Our guest for today is Spencer Hilligoss, a successful FinTech employee in Silicon Valley of 13 years. He and his wife, Jennifer co-founder, started off with a duplex in California and now are LP and GP in multiple larger deals.
Let’s dive right in and learn from Spencer how we can go big in real estate!
[00:01 – 06:011] Opening Segment
- We introduce our guest, Spencer Hilligoss
- Spencer talks about his background
[06:012 – 23:17] Why The Switch From FinTech To Real Estate
- We introduce our guest, Spencer Hilligoss
- Spencer talks about his background
- What’s his worst investing advice?
[23:18 – 28:45] How Do You Make The Right Decision?
- Spencer shares his cheat code
- He talks about planning exercises
- What are the most common answers?
[28:46 – 31:54] Waking Up From The American Dream
- Spencer looks back to messages that resonated with him
[31:55 – 39:19] Road to 5,000 Doors and What’s Next
- Spencer’s role as Co-GP
- Vetting with a 3 part process
- 2021 Focus States
[39:20 – 43:46] Closing Segment
- Spencer’s book recommendations:
- Connect with Spencer! See the links below.
- Final thoughts
Tweetable Quotes:
“I think people take massive action. It’s not aimed at anything and they haven’t taken the deliberate steps, slow down to slow things down, man.” – Spencer Hilligoss
“Just because I can, does that mean I should?” – Spencer Hilligoss
Resources Mentioned:
Visit his LinkedIn to connect with Spencer. Visit his website.
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Spencer Hilligoss
Dan Krueger: [00:00:16] Welcome to Family Investing Made Simple, the podcast where we take the complexity out of investing USA Today, and it started today.
Dan Krueger: [00:00:24] I am one of the host and belligerent, as always, by the CEO. How are you doing today?
Anthony Vicino: [00:00:31] I’m doing pretty good. I want to point out real quick that every time you do the introduce, you are very specific and it’s clear you’re the numbers guy in our relationship because you always say I am one of your hosts. When I do the intro, I come in hot and I’m like, I’m your host.
Dan Krueger: [00:00:45] Also show I have a co-host over here.
Anthony Vicino: [00:00:48] Dan, I got you here. But you give props right away, and I appreciate that it makes me feel important.
Dan Krueger: [00:00:55] Yeah. You know, that’s just how I roll. But we also have some other people in podcast to point out other people. Just one. Just one. Today we are joined by Spencer Hillgrove, Holographs.
Dan Krueger: [00:01:05] Spencer, who I don’t think there’s an answer. I think it’s Helga’s Helios. You’re right, Spencer. I’m sorry. You’re like the thousandth person to get.
Dan Krueger: [00:01:14] I mean, it’s OK to be hilarious, but it’s hilarious. Spencer Holographs. Hyla, I still want to say it. It’s insane. Spencer Heliothis is a full time real estate investor and former technology leader of 13 years. Spencer helps passive investors deploy capital into storage and multifamily syndications with vetted sponsors and deals. His company, Madison Investing, has co-sponsored deals totaling more than 5000 units for more than six hundred million dollars. Spencer invests in syndication as an LP and actually leads Medicin investing alongside his co-founder Xenephon. Jennifer, a lot of names I struggle with.
[00:01:50] You crushed it. I hope you still want to be on our podcast for that intro. I’m excited to be here. Good. I love it. Those are some impressive numbers then. Are there typos? You said this as five thousand units. Six hundred million that those are typos, right? Those have too many zeros that can’t be possible.
Spencer Hilligoss: [00:02:07] A few years ago, I would have thought that, you know, I mean, I definitely when I started this whole journey as a guy who was just doing the corporate WTU thing, I probably wouldn’t have believed that. And I go back about seven years. But yeah, it’s been a wild ride. It’s been a lot of fun.
Anthony Vicino: [00:02:23] So maybe just give our listeners some insight into, like, where you came from, give us ground zero because like, nobody just rolled out of bed one day and had six hundred million and, you know, investable universe there. So, like, what was the path what was your journey that got you to that.
Spencer Hilligoss: [00:02:38] Yeah. And thanks again, guys. I mean, it’s definitely the most fun I’ve had in the first few minutes jumping on a show like this really ever. And so I’m already having a blast. And I seriously think that the are in my last name somehow. And another life was meant to be there because it’s been added it’s been added every time. So it’s basically a member of my last name already. I appreciate that. No, it’s all good, man. So I as you guys mentioned the top and thank you for that. And you know, I came from Silicon Valley 13 years in software companies. I never planned on that. It’s weird for me to still say I spent 13 years specifically in FinTech. I guess the way to say that, like fintech financial tech companies. So flash forward all that time. My my wife and better half is also my co-founder, Jennifer. You know, we started buying real estate locally after I got the bug. I mean, my last corporate gig was actually in a real estate tech company called Lending Home, which is now the biggest lender in the country. So when I got there, I mean, I was tasked with going in and scaling their own origination groups. So we were doing like one hundred and fifty fix and flip transactions per month when I got there.
