that’s going to be around for quite a while. I consider myself extremely fortunate to be able to work with these large companies, solving extremely complex problems, and really getting the insight into how the largest, most successful companies in the world work from the inside really gives a unique perspective. And aside from that, when you not only have the that. Let’s say that vote of confidence or that paycheck that comes in and you understand the money game, how it actually works, then it’s about leveraging the infrastructure of a very large multinational, being able to at the same time learn as much as possible and then use that parlay that into what I’m now doing, which is going out and solving problems, issues for my investors and students.
Billy Keels: [00:04:21] So because of that, I really feel fortunate, like I literally am happy I’ll go into my job because I literally want to go there, not because I feel like I have to, because I’ve got to pay this bill or I’ve got to do this or I’ve got to do that. I have the freedom of choice. And when you have that freedom of choice, I know other people and I wish there were more people that were going into their roles every day because they really wanted to, not because they felt like, you know, there’s this big bag on their back and they’ve got to go and do this kind of stuff. So that’s really why I consider myself a happy corporate employee, right?
Billy Keels: [00:04:51] Mm hmm. Yeah. I love that you take a non binary approach to it as well, because I think a lot of people think that they’ve got to be doing one thing or the other when really the the Goldilocks zone for you and for a lot of people is probably kind of a combination of being, you know, in real estate, but not necessarily 100 percent in real estate. They just either they want to just supplement their 401k or they want to get their entrepreneurial fix to some degree. But you don’t need to get up and quit and be the guy wearing all the hats in these deals. To the point you just made a little bit ago, I think you were a specific hat in these deals. So you’re not doing all the things, you’re just doing the piece that you like and you get to, you know, get the best of both worlds, which is fantastic. So I think that’s a hugely valuable to hear about for for some of our listeners, because, like I mentioned, I don’t think it’s something that a lot of people think is an option. So how did you how did you happen? Well, I guess maybe we should back up and start a little bit earlier and hear a little bit about your back story where you are now, because that part is also a little bit unique.
Billy Keels: [00:05:50] Yeah. So I’m a guy from Columbus, Ohio, like I’m a Midwesterner. Right. And I always thought that I was going to live and will grow and have my kids and kind of stay in the state of Ohio at least. Right. I went to college at Miami of Ohio right after that. I had an amazing opportunity to work and travel throughout some 58 different countries. And so it was at that point where my whole like like life just went my eyes open to things that I never even thought I would see, that I’m staying in five star hotels and on the road 25, 28 days a month and meeting with Fortune 500 CEOs. And their direct reports was amazing. And so after that, I didn’t actually see myself going back to a normal quote unquote nine to five job. I got accepted to a university in Paris called the Sorbonne, where I knew that I wanted to learn more about French language and culture. I wanted to learn how to salsa dance. Yeah, I did say salsa dance and I wanted to learn more about wine. And so I love that so much and started making a lot of really great contacts. And once that was over, I didn’t actually want to go back to the U.S. because I was dancing salsa pretty well. I learned a little bit more about wine and I was actually communicating with people in French, understanding more about why they were doing and saying and acting the way that their work is, meaning that I was getting that kind of cultural sensitivity and understanding. And rather than going back, I was fortunate because remember, I was working with a lot of Fortune 500 sea levels and they’re like, hey, if you ever want a job.
Billy Keels: [00:07:09] So I was crazy enough to actually, you know, kind of pick up the phone and do things that they said. And I ended up moving down to the south of France. I was there for a while. I met a cool, cute Spanish woman. She eventually moved back to Spain. I went to Italy and I then moved back to France. And I’ve been in Spain since July of 2005, married two kids. And then I got into the IT space, which is kind of why we’re here, which may seem a little bit strange, but when I got into space, I was doing everything that I was supposed to be doing. As I mentioned before, I enjoyed my job and the things outside of the job, like my retirement plan I was maxing out. Right, because I’m the A student, you know, do all the things you’re supposed to do. And once you get a good job and max out your 401k. And I was doing that. And just before I moved to Europe back in 2000, my portfolio actually took a pretty big hit with the 2000 dot-com bubble. And then it happened again eight years later, about eight and a half, nine years later, actually, where I lost thirty-three percent of my portfolio. And I was like, you know what this is? This just stinks. Like I’m doing everything I’m supposed to do. And, you know, one thing led to the next. And I was just frustrated. And so I saw this book, Rich Dad, Poor Dad, on one of my trips to the states.
