Episode 104: Moving to Passive Investor full time after burnout from Active Investing
In today’s show, Pancham interviews Travis Watts – a full-time passive investor and the director of investor relations at Ashcroft Capital.
He is no stranger to finances and investments but he realized that a W-2 job, an active investor in multi-family homes, and being a property manager is simply not his thing. So, he started investing in syndications passively!
With his focus on achieving time freedom, he has finally left his corporate job, became a full-time passive investor, is a limited partner in over 35 syndications, and has been devoting his time to teaching passive investment strategies to rookie investors!
In this episode, learn insights and words of wisdom as Travis will share the pros and cons of passive and active investing, deals he made with different approaches, and how you can vet out sponsors!
Want to know the right investing approach for you? Listen and enjoy the show!
Tune in to this show and enjoy!
- 1:20 – Pancham introduces Travis to the show
- 2:28 – How he got into real estate investing
- 8:25 – His transition from active to passive investing
- 12:05 – Why passive investing best works for him (and how to know what best suits you!)
- 20:45 – Identifying your clear criteria when vetting out sponsors
- 23:51 – How mind-clearing helped him to be more productive
- 26:53 – Taking the Leap Round
- 26:53 – His first investment outside of Wall Street
- 29:04 – Overcoming his fear of breaking barriers
- 30:21 – His investments that didn’t go as expected
- 31:59 – Why investors should do their own research
- 33:21 – How to get a copy of his report
3 Key Points:
- Investing is not about replacing your income but rather replacing your expenses.
- Different investment strategies would best fit depending on the type of investor you want to be. A joint venture works best for active investors while a limited partnership works for passive investors.
- Investments are negatively affected by the pandemic and that’s the reality of it. You just have to take advantage of the system.
Get in Touch:
- Get a FREE copy of his report on “Understanding Real Estate Private Placements” at email@example.com
- Ashcroft Capital Website – https://ashcroftcapital.com/
- Listen to Episode #43 with Jeremy Roll at https://thegoldcollarinvestor.com/tgci-43-w2-to-passive-investments/
- The Gold Collar Investor Club – https://thegoldcollarinvestor.com/club/
- Pancham Gupta Email – firstname.lastname@example.org
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki – https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194
- Rich Dad’s Prophecy: Why the Biggest Stock Market Crash in History Is Still Coming…And How You Can Prepare Yourself and Profit from It! by Robert T. Kiyosaki – https://www.amazon.com/Rich-Dads-Prophecy-Biggest-Yourself-ebook/dp/B0175P5M6O
- Rich Dad’s CASHFLOW Quadrant: Rich Dad’s Guide to Financial Freedom by Robert T. Kiyosaki – https://www.amazon.com/Rich-Dads-CASHFLOW-Quadrant-Financial/dp/1612680054
Welcome to The Gold Collar Investor podcast with your host Pancham Gupta. This podcast is dedicated to helping the high-paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host, Pancham Gupta.
Hi there, I’m Robert Helms host of The Real Estate Guys radio program and if you want to have better results in your life you gotta put better ideas in your mind. You’re in the right place. You’re at The Gold Collar Investor podcast.
Pancham Gupta: Welcome to the gold collar investor podcast. This is your host Pancham. I really appreciate you for tuning in today. Over the last one year I’ve spoken to many successful people on this podcast. So far, I have interviewed a few people who have left their corporate career After successfully investing in syndications passively. They did not start like that initially, but eventually that’s where they ended up. One of the episodes was show number 43 with Jeremy rule, if you have not checked it out, I would highly encourage you to check that show out. I’ve gotten really good feedback on it. You can go to the goldcolorinvestor.com/show43. I repeat the cold color investor.com/show43 to listen to Jeremy’s episode. Today I have a similar show for you. We have another story of leaving the corporate rat race. By investing passively into syndications. My guest, Travis Watts did not start until 2015 to start investing in syndications passively. It’s only after really going through the hard way of investing actively. He started investing passively in 2015. Travis is a full time passive investor. He has been investing in real estate since 2009, in multifamily single family and vacation rentals. Travis is also the director of Investor Relations at Ashcroft Capital. He dedicates his time to educating others who are looking to be more hands off in real estate. Travis, welcome to the show.
Travis Watts: Thanks so much for having me. I’m thrilled to be here.