[00:03:51] And I had to go basically through a hardcore boot camp of sorts, we scaled it from one fifty a month to six hundred transactions a month and on nights and weekends I really just got the bug for real estate specifically because I saw the zeros behind all these transactions. Right. And I saw how much the investors were making, but it opened my eyes and so I can’t swing a hammer. You know, I really didn’t like the notion of flipping. I know a lot of people like flipping. A lot of my coworkers are trying to get me into flipping. But not only can I not swing a hammer, I mean, I really just I like predictability. I like investing in ways and just basically business plans and scaling businesses in ways that are predictable and proven and all that wonderful narrative that goes into being a good steward of a business. Apply that to real estate. And I looked at bigger deals. So eventually we started small but locally about a duplex, paid too much money for it here in California, eventually found turnkey investing, but some turnkeys, which are actually about the sales and selling right now.
[00:04:56] And now we only invest in larger deals, both as limited partners as these, but also now actively managing member of many different syndications and general partnership teams, both in storage as well as multifamily. But I mean, the thing I used to be embarrassed about bringing up as well, guys, is like I actually grew up in a real estate household. My my dad was a broker in the Bay Area, California, for thirty years. So he was one of the top performing residential real estate brokers. So he was making me run open houses for these really, really baller mansions back when I was like fifteen. And so I, I did not enjoy that at all. I wanted to run away screaming from real estate from that experience. And I went into tech because that’s what that’s what’s cool when you’re young and fresh out of college. And so that that’s how I found myself in a thirteen year career in technology companies instead. But it’s funny, the funny, the twists and turns where life takes you, because I couldn’t be happier now, because now all day, every day I get to wake up and help other people do real estate investments the right way alongside of.
[00:06:11] That’s very cool. That’s interesting, you kind of hearing your your evolution from being in the corporate space and ended up now in the real estate space and you kind of mentioned that you saw all the zeros and so you were aware of the money that could be made. It sounds like there are some other things that really attracted you to the the real estate business model as opposed to, you know, just the money, right. Because you make money doing a lot of different stuff. So was it like the I guess like the simplicity and the scalability of it that attracted you? Because I know that’s what really kind of drew me in. What was it that you that that that made you kind of fall in love with it, aside from obviously being able to build wealth and and all that good stuff?
[00:06:49] And interestingly, I want to interject there, too. Why did you jump into, like, duplexes and turnkey properties first? Like, why that logical jump?
[00:06:58] Yeah, I mean, both really good questions, right? I mean, I think I’ll probably take the second one first because it leads well into the second I mean, the first one. So I think it’s intimidating, as they say. Heck, it’s intimidating to go do real estate stuff in general.
[00:07:15] I mean, starting with you’re buying your first home. I mean, like it’s a milestone that unfortunately most people in the United States will never even be able to hit. Right. And so for those of us that are fortunate enough to have gotten there, you feel like you’ve conquered this huge challenge by the time you actually foreclose on your home and then all of a sudden you’re like, wow, great. Now I have to pay this huge bill every month and it doesn’t bring me any more income. I actually pay it out. I promise that won’t be a Segway into a risk that more that come.
[00:07:42] So for our recent discussion, that’s OK.
[00:07:46] We’re going to have our Ed just kind of bleep that out so that no references to reach that point out here.
[00:07:51] It’s like we don’t talk about we don’t talk about that. That’s right. And so it’s just intimidating. Real estate is much like a lot of other archaic old school industries.
[00:08:02] It relies very heavily on jargon and it likes to keep people distance and likes to keep people thinking that it is overly complex, because that way the people who are already deeply entrenched in that have their hooks into it, have the livelihoods banked on it. They can keep it as this like never changing industry where they get to have a monopoly on the way that they run business. So they don’t want it. That old boys kind of thing. Yeah, like the smoke filled rooms where people can make decisions and get the lay people out because that that because then they get them, they win. And so I looked at it that way and I had a lot of that same fear. My answer. So to Jennifer. So we went and we started small. We didn’t want to buy sight unseen. We didn’t like the idea of not being able to physically drive and see and literally touch and walk within the property, which was, in hindsight, kind of irrational. You know, when we drove around literally with our infant first son in the car for a whole summer and we tried to find one property and we eventually got one.