Billy Keels: [00:08:17] And I’m sure a lot of other people have seen that book. And when I read that book and just the fact that I can actually have control over something that would produce income, I was like, oh my gosh, I’ve got to get into this. And so, like most people, I was living here, but I thought, all right, I’m going to go buy a property here in Barcelona. And something wasn’t working. Like the numbers that I read in the book weren’t the same numbers as the reality. And I was like, OK, well, I didn’t know it at the time. But I’m like, you’re comparing an appreciation market versus a cash flow market. And so anyway, a couple of friends told me over a couple of months, like, hey, look, you’re American, you’re you might as well buy back in the United States, which I thought also was just nuts because. The Atlantic Ocean, I don’t know if you guys have paid attention between yeah. And between here and so that was a little bit crazy. But one thing led to the next. It’s been probably one of the best things that could have ever happened to me, because I love control because I’ve had to focus on other things rather than actually going over to my property every day, trying to fix it up and stuff like that. So probably a little bit of a long-winded answer, but hopefully it gives you an idea as to why I got into real estate and a little bit more about my back story.
Billy Keels: [00:09:23] Mm-hmm. It’s very interesting. And I love the fact that you took the the the road less traveled, so to speak. You know, your comfort zone was back in Ohio, but you stayed over and over in Europe and you figured out how to make that work because it is different looking at investing in anywhere in Europe and the U.S., the U.S. is just especially well-positioned for that type of investment, you know, from a tax perspective and from a lot of different angles. So that’s super interesting. And I love the fact that you brought up the control aspect as well because that’s really what would turn me on to it as well. I was in the corporate world for five years and it was when I did the deep dive on real estate and realized how little it felt like gambling compared to every other investment I’d ever played around with. That’s where I was hooked. I was like, this is something that makes sense from top to bottom. It all ties out. It all adds up. And it’s simple. And I don’t feel like I’m just hoping and waiting. An amazing feeling. Hmm. So what else are you going to have to know before we go any further?
Anthony Vicino: [00:10:25] I want to make sure that we get in the bad investing tip of the week, because I have a sense that Billy coming from has a pretty unique and different background, is going to have some good insight here that we can all resonate with. So, Billy, what’s your best investing tip for the week?
Billy Keels: [00:10:41] Yeah, so in this happens this is something that comes up over and over and over and it seems pretty basic, but the bad investing tip of the week is really to make sure that you get the highest possible return, like when you’re placing your capital, get the highest possible return, meaning the highest percentage return when you start to scratch the surface. And the reason that I say that’s the worst or the best bite, the bad tip of the week is that unless you actually know what’s behind that percentage, it doesn’t really mean anything because you can be promised a 47 percent return on paper. But if you don’t have a roadmap, meaning that there’s a really clear way as to how you’re going to get 47 percent. And you sleep well at night, it just doesn’t really matter, right? And there are frequent conversations and a lot of times when you see it in the first conversations, either as a passive investor or helping people that are looking to be passive investors really understand really what is behind a number. And is that person willing to accept a two percent return because they sleep well at night, or would they rather go for that 18 percent return because it’s what’s on paper, but they don’t have a clear roadmap to it? And I mean, if you guys have questions about that, but it’s just one of those things that people ask. Well, yeah, I just want the highest possible return.
Dan Kreuger: [00:12:04] Ok, well, based on what you forget about the fact that when you’re looking at pro forma returns or projected or expected returns, there’s no information in that number that tells you what the risk profile is like. Yes. You know, theoretically, this should produce a 20 percent rate of return, but what’s the potential downside? And if people actually factor that into the equation and say, hey, I could make 18 percent, but there’s also, you know, you know, in stocks and stuff in the market, you have a standard deviation that you can use with real estate. You don’t really have that. So you have to kind of infer what the risk is. But typically, a higher rate of return implies that there’s also a bigger potential downside. And a lot of people, if they saw both sides of that equation, more than likely would choose the seven or eight percent return, knowing that they can sleep at night and not have to worry about a 20 percent drawdown. That 18 to 20 percent rate of return looks a lot less attractive when he realized that, oh, there’s a potential that actually could go down quite a bit to the double-edged sword.
