My Realty Gains

Prashant Kumar, CCIM - Founder, MyRealtyGains

Successful Vice President with 47+ years in the attractions and entertainment industry. Highly observant and detail-oriented with a highly developed work ethic. Over the past few years, I have become deeply passionate about learning about Real Estate Investing. I am an avid learner, continually connecting with as many like‐minded people. Love being on various podcasts or panelists for events. I have been actively looking for a multifamily property as GP/Asset Manager/Boots on Ground in TX.

What You’re Going to Learn:

  • Difference between investing in Real Estate v/s investing in Stocks & Bonds?
  • In which Real Estate Asset class one should Invest and How to find those opportunities?
  • How to get associated with Good Investors in Real Estate?
  • How to begin your Real Estate Investment Journey?
  • The Safeguards in Real Estate Investing for Investors
  • How much time is required for W2 family investors to get their money to grow?
  • How many Returns can a Potential Investor expect from Real Estate Investing?

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Show Highlights

Difference between investing in Real Estate v/s investing in Stocks & Bonds?

Difference between investing in Real Estate v/s investing in Stocks & Bonds?

Prashant Kumar, CCIMDifference between investing in Real Estate v/s investing in Stocks & Bonds?

Trevor Thompson – There’s a big difference between Investing in Real Estate versus Investing in stocks and bonds. If you look at the successful people in the world, 90% of them created their wealth through Real Estate. They’re involved in the stock market and different things, but a lot of people don’t know this.

If you research Warren Buffett, he is very active in the Real Estate space. His day job is in Investing in stocks and companies but when it comes to his passive income, he says, if you don’t make money while you’re sleeping, you’re going to continue to work until you die. His Passive Income is all built up in Real Estate holdings quite extensively. 

Prashant Kumar – You are saying that stock and bonds are just one way of investing. There could be thousands of ways through which you can invest in different asset classes and different kinds of portfolios. You are investing in a single-family, rental portfolio, condos, multi-family, and storage. In Real Estate, there are many asset classes where you could invest.

In which Real Estate Asset class one should Invest and How do find those opportunities?

In which Real Estate Asset class one should Invest and How do find those opportunities?

Prashant Kumar, CCIM – There are many asset classes in Real Estate, where could someone invest and How can someone find those opportunities?

Trevor Thompson – All of my opportunities are found in networking and working with people. It’s very important if you consider getting involved in the Real Estate market, you want to connect with people, get to know the people, just like we did, doing a deal, and then make sure that the people are looking for their investors’ best interest.

For example, we both know we had a deal that didn’t happen and yet no investors lost their money. That is what a Passive Investor is in Real Estate. A lot of people don’t understand that. And of course, we’ve just seen some massive fluctuations in the tech market, in the bitcoin, and all the other markets. Real estate is a little bit more steady. Maybe one time in American history, there was a big fluctuation and they fixed a lot of those things that are wrong. 

People need places to sleep, places to live, and places to do their business. There are a couple of asset classes, like an office. A little bit of a struggle right now because everybody went to work at home, but eventually they’ll all go back to work. It’s slowly but surely coming in and those things will turn around. And clearly, hospitality had suffered for a little while, but now airplanes are full, hotels are full. Real Estate investments rebounded very quickly and stayed. Getting stronger even through the pandemic is very remarkable.

How to begin your Real Estate Investment Journey?

How to begin your Real Estate Investment Journey?

Prashant Kumar, CCIM – How should one start investing in Real Estate? 

Trevor Thompson – The most interesting thing is that you have to do a little bit of education on your own. You need to understand what are you going to do, what are the risks, and what are the rewards but the most important thing to find out is who you’re giving your money to.

You don’t want to give your money to these people that are all over the internet. You want to give your money to people with whom you’ve established some sort of relationship. So for people watching this show, all of the different I’ve seen your first few episodes. The people who are connected before I came on. They were excellent, by the way. These are the kind of people that you want to watch and get connected with. Set up some time to talk to them and to get more comfortable with what you want to do. It’s all about comfort and making sure that what they’re offering matches what your needs are.

They come and they’re so focused. I’m not a tech guy, but I was super focused on my job. I knew I should be doing Real Estate, but instead, I kept working. I mean, I worked super hard, 80 hours a week, seven days a week, 20-something years with one company. And then COVID came along and they said goodbye and I went, well, I have no Passive Income.

As your stock portfolio doesn’t send you checks every quarter. And so that’s when I decided I will make money while I’m asleep. Everybody’s goal should be to have their Passive Income investments replace their Active Income. A lot of people love their jobs. You do not have to leave your job to become a Real Estate Investor.

What you want to do though, is you want to have your money making money while you’re asleep. And then it will eventually when you make your life decision, you’ve got enough Passive Income coming in that you don’t have to wait for your pension or some sort of another retirement plan, and then you can make a lot more different life choices.

The Safeguards in Real Estate Investing for Investors

The Safeguards in Real Estate Investing for Investors

Prashant Kumar, CCIM – What is a safeguard for the Investor in the sense that his money is not going into scruples hands? What are the checks and balances put into the syndication business so that investors feel comfortable that they are not giving their money to the syndicator, rather it is going to the property? 