[00:09:08] We bought it and then suddenly we had a property. And we’re like, well, that actually wasn’t nearly as scary as we thought it would be. And so two hundred dollars a month in cash flow for a four hundred thirty thousand dollar duplex is not what you call a home run from cash flow investing perspective. And I just didn’t get that at the time. I thought and sure, it’s appreciating. It’s gone up in value. We’re happy about that. And it will play a key role down the line in terms of like maybe a legacy wealth strategy, because now I understand how all that stuff fits together. But I would have done it differently as a casual investor because I want to I want to generate income in multiple income streams. And so that is why we went and bought a duplex locally. It was just I was we were scared. We were scared of buying sight unseen. We didn’t think we could trust people far away. And so it was kind of the first comment, I already forgot the first question.
[00:09:57] So you have to see. My question was better. That’s what that means. Yeah.
[00:10:01] My question was, what attracted you to realise, I guess, what made you switch from, you know, you were in FinTech for 13 years. That’s I’m assuming like very much your comfort zone. And I know any time you go from, you know, the golden handcuffs, especially out on the West Coast and that industry, you’re probably getting paid quite well. It’s got to be a daunting task to go from that, you know, biweekly paycheck and all the the benefits that you get from that career to going out and doing your own thing and your livelihood is made or lost by what you do any given day. So I’m kind of wondering what got you to make that big switch. And from your your intro that you did for yourself, it sounded like it wasn’t necessarily the amount of zeros and commas that you could add your bank accounts. Yeah. Myself, it was the scalability and simplicity of the business model that was just like, OK, this is it just made so much sense. It was kind of curious on your end what what really tip the scale and made you take that leap.
[00:11:04] Yeah. And and I do think that is a very good question. And so I think for me, I, I looked at where I was and took stock of our circumstances. First, I’d like to think, you know, not to get too corny and pontificator guys, but I’ll just say every major decision and move that someone makes in life comes from both a push and a call. Right. There’s things that that are we’re moving away from. We’re moving toward. And I think for me, the kind of push was that, you know, we were growing a family. We have two young boys now. They’ve grown up a little bit more.
[00:11:38] But I was working. When people think about those grinding early stage tech companies, I was working eighty to one hundred hours per week and that was really exciting. I learned an incredible amount and I’m so grateful to have gone through that. It was awful and in hindsight, a strange relationship. It strains your life. And so that was the push and it kind of prompted me to go look a little further. Frankly, this is worth mentioning for people, because I think it hits home when I’m sure others others to tell me, you know, I was fortunate enough to have like a meaningful amount of equity in an early stage company that could still have a pretty substantial IPO or liquidity event. And that’s kind of the price you pay with with sweat equity, blood, sweat and tears to get into these early stage companies and crush it there. But then hopefully you have some big Uber or Google or Facebook moment. Right? So I say that because someone asked me around that time. Do you think you could actually see a seven figure exit from this? What are you going to do with that money? And I had no good answer. And I was like, well, let’s go put this in an index fund. I don’t know. And I felt pretty stupid. And I was like, well, this is clearly going to need a better answer. And I don’t even know if I were to get it, what I would do with it in a sophisticated sense.
[00:13:01] I mean, I had a substantial fall, OK? I felt I felt very proud of that. But how could I change my lifestyle now? And that led me to this notion then of like, OK, I got a proven playbook.
[00:13:16] I want something that is truly a proven playbook in a larger sense as to how someone can build networks massively over time, assuming that they’re able to work hard and humble themselves and learn and build relationships that are authentic and do all these things that are not rocket science and so proven playbook real estate is that I mean, assuming that you can go out and ignore all the many distractions, all the terrible advice that’s out there and focus and hone on the good stuff and just stay true to yourself. So I think a proven playbook was what I was looking for and predictability as told by numbers. I think that data is like the great equalizer as a guy who is actually not as much nearly as much of a numbers person as people might tend to think. Just because I like to include, you know, I integrated data into so many aspects of our business just as Jennifer, but I’m actually not the guy that just sits around all day thinking about how to go and cut a spreadsheet. Sure. Can I do that? Sure. It still comes down to working with people at its core. So I was like, wait a sec, I get to go do that all day because coaching and relationships and helping and grow other people has been like the greatest joy. Honestly, in my 13 year career, I was like in managerial roles, but the lion’s share of that. So I wanted to, in Playbook, go at income streams to your life, remove volatility from having two working parents that are getting great income W-2 wise. And frankly, it’s like a level of income that a lot of people would aspire to and celebrate. But once you get there, you’re like, the more I get promoted, the less time I seem to have. So this is not working.
[00:14:57] So fundamentally, this is a broken play, like the playbook needs to get rewritten for our life. And so that was going to be and that is why I love it.
