TGCI 62: Crisis Investing and Investing Internationally!

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Episode 62: Crisis Investing and Investing Internationally!

TGCI - Episode 62

Summary

In today’s show, Pancham interviews Robert Helms. Robert is the 2nd generation investor, an international developer, the co-author of “Equity Happens”, and the radio host of the most downloaded podcast on real estate “The Real Estate Guys”.

With his dad being the “Godfather of Real Estate”, he inherited his passion on real estate and has been a real estate agent in 9 states and 6 counties.

He also has been ranked in the top 1% of the world’s largest real estate organization. Today, his past and current projects are now valued at over $800 million – a remarkable feat indeed!

In this episode, Robert shared why investing in real estate is the biggest wealth. He also shared why he decided to invest in a larger scale and what to look out for when investing internationally.

 

If you want to explore and invest out of your area, this episode will surely guide you! Enjoy!

PanchamHeadshotTGCI
Pancham Gupta
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Robert Helms

Tune in to this show and enjoy!

TGCI - Episode 62 Quote

Timestamped Shownotes:

  • 2:10 – Pancham introduces Robert to the Show
  • 3:52 – Major influence on how he got into real estate
  • 5:04 – His tips in investing out of state and internationally
  • 10:09 – Why he decided to invest internationally
  • 15:05 – His achievements on investing in Belize
  • 17:58 – How his business adjusted to COVID-19
  • 20:38 – All about the Crisis Investing Series
  • 24:32 – His morning routine
  • 29:13 – The first time he invested outside Wall Street
  • 30:04 – Fears he overcame in investing outside Wall Street
  • 32:19 – One investment that didn’t turn out well
  • 34:06 – One piece of advice to aspiring investors
  • 35:39 – His favorite asset class
  • 38:03 – Robert’s contact information

3 Key Points:

  1. Why you shouldn’t limit yourself to invest locally
  2. What to look out for in investing internationally
  3. Impact of COVID-19 on his investments

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Books:

Read Full Transcript

Introduction

Welcome to The Gold Collar Investor Podcast with your host, Pancham Gupta. This podcast is dedicated to helping high-paid professionals to break out of Wall Street investments and create multiple income streams. Here is your host, Pancham Gupta.

Hi, this is Joe Fairless. If you wanna diversify out of Wall Street investments, then listen to The Gold Collar Investor Podcast.

Hey, this is Mauricio Rauld, founder and CEO of Premier Law Group and if you are serious about investing in real estate, listen to The Gold Collar Investor podcast with Pancham Gupta.

 

Pancham: Welcome to The Gold Collar Investor podcast. This is your host, Pancham. I really appreciate you for tuning in today. Have you ever invested internationally in private investments? Investing internationally has its own challenges and there is a lot that needs to be taken into account before you go out and invest your hard earned money. As a person who grew up in India with most of my family still in India, I have invested in India for a very long time. Now obviously I have the benefit of having my family there who can keep an eye on the investments but still there is a lot that needs to be considered. All things being equal, currency risk is a big factor when you’re investing internationally. Indian rupee has declined in value as compared to US dollars over time and over time the value has gone down more than 40% relative to the US dollar. In other words, it takes 40% less dollars to convert to the same amount of rupees, Indian rupees. So, my investments in India have to go up by more than 40% for me to make any profits in US dollar terms. So, in my opinion when you’re investing internationally currency risk is a big, big factor and it’s not easy to modulate. Anyway, I’m super excited about my guest Robert Helms on the show today. He is a second generation investor and an international developer. Everyone called his dad Bob Helms, the godfather of real estate and he spent (his father) spent seven decades in real estate and Rob Helms is a professional real estate investor with investment and development experience in nine states and six counties as a far more top producing real estate agent, Robert ranked in the top 1% of sales in the world largest real estate organization. For four years, he taught real estate practices and appraisal at the college level. Robert’s investment and development companies have passed in current projects valued at over 800 million. He is the co-author of Equity Happens: Building Lifelong Wealth with Real Estate and the host of nationally syndicated radio show, The Real Estate Guys, now in its 22-year of broadcast. The podcast version of the show is one of the most downloaded podcast on real estate and is heard in more than 190 countries. Rob, welcome to the show.

