Our guest for today is the Co-Founder and Principal of Wealthward Capital, a private equity investment firm. Wealthward Capital invests in multifamily assets, self-storage, and commercial debt instruments. They help investors preserve and grow their wealth by partnering with top-performing sponsors/ operators who have a strong track record for successful asset management and meeting or exceeding investor returns.
Our guest brings his expertise to the real estate arena with experience from over 20 years in investing, due diligence, and financial operations. He has built professional services practices, run small businesses, and helped take Splunk (SPLK) through an IPO and grow to a billion-dollar company. He’s also the author of the upcoming book From No Doe to IPO.
Let’s dive right in and learn from Christopher Nelson on how to prepare for the unknown after an IPO.
[00:01 – 10:16] Opening Segment
- We introduce our guest, Christopher Nelson
- Christopher talks about his background
[10:17 – 22:34] Little Bit of Domain Inexperience
- Christopher talks about his upbringing and education on Money
- Learning and knowing what to do next
- Christopher goes over his passion for education
[22:35 – 32:48] The Three Principles To Be Considering
- Christopher talks about the important principals
- Principle #1 You are the Asset
- Principle #2 Always work for Equity
- Principle #3 Think like an Investor
[32:49 – 40:28] Don’t Do Any Due Diligence?
- Christopher’s bad investing advise
- Using JOY as a North Star, a compass, as a guide
- Christopher shares his experiences as a full-time doctor starting out investing
- Deciding what your goals are and choosing the vehicle to go with
[40:28 – 47:42] Don’t Do Any Due Diligence?
- Christopher shares using a lens to see the world
- Final thoughts
- Christopher’s book recommendations:
Tweetable Quotes:
“So it was out of that failure. And I truly believe that it’s in failure, that we have our greatest lessons learned.” – Christopher Nelson
“OK, how do we actually take this paper money now and turn it into a suitcase full of cash?” – Christopher Nelson
“at least in technology, we have the spirit of open source, like a watch and see what we’re doing and feel free to participate and contribute.” – Christopher Nelson
“So I do think there’s also a lens of I I like I work so hard to get here. I don’t want to be the guy raising my hand saying I really like I didn’t plan for what happened next.” – Christopher Nelson
Connect with Christopher! See the links below:
Go to his LinkedIn, Facebook, and Twitter, pages to connect with Jeff. Visit his Website, and YouTube.
From Tech Titan To Real Estate Mogul with Christopher Nelson
Anthony Vicino: [00:00:15] Hello and welcome to Multifamily Investing Made Simple, this is the podcast where we take the complexity out of real estate investing so that you can take action. Today, I am your host, Anthony Ticino of Invictus Capital, joined as always by Dan. I have intro anxiety. Kruger, how you doing and doing?
Dan Kreuger: [00:00:30] Good. Now that the intro is over, feel great.
Anthony Vicino: [00:00:33] That’s always the most stressful part like it is. Am I going to remember the name of our show? Am I going to introduce ourselves correctly? I still find myself 70 percent of the time pronouncing your last name, Kreger. So a lot of people do. Any time I can get it right, I’m happy.
Dan Kreuger: [00:00:50] Ignore the part that’s scripted. I think that’s why we don’t do scripts. If you give us a script, it just gets weird.
Anthony Vicino: [00:00:58] I mean, things kind of get weird even without the scripts. But today things are going to get particularly weird or particularly awesome depending on how you look at it. We have a really awesome guest. We’ve had a couple of conversations with this fella in the past, and it’s been each time has been a lot of fun. So I’m looking forward to this conversation today. We have Christopher Nelson joining us in the studio. He is a technology executive and the co-founder and principal of Wealth Wired Capital, a private equity investment firm, Wealth, where capital has a multifamily portfolio of two thousand nine hundred and seventeen units with a value of two hundred and ninety-four million dollars. In central Texas, Christopher helps technology employees and entrepreneurs achieve financial independence through creating passive income portfolios. He’s also the author of the upcoming book From No Doe to IPO. That’s like one of the most fun titles to say, Christopher. So thanks for joining us. Come on out here and say hello to everybody.
Christopher Nelson: [00:01:49] All right. Hello, everybody. Glad to be here on the show today. Thanks for inviting me.
Anthony Vicino: [00:01:56] Thanks for coming. Yeah, I again, from no to IPO, we’re going to spend some time talking about this book today, I think, because one, it’s an awesome concept. But before we get there, before we talk about the what was it, two thousand nine hundred and seventeen units, you got the amazing growth in your background in the tech industry. Just give us walk us through. Who are you? How did this guy get to where he is right now? Because as I’m looking at your bio, there’s a lot here to unpack.
Christopher Nelson: [00:02:25] Yeah. So, I mean, I think so how did I get here on this show and really involved in real estate investing? Let’s talk about that first and foremost because I think if we’re going to talk about Noto the IPO, we’ll talk more about my technology journey. But I got here because of an IPO, because of success, because, you know, one day it was April 12 or April 19th. Twenty twelve, we had an amazing IPO. And all of a sudden we had all of this equity, the stock, and there was this joy and there was this fear that said, what are we going to do now that we have one stock that’s 90 percent of our wealth? And I think my wife and I had always known that we wanted to get it into real estate. But at that point, I think like most people and especially most technology people who live in the Bay Area, we had no idea how do we get it into apartments. We had no idea that there was passive investing made simple for us. So that’s where we went on this journey to truly discover it. I think it was a nice time. Crowdfunding had been opened up. There were a lot of opportunities to actually see and understand the deal flow. But as we started getting into it and then we relocated from the Bay Area to Texas and we started actually making investments here in central Texas because we saw the tremendous growth. We saw the opportunity. We had friends in the Bay Area that said, OK, now you’re boots on the ground in Texas, get us in on some of these opportunities. And so that’s where we were able to find the right operators, build relationships and start scaling.
