BiggerPockets Real Estate Podcast - 557: Raising Millions of Dollars (and 8 Kids!) After Dumping Her Day Job w/ Esther Reizes-Lowenbein

Episode Date: January 13, 2022

Raising capital for real estate investing is a far more useful skill than most people realize. If you have a strong knack for networking and the social skills to connect with many different individuals, you could be the exact piece that almost every investor is looking for. As more investors get into the hot commercial real estate market, they’ll need private capital to fund their deals. So who better than you to connect the investor and the deal finder for a piece of the cash flow pie? If you’re worried about the time commitment of raising capital, let us introduce you to Esther Reizes-Lowenbein, who not only worked as a broker, capital raiser, and investor but also is raising her eight children while doing it. Fortunately for Esther, raising capital is something she loves to do, as she has a strong communication background with her former training in speech pathology. If you’re getting the itch to start investing in bigger deals, but don’t know how to get started, Esther can help. She walks through the different roles in commercial real estate, whether to invest, syndicate, or stick with small deals, and how to become a capital raiser yourself (the right, legal way). In This Episode We Cover: General partners, limited partners, and every commercial real estate role in between Whether to invest, syndicate, or continue to buy small deals yourself How to legally (and ethically) become a great capital raiser The biggest mistakes commercial brokers make early into their career The hottest property types and which you should look into for 2022 The Achilles heel of most short-term rental deals  And So Much More! Links from the Show: BiggerPockets Forums BiggerPockets Podcast 518: The Biggest Takeaways from BPCon 2021 | Live Host Panel from NOLA BiggerPockets Podcast 366: 40 Doors in the First 2 Years with Henry Washington BPCON2021 - New Orleans Airbnb Henry Washington's Instagram David Greene's Instagram Check the full show notes here: https://biggerpockets.com/show557 Learn more about your ad choices. Visit megaphone.fm/adchoices

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I like connecting people. I like connecting people with money, people with properties, people to people. I'm a matchmaker. What's going on, everybody? It is David Green, your host of the Bigger Pockets podcast, the show where we arm you with the information that you need to start building long-term wealth through real estate today. If you're new here and you'd like today's show, check out Bigger Pockets.

Pockets.com. It's a free one-stop shop for all things about real estate investing, ways that we can help you save time and money, avoid mistakes, and tap into the wisdom of two million fellow members. Here rejoining me today on the podcast is my good friend, Henry Washington, from show 366. Henry, how are you today? I am doing well, man. Thank you so much for this opportunity. It has been a great time interviewing and socializing with you and getting to share some information with the people, man. This is what an amazing experience, man. I can't thank you enough for this. Yeah, the pleasure's been ours. Anytime we get to get a new perspective and a new source of experience as far as what went well with real estate and what went

wrong, I feel like everybody wins. You had some great points today about things that you have been teaching students when it comes to the wise and prudent way to invest in real estate versus just following the herd and doing what everyone does, which is the quickest way to lose money, in my opinion, right? There's this idea, there's safety in numbers. And you see a lot of people that invest in a stock after it's already gone up because it always feels good to invest in something that's going up. And oftentimes, you're just running right to the cliff edge. Anything you want to share on that topic? Yeah, absolutely. It's a bull market right now, right? It's easy to be a genius in a bull market, right? Everybody's winning. And so you can find yourself pretty quickly

in a deal that can hurt you financially if the smallest or slightest thing changes with the market. And like we talked about today, you don't always have control over some of the things that can change, which can cause you to have to pivot. And if you don't have another exit strategy, you could be in a world to hurt. And that is a great point for why people should listen to today's show, because we get into a really, I don't want to say cool story, but a very insightful story about a successful investor, our guest today. Esther Loewin Bine, who raises money for other people's deals, has a lot of experience looking

at different deals as well as experience with seeing which ones worked out and which ones didn't, who still had something that she couldn't have predicted go against her. And I think Henry gives a incredible piece of advice of how to avoid yourself falling into that same trap. So make sure you listen all the way to the end because Henry says something. I'm not going to say it here, but I never even thought of it myself. It was that good. We also talk about how to connect people and the power of connecting what types of deals Esther and her team are looking into, as well as how she does all this with eight. Yes, eight kids. Pretty amazing woman. I've got two and I can't even imagine eight. That's incredible. I have nieces and nephews and those things can be exhausting at times.