Pancham Gupta: Absolutely. Amazing. I know we’ve been trying to connect for almost over a year now. And finally we are you’re here recording this. I’m really happy about that. Pleasure to have you on the show today. Are you ready to fire up my listeners break out of Wall Street investments?
Travis Watts: Yeah, yeah. That’s my little john. Yes, yes.
Pancham Gupta: Great. All right. So Travis, like you know, before we get started, why don’t you tell our listeners about your background? And more importantly, the person behind that background?
Travis Watts: Sure. Yeah. I guess I should start with kind of early childhood. So I was raised by two very frugal parents, who really got my mind thinking a lot about just budget and finance in general, but never anything about investing. Right? So I got real good at you know, the coupons and buying the off brands and finding the sales and the discounts and then Black Friday deals. But at the end of the day, you know, as you well know, you can’t really save your way into wealth. And so I had to start teaching myself about investing and of course, I shouldn’t say I fell prey but I started reading the Kiyosaki books like a lot of people do the Rich Dad Poor Dad, Reset Prophecy, Cashflow Quadrant, those were kind of my foundational books that started opening up my mind. And so, the only real takeaway that I took from that was real estate kind of checked all the boxes, right? I mean, Kiyosaki talks a lot about passive income, cash flow, well, that’d be real estate, he talks a lot about taxes and debt, well, that’d be real estate. And so, it just made a lot of sense. So, I didn’t know how I was actually going to get started with that at the time because I was reading these books and you know, high school college and I wasn’t prepared for this yet. But I kind of put that in the back of my mind said, okay, when the timings right, Real Estate’s my game, and long story short, I was out in New York City, I was actually on Staten Island doing an off Broadway theater gig after college. And what I thought I was going to do is go into lighting, audio, sound mixing, touring with bands, you know, I came from being in a few different bands out in Florida, and I thought that’s gonna be my future until I realized what that industry is really about, you know, and how it works. And you need a lot of connections and a lot of know-how, and quite frankly, it just wasn’t a good fit for me. So, came back to Colorado where I was born and raised and got into real estate in single family homes. The first home that I bought came in 2009, just after the largest decline in home values and still hadn’t bought them yet. But, you know, I was looking at this house that was previously about $165,000 and was on the market for $95,000. So, I thought well, at the end of the day, even if we’re not at the bottom of the market, that’s a pretty good, you know, discount, right? Yeah, they get back from childhood, you know, getting a discount coupon. So, it was in a college town. It was in Fort Collins called So I ended up house hacking it. So, I had a spare room, I furnished it out, you know, Craigslist, all this kind of stuff. And I remember getting this cheque from a roommate for $600. And my mortgage was 640. And I thought, you know, that’s pretty cool. Cuz I just out of college, I’m living for free, you know, mortgage free, basically. So that was kind of the first light bulb to passive investing, I think. And from there, I went in to do a bunch of active real estate in the single family space, I did flips, vacation rentals, more house hacking, this kind of stuff. But mind you, I had a W2 job and not just that, but it was in the oil industry. So, I was working a consistent 14-hour days, which is 98 hours per week. So as a full 7 as actually a full 14, two weeks on one week off. And I was out of state, I worked out of the country, I worked out in Saudi Arabia for a while. And it was really hard to try to be the everything you know, I’m the property manager, and I’m the construction guy. And I’m finding the deals and I’m building the relationships, and I got this oil field gig too. So, I just burned myself out is what happens. So, I did that for about five, six years. And by 2015, I just I had to find another way. And that’s where I shifted to the passive investing mostly in multifamily. And this is where private placements really added a ton of value to my personal situation. Because I was just dying to get out of this. You know, instead of seeing the light at the end of the tunnel, it’s like it was getting darker. The further I went, every property I acquired was like, Man, I’m about to break at this point. So yeah, that’s kind of my background in a nutshell, and the quick highlight journey.
Pancham Gupta: So that’s quite a bit of hustle there a lot of hustling, right? Like, you know, at least until 2015. So, when you said that, you know, you bought another house or you were thinking of buying another house, and that would break. So, is it? Are you referring to that amount of time that it was sucking up from your schedule? Is that what you’re referring to?