Dan Kreuger: [00:04:03] That’s really also, I think, part of your business model, if I’m not mistaken here, is not just finding good operators and identifying good opportunities, but also educating and I guess guiding busy technology executives into the passive investing role in the space. So you’ve kind of made that transition yourself and you seem to have a lot of experience with escorting other individuals through that, the learning curve. What do you find as this is kind of a difficult change to make going from the tech industry mindset to the real estate investor mindset? Do you want to call it that?
Christopher Nelson: [00:04:45] Yeah. And so, I mean, just to back up on your question a little bit. Yes. The majority and quite honestly, the majority of where I spend my time in education. And that’s truly where my passion lies. I feel technology employees are my people. I call them fire eaters because every day we’re expected to solve difficult problems on challenging technology and we do it at speed. And that’s sort of like the baseline to get in there. Then there’s twenty-four by seven on call. Then there’s, you know, people got sick of people having issues at home or you name it. And so for, for people like that, I really, I really have a passion to show them how to get to financial independence. So that’s where I spend a lot of my time. And this is also the value I think, that I bring to my audience, which is you like I’ve been through this and I’m really trying to lean back into my community and say, hey, I can be the Sherpa, follow me, follow me this way. And you’re right, like in technology. And did you want to double click on that, Dan?
Dan Kreuger: [00:05:51] No, I was I was going to ask that. I think you’re going to get there in a sec. But I was just kind of curious for you personally, like, how was that transition? Like, what was hard and what did you identify that was kind of a sticking point for yourself? Not necessarily a sticking point, but a struggle point for you going from, you know, focused on basically being 100 percent in on one equity position, the company that you’re helping build and going into the real estate investing kind of mindset.
Christopher Nelson: [00:06:20] And that that to me, is actually the right question. And in the sense that no, people don’t even talk about it. Right. I think to me, the biggest challenge that I had is so I went through this event. But how weird is it that then we all went through it together, we all jumping up and down when we went out on the Nasdaq, but nobody was really turning to each other and saying, OK, how do we actually take this paper money now and turn it into a suitcase full of cash? Nobody talked about it like there. To me, that’s a problem with our culture where we’re not talking. And again, we don’t have to sit here and compare notes like how much did you make? But how are we managing it? What is the process? And I’ll tell you. What most people experience in this is this is the let me let you peek behind the curtain, which is most people think, oh my gosh, that’s the happiest day of your life. And quite honestly, for three-quarters of the day, it was. But then when I get home and my wife looks at me and says, OK, wait, when do we get the money? When can we buy the house? And I have no idea. Like, fear takes over. And then there’s this questioning, like, is it really real? So I think to answer your question, I think people really struggle with how do you deal with this success when there’s there is no independent reference that says here’s what you do in this situation. Here’s what I’ve done. Here’s an example of what you can do. And the flip side of that, and I think we both know that is nobody trusts the wealth management industry. Nobody trusts it because it evolved out of salespeople.
Christopher Nelson: [00:07:57] Right. It’s salespeople who are selling things, who have a very confined Buckett who want to give you a message and technology. People are smart enough. Employees are smart enough to understand that. So then it becomes this question of who do I trust? And you get locked up. And so then that manifests itself for tech employees in three ways. Number one is I found that just pulling my investors, 80 percent of them will just let it ride. That means that they will leave a large position in a single stock because their best thinking got them there, which I know from experience I get a gut punch like that’s every day. Don’t look OK. I’m going to look oh, it’s down 10 percent wall. Oh, it’s up 30 percent. Yay. The second thing is they let it leak into their lifestyle. So you do get depending on where you are. But once you get to liquidity, which is where you really get the success and the access to dollars, you can be getting tranches delivered to you quarterly where if you’re getting fifty seventy-five, one hundred grand a quarter, it’s easy to then get a higher mortgage, get a different car. Right. Get things that all of a sudden now you need to fuel your lifestyle style. And then, and then the third thing is that I think is that people make the mistake is they, they, they, they do farm it out to these fast food wealth managers. And then they just hope that they’re going to get to financial independence. But then when you ask them, OK, well, what’s your wealth manager telling you about income? And they say, well, he says that we’re then going to transition to bonds.
Dan Kreuger: [00:09:34] Oh, or so.
Christopher Nelson: [00:09:37] Yeah. Where’s the where’s that twenty-eight
Dan Kreuger: [00:09:40] Percent inflation problem.
Christopher Nelson: [00:09:42] Right. It truly is. And this is where then. And so this is truly what I’m trying to lean in and address these, these problems head-on and say you have an opportunity more than anyone to get to financial independence. You’re getting this additional compensation outside of your paycheck. Here’s what I’ve done, and you can choose to follow me or you can choose to not, but I just want to make sure that I’m at least in technology, we have the spirit of open source, like a watch and see what we’re doing and feel free to participate and contribute.