Anthony Vicino: [00:13:04] I love the risk conversation because it’s such an ephemeral topic. We all understand it at some visceral level, but how we all define risk is going to be different, as you know, where we’re coming from and what our expectations are. And then to Dan’s point, like, how do you actually measure risk? It’s an impossibility because again if we can all agree on a set definition, then how are we going to measure it? And too often we don’t know what the risk actually is behind an investment opportunity. It might say, you know, 20 percent IRR, but it’s like, what’s the risk behind that? And if there was a number that we could associate with it, then great, that’s going to make everything a lot easier. Short of that, what we found is running sensitive sensitivity analysis and understanding what’s the probability behind our ability to execute the game plan as projected and running through these scenarios of saying, OK, if this, then that and we can try to extrapolate and get a better picture. But the future is a murky crystal ball. So at the end of the day, what you’re really betting on is the operators that are running the deal and their ability to execute the plan that they put in front of you because I think you were touching on this is like it’s the difference between a million-dollar idea and million-dollar execution. Like, you can have a great idea. We can put it on paper right here and show it to you. And if we don’t have the ability to execute it, then who cares if it’s just, you know, fiction?
Billy Keels: [00:14:24] Yeah. And, you know, and there’s aside from that, there is there’s the whole level of really understanding what is the return like. I think to your point, Anthony, it’s a kind of it’s a visceral thing. So can you sleep well at night knowing that you just placed two hundred thousand dollars in this investment? If the answer to that is yes, well, then I guess the risk-adjusted return was worth it for you. Are you going to also be able to sleep the next seven years or five years or however long the play is? That’s the other question. If you can and you think you can, well, then great. There was it’s going to be worth the return. If you can’t, then probably don’t want to play share your capital there. The other thing is a lot of times you’ll see the people.
Billy Keels: [00:15:05] What I find is when you have someone who’s just getting started, maybe they don’t understand the what is total return. Right. Especially when you’re in real estate and understanding, OK, how does this actually help you to not just make more money, but more importantly, how does it help you to keep more money? And so when you’re looking at the entire investment opportunity, on your understanding of how the income is being generated, is this active income? Is this passive income, are you going to be taxed at 20 percent because it’s over X number and it’s a long-term capital gain? Or is this going to be taxed at short-term capital gains? Are you taking money from your short, your SDR, your self-directed IRA, or do you have something else that’s much more sophisticated? Because all of that matters at the end of the day, when you’re placing your capital in typically it goes well beyond the, you know, eight percent preferred return or the 14 percent IRR. There are other numbers that are there. And once you have the number of reps, then you know what questions to ask. So that once again, it comes back to I always look at things like how well do you sleep at night? And if it comes back to you can sleep well. And guess what? That’s a risk-adjusted return that you’re willing to accept.
Dan Kreuger: [00:16:15] Yeah. And to kind of double down on that if something does a higher risk investment and maybe you can’t sleep as well as a certain number, maybe you just make it a smaller position. Right, if you have 250. Grand allocate maybe, you know, put 50 grand into the higher rate of return one that’s got a little bit more unknown to it, and then put the rest of your money in something a little bit lower risk and have a mix that suits you if it’s going to be different for everybody. So, absolutely, that’s the way people need to be aware of what their specific goals are, how much they actually need to make to reach those goals. And then, you know, it’s going to be different for everybody because there are younger people who probably just completely gloss over when you start talking about the tax component. And then there are people that once they’re in their late 30s, their 40s, the task upon it becomes the main component, the biggest part of it. So it’s always a lead.
Anthony Vicino: [00:17:04] Bill, you mentioned some things there about the kind of intangible aspects of the returns that don’t show up and the IRR or the cash on cash return. And, you know, you start talking about the tax benefits. I think that’s a really critical one. And then this idea of like, can you sleep at night? And what I’m thinking about when I hear that is OK, that makes sense. If I am operating with complete knowledge, then I can sleep well at night. But there is also this idea that ignorance is bliss. And so I don’t know that it’s risky that I might sleep well at night, but that’s not good either. Right. And so what can we do? Like what is those questions that we don’t even know to ask that would help us uncover whether or not this thing is risky or like to get a better full picture of the return profile so we can go to bed at night, not just in ignorance, but in confidence that we have made a good decision.