Travis Watts: Exactly, yeah. So, you think, you know, when I would work a 2-week shift, and then have one week off, you know, your first couple days are kind of just unwinding, right, maybe I was on night shift, and I’m readjusting to life catching up on laundry, and groceries. And so then you think the rest of the days are all about my real estate, you know, I’m having to fix this tenant and, and go to this closing and do this. And so by the end of your days off, you’d worked the whole thing. And now I’m back to two weeks, again, working 100 hours a week. So I just had no life, let’s just put it that way I wasn’t able to travel, I quite frankly, wasn’t even able to date during that period, you know, I just didn’t have the time. I just couldn’t, it wasn’t reasonable. And so I was literally trading time for dollars. And I got to thinking there’s got to be more to life than this. You know, it’s not just dollars and cents. And so that’s kind of where this idea, this concept for me of, of like time freedom came up, you know, like the ability to free up your time and focus on things that you actually enjoy. And how do you get to that point. And that really became my passion, my focus. And that’s what I do now today is I help others kind of uncover that that mystery, so to speak. How do you get to the point where you have flexibility over lifestyle, and you get the opportunity to do the things that you want to do, quite frankly, simply put, right. So,
Pancham Gupta: you know, let’s fast forward a little bit. So in 2015, when you had that last house, you had that moment where you realize that you want to get time freedom, right? Yeah. So what happened after that you invested in few passive opportunities, like you said, and you need capital for that, too. Right. So you were still working full time job. Is that right?
Travis Watts: Yeah. Yeah.
Pancham Gupta: Well, when did you quit your job? And like, was it at the point where you had the, you know, enough income coming in, that will offset your kind of expenses? Like what was that point?
Travis Watts: This is a really interesting point in the story. I think this is kind of a critical moment for anybody listening. So a lot of things happened in 2015. It was my breaking point. It was the burnout year, but what did I do about it? I went back to the drawing board of self-education. And I said, Look, some people are doing real estate the right way. I’m obviously not at least not for me. Anyway, this isn’t the right approach. I had to figure out how people were actually being passive with real estate. And it wasn’t by just getting a property manager to look after your single family homes, there was something else. And I already went through those motions. And so I read 52 books in 2015. So that was my first goal was I’m going to read a book a week, and most of those were dedicated towards real estate and finance and this kind of stuff. I’m going to listen to a lot of podcasts. I’m going to join real estate meetup groups. I’m going to start going to conferences, I’m going to find mentors, I really buckled down on this idea that I have to make a change and I’m going to make It happen. And so that year was just a crazy year, my schedule changed because I was working, as I said, in Saudi Arabia at this point. And so I was working a month on and a month off. And oil was crashing at this time. And this crazy, amazing thing happened. And they said, who would like to stay home instead of come into work on the next month on so I ended up getting three months in a row off and I just buckled down daily, wake up early, stay up late read all day, that kind of stuff. So it really made a big impact. And then I made the decision. Once I discovered private placements and multifamily did a lot of the data. The research had a couple mentors that have been doing this for decades. I thought, okay, that’s what I want to do. That’s my new approach. And that was my lightbulb moment. So I started selling off the single family rentals. But here’s what gave me the courage to do this. This comes back to the time freedom. I said, What if I sold all my single family homes and the house that I live in as a owner occupied home? And then I went complete liquid? I paid all the taxes, the realtor fees, the Commission’s what would I have as far as a net worth, you know, the first time I really got clear on my numbers, and I said, Okay, if that were my net worth, and I started placing that into these private placements, you know, 25 k here, 50 k there 75 k there? How much passive income could that generate if I’m being conservative? And so when I ran those numbers, I thought, that’s the answer. I can leave the oilfield job and there’s Believe me there was nothing more I really wanted at that time than to leave that career. And if you want to call it a career and so that’s what I did. And just one by one It took a while obviously I’d tenants right at leases and commitments, but over the next year and a half or so I unwound all the single family. And I went all into syndication. So today I’m a full time LP limited partner investor in syndications, maybe 35 or so deals that I’ve done at this point.
Pancham Gupta: Wow, that’s an amazing story. So that naturally brings me to the next question. Now, you have seen from your college days in Fort Collins, where you bought that single family house, right? And you had $600 coming in from a roommate to a point where you were like completely breaking to a point where you actually sold everything off. And to this day, which is where you have over 30-35 passive investments, and you’re doing that full time. My question for you is that you’ve seen pretty much in very clearly, both sides of the world active investments, right? Where you’re actively buying stuff, whether you’re working in full time job, but you’re actively managing that portfolio of properties, right? Call that active investing and the passive investing on the other side. So which one like what are the pros and cons of each approach? Obviously, we know your answer what you prefer, do you prefer passive investing at this point? But which one? Like why do you prefer passive investing? And people who are considering or deciding you know, who’s listening to this? They’re not sure they’re like, you know what, we can make more returns by doing active or there’s much more control by doing active investments. So maybe we should just do the active investments? What advice or words of wisdom you want to share with people who are thinking that versus people who want to be passive?