 

Robert: Well, thank you very much. Thanks for having me.

 

Pancham: It’s an absolute honor to have you on the show today. I’ve been looking forward to this show for a very long time and great to have you on today.

 

Robert: Well, it’s my pleasure to be here. Thank you so much for the kind invitation.

 

Pancham: No, thank you for your time and are you ready to fire up my listeners to break out of Wall Street investments?

 

Robert: Oh my gosh, yes, that’s my whole gig, man, yeah, I’m ready.

 

Pancham: All right, absolutely looking forward to that. So, Robert like tell our listeners about your background and more importantly the person behind that background.

 

Robert: Well, you know, I was fortunate enough to have a dad that got the real estate bug and early on he had rentals, he had an apartment building and I kinda got caught up in the whole thing and when I got licensed, made decision to get my real estate license, the first thing I did with my first commission was buy a duplex. So, I kinda drank the Kool-Aid and I’ve always been around real estate, always love real estate. Not everybody in my family feels that way. Some of them would rather not be bothered but I think it’s the greatest wealth building vehicle there is and there’s so many great ways to do it. And so, you know, growing up I was in that kind of real estate family, but even more so, you know, Bryan Tracy talks about whatever you’re doing between the ages of 7 and 14 is the clue to who you might be when you grow up and my favorite thing to do when I was 10 was play monopoly. So, I guess today I just play monopoly in real life. 

 

Pancham: That is so cool. Monopoly is one of my favorite games growing up too and my son I actually got in hooked up to cash flow game which Robert Kiyosaki created and thankful for that and grateful for that. So, my son loves that. So, Robert, you are a second generation real estate investor like you mentioned your late dad, Bob Helms, that got fired up real estate was an inspiration to many of us out there and he was in real estate for seven decades and in your career, you have invested in many different stage and internationally, but people are usually scared to invest out of state, forget internationally, right? So tell us about the things that you need to be careful about when you’re investing either out of the state or you know internationally in your case.

 

Robert: Yeah, well, that’s great question, Pancham. You know what, most people have a comfort zone. They are used to investing where they are comfortable and that could be the place they live but I always say live where you wanna live and invest where the numbers make sense. If you happen to live in a place where there’s good investment property, awesome. But you don’t have to limit where you invest based on your geography. You know, people that invest in stocks don’t look around for the companies that are near their houses, I mean you won’t even think about that. That’s not how you make your decision and it’s the same with real estate. Now to start out sometimes people invest in say single family homes in the neighborhood that’s pretty close and I can’t fault that idea but eventually that’s gonna limit everything about your real estate portfolio. If you’re only willing to invest in your own city or county or state, you’re just leaving a lot of opportunity on the table. But it takes time to get around that and you really got to build the team to be able to invest outside of your own, you know, zip code if you will and then internationally, well, to me that’s just a diversification strategy. You know, we’ve never seen in an instance even now in COVID where all property has gone up or down in value or all rents have gone up or down in value equally. Back in 2008, we don’t make it a secret that we have some challenges. We lost some properties. It was terrible but the thing that really saved us is we had diversified internationally and I’m not saying it’s the end all be all, but at some point it makes sense to consider diversifying through geography.

 

Pancham: Right. So, internationally, you know, there are a lot of things that change. When you’re out of state, yeah, you have a different county loss, different state loss that you have to pay attention to, but when you go outside of the country, it’s a completely different ball game like what other things that you need to look for when you’re investing internationally let’s say, you know, I want to diversify, I listen to this podcast and I’m fully motivated. I want to get educated like what do I need to really look for in investing outside of the country?