[00:15:07] I think and I love that you pointed out that proven playbook point, because I think that’s something that a lot of people are missing these days, whether they’re active in real estate or passive. Everyone’s so enthralled with like whether it be Bitcoin or the next tech startup or like the hot new thing. And it’s like there’s this thing over here that has pretty much generated the majority, if not all, of humanity’s wealth over the years, which is land values. You know, it might be you know, you could farm it, you could put income producing property on it, you put a business on it. But at the end of the day, if you look at where the majority of people in human history have generated their wealth, it’s been some kind of land ownership. And like you don’t need to recreate the wheel. Like this thing has worked throughout pretty much every economic cycle, with the exception of a few with a few asset classes during a few phases. But by and large, that business model works great and there’s no reason to go and try and do something different. So I can relate to that one hundred percent.
[00:16:09] And I think this is a really good segue point, actually, because you mentioned, Spencer, that it is a proven plan, but you have to get down through all the safety junk because there is a lot of junk out there in terms of investing advice. We all hear it and we know it. And but for a new investor who doesn’t know the wheat from the chaff yet, it can be daunting. You can be very easily misled and go down the wrong path. So that brings us to, I think our best investing tip of the week are bad investing advice. When you were first starting your transition or like where you’re at right now, like what is the piece of advice that you’re hearing the most frequently the way like not just do not agree with that.
[00:16:49] Yeah, this is a long list.
[00:16:52] Yeah.
[00:16:53] It’s a tough one to curate. I would probably say this is going to tie back to recommendations if people ever want to ask, like, what’s the right books to read and stuff. I think that there’s the narrative of massive action. Right. Go take massive action. And I agree with that. I agree with that that first part of it sounds good. It sounds really good, 10 x. And of course, if you have, like, guys like Uncle Jesse out there saying stuff like that. But in truth, it’s dangerous advice. It’s dangerous because most people don’t understand that, that before they take massive action. It’s their job to decide where to place it. And that is the single most important thing that they do and everyone in their pockets, everyone that is going out to meet ups, people at conferences, I’m not saying I did this right.
[00:17:53] I clearly didn’t. I went out and bought a duplex that cost almost half a million dollars. And then I bought a bunch of turnkeys before I found our strategy. So I don’t I don’t have some role model here.
[00:18:02] Perfection, guys, just to be clear, my walking on higher ground that said, people will take this massive action and they’ll do it before they even go out and sit there and ask themselves, what do I enjoy spending my time on and how much time do I realistically have to go and do this thing? And even more fascinating to me is and this is this might be timely because I think I even posted this again this morning on LinkedIn because I keep getting individual messages every time I posted a posted three times. Is this notion of like this boomerang investor, great example to hit the point home every month. Now I hear from a person that I spoke to like two to three years ago, and there someone who at the time they had just finished devouring podcast. The same thing I went through. They found the bug. They got bit by the real estate bug. They’re devouring podcasts. They are reading like hardcore, just like I did. They’re in it. And you guys are going through this, too, like you love this stuff, but you’re just you’re so blinded by I can do everything and I can take on the world. You you start to DIY everything under the sun and you think that you are the person who’s going to go out and do that project and you want to do all of it. Like you’re like, I can do it. But what they don’t stop and ask themselves is, OK, just just because I can, does that mean I should?
[00:19:35] And they find out the hard way two years later when they reach out. And I talk to them again and they say Spens, that this is a true story. This happened with like three or four investors that have actually invested with us. Now they say, you’re right. I went off and I did that project. It was a lot harder than I expected.
[00:19:55] And I spent X amount of money. And I think I should have done passive because it actually didn’t like it as much as my job. And that’s a pretty eye opening conversation. Right. And so, like it it both invigorates me because it makes me want to go help other people to avoid that misstep legitimately. You know, I’m not trying to get them nudged into a passive investing syndication group. It’s like I’m the guy I’m guessing one doesn’t know this already. From listening to a dozen other conversations I’ve had out there, I’m the guy who tries to talk people out of it if they’re trying to find a different strategy. Right. It’s not for everybody. So you got to slow down and ask yourself, what are you trying to do? Like, are you are you trying to go? Do you like rehabbing? Cool. Maybe a flip this for you. Maybe a burst strategy is for you. You are. Do you want to do syndication. Hell no. You’re going to you’re going to feel uninvolved. You’re going to feel like you are on the back seat of this bus and you and you want more of a say it so it’s not a good fit. So long story short. Very, very short question. Very long winded answer. I think people take massive action. It’s not aimed at anything and they haven’t taken the deliberate steps, slow down to slow things down, man. And like, go out and ask yourself, what do I want to do with my time? What do I enjoy? What do I enjoy it like activities wise, like literally write down how you want to spend your ideal day. In like five years from now, and if you think that’s stupid, you’re missing out on like the most helpful, powerful planning exercise that I’ve ever personally done. So anyway, hopefully that rentals go ahead.