Travis Watts: Sure, yeah, believe it or not, I’m not so black and white on the topic in the sense of you got to be passive, don’t ever be active. It really depends on the person. Obviously, plenty of people are well suited for both active single family or active GP roles in multifamily or self storage, mobile home parks, it depends on you your skill set your interests, your passions. So quite frankly, why was I doing single family active real estate just for money? I mean, literally, just that was it. And that was not a good reason, because I didn’t enjoy it. I wasn’t good at it. I wasn’t even competitive. If you look at the flips that I was doing, compared to professionals in my market doing flips, Oh, my God. I mean, let’s say I was pulling, you know, 25 k profit, they’re pulling 150 K. I mean, I was nowhere near being at the top, I was such an amateur. And I don’t enjoy construction. I mean, the only thing I can really do is paint a wall and sweep the floor. Let’s just get real, you know. And so in, for example, I have a buddy out in Florida, handyman galore. I mean, he’s made his own countertops and cabinetry. And I mean, he builds things from scratch, and he enjoys it, and this is what he does on his free time off. And to me, I’d be banging my head against the wall, you know, so I think you really got to do a little self analysis. You know, you really got to kind of look in the mirror and what is my highest and best and what do I enjoy and I think the sooner that that people can get to that doing what they love and enjoy, the better off, they’ll be. And so for me what it was, is taking a more passive approach saying, hey, look, these general partners, they’re passionate about this, they’re great at it, they love being in the business of it, I’m going to hand the ball to them, and say, how about you go do it, and I’ll just participate with you. And that approach made so much sense to me. And as I got to see these mentors of mine in their 60s, and 70s, who had done 100, plus LP deals, and I thought, that’s who I want to be. I finally found my role model in life, you know, so that’s kind of my long winded answer to that is, it depends. And there’s nothing wrong with you know, being 20 and trying some single family stuff out and seeing if you like it, sometimes you need to experiment. But it was not a good thing for me, I’ll put it that way.
Pancham Gupta: Ya know, my two cents on that is like, when I started, I started just like you, but I took the completely different route, like I absolutely loved it and, and a stop left my job for doing that full time. But you left your job to not do that full time? Right? So again, it totally depends on the person and totally agree with you there. Were thank you for sharing that. So do you like you know, now, I want to like a lot of people, like many of my listeners, they are like analytical minds. And you know, they’re engineers, bankers and stuff like that. So do you mind sharing an example of a number? Let’s say you did an active deal, what kind of returns you made on the deal versus compared to a passive deal? any random deal that you did? how they compare?
Travis Watts: Yeah, I think Yeah, and I’ll start by saying this, the biggest lesson learned in the past of space is how important the sponsorship team is the general partners, right, their ability to actually execute the business plan that they’re proposing. That’s been the lesson learned. And why I say that is, I had single family homes that I made incredible profits on by doing very little, and I had single family homes that I made a horrible profits on by doing a ton of work and putting a lot of time into, and that the same is true with the passive stuff. You know, there were operators that quite frankly, couldn’t pull off the business plan. And so my, my returns were squandered in that deal. And then I had other, you know, really good operators that way exceeded the pro forma. So I can give you a few examples of all of that, you know, single family home that I bought right time right market out in Colorado, in a growing metro area of Denver. I paid I think it was 97,000 for this condo, I rented it out about two years as a buy and hold. And I sold it for like 215 or 220. And I did nothing to it, I changed out like a, I think the fridge or the dishwasher. That was it. I literally did nothing to it. So that was like 100% return on investment, you know, in two years equally. So I did a flip in a metro Denver where I rented to the wrong people. I had to do a lot of rehab upfront these renters destroyed it. I mean, I had new carpet, new paint new curtains new and they tore it all apart, put a cat in there, it destroyed all the carpets. It was bad. It was really bad. So between you know, rehab upfront and rehab A year later, and then then not paying half the rent the time they were in there give or take that was a disaster. You know, I walked away with like a 16 grand profit on a $250,000 home. So it was it was crappy. It was just really a lot of time stress effort hassle was not worth it whatsoever. On the passive side did a deal out in Arizona as an LP we were