Anthony Vicino: [00:10:17] I love it. I’m curious about it when you’re talking about nobody talks about what to do next as you’re sitting there and you have the big IPO and everybody’s like slapping each other’s backs and because we did it. But then from there, nobody talks about, OK, now what do we do? Why do you think that is? Do you think that’s a problem? Unique to the technology industry is a problem at large with a society where we may be financially illiterate or it’s a taboo topic? Is there something unique about the technology sector where it makes it especially prevalent? I’m curious if it’s like because a lot of people that are in this industry are very, very intelligent people. Right. And I’m wondering if there’s a little bit of domain inexperience that makes them uncomfortable with the idea of financial literacy. And so they just don’t even, like, look at it or what do you think is the cause of, like, the not talking about it?
Christopher Nelson: [00:11:08] I think it’s multilayered. I don’t think it’s an easy answer. But I do think, Anthony, that the United States, like we’re not comfortable talking about it. Like, I don’t I don’t think that I know in my house we didn’t talk about money around the dinner table. We didn’t you know, and I had a middle-class, traditional American upbringing. We didn’t talk about money, you know unless you needed some money to go out or et cetera. And so I think that’s a layer of it. I also think that. You know, I also think that especially in technology, because they’re like there is a culture of you’re expected to know, right. And especially when you have this deep knowledge in these very challenging technologies and or this expertise and whether it’s marketing, sales, et cetera, you’re expected to be the expert. So I do think there’s also a lens of I I like I work so hard to get here. I don’t want to be the guy raising my hand saying I really like I didn’t plan for what happened next. And that’s truly what I’m trying to show and tell everyone is that was me. Like, I work so hard to get to the IPO. And then I literally stood there that night after we were spent the whole day like deejay’s in like lunch bars and pop. And there was a famous photo. This ping pong table was covered with VOV bottles. And we raged all day because it started at five-thirty in the morning because the East Coast and then I went home and was literally like almost crying that night because I did not know what I was supposed to do next or who I could trust
Anthony Vicino: [00:12:49] As a little bit like the dog that chases the car and then catches it and doesn’t know what to do. Right. I got the thing, but now I don’t know what to do with this thing.
Christopher Nelson: [00:12:58] Yeah. One hundred percent. A hundred percent. And it was really after that that I really then started talking about it more and really try. And so now there’s a group of us that are talking more and more about it. And this is really where, you know, I’m why I’m writing the books, why I’m out here and building wealth for capital is because I want to really educate people and then provide done for you investments for them so they can understand. OK, how does this whole machine work?
Dan Kreuger: [00:13:30] So does the from no to IPO. Is that kind of your story or is that more so kind of like an instruction manual for somebody who’s about to go through that process or neither of those things? Not sure what to do.
Christopher Nelson: [00:13:43] So interestingly enough, so this is actually the prequel to the first book that I wrote that I haven’t published yet, which is called From IPO to Cash Flow. That’s really the book that I drafted and started writing after I went through the IPO that says, OK, how do you actually plan for an IPO, protect your capital, and then produce cash flow. So it’s the plan, protect produce. But then as I was writing that book, the beginning kept getting longer and longer. And my book coach said I think you have another book here. And that’s actually my story of people who actually go to work for technology companies. They have a lot of frustration because, again, nobody talks about, well, what company should I go to work for? Oh, this is the latest startup that Wing v.C is funding. Go to work for them. Well, wait a second. When see is an early stage in somebody’s portfolio, that’s going to be high risk and that and where does that lie in their portfolio? Is that a high-risk bet? So no doubt IPO is my story where when I wanted to go to work for my first startup, what happened is I made an incredibly emotional decision. I was working for a consulting company and I had done some very good things in my career, made some good choices.
Christopher Nelson: [00:15:06] And so I was well respected. I was being flown around the world and was executing programs. And I found myself in two thousand eight sitting in my apartment in Tokyo. And I was just really lonely. I was sad. I was burnt out. And so I thought, I need a job change. And so I started talking to some people about start-ups. I got really excited, really emotional. And so I joined a startup and a year later I found myself nursing an ulcer and working for a bad boss. And also at that time, and this is a whole other side story, had another side hustle where I was trying to stand up some juice and smoothie bars to buy real estate, and that got swallowed by the Great Recession. So then here I was broke. So I’m broke and nothing’s going on. I was like, wait a second. Like, I’m a smart guy. I was a stock investor at that point. And so I’d done well in the market. But I’m like, how did I get here? And the reality was, is that I made an emotional decision. What I thought was I was moving towards joy, I was moving from fear, and I didn’t really realize I was actually in a great situation.