[00:21:28] There’s there’s just so much good golden information and thought process there that I want. I don’t know if we’ll have enough time to even start unpacking at all. So for you listeners at home, make sure as you go back and listen to that, because Dan and I talk all the time about you have to understand your outcome before you start. It’s like the I think the Marines have a saying understand how you how you’re going to get out before you go in.
[00:21:50] And if you don’t know if you have a clear vision of what your desired outcome is, then you will never get there. And you can even still have that desired outcome clearly formalized in your mind. But if you don’t choose the right vehicle to get you there, then it’s all for naught. And it’s very you know, we talk about the jumbo jet investing strategy, which is really just a metaphor for syndication. And we could we could extrapolate that out and we could say, OK, so let’s say single, single family home Fixin’ Flip’s, that’s like a motorcycle. And your goal is to get to the place where you’re just passively like you have all the free time in the world. You don’t have a lot of tax liability. You get to spend days with your family. You just collect money. Well, that’s like saying I want to fly from Minnesota. I want to get from Minnesota to France, and I’m going to take a motorcycle there. That’s not going to get me there. I might get closer. I’ll get to the very tip of Florida. You know, if I’m lucky, I can get that’s about as close as I can get, but I’m never going to get there. Right. And so don’t mistake progress for actually like or mistake action for making meaningful progress towards your goal. Because at the end of the day, some of these investment vehicles are strategies they won’t get you where you want to go. And so it’s hard to know that at the very beginning, like when you don’t know what you don’t know and you’re drinking from the fire hose of possibility. So I’m curious, not knowing what you don’t know, how do you make the right decision or a meaningful decision?
[00:23:18] Yeah, gosh, that that is the big question, right? Truly like, I think. I feel like I almost have like a cheat code for that. That was really hard to find and I’m oversimplifying it because basically when I first got into this stuff, I’m taking a big breath because I’m like, how do I explain this simply and quickly? I knew I had a counterpoint example of a couple of coworkers, I was working inside a company and I saw multiple co-workers that are brilliant, brilliant, and they have actually gone off since and built like a fix and flip business that is thriving in another part of the country. And there is absolutely crushing and. One of them in particular, who I’ll keep anonymous, he told me how his significant other wanted nothing to do with it and wanted to not be involved in that business. And that was his thing. They weren’t married yet. I wonder if they are now. So I’m being a little snarky because it’s fascinating to me how often people think that their number one relationship in their life isn’t going to play a role in them becoming a full time or significant part time real estate investor. So I slowed. I slowed down and I was like I committed to myself.
[00:24:32] And I was like, I’m either going to help involve Jennifer and have her and I’d be co-founders of our organization or I’m just not going to do this period because everyone is allowed to have I’m getting a little bit preachy on the relationship personal, but I think people mistake it. They think they’re decoupled your business and your your marriage are not decoupled or you’ll find this out the hard way, by the way, in 10 or 20 years from now.
[00:24:59] So I either want it to deepen that relationship and also be going to business with her because we had two very successful separate careers or know we would just have to step away from that. And so long story short, we had two very, very hard weekends where we planned and literally did that planning exercise together with Jennifer and I. And it was formative stuff. I mean, there was laughter, there was tears, full cycle, both this. And by the end of that, we walked out with a very clear plan of like with actual numbers behind of when we wanted to hit certain milestones of how we wanted this to go.
[00:25:41] And I think that that is the type of people just need to dig their got to dig inward and they got to figure out what kind of conversation they want to have and reorient their life. And you can’t do the easy version if you want to go find the right strategy more quickly. You can’t do the topics when they go to a meet up, listen to a talk, do a spreadsheet, go buy a rental, and suddenly you find yourself in the right strategy for the rest of your life. You have to go and find out and have some tough conversations that might require you to break down in tears. So, like, ask yourself how honest with yourself are you being about what you enjoy if you find yourself talking yourself into activities that you think you oh, you totally enjoy, by the way, you know, quote unquote. I love underwriting deals. Well, great. You’re going to do it about a thousand times over the next decade. So I really hope you’re being honest with yourself. I’m sorry for the bridge.