intending for that to be a five to seven year hold ended up selling about 18 months later, we all got about a 40% return out of it just had an off market offer that happened and it was just too good. And so we took it and there you go, right, relatively I did no work. I just had to vet the deal and the operator and then boom, pretty great return equally. So did a deal out in Atlanta that was supposed to be five to seven years same situation sold early, but for the wrong reasons, right. They sold because it had a lot of problems, a lot of issues. And the operator was thinking we probably can’t execute this business plan, like we told our investors. So we ended up with about half the return of what we were hoping to get out of it. Right. So it all came down to that operator and a little bit of luck to them. No one knew enough off market offer was going to happen. So yeah, there’s three risk points that I always talk about with LP deals, you know, you have the operator and the team, you have the market and then you have the deal itself. And personally I put about 50% emphasis on the operator as far as importance is concerned. And then 25 and 25 to market and deals. So that’s the lesson learned. If you want to get real analytical, get analytical with the operator. Do your Due Diligence there and then worry about the deal last because I had that backwards when I started. And I would get caught up in analysis paralysis on the deal and trying to, you know, argue with the underwriting. But at the end of the day, it really didn’t matter. Because if they couldn’t execute the business plan Anyway, what good is anything else, you know?
Pancham Gupta: Right. Oh, thank you for sharing your all the deals. The condo sounds exciting that deal. 97 to 215.
Pancham Gupta: I know work. Literally you. I’m sure you did some work on like putting the tenants in and all that.
Travis Watts: Yeah. Yeah. advertising and turning it over. And yeah, vacuuming it twice. Yeah,
Pancham Gupta: yeah. Great. Cool. I will ask you one question. And then I have two more questions in this round. And before we move on to the next section, do you have any guidance on how would you like if there is someone who’s listening right now and they have never put in money with the passive as an LP. And the market and the deal can be vetted out? Let’s say they can do that. But on the sponsor, where you’re putting 50% of the weightage? How can they vet out the sponsor?
Travis Watts: Cool. Yeah, good question. So when it comes to, you know, vetting out a sponsor, okay. I always get back to self education, right. So you need to go out, find a book, you know, listen to several podcasts, find a mentor, you’ve got to understand some fundamentals and criteria, meaning what is your criteria, you need to start identifying Do you like Self Storage, mobile, home parks multifamily? Do you like a Class B, Class C Class D class product, opportunistic, you know, new construction, there’s so many pieces of criteria out there. And so what I do is, well, what I didn’t do, I should say upfront day one is have my criteria clearly identified. And that caused some issues, getting into deals with operators where we had a different philosophy, a different take on things, and I really didn’t agree with what they were doing. And I’m sure I was annoying to them. So if you, you know, write down like, for example, I like you know, B class value add multifamily. And, you know, I’m just spitballing stuff, you know, Texas, and Florida and five year holds and monthly distributions. And these are all just pieces of criteria, yours could be completely different. But being able to identify that and then go out and find a sponsor who closely aligns to your criteria is probably the most important thing. Obviously, they need to be a reputable firm, I usually get a lot of word of mouth references to different groups, you want to do your due diligence, and perhaps even a background check. But what I found is that if you get enough word of mouth references, there’s usually a few people who have already gone through all those motions. So you can kind of just get the answers that way. But you know, perhaps not. So yeah. So but really, here’s what you’re trying to do. let me simplify it for everybody. When you’re an LP, all you’re really trying to do at the end of the day, is say, okay, GP, what is the likelihood that you can actually execute the business plan that you’re showing me? How, like, how realistic is that? Now, the more track record they have, the more proof of concept they have, the more they can say things like, hey, we’ve done this 30 times in a row, look at the results. There’s our numbers, you know, that can give you a little more certainty, right on whether or not they can actually do this versus saying, well, it’s our first deal. And we just took a bootcamp class. And we’re really psyched, because we think that we’re gonna turn this 1800 or, you know, what our 800 unit apartment building around in one year on bridge loans, you know, that’s where you kind of read between the lines and stay? Well, I don’t know that you can do that. So.