 

Robert: Well, just like about as going to other state, I’d want to get educated on tenant landlord law. I wanna build up a local team. I wanna understand the market metrics. I wanna know what the drivers are, what’s building the demand for real estate whether it’s, you know, office or retail or residential. It’s the same thing when you go international plus a few other things and those few other things have to do with the way businesses conducted in those places. So the first thing is the basis of law. If we only live and invest in one place then you kind of take it for granted whatever that is, wherever you live. Your basis of law, you expect it to be same but it’s not. It’s not really even the same from county to county but those are nuances. There’s basically three types of law if you will, it’s broader than that but it can all boil down to three types of law and you have different real estate or property rights within those. That’s the first as basis of law. The second will be language. If I go to another market place typically the controlling language of the contracts and everything else is in that country’s language and so oftentimes like my first out of the US investment was in Mexico, all the contracts in Mexico are written in Spanish. But they typically have right next to the Spanish language, they have another column in English. But that English is just a translation for my benefit. If there were ever to be a legal issue or problem, the language that would prevail would be the Spanish language, not the English language. So, language is important. If you don’t speak the language, you better have someone on your team that does who you trust. And the next will be currency and the valuation. If I’m investing in another country, it might be that those properties are denominated in the local currency but it might not. In a lot of places real estate gets transact in US dollars even though there’s a different local currency. So those are the three of the things that you start and then there’s a bunch more you wanna know about banking, you wanna know about any of the upholding laws, you wanna understand what kind of tax treaty there may be between nations. So, it’s kind of a big topic but here’s the thing, it just takes a little bit of education and that shouldn’t stir anybody away just listen to a great podcast like this I mean you just have to get your mind around it and once you do, the world will literally opens up to you.

 

Pancham: Great. Thank you for explaining all the things, the basis of law number one and number two, the language and number three the currency risk that you have and what they are transacting in. So, you know, you have invested you mentioned in Mexico and I know that you’ve invested in Belize heavily over the years and so for you to go there and invest there, you actually had to go through all of this and with the local team off, local army of people who understand all of this, right? And so how long did it take you from a decision point of view from the time you decided, oh, you know what, there’s this country called Belize, let’s check it out to a point where you said, okay, you know what, we are going to be investing here.

 

Robert: Yeah. So, longer than you might think but it doesn’t have to be that way. I’ll tell you as a passive investor, I owned property in Australia and I’ve been there twice and both related to the real estate, you know, purchase if you will, but they do speak English mostly. It’s easy to understand. I got introduced to a great team there, so I felt comfortable and that’s the key. You’ve got to get to feel comfortable. In Belize, you know, we had invested in Mexico and done fairly well, but there was a lot I didn’t like about investing in Mexico. There’s some burdensome things and we were looking for kind of another international destination and we looked around for two years. Went to basically every country in Latin America, most of the Caribbean islands looking for something that was relatively close geographically to the US and time zone wise but that have that some upside and when we found Belize, it kinda check all the boxes, a lot of reasons to like Belize which we could get into our knot but in terms of how much time it took, it was two full years before I bought a property from the first time I went there and I wasn’t going every month today on there a lot. But I fall in love with the place and it’s a market that I’ve chosen to spend a great deal of time in and energy and it’s where a lot of our real estate is, but to start, you really have to make sure you do have that team that you can rely on because everything is different in foreign markets and there’s some market places where Americans for example can actually own directly. Well, in that case, you better find someone local to partner with and takes time to get in a relationship. You don’t wanna jump into that relationship in a weekend trip down there, right? So, it takes sometimes. The great news is once you’ve gone through that kinda learning curve, now you have a strategic, you know, advantage because you’ve met the right folks, you’ve learned, you become a resource to other people that want to invest and I supposed it also depends greatly on whether you’re an active hands on investor or if you’re of a passive investor where you’re kinda betting the project and people running it more than you are spending time in the country buying and selling properties.

 

Pancham: Right. You mentioned a great point that better you’re active or passive. If you’re a passive investor like you did in Australia for your Australian investment, you found a team who you really liked, know and trusted and really invested with them, so you don’t have to be there a lot. You just found the team who are taking care of all of that for you but if you’re active investor then you have to do everything that you did for example for Belize spent two years before you even invested in Burdwan property, right? That’s great advice there. So, what would you say that like now it took you two years like initially to buy a property in Belize and how many years ago was that?