[00:26:31] No, that’s great. I’m so glad you said it, because I’ve had conversations with so many people, whether they’ve come to me, because they they want to get into real estate and they want to or they maybe they think they want to be really active and do what we do or they’re just passive investors and try to help them figure out what is what their long term goals are. Because I’ve noticed that a lot of people haven’t thought that far ahead. They just know that they need to invest in something and they’re just, you know, doing the shotgun approach, trying to learn as much as they can, but they haven’t thought about what they want to be doing in twenty, thirty years. And when I’ve actually had that conversation with people across the board, I think the most common answer, I guess the most common conclusion that we come to is that it’s probably not a thousand to five thousand. Let’s see where you have five thousand goals. Sorry, five thousand doors. That’ll make them happy. It’s not a million a year in in passive income. It’s just enough to free up their time. I feel like that’s the most common conclusion is I just want time to be able to decide what I do. And you don’t need to be GC level. You don’t need to be greencard.
[00:27:40] I’m sorry, who? General contractor. You don’t need to you know, you don’t need all that to to make them the average person that I talked to happy. So I think the point that you made where you just start with the end of mind, what is it that’s going to make you happy at the end of the day and then reverse engineer? What you actually need to do to get there is key. And I think also I want to kind of hit on this, too, the fact that your. Making the the partner in this in these conversations, a part of it as well as is huge because I go through this on a daily basis. I think Anthony does as well. And I’ve had countless conversations with investors where they one person is kind of starting down this rabbit hole and the other person is kind of over here. And we’ll we’ll go and clue them into what we’re doing later this early work that will you know, you’ve got to be proactive because this is one of the biggest things that you are going to be doing outside of buying your home is how are you going to, you know, plan the rest of the next 30 years of your life, financially speaking. So I love that you brought that up. That’s really important.
[00:28:46] This reminds me of, you know, we talked a lot about the American dream and how one of the one of our objectives, one of our goals in a podcast like this or in any of the educational materials we put out there is to help people realize that the American dream as it was sold to them isn’t necessarily the right dream for them. Like go to school, get a job, buy a house investment for one K, retire when you’re 65 like that. That’s the American dream and some for a lot of people. And one of our goals is to help wake people up from that. But what ends up happening, I find a lot of times is when you wake up from the one dream, you immediately then pivot and you start looking for the next dream and then the next dream is the dream. Like, Oh, I guess if I’m waking up from the American dream, I need to I need to buy a jet and I need to have five homes. I guess like that seems like a dream because, like, it’s so much easier to latch on to other people’s dreams than to sit down and do the hard work of, like, OK, what is it that I really believe in that I want my life to stand for and the impact I want to have that unfortunately, you know, I asked you that question, like, how do we get how do we create a strategy or make that plan? And it’s a loaded question because, you know, there’s not a resource. You can maybe find a mentor. They can help you ask the right questions. But at the end of the day, you have to answer them. And that’s hard. It’s hard work and there’s no substitute for it. And it takes time, takes energy.
[00:30:08] But ideally, if you do it, then on the outside, on the coming out the other side, you have a plan.
[00:30:14] And that’s better than where you were at least before, where you were just dreaming somebody else’s dream.
[00:30:19] Oh, man. Now you giving me the give me the fields. I feel like we the last comment you made just just to kind of opine on that one.
[00:30:28] I think it’s fascinating looking back at so many of the messages that resonated with me when I was still working full time. And they resonate with every person out there that has a full time job. Right. And it’s interesting because I didn’t hate my day job. Right. Like I mentioned earlier, I was going through a particularly challenging moment, you know, a working eighty two hundred hours a week at the time when I when I was kind of feeling that that was one company. I mean, like I look back at one, I look back at the journey and the arc of my career. And I think of joy, you know, largely I think of I think of hundreds of excellent relationships. I think of like lifelong friendships. I think of people that I literally have a texting everyday relationship with who I met because of that career. So most people are not coming at this notion of this passive income, financial freedom, financial independence perspective from that. I think unfortunately, I think a lot of people do have jobs that they hate. And that and that is not only a bummer, it leads them astray. Right? I mean, it leads them astray, at least in thinking that at least I’m thinking that they’ll find inherent happiness and know how to fill the time. And so, like, that is a dangerous proposition because, I mean, humans are happy when we’re moving forward making progress on something challenging. We’re not happy when we’re sitting on a beach. And so that’s a whole separate therapy session. But it’s it’s a fun one.
[00:31:55] I love it, that’s that’s fantastic that I think we hit on so many points that we talk about repeatedly, so, so good to hear someone kind of reiterate the same kind of concepts in a different way and relate it back to their life. It’s super valuable. I’m curious, though, you know, obviously, you’ve built this massive portfolio and from the sounds of you started, you know, quite small duplexes and some turnkeys, like how did you get from there to five thousand units? Six hundred million. And is that assets under management? Is that that number is or.