Billy Keels: [00:17:55] Sure. And number one, what I will say is anyone that is watching or listening, they are already a step ahead. Right, because Dan and Anthony, they’re investing their time with the two of you and they’re learning and they’re known, they’re learning what questions that they should be asking so that they can gain the experience. So kudos to everyone that is watching and listening. You’re already way ahead of most people because most people don’t even invest their time to really understand and learn the things that they should be learning. That’s the first thing. The second thing that I would say is you absolutely do not know what you don’t know because that’s kind of part of it. But there are simple things. And eventually, you should always know, keep in mind. Right, because if you are investing in a 506 B or A 506 C type of investment, either accredited investors or sophisticated investors. And I know you guys have talked about that and most people are familiar with those that are here. But you’re going to see that in the private placement memorandum. You’re going to see what the risks are, right. Eventually. And if there are things like this is a really simple thing. But take the time to read through the private placement memorandum because it highlights all of the risks.
Billy Keels: [00:19:03] It highlights the operational risk. It highlights the risk that could happen in a certain sector or in a certain geographical area. And if you don’t understand what those things mean, ask the question. And if you don’t get an answer that you understand, ask the question. And if you still don’t get an answer that you understand, then ask it the last time. Right. But eventually in teams are working together. And so if there’s not someone on that team that can help you understand the risk that is associated that you’ve read in a document that you’ve taken the time to read before you place two hundred thousand dollars, then you may not be in the right place. And or you may want to listen to what Dan said before. This is probably not the right place for you to place that amount of capital because eventually, you’re not going to sleep well at night. And if you don’t sleep well at night, you’re going to call the syndicator or the general partner or whoever the key partner, however, you want to call them. And you’re going to probably not make them sleep well at night either. And that’s just a bad place to be in. You know, I’d like to keep things really, really simple. You know, you can talk to the syndicator and you can ask them the things like, hey, you know, what do you consider to be the biggest risk? Well, they’re going to tell you what they consider to be the biggest risk. At the same time, I would say read through the documentation.
Dan Kreuger: [00:20:16] If you’ve gone that far in the process, read the private placement and there’s a section in there that’s just disclosures. So you don’t need to, you know, personally read the whole thing. I usually advise people to just have a lawyer read it on their behalf and tell them what questions ask. But if you’re going to read any chunk, I would say take a peek at that one. That’s probably one or two pages of the most out of the fifty-seven pages.
Billy Keels: [00:20:36] So I was going to say usually in, you know, we just did one recently, and if you I’m going to just kind of give perspective like of them if they were 50 pages. Twenty of the pages we’re talking about the different like usually it’s the risk section that’s the most like is the junkiest section. And you know what then I would say if someone doesn’t have the sophistication, if they’re just doing it, maybe kind of what Dan was or what Anthony was saying earlier, like, you don’t know what you don’t know. I would recommend that not having your lawyer read it, not having your attorney read it if you’ve not done it before, like you need to read it first, because if you don’t understand it, then that’s a way that you can gain experience, like after you’ve done passive investing probably four or five times. Yeah, I mean, it pretty much looks the same. But if you’re looking to gain experience and be much more.
Billy Keels: [00:21:27] Well, you just want to understand more what you’re investing in, take the time to read it like don’t do like I did once, which was I took an I got a home inspection on one of the very first properties acquired complex I bought. And I paid the money to buy the property, to have the home inspection done. And when the home inspection came back, when I read through, it actually glossed over it, didn’t read through it. That mistake cost me about twenty-five thousand dollars. Had I just taken the time to actually read through it and ask the question of the general contractor, like, hey, what does this actually mean? I could have probably negotiated a better deal. I wouldn’t have had to pay for my residence to live in another place while we were fixing the roof on the property because I didn’t take the time to read it like nowadays. And absolutely to your point, then, I would have somebody on my team read it. Right. And they are responsible for making sure that they, you know, that they have that they give me the right guidance and they have in our, you know, errors and emissions insurance and stuff like that. If they don’t. But when you’re just getting started, I would definitely say to take the time to read it and have someone explain it to you and you need to be able to explain it to you in a way that you feel comfortable and understanding, because at the end of the day, everything goes back to, are you sleeping well at night?