 

Robert: So that’s about 16 years ago and I know that because when I look at my oldest son, my wife is pregnant with him my first trip to Belize, so that’s how long I’ve been going to Belize now, 15-1/2 years and it’s not that we wouldn’t have bought something sooner but the submarket we were in was really constricted in terms of larger properties and we didn’t just wanna buy a house, we wanted to buy some land to develop and it just took a while to find the right mix of team and then you know, targets of opportunity as my dad would say. Where are the places you’d want to be and how is that compared to everything else you could do. So it took us a while but again we weren’t in a hurry, right? We had a portfolio. We had a development projects. We were really just looking to try to add Belize for all the reasons that it make sense as a market. So it wasn’t like we had a burning fuse and had to make a decision quickly. Sometimes that can help, right? If you get pushed into something like a tax problem or you’ve got exchange I have to make. In this case we were just trying it on. Felt good the first time, we were attracted to a lot of the strong reasons like it’s the only country in Latin America that English is the official language, so there’s no translation. That made it easier for us but rather than just saying, oh, that’s great, let’s jump into it, we spent that time and the other part is because we do have a bigger vision and that we bring along other folks. So a lot of people have invested kinda side by side with us in Belize, so we needed to have it done not just for our own account but to make sure that we could explain everything to passive investors. 

 

Pancham: Right. So you know, since we’ve talked about Belize, I would want to quickly touch on your amazing project that you have down there, you wanna talk about, you know, what you’ve done in last 16 or 15 years that you’ve been down there and this amazing resort that you have built there?

 

Robert: That is pretty amazing. Thank you for that. It’s phenomenal actually. We have developed the single largest hotel by room count in the country of Belize which sounds crazy even to come out of my mouth because that’s not how it started, right? We were just open for opportunity down there but it’s—for a lot of reason it has made sense, you know, it hasn’t all been smooth sailing that’s for sure. There’s a lot of time delays, a lot of those kind of Caribbean and Latin American countries are on a slower pace so things don’t happen as quickly as they might here but you kinda develop that’s kinda what you figure out as one of the big attractions is the slower pace lifestyle down there and so it’s been something, you know, it’s funny we don’t even talk about it on our show because it’s independent of what we do as the real estate guys where we share information in all kinds of places and people and markets but we have a boutique development company and built this resort, it’s beautiful, it’s first branded hotel in the Island of Ambergris Caye which is the number one tourist destination, so just a great learning curve figuring out that whole, you know, hospitality sector and then dealing with the local tourism board and then local basically chamber of commerce for the country, the Belize Trade Association and then you know, having to navigate opening a hotel and then closing a hotel and Corona virus and getting ready to reopen so it’s been a ton of fun but we are sure proud of it. You walk down there, walk through the place and just think, wow, we built this thing. It’s pretty awesome.

 

Pancham: It is awesome. I was there last year just for vacation and then visit the property, it was great. It just feels like a different place and it’s amazing.

 

Robert: You know, I think that brings kind of a point Pancham which is with real estate, people do have a reason to invest other than just pure ROI. If I’m looking at a bunch of mutual funds or stocks and you’re just trying to get dividend yield or whatever, I’ll just, okay, I’ll pick that one. I don’t get emotionally attached which can be a good thing. But with real estate, you know, I will definitely admit that I have an emotional attachment to believes, I think my family there quite often we spent three, four or five weeks most summers there and we just love the lifestyle, the people, the fishing, the waters always 80 degrees, palm trees and white sand I mean we just love that stuff and it can serve multiple purposes. So, it’s not that you want to necessarily fall in love with the property but there are reasons for you to be passionate about it other than simply return.

 

Pancham: Right. Absolutely. So, that’s whole side of like lifestyle investing what they call, you know, where you are investing for the lifestyle that you want and create in your life.

 

Robert: That’s it.