Christopher Nelson: [00:16:18] But again, I had the shame and I couldn’t talk to my bosses about burnout. So I moved from fear. And then all of a sudden I found myself in a bad situation. So it was out of that that is out of that failure. And I truly believe that it’s in failure, that we have our greatest lessons learned. And it was in there that I realized that no one is I had this valuable thing called career capital and career capital. Is your education, your experience, and your results like what you deliver. And I could actually trade that for equity at a startup company. However, I have to think like an investor. I have to look across the scope of what technology companies can I work for. Because in your real estate, guys, you’ll get this. Most people look at early-stage startup companies and they say, I’m going to go make money there. That’s just like in real estate, saying, I’m just going to go do an opportunistic deal is my first deal. I’m going to go find a patch of earth and I’m going to build something. There’s no risk of failure there, is there? And so I’ve never
Anthony Vicino: [00:17:24] Seen it go wrong,
Christopher Nelson: [00:17:25] Right? Never, ever, never, ever. And because the reality is most people don’t realize that, you know, established companies like Google, like Facebook, like Amazon, have incredibly competitive equity programs that even if somebody’s coming out of college, you could work there for five years, get a ton of experience and walk out with four or five hundred can equity. And then you could go to work for an earlier stage startup. There are also the companies that go into Splunk and the company I’m working for now get lab where they’re eighteen to twenty-four months from an IPO. It’s like a value ad where I can actually go in here, help execute a complex business plan and get a big bump going through an IPO. But most people don’t take a step back and look and think like an investor. And so no doubt the IPO is and this is where I want it to be. Dan, is it a story like see what happened to somebody else and its principles? And I think that’s something that we all align on. It’s like let’s be principle led and then it’s a how-to it’s like, OK, here’s how you go execute. And honestly, I think you guys will dig it because it’s showing them how do you create a risk profile so you can go through the companies and filter out and go, OK, here are the piles of companies that meet my risk profile. Then there’s company and manager due diligence because most people also don’t realize your manager is going to either help you grow or could help you depreciate your career capital. So selecting your manager is critical. And then there’s the company. And all I’m trying to do is give people a process to do risk, because the thing is, again, nobody talks about it. But I have gone and talked to people who have worked for two or three companies and gone through either IPOs or larger companies that have acquired equity to really try and understand how do people create these methods because they’re out there.
Dan Kreuger: [00:19:21] That’s amazing. It’s so cool because initially, I was thinking that this was just going to be a resource for four people in the tech industry who want to start getting into real estate or they want to introduce some other income streams or something. But really what you’re doing is you’re providing them with a real estate lens and start looking at the world through before you even get to the real estate conversation so that they’re looking at their career from an investor’s perspective, factoring in risk-reward ratios and things like that, so that by the time they get to the actual real estate process, they’ve already got that lens to look through, which is amazing.
Christopher Nelson: [00:19:57] One hundred percent. And this to me, the concept that I’m one of the concepts I introduce the concept of also career compensation, compounding where if you just want to work for a company with no equity, that’s like simple interest where you’re just a straight line up into the right. However, if you always work for equity, whether you’re whether you have tech skills or not, they need marketing people. And I tell this story about a woman who moved from Kansas City, Kansas, was working for a product company, knew that she could make a difference and technology, went to work in Silicon Valley, went through an IPO, worked for an established company, and then exit. Then she left Silicon Valley as a director, took a role here in Austin. But now she also has a mountain of equity and is starting to invest as well. But she had marketing skills. This isn’t so. This isn’t just for tech employees. But to your point, how do you going? Because my focus is how can we help people understand how to build that equity position, diversify it into real estate? Because then that’s when you get to financial independence.
Dan Kreuger: [00:21:06] That’s a really powerful combination right there. It’s like the one-two punch.
Anthony Vicino: [00:21:10] The tech industry is really interesting to me because it’s not new by any means. It’s been around, but it feels a bit like the Wild West still in the sense that it’s kind of a black box of career advice. Like there isn’t a lot of maybe information like what you’re pointing out here, how to select a company or the manager, or how to weigh the pros and cons of an early-stage equity position in a company that’s maybe just past like the MVP phase or somebody that’s getting closer to an IPO for being eighteen months out and then weighing those and saying, like, what’s the risk-return profile for both like the equity side of things. But as you’re pointing out, another aspect of this is the career capital, like who are the people that you will have access to? And that’s one of the most one of most interesting things is that picking the right team can give you access to some real all-stars or it can give you some access to some real duds. And so there’s a really important decision to be made there.
Christopher Nelson: [00:22:05] One hundred percent. And you’re right. And this is exactly why I see this blue ocean opportunity to lean into this and really help the community because, at the end of the day, I want to really help people. To your point, Anthony made good career decisions. And then also made good money decisions and nobody is talking about it, and your part of it is I think people get really busy and yeah. And at the end of the day, I think this is an opportunity.
Anthony Vicino: [00:22:35] Mm-hmm. Yeah. And I think part of it, too, and I don’t I’m speaking entirely from an outsider, but I can I’m going to speak in broad generalizations. Is that to become like a really great coder or a programmer or whatever this thing is like? It’s a hard skill that you’re focused very, very hard on, like becoming very, very good at. That’s probably like a musician in the sense that you want to level up that skill and get really good and then you don’t necessarily think about where you’re going to perform or what venue or what band you’re going to join. You’re just focusing on the skill acquisition itself. But you mentioned something that really stood out to me before. When you’re talking about in the book, you talked about the principles like establishing principles that can be guiding for. Yeah, I’m curious to unpack that a bit like what are the principles that we should be considering? How do we find the ones that are meaningful for us and then how do we implement them?