[00:32:27] No, no, that’s coteries. Yeah. So so we are just give you and your listeners some background. So we are a deliberately a co-sponsor that actually does a bunch of stuff depending on the partnership. So we focus on storage, focus on multifamily. I’m also a registered representative now registered security professionals. So I think Taketo roles in our partnerships are basically managing member of the general partnership on syndicated deals, as well as a placement agent, because that allows me to do things more at scale. And also sometimes I don’t necessarily want to be a managing member of a deal, but that’s something that I want to work on. So we are firmly.
[00:33:10] I love it. So that seems like it’s my guess is I don’t want to answer the question for you, but I’m I’m assuming that you your goal there is to basically maximize efficiencies, find where you can add value to particular deals and not do the like the the DIY can. Kind of you mean where you don’t necessarily need to be the guy pulling levers, doing all the things you can to find opportunities where you can insert yourself, add value, do your specific things really well and strategically partner with others to scale from what I could tell exponentially because I guess how many years are we talking about here? You were in fintech 13 years. How long did it take you to go from those first duplexes to your current standing here?
[00:33:56] Yeah, we’re about a little over four years now. That’s fantastic. It was pretty fast and it was the same phrase that we apply to parenting with young kids. Right. Is like, what’s the phrase? The nights are long in the years are short. Right. And so that applies here for sure. It’s like depending on how deep we were into one particular deal, it felt like a slog. But yeah, the answer your question. Yes, playing to strength is something that is just inherently a great idea. I look at the way that the way I view business decisions in general, not just with real estate, not just within a market and not just within it’s a partnership and not just within the economics of a business plan for a couple hundred in an apartment building. It’s about framework. And as a passive investor, whether you’re purely passive and you just want to sit on the jumbo jet of the jumbo jet analogy is there is a great one or your active. I think it’s important that you have your own framework on how you go into this stuff, because that’s the same way I look at like what role can I play in a given partnership? And granted, we are a little bit slower, actually, quite a bit slower and more deliberate when working with certain partners. Like, for example, I’ve been approached by brilliant, successful sponsors in the last week multiple times, and they say, hey, we’d love to have you partner deal. And I have to tell them, well, here’s our that. I appreciate that and I’d love to get to know you. We don’t jump into deals with strangers. So here’s our here’s our our three part process.
[00:35:30] Build a relationship in the real world usually takes three to six months. It’s not a hard and fast rule. We invest money, put in money as an LP, as a limited partner. First with this team, let it run for about, you know, a few cycles at least. See how they operate to do that. They’re not a Ponzi scheme that they are going to do good reporting. They actually communicate at the standard of twenty twenty one nineteen ninety five AOL dot com addresses will not make a good impression. I will literally walk away because of that. So last but not least is like put someone through an investigative background check, which is well worth the seven hundred dollars. So that’s like all of these things happen and then we decide, OK, like I think we can go work with you on the next deal. Let’s figure this out. It’s a more deliberate, slow approach I like and and it really helps us make, I think, decisions thoughtfully and also know, frankly, if we’re going to be able to add material value to a partnership, because I don’t want to go in and have it be like a vanity thing. I want it to be like, sure, we’re going to help on equity capital and we’re going to bring investors and sure, we can help the investor relations. But like, literally right now, I mean, we’re about to to launch like a million dollar storage fund. And I mean, I think, you know, we’re doing a bunch more than that. And so it just takes it takes a village and you’ve got to find partners who really are a good complement to you.
[00:36:56] That’s that’s a I’m glad you mentioned that that fund there, because that kind of leads into my next question is what’s next? You know, you’ve you’ve got the five thousand units, six hundred million dollars here. Now, you mentioned the storage fund. What is next for twenty, twenty one and beyond? Are you guys shifting your focus at all? Are you going to keep doing the same thing just bigger. Better what’s what’s going to happen.
[00:37:18] Yeah. I appreciate doing it up. I think for us back in Q3 of twenty nineteen coming into covid didn’t know this coming of course of my crystal ball doesn’t work like everybody else’s. I saw that like multifamily has still been and will continue to be the core asset class that we focused on. However, storage has been a growing part. It is now our primary focus for twenty twenty one. So that’s why I already love markets like Texas. Texas has also been our number one geographic focus beyond the Carolinas and Colorado. I know, but I love Texas. covid is still made Texas even more attractive now because these companies down there, yeah, there’s a heck of a lot of space. I mean, Dallas alone as a dumb ass, California going out there for the first time. A few years ago, I was like, oh, cool, you got like a white almost two hundred cities literally within the Dallas metro like that is bonkers and so many ways. Storage, believing the asset class we’re going to focus on. They’re doing a big fund, they’re passive investors. We actually just launched a new website just this week with a new with a new portal so people can actually register and just take a look at the basics there without having to do a phone call, which we used to require.