Anthony Vicino: [00:22:39] Yeah, yeah. I think that’s probably probably one of the biggest takeaways for people is that you need to understand what you’re doing. And if you don’t just keep asking questions, like you said until you do. But if real estate’s a fairly simple business, at the end of the day, it’s not that complex. So if you can’t connect the dots and understand how this thing is structured or how the performance returns were arrived at, then just wait. You know, if that one deal doesn’t work, that’s fine, because there’s going to be a deal that makes sense. And that’s the deal they want to invest in because if it makes sense, that’s when I feel like that’s when you can sleep well at night. You can ask a question, get an answer, be like, OK, yeah, that that sounds logical.
Anthony Vicino: [00:23:20] And Bill is touching on something here that I’ve I’ve found really interesting. And I think people don’t really they don’t think about it enough is that the deal itself might make perfect sense. The risk factors in there might be totally normal, but for whatever reason, it’s presented to you in a way where you’re not understanding it and you go to the operator and you’re trying to have this conversation like, hey, can you explain this to me? And it just keeps going over your head or around your head. Just keeps, like, not landing on the mark. And it feels like you and your operator, your sponsor, you’re just not seeing it or speaking on the same wavelength with one another, with one another. And that’s a sign and it’s not a sign that there’s anything wrong there. Like you are just different people. We all communicate differently. But if you’re not able to, like, get in sync with something so simple at the beginning, then you’re going to have a difficult time ever getting in sync down the road. So it could be that the deal’s perfect. But you’re just your communication style, for whatever reason, is not what is it Sympatico? That word. I’m making it. We’re going with it. But, you know, it’s not linked. And so find the operator when you’re talking to them, you go, OK, I get this. They speak in the language that you understand.
Billy Keels: [00:24:29] Right, and Anthony, because I mean and I know when you’re saying they speak to the operator, it’s the operator or someone on their team, like someone has to be able to make you feel comfortable that you understand that what is the plan and explain it in a way that you go, oh, you know, OK, yeah, that makes sense. I can see it that way. Oh yeah. That is a pretty big risk. And I willing to deal with that. Probably not. OK, well that’s fine. Well, this is probably not the right opportunity for you. You know, there’s going to be other things that are coming around and we’ll you know, we’ll continue to make sure that we are bringing as good stewards, we’re going to bring the next opportunity forward to you and things like that. All right. No big deal. You go on.
Dan Kreuger: [00:25:04] Mm-hmm. There’s no shortage of opportunities these days. And I like to also remind people that real estate is a fairly slow asset class and thing to invest in. So it’s not like the stock market where when there’s a dip, there’s like maybe a day or two where you could go shopping and get things at a discount. The real estate’s very slow. So when there’s a good market to invest in, it’ll be a good market for many years. So people could really take their sweet time being able to understand what they’re doing, wrap their heads around it without fear of missing out just because it’s a nice, slow, sleepy investment, which is why I like it. It’s not volatile, which is why I can sleep at night.
Anthony Vicino: [00:25:44] What do they say? It’s the best. Get rich slowly but surely scheme, you know. Yeah, you don’t get rich overnight, but if you stay in it long enough. But I want to pivot the conversation because Billy, you we were talking about before we went a life that I guess you do such interesting, varied sectors within real estate. It’s not just multifamily, it’s not just mobile home parks. Like walk us through how you got to this point and why you’re looking across such diverse asset types and such geographic different locations and maybe walk us through for our listeners maybe why that’s a good idea for them and how they can start thinking in those terms as well.
Billy Keels: [00:26:21] Yeah, so so love this. And we’re going to now bring back what Dan asked the question earlier, made the comment earlier. And you know what, I as I look at things now, right now, initially I was just an active investor and I was busy buying things because I was sick and tired of being in the stock market. And so I wanted some predictability and control. And so I was buying things and I had, you know, more than enough capital to do it myself. And I was working with the banks and set it up. And then eventually I found out this thing called passive investing. And I was like, okay, well, I want this portion of my portfolio to do this, this, this, and this. And I was still working at my corporate job and, you know, managing these really large, complex businesses with people and all this kind of stuff. And so eventually I started realizing, OK, well, it purchased my own properties here. This was small multifamily. And then I got into a development project and really vetted the team and understood the team and ask all the same questions that like reading through PubMed and didn’t understand this because it was the development and asking and then eventually got into a larger, like 250 some odd unit apartment complex possibly, and then got into ATM machines because this made sense and it was always this common thing, which was.