Christopher Nelson: [00:23:27] Right. So I think that principle number one is, is yourself, the tech employee, they have to think of themselves as the asset. At the end of the day, when you tease it out and you imagine the interview table and you have potential employer candidate on one side, hiring manager on the other, it is in negotiation for the rare and valuable asset that you bring to the table. And on the other side is sitting equity, which is the opportunity for ownership shares in that company. So what I try to make sure that people understand is you have to position yourself as the asset and you also have to tell your own story. And I talk about in there, when you think about porn stars, if you’ve ever watched that show, which I find that are Antiques Roadshow, you see somebody bring in something that’s dusty and beat up somebody tells an amazing story and talks about the artist, the craftsmanship. And all of a sudden, in your mind, it goes from a piece of junk to it’s worth a hundred thousand dollars. And so when I’m trying to tease out in that, again, the principle is, is that we all have to be the asset and be the keepers of our own story and tell it because then that is going to then help you in that negotiation. So be the asset principle, number one. Principle number two always works for equity. Always work for equity. Right. If you want to get to the career compensation compounding, if you want to get that nice exponential, you have to have equity.
Christopher Nelson: [00:24:57] And why is that? It’s right there in the cash flow quadrants. It’s just not written down, which is working for equity is a bridge between quadrant one and quadrant three, which is quadrant one is you’re the employee. Quadrant three is the owner of these companies, you have the ability to walk in there and I can be an employee. You have the freedom of an employee. But I can also then have the power of the owner, which is people are working for me to increase the value of what I have while I’m sleeping. Right. And so this is the other mindset is always work for equity. And then the third one is to think like an investor. Where are you going to invest your time? Right. So that is really then how do you remove emotion and how do you create processes to analyze the situation, give feedback to yourself after you’ve made a set of decisions so that you can always be d risking the situation and moving in a direction. And this is what I combined together into a concept I call the career compounding quadrant, where it’s a quadrant with two vectors where you’re increasing or decreasing career capital and then you’re choosing better companies or not. And the goal is to be in the upper right, which is the compounding quadrant.
Anthony Vicino: [00:26:11] And I love it, there’s so much to unpack there, but let’s run back through these because I think these are so these are so good and so important principles. Number one, you are the asset. This is absolutely what I think when it comes to investment, the best investment you’ll ever make is the one that you make in yourself. And if you view yourself as the asset when you go into negotiations, it fundamentally changes the paradigm. You’re no longer there just looking for a job. You’re looking for a partnership. Number two, always work for equity. This gets right back to Warren Buffett’s idea that if you can’t find a way to make money in your sleep, you’re going to work until you die. And by getting that ownership percentage one, it gives you a little bit more skin in the game, gives you something a little bit more to work harder for, lets you care a bit more, which is important, I think, for rising to the highest level of your ability. Number three, I think like an investor, remove emotion. And you mentioned something there that reminded me of the concept of a decision journal.
Anthony Vicino: [00:27:08] I wonder if you’re familiar with this and the idea I got this from Farnam Street, where it’s a blog where they talk about as you’re making an important decision, we never retroactively have a way of grading our decisions because we make them. And then in the future, when we look back on it, we say, oh, it worked out or it didn’t work out. But we tend to think our judgment, our decision-making process were better than it really was. So this tool that they proposed was having a decision journal where you go through like six or seven questions about your frame of mind, what the options were that you considered, what you eventually decided on, why you decided, and then revisiting that in six months to give yourself the feedback loop of saying, OK, was this a good decision? In the end, were the parameters that I judged on where they saw it or not? I’m curious if you’ve ever done anything like that because you mentioned something almost like tickled that a bit for me.
Christopher Nelson: [00:27:57] Well, so I think the thing that I recommend that is a little bit different is but similar is I talk about how do we convert in our mind open threads to lessons learned, because I think especially in career and this is something that, you know, hit me in this period of time where I made this very poor decision to go to work for this company that just turned out to be a failure for myself in that reflection. As I was walking away from that, I kept having these open threads where it’s really easy to say you beat yourself up like you’ve made a bad decision. You wasted your time, you did all these things. So what I did is I sat down and walk through an exercise that said, OK, you know, it was very similar. Where I tried to go, though, from the aspect of what did I learn? OK, I learned that I don’t want to move from fear. I don’t want to be motivated by fear. I want to move towards joy. And so then I unpack. So what was your point like? What was your situation? What were you doing? And then what I took away with that is I try to label that is what’s the lesson learned? The lesson learned is to move towards joy and recognize my own fear so that then when I’m in similar situations, I have a lesson learned.
Christopher Nelson: [00:29:14] And so that’s really sort of what I do and advocate in this book as we’re moving through our careers. We need to take time of reflection to do that because what I found is powerful for me anyway, is then when I hit the open thread when I’m going to maybe take the baseball bat to myself mentally and go, well, you did. It’s like I got this lesson. And if I learned this lesson now that’s going to pay dividends later. That’s a win. Because if you go to I think it was Nelson Mandela said if you choose to either win or learn, in my mind, it’s how do we actually frame up the lessons learned? And I’m trying to think of the words, but we want it. We want to really put those in front of us and put those on paper so that then we can celebrate those.