[00:38:34] Is that that’s not Madison investing dotcom as it is at a different.
[00:38:38] That is. Yeah. Madison, thank you. Madison investing back and plug mint and your a.
[00:38:44] Yeah.
[00:38:45] It’s like you’ve done this before. So I would say that’s kind of the current focus for us. I think beyond that I am not the Empire got like coming back to the discussion earlier. I just want to be a great dad. I want to be a present husband. I want to play some guitar. And I think that ultimately we want to show up extraordinarily well for our investors. And I think that that is that is my reality currently. Right. Which is we just want to do well enough and thrive on behalf of investors. And so that’s the name of the game right now.
[00:39:20] I love it. I love it. And it’s a great way to tie it up, too. I mean, as it relates back to, like everything we’ve been talking about here, you’ve you figured out what it is you’re trying to achieve and you’re staying true to that. You’re still growing, but you’re not getting caught up with, you know, achieving bigger and better numbers to infinity. It’s been a good dad being a good family, creating a strong family and being happy right now. So it’s all about exactly.
[00:39:45] Yeah, I can think of a better, better spot to start wrapping up on there. I do. I do want to transition, though, before we let you out of here, Spencer, and get your book recommendation for the week. So we set some parameters before we went live. Told you you can’t recommend certain books. We’re tired of hearing about that. Not a lot of holes in the space. Yeah. Yeah, we’re rigid, very authoritarian for you listeners at home. We just want to ensure the best listening experience for you.
[00:40:11] So what is your book recommendation and all the pressure on this podcast to say, you know, gee whiz, oh gosh, don’t open that can of worms.
[00:40:24] I will have to go with essentialism. Yeah, let’s go. That has got to be my number one most recommended book. And it’s not a real estate book. I’ve read it. I mean, I say I’m a big audio book these days because of the time efficiency thing. I could do it when I run. So I listen to it three times and I recommended it. And I, I love it because it comes all the way back to that whole tangent that we just went on talking about massive action and how it’s the worst advice because Busi does not mean productive. And that book arms you with actual ways and phrasing to say no. And I think that is where people missed the mark, everyone’s yes, for the sake of comfort zone expansions and people going to say yes to stuff that is outside their comfort zone. Well, yes, they should. And I’m happy to help get on the phone and help people get the motivation to get there. However, the bigger problem once they get there is saying yes to everything. And what they need to do is just understand you should be saying no a lot after you get the momentum that you need just to get started. You shouldn’t be signing up for literally every up. You shouldn’t be signing up for every mastermind. You should be going to every single conference. You should be going and doing the focus that you committed to.
[00:41:41] Yeah. This man, this is perfect. Yeah. So my my my favorite right now, All-Time favorite book of all time is Meditation’s by Marcus Aurelius, and he has a quote in there, which is the key to a happy life to do less better.
[00:41:54] And it reminds me of Steve Jobs, who said, you know, for all the things that we’ve done that I’m infinitely proud of, I’m more proud of all the things that we said no to. And yet you just nailed it on the head there. So essentialism, go check that out. I recommend that book is fantastic.
[00:42:09] And Spencer, where can people get a hold of you kind of already dropped a little bit of info on Madison investing dotcom. Sounds like there’s a portal there that we can we can go and sign up for. Is there any place else people should be looking for you?
[00:42:22] Yeah, and just to double down on that website’s brand new, really easy to use, so people should check that out with LinkedIn. I think you guys know this, but I don’t really spend a lot of time on other social media that I spend a lot of time on LinkedIn. And it’s just been a wonderful way to connect. And people can read my Internet rantings in the morning. So that is to send a connection, invite or send me a message. I promise I won’t bite.
[00:42:44] Yeah, definitely. Check them out. Something that I appreciate about the content that you’ve put out as you’re very well-spoken and articulate things, very well. So as far as just communicating to people, there’s so much content out there. It’s just yours is so consumed whether you are an astute investor or pretty new. So thank you. I really appreciate that.
[00:43:04] Yeah, and I’ll piggyback on that. I think you say things in interesting ways that isn’t just regurgitation of what other people say. That’s my shtick. That’s what I do is I just quote other people noticed that and it makes me look smart and they’re like, oh, he’s smart. But you you say things in original, interesting ways.
[00:43:20] So I appreciate that about you. And I appreciate you taking the time to join us here today. Yeah. For you, dear listeners out there, we appreciate you taking a bit of time of your day as well to join us next week.