 

Pancham: Yeah. You mentioned about COVID-19 real quick and you know, I’m sure that impacted your business in general overall and I’m asking this question to every guest on the show, how has that impacted your business and are you changing any strategy because of it?

 

Robert: Yeah. You know, it’s been a big change all around. It has changed people’s lifestyle, their outlook on life, sometimes their vocation. We’ve been fairly fortunate, we’ve got some businesses and some properties that have not done so well, you know, some multifamily where are collections are down but you know, we are being gentle and we are working with our tenants and recognizing that this is just a thing that we are all dealing with together, so we always underwrite to a standard where we can, you know, take a little bit of a hit if we have to. Obviously, in the resort market, we went from 400 guests to zero in one week and now we’ve had seven months without any income which kinda hurts, right? But at the same time we’ve got a great local crew, we had a furlough more than 160 employees but we kept more than 20 on and the place is beautiful. They are taking care of any even close to inkling of deferred maintenance, they are painting and sanding and the landscape is lash and so we are really getting ready to open up and have it be an experience people are itch into have where people wanna get out of town at least some do, some people aren’t gonna be ready to travel at all, some people aren’t gonna be ready to travel internationally but when they are ready, we are ready. So, that’s been a change. I think underwriting is a thing. If you’re looking at new properties today, you just have to sharpen your pencil a little bit knowing that we don’t have a crystal ball and even, you know, three years of performance at a property, doesn’t mean a lot if that property was a gym or a movie theater or a restaurant or C class apartment building where most of the tenants have lost their jobs. So, we just have to be prudent. The other thing I think that happens during a season like this for folks that do find themselves with more time on their hands, it’s a great time to get educated on this stuff. Great time to take courses and classes and read books and listen to podcast. So, you come out of this thing better off not just older.

 

Pancham: Absolutely. And this is a great segue way into my next question. So, you have your investing company, your boutique development company and then you have your educational company as well and I have personally learned a ton from you and I started listening to your podcast, I don’t even remember the exact time but it’s been many years since I started listening to it. So, in very recently in the middle of this pandemic, you came up with this crisis investing series, tell us about that you and Russ your partner put it together, it’s an amazing series. Tell us why you put it together and what can people expect if they tune in to it?

 

Robert: Well, the first thing to say is it’s free so there’s not gonna be a big pitch on I have to subscribe to it but here’s our thinking and we’ve been on the radio for 23 years and we are still on terrestrial radio or a radio show primarily, the podcast version of the show is now heard more than 190 countries and millions of downloads and it’s absolutely humbling and amazing and folks like you that find us and then we get to meet and then we become friends, it’s the coolest thing, but I will tell you that there have been, you know, bumps along the road with COVID-19, listenership is up, that’s a good thing, but we’ve built a huge number of really great relationships and that’s where the keys I think to our success is we don’t just, you know, throw anybody on the air and ask him a bunch of questions, we would like to get to know them and so we have fewer guest than we could but we really try to be strategic and not just talk real estate but we are real estate investing show but we talk broader picture economics and when this whole thing hit, we recognized that last time around, we did not have the support system and the people in our lives that could help us navigate through the 2008 downturn and this time around we do I mean we have such amazing friends and we just thought, wow, if we could get somebody’s big brain friends of ours to just share their thoughts on where they think there’s opportunity, what are they worried about and personally it’s just gonna be a single webinar and then we had this incredible interview some are 20 minutes, some are 40 minutes with folks like Peter Schiff and Danielle DiMartino Booth who worked for the Dallas Fed for years, Nomi Prin who wrote Collusion, Robert Kiyosaki Rich Dad Poor Dad, Ken McElroy who of course is a Rich Dad Advisor for real estate and the Rich Dad Advisor for Tax Tom Wheelwright. We talked to Richard Duncan who is an economist that lives in Thailand who wrote The Dollar Crisis and lots of other folks and just pick their brains and decided that we just make it free just so people could get exposed to different ways of thinking. What’s interesting is not everybody has the same answer. In fact, sometimes the guest are on opposite sides of the coin which is great because you’re not really looking for answers, you’re looking for the best questions to ask and you’ve got to decide for yourself, right? Jim Rohn said, you should read a book on Gandhi and you should read a book on Hitler and then you should make your decision. So, for us we just wanted to get super smart people to share the thoughts and they were so gracious with their time and that’s really become a really great series, but we weren’t sure, right? We weren’t sure if people wanted to spend more time kind of in the bigger economic stuff or if they just want to hunker down or forget how to buy great properties on sale and it’s been really neat. So it’s a whole series of interviews and you can watch it from the beginning through. It kinda rolls like that on our YouTube channel but you can also pick and choose and say well I really like to hear from [Inaudible] [23:51] oil guy and he’s got this great different perspective or Brien Lundin who is the editor of the Gold Newsletter, he was one of our guest and he has a different perspective and if you can handle the language you can listen to Robert Kiyosaki and what he thinks right now. So, it’s kind of a cool thing and it’s been well received for sure.