Dan Kreuger: [00:30:00] Yeah, I can see how those could probably be used in parallel together, the close enough I don’t think I completely overlap, but I like the decision journal idea. Anthony my fear is that if I tried to use that, I would bring that little journal to Starbucks and use it for every single little decision I make. But I think it’s powerful because I think usually to your point, you look back and you think about your decisions from kind of a binary perspective, as opposed to looking at different aspects that led to those decisions to see, you know, how you got there and for years was fantastic because it kind of helps you focus on the lessons learned, because I think from the point you made and the Nelson Mandela quotes, I learned a hell of a lot more from failure than success. So I think that process of going back and extracting those lessons is key because otherwise you just get the downside of failure.
Anthony Vicino: [00:30:51] So it’s just going to say one of my other companies, we would call that. And this is not unique to us, but we call it the post-mortem where we would at the end of this project, we would look at it and say what worked, what didn’t work? And I always get pushback from everybody because they’re like a post-mortem. That sounds so depressing. Like but I mean, what did we learn from the death of this thing? Like, let’s learn from that so that if that we shouldn’t. Well, it’s but it’s not always a recap because, you know, a recap softens it a bit like I like the post-mortem idea because it’s like, hey, we got crushed on this one. We got to hand it to us or we died because we cross the street and we didn’t look both ways. What did we learn? So we don’t die next time. And so I’d like adds a little bit more gravitas to it, but maybe I’m just morbid.
Christopher Nelson: [00:31:35] I’ve already called. I’ve also heard it called an after-action review.
Dan Kreuger: [00:31:39] So there we go.
Anthony Vicino: [00:31:43] That stands more corporate mindset. That’s right.
Dan Kreuger: [00:31:45] To self and less like deadly.
Anthony Vicino: [00:31:49] Hey, man, in the world of startups decision, and everything.
Dan Kreuger: [00:31:53] And I agree with that. But so Christopher Wen is from no dough to IPO actually going to be hit the streets because it was just chock full of golden nuggets?
Anthony Vicino: [00:32:06] Yeah. We’re gonna check this book out. Yeah.
Christopher Nelson: [00:32:09] Yeah. We’re looking at the end of the summer, so I’m targeting somewhere in July. August, so. Yeah.
Dan Kreuger: [00:32:15] Is that on your website is on Amazon on both.
Christopher Nelson: [00:32:17] Or you will be on Amazon. I mean right now, I mean people can come to my website well for dotcom and get on my list and I communicate about the book and things, but I’m looking to stand up the website and do the preorder in probably a couple of months.
Dan Kreuger: [00:32:32] Ok, yeah. Well if we can get a link for that, we’ll throw it in the show notes because sure. If anyone else is like me trying to remember that something’s coming out in a couple of months, it’s tough. So if you could just preorder it, get it done, that’s probably way better.
Anthony Vicino: [00:32:45] Just appears one day magically. It’s to me
Dan Kreuger: [00:32:47] It’s like Christmas. It just shows up like, oh, I
Anthony Vicino: [00:32:49] Forgot, you know. You know, we kind of skipped over at the beginning of the show. And this is pretty good advice. Yeah. This is unlike me because it’s part of the show that I care about. But we kind of got like so into the weeds already. And it was great that I didn’t want to bring us out. But now I’m going to bring us out of the weeds and into the bad investing advice of the week. So, Christopher, with everything that you’ve seen out there. Yes. Vast years of experience. What is your bad investing advice?
Christopher Nelson: [00:33:16] My bad investing advice is. Don’t do any due diligence.
Dan Kreuger: [00:33:24] Ready, fire aim, right? Just get out,
Christopher Nelson: [00:33:27] Just get in, just like, you know, the upside looks great.
Anthony Vicino: [00:33:31] Fortune favors the bold. Yeah, omnibuses just run in there with your hair on fire. And, you know, we have a bias towards action if you want to succeed.
Dan Kreuger: [00:33:42] So because your first startup experience was the result of no due diligence. Correct.
Christopher Nelson: [00:33:50] One hundred one hundred percent. It was totally emotionally based. Right. And actually, this was it. It’s like, oh, what can the product do? Oh, the product could do this and who can we serve and oh it will help this. And it was just all of these, you know, amazing. And I talk about it in the book like we painted this vision of the future and I went there and I was living there and this future world not thinking about anything that could go wrong. And then I signed the offer, I’m going to live there, which, you know, there was no way to get there. And so that’s exactly that’s really why I called this out because to me, this is is is really the advice that I think people give technology employees like, oh, that’s a great company. I just read this article, go work there.
Dan Kreuger: [00:34:39] We’ll say to some of these founders are so charismatic and inspiring because they’re so obsessed. But, you know, you can get kind of blinded by how obsessed they are. You’re just sound like it’s the most amazing thing ever created.
Anthony Vicino: [00:34:49] Let’s hear Christopher mentioned something I thought that was really interesting and super important, which is when you’re doing your due diligence right now and I’m talking about real estate necessarily, but it also applies there. You’re not just vetting and doing due diligence on the company or the founder, but the direct report, the manager that you’re going to be.
Christopher Nelson: [00:35:08] And that’s that’s
Anthony Vicino: [00:35:09] So important because that person really controls a lot of your trajectory. So, like being really clear, like who are you going to be actually working with and working for them? Do you like it?
Dan Kreuger: [00:35:19] They make or break it, right.