Billy Keels: [00:27:26] All right. Well, this is something that I understand. I can ask a question and I can see the process right. And just recently got into something else, which is in the energy space, which is once again, it’s a product that I can actually see. I understand I understand the process. And it’s something that does two things for me. Right. Number one, I’m always looking for cash flow, like just predictable cash flow. And I really love tax benefits. Why? Even though I would choose to live in Europe, like, one of the things that is important for me as a high wage earner is I’d like to earn money and I like to keep as much of it as I possibly can, because when I’m working, I’m working. You know, I’m working the hours and I’m working and I’m putting in the work like everybody else that’s there and listening. And so I want to make sure that I’m doing the things that for me are creating cash flow because I can use that to pay for things. And I know appreciation is important and should be in those types of opportunities because that really creates wealth. I get that. And most importantly, is the are the tax benefits. And so I’m telling you all that, first of all, because this is about how I got into this space.
Billy Keels: [00:28:33] And when I started looking around, I was realizing like I was talking to people and they were only doing self-storage facilities and then there were only doing single-family portfolios and they were only doing all of you know. And I get that to go really deep. But I started realizing in my skill set what I’ve understood is how to meet people, create good relationships, ask difficult questions and understand if I actually understand what they’re doing. So when I take what I’ve learned over the last 23, 24 years in the corporate and I start saying, all right, well, does it actually really matter if it’s a multifamily, large multifamily apartment building or it’s a self-storage facility or it’s an assisted living facility? They’re going to create returns and they’re going to create tax benefits. And so I continue to go out and do that one thing and that one thing is to meet with real-world class operators. And when I started seeing that, there were other people. All in the syndication game doing that as well. I realized, OK, well, I’m not actually alone. There are other people that are really good with their skill set and they go out, they meet operators, they forge strong relationships, they ask tough questions. And eventually, what do I do? I take that back to my investor pool we were talking about before the show, Anthony.
Billy Keels: [00:29:47] And then. Right, one of the things that I’ve always thought about in one of the reasons that I love real estate is because real estate, allows us to create very interesting returns. And because of understanding how you earn your money, which is extremely important when we’re earning these returns, they’re typically protected very well because we’re creating passive income as it relates to the IRS code, not just passive income, because we’re not doing anything like the IRS says, that this is non-active, i.e. passive income. And the thing is, as we’re creating it there, it stays in the bucket there. And so when you’re a high wage earner, right, like me going back and understanding who that person is if there was a way that you could actually create returns and like those strong returns and whether they’re high digits or double digits or whatever. Great. But you could also and at the same time, you can find a way to help to reduce your active income like you would want to know about that. At least I would want to know about that. And so as I’m going out looking and creating relationships with operators, I’m looking to see if this is going to actually fit into the bucket that my investors are interested in.
Billy Keels: [00:30:54] And because I have that skill set to go out to create relationships, ask difficult questions, and really broker, for lack of a better term, those relationships and being able to bring them back to my investors. Like that’s what I’m really, really excited about. We were talking before like this. The thing that we’re doing now with energy, I mean, it’s just it’s really, really interesting for my investors because they like their jobs. They’re earning, you know, multiple six-figure salaries. And every time they’re getting returns in real estate, it just stays in the passive income bucket. And they’re like, well, yeah, this is great, but I’m still out here earning four hundred thousand dollars a year and there’s nothing that I can do to actually bring my active income down. And so if were if I wasn’t actually out there looking for how to help solve that problem because I was just focused on the one thing I wouldn’t be able to offer them that solution to their quote-unquote problem. And probably another long-winded answer. But that just I mean, the one thing that I’m focused on is how do I make sure that I’m teaming with the right operators so I can bring the best possible solutions to my group of investors.
Dan Kreuger: [00:31:58] That’s very interesting. I love it, you mentioned specifically the high wage earners that, you know, they have their investments that are passive income and those can be tax protected as far as the dollars that are earned in that bucket, which is great. How did you find out about how to bridge the gap between reducing the taxable income from their active wages? How did you kind of come across that and specifically how are you helping your investors get into those deals? Is that specifically the energy investments or is it more so how the deals are structured?