 

Pancham: That’s great. Thank you for putting it together and listeners if you have not really listen to it, I would highly encourage you to check it out. It’s very educational. It’s totally free. Can’t be better than that and since you’re home, it is great time to get educated like Robert said and this would definitely be a right step in that direction. So that’s great Robert. Now, I wanna actually completely segue way into it different question which I have started asking recently to everyone and this is mainly for me, myself reasons to really learn from people like you, so do you have any morning routine that you follow? If so, what is it and do you think it attributes to your success?

 

Robert: You know, it’s funny, I read the Miracle Morning and I started exercising two years ago differently early in the morning because I was training, my son and I climbed Mount Kilimanjaro which I was not in shape for so it took us 5 months to get into shape and we made it barely, but that really changed kind of my routine. My morning routine is always, well, not always but I guess in the last 10 years really revolved around the fact that my kids get up and go to school. What I do is I stay—I’m naturally an evening person, a night owl. I’m not naturally a morning person but that hasn’t worked very well when you have small kids as you know, so I have built up the habit of getting up and spending that time with my kids so they don’t feel like I’m waiting until they leave to go get to work, I’m with them, I spent time with them and then when they do leave now that’s when I got to make hey, right? Because I want to be around when they get home from school and then travel has changed so much, you know, typically I think last year in 2019 I took 162 flights something like that. I keep track trying to keep the number down. This year I just got back from my first trip since March because I just have been traveling so that’s been great. It’s kinda changed my routine but I do think the most important thing for me is putting great positive ideas in my brain first thing out of the gate. I don’t read the news, I don’t watch the negative garbage on television. I listen to podcast. I listen to some of the great personal development speakers, Jim Rohn, Brian Tracy, Dennis Waley, folks like that. And it just gets good ideas, gets my blood pump in and has me looking for possibilities. There’s plenty of things to be upset about and to point at and you know, it’s an election year and there’s rioting and all these things we could just spend our time complaining about, but to me I can’t be of any help to anybody unless I managed my psychology. So, I will say I don’t enjoy exercising, I know I need to so I’ve tricked myself into doing it by that’s when I get to hear podcast. That’s when I get to hear this audio programs is when I’m on the treadmill or when I’m on the elliptical or when I’m lifting weights that’s I have disciplined myself to make sure that’s how I start my morning.

 

Pancham: That’s great. Thank you. You know, I’m an absolute big fan of Miracle Morning myself and I started putting that into practice probably four or five months ago very religiously. I think since the pandemic started, so it has definitely have very positive impact on me and thank you for sharing that. So, we will be back after this message.

 

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Pancham: Welcome back, we are going to go to the next section of the show which I call Taking the Leap round. So, Robert I ask this 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?

 

Robert: Well, ironically my very first investment before I ever invested inside of Wall Street was that property I told you about. It was a two-bedroom one-bathroom, duplex on each side so my first commission check went to buy a rental property. From then on, every time I bought a new house, I didn’t buy I would keep the old one and had this whole chain of rental properties and then I changed my investment philosophy so I have not been much of a Wall Street guy I will say. I owned a little bit of stock but I just, you know, I wanna invest in things that I understand and I haven’t really taken time to learn about all the different companies, so whether it’s right or wrong, I invest in companies that products I used, I like their business model that serve me well but it’s the minor part of my investment portfolio, I’m definitely a real estate guy.