Christopher Nelson: [00:35:21] Well, and this is where. Interesting. So now my experience in real estate, I’m bringing over some of those questions that, hey, let’s talk about operators. I’m bringing some of those same simple principles to that. Your manager like how long have they been in the business? Like, what is that been their success? What have they done? Right. Because I really think that to me, from a risk level, even if you just go and review their LinkedIn and see where they work for how long have they worked with somebody that, you know, can you get a reference on them even before you meet them? Then how do you go and meet them and ask a series of questions to do due diligence? Because, again, the worst investing advice ever is just go with the flow, go with what you feel right now because there’s no such thing as emotional bias.
Anthony Vicino: [00:36:10] You know, one of the other aspects of due diligence that’s that ties perfectly in with this whole conversation is the fact that to be able to do due diligence, you have to understand your desired end state. Right. You have to know what you’re looking for. And if I understand anything in this conversation, which I might not, I think one of the nuggets we can take away is that in all aspects of life, whether it’s tech, career, real estate investing, or whatever it is, you have to understand you’re out your outcome. What are you working towards and defining that. And one of the things that you talked about, Christopher, repeatedly now is moving towards joy. I think that’s one of the outcomes you hold in very high esteem. So probably when you’re vetting and doing due diligence, you’re probably asking the question, is this moving me towards or away from joy? And that’s a great compass. That’s a great guiding North Star to navigate by.
Christopher Nelson: [00:37:03] Well, sorry to cut you off then, but I just like this is a phenomenal point, Anthony, because here’s where I feel and I know we’re spending a ton of time talking about second place, which I love talking about, which is, you know, the fundamental thing that people like, they like they want to they go to work for tech because they want the money. The money is in liquidity. Liquidity is an event that you need to understand how far you are away from or are you past a liquidity event. And then it’s more of how am I going to get that? But where I feel as people aren’t setting the vision of I want this much money, when do I want this much money and how am I going to actually think about a calculation that could get me there? Because what I see is people get so frustrated because they’re not making the money, but they haven’t really thought in the first place how they’re going to get from A to B. Mm.
Anthony Vicino: [00:37:57] Yeah, it’s this conversation is really interesting because ostensibly we spent the whole time now talking about tech, but for our listeners, I would encourage you to broaden the filter a little bit, because I think everything that we’ve talked about right now is applicable regardless in many instances across the board of industry career. Maybe if you’re listening to this and you’re thinking about getting into real estate investing, either as an active investor, as a passive investor, there are timeless nuggets in all of this that apply regardless of just take the tech out of the conversation. We’ll just take and pretend like that where it’s not in use anymore and just say this applies to your life in real estate and what you’re doing right now. And I think it’s been a really powerful conversation. Honestly, there’s been a lot of nuggets already. So I have a lot of notes here.
Dan Kreuger: [00:38:41] Yeah, I think key takeaways for people who aren’t in the tech industry, who are just trying to, you know, get up to speed on the multifamily business are completely lost.
Christopher Nelson: [00:38:55] I mean, I think, OK, we’ll save you, you know, because it is like the thing is, is is we started this.
Dan Kreuger: [00:39:01] I got it now.
Christopher Nelson: [00:39:02] Ok, let me
Dan Kreuger: [00:39:05] Ask you both
Christopher Nelson: [00:39:07] The parallels. Right. Is, are you due diligence on your operator, right. Your operator. If you are a passive investor, you are trusting the operator to guide the investment. The same parallel we’re talking about the manager. You need to go and you need to vet your operator very well. And then you need to look at the investment through an emotionless lens. You need to have a process of due diligence, whether it’s complex or whether it’s simple, to let you look at all the risks and say, are you willing to accept that? And that that to me is is is these are the principles that in my mind, you could be a life investor, whether you want to apply that to real estate, you know, or who you want to spend your time with is the same type of thing. Over to you, Dan.
Dan Kreuger: [00:39:50] Yeah, well, that was very eloquently put and that’s essentially what I was going to say before I started doing Windows updates in my head. And I just got to restart something there. But basically, the takeaway was going to say it was like the the way you are showing people how to look through things through a different lens is going to be applicable. Right. Whether you’re looking at a potential startup to start working for or a real estate deal or just an asset class trying to figure out what you want to get into, like figuring out what your outcome is for what Anthony said. Doing that first I think is most important. And then how do you make those decisions? Through what lens are you looking like? All the stuff we’ve been talking about here can easily just be put right under real estate.
Anthony Vicino: [00:40:29] So I love it. I honestly, I think we’ve spent very little time actually talking hard real estate, but that’s OK because I think this is one of my favorite episodes in the sense that, like Dan just pointed out, like you’re being handed lenses that you can pick up and put down and look through the world through and the mindset of an investor. And I think that’s really what you’re getting at when you’re talking about from to IPO is like thinking about yourself as the asset. And how do you view yourself as an investment and how do you think about your investing career? These are all I think they’re just universal concepts. So I think that’s just incredibly powerful. But we are getting towards the top of the hour. I don’t want to I don’t want to run over into dinner time for everybody here because Dan gets cranky when he can’t eat his dinner. But I do want to get book recommendations because, Christopher, I have a sense that you probably are sitting on some really good books over there.
Christopher Nelson: [00:41:21] I’m sitting on some good books. So I would say the one that I think has really impacted me recently is essentialism by Dan McKune, which really, really helped me focus. I think I’m a technology executive right now. I have a business I have a family looking across all of those and figuring out what is really essential and creating, again, a really emotionless way to say no to things and know that I am choosing and betting on the right things. And I think the fundamental thing that he said is that I thought was a light on switches, that we’re not looking for more opportunities. We have opportunities everywhere. We’re looking to make very intentional choices and we want to choose what’s essential.