Pancham Gupta: Got it. Great. Thank you for sharing Travis, on your knowledge and wisdom that you’ve gathered over 35. You said,
Travis Watts: Yeah, it’s about there. Yeah, a little more, a little less.
Pancham Gupta: Good. So my last question, actually, before we go on to the next section of the show is do you have a morning routine that you follow? And if so, what is it? And do you think that attributes to your success?
Travis Watts: Yeah, again, this is highly individualized. So I’m not much of a morning person. So I try to naturally sleep in as long as reasonably possible I really can’t sleep that long. But let’s say I sleep until 8am, or something, you know, and then what helped me the most is not diving right into work stuff, you know, not flipping over and starting to do your emails or start responding to things you know, take a few minutes to kind of unwind, you know, have breakfast, like go through a mind clearing, if you will, before you jump in and get started with stuff otherwise I tend to burn out early in the day. If I do that, if I just go right into it, you know, by noon or one I’m kind of done. So everybody’s different. I’ve heard a lot of different things exercise helps a lot of people juicing, I made an episode on celery juice and kind of what natural energy that can give you as opposed to having coffee. And caffeine and sugar and things like this breads. So yeah, whatever works for you. It’s a constant experiment, I don’t have one set in stone.
Pancham Gupta: Thank you for sharing that we’ll be back after this message.
Pancham Gupta: So let’s move on to the next section of the show. Travis I call this taking the leap round ask these four questions to every guest on my show. My first question for you is When was the first time you invested outside of Wall Street? It was that that single family home that you bought right outside of Fort Collins,
Travis Watts: It was but there’s a really interesting story to go with that that actually came later that probably hit on. Yeah, so kind of a quick two part story here. So I first had money in the stock market to an extent that was supposed to be allocated to college, which I ended up getting a scholarship for. So I didn’t end up using it. And this is when I was reading those Robert Kiyosaki books, specifically Rich Dad prophecy, which basically said, Get out of the stock market, there’s gonna be this massive crash. And I kind of I took the bait on that one. So I went into cash. And coincidentally, I guess there was the 2008 recession, I don’t know if that was really predicted, or if this book was just, you know, whatever. And so yeah, that that single family home in Fort Collins was the first time outside of Wall Street that I’ve invested. But more importantly, I left this part out of my story earlier, when I first left the oil field in 2016. This was in like late January, the first thing I did is I went to go work for a large brokerage firm so that I could learn stocks, bonds and mutual funds. So I got my series seven and 63 license. And I really wanted to go through like a formal training program of how this stuff works from the inside out. And I quickly realized, I don’t like it. Make it simple, right? Just the lack of alignment of interest, the fee structures, the volatility in the market, it just wasn’t, it wasn’t right for me, that doesn’t mean it’s not right. For other people, it doesn’t mean it doesn’t have a place for maybe a diversification aspect in your portfolio. But overall, I was unenthused about the Wall Street system. And so I went back, I tripled down basically, I went back to real estate, and I said, Okay, now that I understand the leverage the debt, the tax advantages, the cash flow, the yield the returns and what I can do with it, I’m really buckling down on this, because it makes a lot of sense. But you know, it took a long time to get to that, that firm conclusion.
Pancham Gupta: Got it. Cool. So my second question for you is that what fears did you have to overcome when you did that, like you got when you double down or triple down on your real estate? Did you have any fears?
Travis Watts: Yeah, I think well, yes. And no. No, in the sense that I had already done real estate, and I already knew kind of how that works and what it is and how it functions, you know, so I was very comfortable with that. But the fear would be you have everybody around you in society, saying the opposite, right? fund your, your Roth and your 401k. And, you know, buy the index funds and, you know, max out all these accounts and stuff. So everybody’s talking about Wall Street stuff, and everyone’s talking about the traditional retirement system. And so what can be a little scary is saying: “Well, I’m going to go against the grain here. I’m going to do something completely different and the alternative space” and it freaks financial advisors out when I talk about how much I actually have in the stock Market compared to what I have in private placements, they, they go berserk. He knows, oh, you can’t do that. That’s not possible, you know, you have to have 90% of your portfolio in stocks. And so that would be the fear, I guess, is having family, friends and everybody in society around you saying, That’s crazy. What do you think?