 

Pancham: Great. So, my second question for you is what fears did you have to overcome when you first bought that duplex side by side?

 

Robert: Yeah. So, there’s a thing called a truth in lending statement and that is prepared by the closing agent or attorney or title company and lender and shows this is how much interest you will pay over the life of the loan and that was a gasp for me, you know, it’s just it’s so much more than the principal you’re borrowing and that just really had me thinking like what happens, you know, if I can’t get a tenant or if I have a problem with my income all those kinds of things but I got help with mostly from my dad and his partner who was our broker. It’s just understanding that real estate serves a basic need and this particular property was an area that had a history of strong rental demands, still is today one of the nicer rental areas but if not so nice that the numbers don’t make sense at least back then and it just really, you know, kinda call me down a little bit, but I was worried about this big long commitment I was making. Real estate is a long-term commitment. It’s hard to get in an out because of the sales talks, you’re gonna pay 10% every time you turn a property, so you can’t just buy and sell and buy and sell even folks that flip properties to me they are not real estate investors. Those folks have a job and it could be a great job. But at the end of the day if they stop the work then the money stops too. Real estate has a long-term investment, my goodness when property just continues to throw off cash flow that’s pretty amazing.

 

Pancham: Absolutely. We did one flip and I was like that’s it. That’s a job, you know.

 

Robert: I did one too. Actually two, one where I was just a money partner with a gal who really wanted to, you know, do some of the flipping right at a 2004 and 2005 when the market was strong and I had more money in time and she was awesome, so I said well here’s the deal, if you will qualify for loan, I’ll put up the downpayment and all the money to do the flip and it was great, great return but it was leveraging through her. My first flip, my dad and I did, we made a hundred grand but I’ll tell you for the time and anguish and just all that stuff, we both agree that was the end of that, I’d much rather be a long-term buy and hold real estate investor.

 

Pancham: Thank you. Thank you for sharing that. So, can you share with us one investment that did not go as expected?

 

Robert: Well, there’s a long list. I had several that haven’t gone as I guess probably the biggest profile one is our big project in Belize, we hit a snag that was insurmountable and that the sewer which was controlled by the local water service and in order to get the sewer in, we had an 18-month delay, 100% out of our hands. Even, now, today, years later in hindsight there wasn’t a single thing we could have done to change that and yet we had investors that were expecting the property to open and expecting to have cash flow and it was 18 and a half months of delay and so what I’ve learned in hindsight, however, is that the project has performed so much better than it was performing to many years before. So, it’s a better property, it’s got the stable income then we would have thought I mean so everything is better in hindsight but going through it, it was ugly at that time. Fielding phone calls from people saying what is going on? Pretty tough. You know, most of the things that go wrong in real estate is because of the physicality of the investment but the great news is they are almost always solvable sometimes it takes more time or more money than you are planning on is the reason we will have contingency and miscellaneous budgets in our syndications and so on but it is forgiving over time too. It’s just one of those things you can’t expect that every deal is gonna go perfectly and I think that’s true in life. 

 

Pancham: Absolutely. And you know, those are some of the lessons and we call that real world seminars, right? 

 

Robert: That’s it.

 

Pancham: It’s a university tuition, real life. All right, great, my last question for you 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?

 

Robert: I would say, stop thinking about it and do it. 20 years from now if you think real estate will be worth more than it is today then your mission between now and 20 years from now is to figure out how to get more of it and markets go up and markets go down, it’s a long-term investment, so you don’t have to jump in and jump out, you have to move quickly, you don’t day trade real estate, you can get acquainted with the market, we say we date and then we get married to a market. If you’re gonna be a passive real estate investor, active real estate investor in a particular geographic market, learn that market, take the time, but the challenge with that is then people are not taking action. They think that every time they are reviewing a perspective or looking at the data from the BLS that they are working, no, you got to take action. Our motto with The Real Estate Guys is education for effective action is the most important thing. Doing something with the knowledge you have. If you’re a busy person then find the great champion, the great syndicator, and promoter, someone that you can invest alongside with, but get in the game.