Dan Kreuger: [00:42:08] I love the. Yeah, that’s on the list.
Anthony Vicino: [00:42:13] Before we read that one, actually, it’s been a few minutes before
Christopher Nelson: [00:42:17] I yeah,
Anthony Vicino: [00:42:18] I’m familiar with the concept, but
Dan Kreuger: [00:42:21] I thought you recommended it to me,
Anthony Vicino: [00:42:22] But I haven’t, but I thought some of it recommended at some point
Dan Kreuger: [00:42:26] Anyways. Well, Christopher gets the credit for recommending it, so. But it’s up to you, my man. It’s on our list now for sure. Now, before we wrap things up, we spent a lot of time talking about, obviously, the book and kind of your backstory, where you came from, what you’re doing now. But as far as the types of deals that you’re looking at, I’m kind of curious if you could kind of give us and our listeners a quick update on what you’re looking at right now and what twenty twenty-one is looking like it’s going to be shaping up for you. Sure.
Christopher Nelson: [00:42:57] So twenty twenty-one it’s here. Yes.
Dan Kreuger: [00:43:01] And halfway through already.
Anthony Vicino: [00:43:03] I know. Oh, my God.
Christopher Nelson: [00:43:04] Yeah, we’re it’s turning out to be a busy year. So our current portfolio of multifamily is in central Texas, said Dallas, Austin, and San Antonio. And so with the continued acceleration of those markets, we’re actually exiting three deals right now, a couple of them our portfolios. So it’s actually five buildings. So it’s a nice opportunity, some of them were three, three, and a half years and we’re having the opportunity to take some dollars off the table. And we’re right now, we’re under a contract with the two hundred eighty-eight-unit building in San Antonio and one of the nice suburbs there in the northern growth path. So we’re continuing to reinvest here in central Texas. And then the other thing that we’ve done, I think Wellford Capital, while we are focused on multifamily real estate, is the anchor of our portfolio. We also went out and made an investment in an institutional item fund. And we did that because it’s a beautiful counterbalance to real estate where ATMs are no leverage versus real estate, where you may have 60 to 80 percent leverage. It has a very high cash flow. Twenty-three percent compared to maybe seven percent seems to be the average price right now. And then it also has high depreciation. So you’re able to get bonus depreciation. And the great news is that that depreciation because you’re in a high depreciating asset, there’s no value to reclaim at the end. So it is true. Depreciation never knew that. Yeah, it’s because it’s and it’s not because the interesting thing is real estate, because it’s an appreciating asset. You’re getting depreciation on the capital, improvements for our value add. But then there’s recapture at the end. Right. Because the fact you’re selling an appreciated asset versus an ATM, it’s just this full, exhaustive race to zero. Now it’s worth noting. And you’ve taken your gain and your capital since. Yeah, it’s phenomenal.
Dan Kreuger: [00:45:09] That’s very cool. If there’s something of anything I’ve learned from you this evening, it’s that you appreciate diversification. And when you start getting concentrated even in a single asset class, it’s always a good idea to kind of check yourself. It’s like, well, maybe we should put a few chips over here just to kind of spread around a little bit, obviously. So focusing on this thing but won’t have helped. Won’t hurt to have something else off to the side here that’s not really correlated to real estate just in case.
Christopher Nelson: [00:45:34] One hundred percent is looking for those noncorrelations and then. Yeah, hard assets now.
Dan Kreuger: [00:45:40] I love it, man. So how could people get in touch with you if they’re interested in anything that you’re working on to get on the list for this book when it comes out.
Christopher Nelson: [00:45:48] Yeah. So so had the wealth were WGAL A.R.T. moving you towards wealth, wealth, word dot com and then if they’re interested in ATMs they can go do invest in ATMs, dotcom there they can go and download. We have free white paper. We also have a calculator that shows you how ATMs can add monthly recurring revenue to your passive income portfolio.
Dan Kreuger: [00:46:13] It’s very cool. Yeah. Now, I’m assuming you’re on social media platforms.
Christopher Nelson: [00:46:19] I’m on social media, so I’m definitely like a LinkedIn guy. So there’s definitely if you go to my Web page, you can hit me up on LinkedIn. I’m also on Facebook and YouTube.
Dan Kreuger: [00:46:30] Awesome. You’re all over the place. I love it. Find me.
Anthony Vicino: [00:46:36] All right, Dan, walk us out. I did the intro. Oh, I do that. You got up to the finish line.
Dan Kreuger: [00:46:40] Oh, I didn’t know that was implied. Here we go. Well, I get the easy one. I basically just say thank you, Chris was awesome. So for those of you who missed all the golden nuggets, there’s a ton of them. But this is an
Anthony Vicino: [00:46:50] Episode worth listening to, I think.
Dan Kreuger: [00:46:52] Yeah. Go back, you know, after you’ve listened to this wonderful outro and if you’ve got this little summary to work on until you go back and listen to it again. But there are just tons of golden nuggets we got from Chris over the substance. Thanks again for coming on. Hopefully. Good to have you again soon. We’ll do it when the book gets out, OK? Thank you, Christopher.