Billy Keels: [00:32:31] Yeah, so and I guess I probably should have stated this in advance. So what we’re talking about here, we’re not giving anybody any advice, just sharing experiences and things that have worked with other people. This is also why. So that’s everything. So make sure you consult with your tax professionals. And so, you know, at the end of the day, this is really where teamwork comes into play.
Billy Keels: [00:32:53] Right. And Dan, you were talking about this earlier. Make sure that you’re speaking to your your your your attorney or your tax person. So when you have a specific opportunity and you’re looking to solve a problem, which is what I’ve been doing, it’s like, OK, well, now how do we make this work? And depending on where you’re working, there are possibilities to make active income or non-non-active income or sorry, active income, being able to reduce it based on the structure that you put in the deal, which is what we’ve done, we’ve been able to structure a deal that makes sense and is allowed by law to not only create the the the returns but also to have the possibility of being able to write it off against your active income, which once again, for the people that are part of my group, this is something that’s really important for them, creating returns and being able to also bring down their adjusted gross income. And also without having to become a real estate professional or having somebody in your family become a real estate professional. Like, that’s another way. But if you’re a single person making three hundred fifty thousand dollars a year, well, you can’t work in your day job and be a real estate professional at the same time.
Billy Keels: [00:34:04] So it’s kind of like, well, what am I supposed to do? How, you know, is there a way that I can kind of get both of these things in? And the answer is yes. But you have to be able to spend the time and build a team. And it’s not for everybody. Right. But as being able to offer those solutions.
Dan Kreuger: [00:34:23] Yeah. It’s great to hear essentially that team that makes that a possibility for people so that they don’t have to go out and do all the legwork themselves to get into these deals. You kind of go out, cultivate the opportunity and bring it to them. And that’s your niche in the spaces being the guy that connects to the two parties and the investors.
Billy Keels: [00:34:44] Yeah, that’s exactly. I mean, as the syndicator, it’s a matter of, OK, am I going to syndicate a multifamily apartment building. Yes. No, why am I going to syndicate very large pieces of equipment? Because there are things that exist today and like bonus depreciation, which is something that is really, really interesting. And it was interesting before. It’s still extremely interesting. Now, who knows what it’s going to look like in the future. But when you have really large pieces of equipment that are generating revenue and because you’re a part of that, you’re able to potentially take that against your active income or. Yeah, as a syndicator, this is definitely something that I want to at least talk to people about. You know, the people that I’ve talked to about, typically really are liking it a lot. And so but it’s definitely not for everybody.
Billy Keels: [00:35:32] But yeah, being that conduit as the syndicator between the two is something that I genuinely enjoy doing. And it really ties into a lot of what I’ve been doing in the corporate world for 20 some odd years.
Anthony Vicino: [00:35:42] Yeah, I was going to say it ties nicely with your unique superpower, it sounds like, which as you’re talking about this year, like, you know, I can dive into ATMs and I know the question. I can maybe not know the questions asked, but I can find the questions ask and I’m comfortable asking them and then I understand it. And then I can move over here with mobile home parks or with the energy sector. And it’s a unique ability to be able to learn and to understand what you don’t know and then to go after and get that information for a lot of busy people. Maybe later listening to this, you don’t have the time and the energy to do that, or maybe they desire to even do that. And so you’re listening to a podcast right now that’s ostensibly all about multifamily investing because you want to go into this thing that’s, you know, go deep and learn this. And it’s a great vehicle, but there’s a lot of different vehicles within real estate. And where somebody like Billy really excels and comes in to add value is he’s this guy who spends the time learning and making these relationships with the operators in different sectors so that if you trust Billy’s judgment in the same way, that if you were to come and work with Dad and me because you trust our judgment, well, then you can be confident that the deals he’s going to be bringing you are going to be good deals. So I think it’s just a really interesting, you know, way that you’re adding just tons of value to your investor pool there.
Billy Keels: [00:36:56] Yeah. And it’s in a. Should you send that, Anthony, you know, and at the end of the day, it is because it comes down to the team and there are many times just like with you guys right there, there are moments where it’s your tax team has to speak to the tax team of your investor because they’re you know, they if you’ve tried to explain it a couple of times and they’re still not understanding it at that point, it’s time to pivot just like in the multinational. You can’t just try and, you know, jam a deal down someone so it doesn’t work that way. Sometimes you have to take a step back and say, hey, listen, maybe I need our CFO to talk to their CFO because they’re going to put it in a similar language. Right. And then their CFO can then talk to the person who’s going to place a million dollars of capital with you and go, OK, you know, I wasn’t really understanding it, but now that my financial person explained it to me, I understand the benefits that I’m going to get. Well, you know what? Now it makes sense to write a thousand-a-million dollar check. And we want to be involved in this because we’re going to get this type of return and we’re going to be able to sleep well at night and all these different things. But it’s definitely the team, the team that is really bringing the massive value, I would say.