Trevor Thompson – This is very much what a lot of people don’t think. It’s very much a relationship business. We don’t have a relationship with Tesla, we don’t have a relationship with Apple or IBM. They’re just a product, the commodity, and they give out products. But when you’re investing a little bit where your money goes to somebody, into an individual, you want to make sure that you have some sort of relationship with them. In many of the ways the rules are written, you must have a relationship with them to be able to invest with them. They need to make sure that you understand what you’re doing and that the investment is correct for where they are in their life. You want to make sure that this is the right investment for them because all types of investments do different things.

If you’re investing in something that’s a deep value add, the cash flow comes later and you make your money on the sale. If you’re investing in a new build, there’s no cash flow till it’s built and sold. You’ve got to understand the differences and make sure that it matches what you’re going to do.

For example – When I was working, it was wealth preservation and growth. I wanted to double my money every five years. That was my goal. I didn’t need the cash flow to live on, so I kept reinvesting it. Well, now that I’m doing this full-time, I’ve switched my investments because I need the cash flow.

I need a little bit of money. I haven’t reached 65 yet but I’m getting closer. I need the money to come in to be able to take care of daily expenses. You need to know what fits you where you are in your life right now. The beauty of Real Estate is there’s something that fits everybody in every series, every position of their life. There is something that can be a perfect product for that.

Prashant Kumar, CCIM – That’s a very good answer. What are the regulations like PPMs and stronger property management? What are the things which are giving mental peace to these investors from a security standpoint? I mean, how a syndicator is bound by law not to scrupulously use investors’ money for their gains? 

Trevor Thompson – There are different types of deals offered. The most common is syndication, which is called the 506 B. The difference between C and B is I have to have a one-on-one relationship with you, and we have to have some, what they call substantive communications. I need to know, where are you in your life? What kind of net worth do you have? What kind of liquidity of cash do you have? What are your goals to make sure that what I’m offering you fits into it? There are 560, which are only for accredited investors, which is a whole other topic, and those can be advertised. Regardless of which one you do, you want to make sure you know the person you’re giving your money to.

There are some flashy people out there, but you want to make sure that you know the person. You’ve spent some time watching them. You’ve listened to or read all of Prashant’s interviews with this client, and then you find them on LinkedIn or Facebook and you see what are they doing. And then you start attending and getting educated, and you want to give your money to somebody who will take the time to educate you. I know that’s why you’ve started these podcasts. It’s not because you have nothing to do on a Friday afternoon. It’s because you want to educate people so that they can create Passive Wealth. One of the things that always amazes me is that I’m also an immigrant in Canada. It is not quite as bad as our difference in coming from another country. 

People come to America for the American Dream, and the American Dream is not working 80 hours a week for a paycheck. The American Dream is the land of opportunity, where you can take the money that you earned while you work and you can invest it. It makes money without your work and continues to grow in the amount of money because it multiplies over time to where you can make the choice, am I going to work or not work? That is the American Dream. But a lot of people don’t think of it that way. They get stuck in. I got stuck in just going to work and not even thinking about it. I didn’t start until I was in my 50s. I wish I had started in my 20s. Life would be a lot different.

Prashant Kumar, CCIM – You hit the nail right on the head, Trevor.

How much time is required for W2 family investors to get their money to grow?

How much time is required for W2 family investors to get their money to grow?

Prashant Kumar, CCIM– How much time if somebody who has regular income, who can probably save, let’s say, 50-200 thousand dollars a year because both husband and wife are working and they can save that much money, how much time is needed by these sort of families to invest and let that money grow? How much more attention do they need for such investment?

Trevor Thompson– Other than getting educated, which everybody needs to get somewhat educated, and again, watching the podcast, everybody who’s going to come has slightly different expertise. You want to make sure you’re watching these to get educated. Once you get educated and make a decision, you have nothing to do. There’s nothing to do. Whether it is you attend a quarterly phone call and you open up your bank account when the money gets transferred in and you look at it and you go, oh, it’s there, this is good news. You go back about what you’re doing as a passive investor.

A really good example of it is an aircraft. You were the pilot and I was the copilot on our deal and we brought a bunch of passengers on the plane. Now they all had to buy a ticket, get on the plane, and know where they were going, but we were doing all the work and they sat on the plane and when the plane landed, just like getting the rewards, they got to their destination. And our destination is financial freedom. If you think of it, simplistically, we’re the copilot and pilot taking people to their financial freedom. You’re going to have to invest for a little while to get financially free. It’s not a get-rich-quick scheme, which is, I think, good news because the good news is steady, reliable Real Estate is steady and reliable.

It always goes up in value. There are things like forced appreciation by running it better and fixing it up. This is as steady as you go. This is not a get-rich-quick scheme, but it does create peace of mind because it is passive and it is truly the way that you get to create wealth for your family. 

Prashant Kumar, CCIM– It’s a no-nonsense income stream that you are creating when you invest in it. Possibly with a Real Estate syndicator to say, kind of elaborate what you just mentioned about how much time is needed.

In my mind, if you are educated, maybe a month or two. You spend an hour a day or something like that to get yourself educated. Once you have decided a place where you want to invest and you continue to invest further, once you have invested in a deal, then I think an investor does not have anything, maybe half an hour a month to talk to whom you are, where you have invested if you want, only if you want.

I have invested money with many people and I’m not talking to them for two years because my checks are coming. No need to talk. So only if you are eager enough, then you probably need maybe 10-15 minutes a month or half an hour a month.

Other than that, once you have invested, you have invested and you are enjoying all the benefits of Passive Real Estate Investing.