 

Pancham: Great. Thank you for that advice definitely. We’ve gotten that advice so many times on this show. I wanna add one more question for you since we have the honor and we hardly like we rarely get people who have invested over so many years actually, decades in different asset classes across the board and different nationalities and area and all that, so what is one asset class that is your favorite and why if you have any?

 

Robert: Okay, that’s a great question. I’ll tell you it has changed over the years. When I started my real estate investing career, I was buying, you know, this multifamily properties, duplexes, sixplexes, smaller properties and then we got into C class apartments and I found my heaven. It was like I was good at managing it. Those are hard to deal with but I figured it out and I need tenant landlord law, but today that’s the last thing on my mind. Today, my favorite thing to do is to invest passively in somebody else’s deal. I mean I am still a very hands on investor. We’ve got a lot of holdings. We’ve got developments and so we are doing the thing but today when I can get the ball to someone else and let them take it, I think that’s great. I think real estate in general—if COVID has taught us anything that it’s not all created equal. Certain types of property have done better in this new reality and certain types haven’t. I have always taught that anything that’s related to housing is probably pretty strong because we don’t see a technology coming along that’s gonna eliminate the need for human beings to sleep under a roof, so I think if it’s a research well, if’s underwritten well, a big fan of multifamily are arguable where I made the most money in real estate is through land. And land was my least favorite investment for a lot of years because of the four ways we make money in real estate, three don’t apply, so I had to get my mind around that and so today, I’m much more of a chameleon when it comes to investing, I don’t say yes or no based on market or based on asset class. I wanna hear the whole story. But I think when you start out, you gotta find something that fits for you, something you get your mind around, get your heart into and then over time either you get rich in the niche, stick with that thing or start to consider other investments and then by the time you’re 30 or 40 years in, you will have a well-rounded amount of real estate that does different things for you. We have real estate that we hold for the production of income. We have real estate that is just position to do well when it gets subdivided or sold. And so you got to get in touch with your inner investor and decide who you are as an investor first then you can pick the market and the product type, the niche if you will that makes sense.

 

Pancham: Thank you. Thank you so much for answering that last question that I just thought of and it’s an amazing answer too.

 

Robert: No additional charge for that extra credit.

 

Pancham: All right, so, how can listeners reach you Robert if they wanna connect with you? Tell us how they can find the Crisis Investing Series that you put together.

 

Robert: Yup. So, we need you to find the RealEstateGuysRadio.com. So, RealEstateGuysRadio.com. If you’re just in the Crisis Investing webinar,  just send an email to crisis@realestateguysradio.com and automatically you’ll get invited to watch that series and you know, get up in the morning make it part of your morning routine or get a bunch of folks around the monitor or the TV and watch it, discuss it but every week our podcast is out there 23 years and counting, so we’d love to have you hear what we are doing and so RealEstateGuysRadio.com.

 

Pancham: Great. Thank you so much for you time today, Robert. It’s been absolute honor to have you and your added ton of value to our listeners. Thank you for your time today.

 

Robert: Thank you, sir. Keep spreading the word and keep up the good work, my friend.

 

Pancham: Thank you. Thank you. So, I hope that you learned something from Robert. He has a wealth of knowledge and we didn’t even scratch the surface or you know, touch the tip of the iceberg here. He actually has—I have over the years learned ton of things from him, his podcast, his events, live events, and definitely I encourage you guys to listen to Crisis Investing Series, it’s great for the time that we are in and you know, you will learn something from that if nothing has. So, thanks for listening. Thank you for tuning in today. I really appreciate you. 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.thegoldcollarinvestor.com and follow us on Facebook at The Gold Collar Investor. The information on this podcast are opinions. As always, please consult your own financial team before investing.

TGCI - Episode 62

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