Anthony Vicino: [00:38:03] I love it, it’s all about teamwork. Real estate is we game, not a game. It took a long time that some people take a really long time to get to that place where they realize it. But you can’t wear all the hats all the time. So, Billy, this has been a fantastic conversation. I like I want to keep going, but I want to be respectful of your time. So before we let you out of here, before I let you go about your day, what is your book recommendation for the week?
Billy Keels: [00:38:27] You know, one of the best books that I read actually the during the period we were locked in the home, I ordered a book called The Return to Orchard Canyon, which was Ken McElroy. And.
Billy Keels: [00:38:41] Yeah, yeah. And so it really resonates a lot with me, especially, you know, because we’re talking about people that are working at Multinational’s. Sometimes you think that’s the only way is the multinational way and you don’t really open up your eyes to see that there are other possibilities that you can use, that unique skills that you’ve developed and been trained and become a master at during the multinational. And you can use so many of those skills outside of the net. Multinational decided that you want to do that. And I felt like that book. I read it and it just every single page. I didn’t want to stop reading it. And Ken McElroy, you know, I mean, he’s just someone in the multifamily apartment game is just a master in the fact that he’s been able to put this into a story that so many people that are in a multinational and really love passive investing, which is most of everybody that’s listening to you guys and watching you guys what they’re interested in, I think that would add a lot of value to them as well.
Billy Keels: [00:39:36] By the way, let me just I just want to say one thing, because it’s really important. Like we’re talking about doing multiple things. I love multifamily apartment buildings. Like, I will continue to do that for quite a while and invest in them. And it’s just a matter of being able to see what is the right solution for the right person. So I do real estate. I love real estate. I will continue to love real estate. And I just wish I would have known about it much sooner.
Anthony Vicino: [00:40:01] Yeah, so we hear that narrative a lot. It’s about having the right tool in the right and the toolbox at the right time and knowing when to use the hammer when to use the screwdriver. And you know what you’re talking about there about you know, you come from this multinational world and you found a cool intersection of those skills that you have and applied it to real estate. But I think a lot of people, a lot of us, forget that we’re we have unique skills and we take those skills for granted and we apply them in a very particular way. And it can be difficult to think, you know, tangentially and think about, OK, what’s the French case where I could apply this over here? And so it sounds like can McEvoy’s book Return to Orchard Values? A little bit of that. And so I’m excited to check it out. I remember seeing it maybe a year or so ago, but I haven’t picked it up yet. It returned to Orchard, Orchard Canyon, or Canyon, not a valley. What’s the difference between a valley and a canyon?
Anthony Vicino: [00:40:51] I have no idea is the deep questions we have to get into the future. I said. Yeah, well, well, Billy, thank you for the book recommendation.
Anthony Vicino: [00:40:59] Thank you for your time. We really appreciate you. Working people get a hold of you. Yeah, sure.
Billy Keels: [00:41:03] I’d love to connect with people through LinkedIn. Just definitely let me know that you heard Anthony, Dan and I speaking here. I mean, I think that’s one of the best ways every single day. I mean, of course, you can go to my website at Billy Kilsby, Allawi, Castells Dotcom. If anyone wants to just speak, you can go to bit that forward slash speak with Billy.
[00:41:22] And I also wrote a book that talks about long distance investing. So if anybody is interested, they can go to grow your money the smart way. Dotcom and if that wasn’t enough, you can also check me out at going along podcast with Molecule’s.
[00:41:35] Love it. I love it. So that is going to do it for us here at Multifamily Investing. Made simple. Thank you again for joining us, dear reader.
[00:41:43] Now, dear listener, not reading this. I’m so used to writing as a writer at heart, so make sure that you go connect with Billy if you have questions. If you’re an international investor, this is definitely a guy. We appreciate you taking time out of your day to join us. Thank you.