Pancham Gupta: So my third question for you is can you share with us one investment that did not go as expected? Yeah,
Travis Watts: I briefly alluded to the one that I did out in Georgia, that kind of underperformed, and we sold early, that was a light example. But a more heavy example was a big advocate for investing and what you know, and what makes sense to you. And I went in, I was in this investor group, and every month they have a presenter, and it’s usually a different type of asset. You know, it could be insurance, stuff, distressed debt, you know, note lending Muni bonds every month is different. Well, this particular one was that they were buying distressed debt from the banks, you know, uncollected bills on credit cards, and things like this, and then they were trying to collect on it, you know, renegotiate the terms with the individual. Well, long story short, ended up being partially a Ponzi scheme. So one of the partners that was in this big fund who I couldn’t do due diligence on because I didn’t even know that they existed. I did my due diligence on the sponsor who put the deal together, it was a fund with a whole bunch of different things in it. But this was like someone out of state, you know, hadn’t heard of them. And anyway, they ended up being a fraud. So we lost about 35% of what we put into this fund, and I’ve gotten pretty heavy in it, because the projections look pretty solid. And that was a hard lesson learn there, that certainly didn’t go as planned. So I should have just stuck with real estate at that point. And I didn’t.
Pancham Gupta: Now you do and you learn, right. Those are hard University lessons. Yep, absolutely. All right. So, my last question for you, Travis, is what is one piece of advice would you give to people who are thinking of investing in main street that is outside of Wall Street,
Travis Watts: Do the research, do the homework, do the self analysis that we talked about, for example, with me, I can’t stomach the volatility of the stock market, you know, if I had a million bucks in there, and then like, last March 2020, stock market takes a dip, but 30 40% whatever it was, I can’t stomach looking at paper and saying, Oh my god, I’m down $300,000 right now, I just I can’t deal with that. Personally, it causes a lot of anxiety for me, but you may not be that type of person, you know, so do the homework, do the research, know, your risk tolerance. And the more you learn, this is my firm belief. The more you study real estate, in general, this is a fantastic asset class to be in. And so that would really be my advice is know the facts, and then it’ll kind of write the story for you. Right? It’ll be kind of a no brainer, in a sense, to me anyway, that you should probably allocate some towards real estate.
Pancham Gupta: Wait, thank you. Thank you, Travis, for sharing that. And I know you’ve put together a great report for people here that, you know, that talks about all the knowledge that you have, you know, learned over the last four or five years in investing private placements, right. Tell our listener who’s listening, like how can they get hold of that report?
Travis Watts: Yeah, so I have calls with investors every single week, right? I’ve spoken hundreds, maybe thousands at this point of investors, and a lot of questions come up with that, how do I get started? Or what’s the first thing I should do and as I mentioned earlier, self education. So I put together a 20 page PDF, completely free. It’s called understanding real estate private placements. All you got to do is send an email to Travis@thegoldcollarinvestor.com, and you can download it there. In addition, we can throw a calendar link on there so that you can connect with me on a free Q&A call 15 minutes any questions you have on this podcast about private placements about syndication, investing, whatever, I’m happy to be a resource for people. The one thing I was really lacking for many, many years when I got started in this was having a mentor and having someone I could reach out to for free to just say, Hey, can you share this with me? Or how does this work or I’m not quite understanding this. Of course, there’s a million paid programs out there and nothing against them. They’re great, most of them but I try to be the free resource unlimited capacity for folks you know, if you want, you know, 15 to 30 minutes of my time, I’m happy to give it back. So Travis@thhegoldcollarinvestor.com for the PDF industry terminology, how to better deal a market a sponsor definitions, you know, what private placements are, how they function, how they work, things to look out for red flags, questions to ask a sponsor, it’s got so much packed into these 20 pages. It is not fluff. So go check it out.
Pancham Gupta: Great. Thank you. And again, that’s Travis T-R-A-V-I-S @thegoldcollarinvestor.com Thank you Travis for sharing all your knowledge and being generous enough to share your time with the listener of the podcast. Thank you for your time.
Travis Watts: Pancham, thanks so much. Appreciate it.
Pancham Gupta: I hope you learned something from Travis’s experience. I would highly encourage you to get his report which you can go and get by emailing to email@example.com. I appreciate you if you have questions email me at firstname.lastname@example.org that’s P as in Paul @thegoldcollarinvestor.com.This is Pancham signing off. Until next time, take care.
Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollar investor.com and follow us on Facebook@thegoldcollarinvestor. The information on this podcast are opinions as always, please consult your own financial team before investing.