I get to give them back. You just get to sugar them up and drop them off. That's exactly right. I just posted pictures on my Instagram. They caught some fish. The bigger fish that I have I ever caught in my entire life, they moved out to Idaho and they have big fish out there as opposed to California. My brother said, like, as soon as they took the picture with the fish, they just ran off to the woods to go play again. This couldn't have cared less. Right. All right. And now for today's quick tip.

Today's quick tip is very simple. Head to the Bigger Pockets forums and see if you can get your questions answered there, as well as ask more questions. In the fire round from today's show, we pull questions directly out of there that people have been asking that we think would be good for the guest. The forums are how Bigger Pockets started. They're incredible. There's tons of good stuff. You can search for key topics like the area that you invest in, the asset clasher in, or the specific problem you have and find questions of other people asking.

Sometimes I go there just to see what are people curious about because that lets me know what I need to be making content on. But you can kind of keep your finger on the pulse of real estate just by paying attention to the Bigger Pockets forums. Two million members. How could you not? Right. There you go.

All right. Anything you want to add before we bring in Esther? No, man, just that, you know, pay attention to the questions to ask when you're looking to get involved in the syndication and the rules that are involved with being a part of a syndication because it can sound complicated. And don't get me wrong, it is complicated, but there are rules to follow. And so try to pay attention to some of the questions you should be asking and some of the things you should be looking out for if you want to get involved in raising capital. Very good. I neglected to mention that, but that was one of the better parts of today's show where you interviewed Esther and asked her questions that you would want to know if you were going to be investing in somebody else's syndication. Absolutely. All right. Let's get her in. Ms. Esther, welcome back to the Bigger Pockets podcast. I know that we had you on in New Orleans when we sort of did a podcast by volume, sort of strength and numbers there. But now you get to be the focus of the show.

Thank you. I'm excited to be here. Good to see you again. Let's start off. What have you been up to since New Orleans BPCon 21? I have been purchasing more properties. I've been expanding my list of investors and list of people that need investors. I've been raising a lot of capital. I have since up to $5 million, I think, since the last time we met. And I have lots more under contract and working on some very big things on the capital connecting end. Awesome. So for people who haven't heard your story, can you give us kind of a brief oversight of what you do when it comes to real estate? And then we'll dig into your personal story after that. Yeah, my real estate journey has evolved and is still evolving, so I'll give you a little rundown of how I got started and what I'm doing right now.

I am formerly a speech language pathologist. I still have my degree, but I'm currently not practicing. For several reasons, which I can explain later, I decided to pivot into real estate. It was just me wanting more in short, but there were many more reasons. I started as a residential broker in my area. I live in Rockland County, New York, and I really enjoyed doing that for a while. The truth is though I always wanted to go into the commercial space, but the broker that I had met told me that I need to start on the residential end in order to go to commercial. And to me, that didn't really make any sense, but I didn't mind learning the residential business as well. So I started on the residential end. That was going good, but I was tired of being a marriage counselor and a psychologist, which you have to be on the residential side oftentimes.

And then there was several difficulties within the residential space between brokers and buyers that I decided to. pivot into the commercial space full-time. The last residential sale I had showed that buyer 50 homes and I had enough. You don't get paid for those 50 showings. You only get paid upon sale. So thankfully he closed, but that totally drained me and I decided to go full-time into commercial. I also enjoy it more because it's more factually based than emotionally based. It's do the numbers add up? Does the deal work for me? Do I like this location? Do I like the asset, it boils down to the numbers and the profits that I'm going to make over time. So for me, that was more exciting than dealing with the residential side.

About a year and a half ago, one of the clients that I sold a commercial property to had reached out to me and asked me if I can help them find an equity partner for the deal that I had sold them. Within two phone goals, I found him an equity partner. I connected two CODPs together, the sponsor and the equity provider. they became partners. And I was like, wow, this is pretty cool. I can do this more. So I got into that role. I started connecting capital on the equity side. And I've since raised $45 million in the last year and a half. Going forward, last September, my husband started, I mean, he was always noticing what I was doing, but he kind of like caught the bug of what I was doing.

And he's like, all those properties that you're sending out to all your clients, send them to me. Let me see them. And he started taking a look at them and started purchasing. And now he's my biggest client. We are purchasing office, industrial, triple net retail properties. And things have scaled on a insanely great level. And we are set to hit $1 billion assets under management within several months and short. And that's a lot of assets under management. And so a lot of the times when people say commercial, they mean like commercial residential,

meaning like apartment buildings. But you're doing true commercial, which is retail. space, industrial space. Yes. The interesting thing about it is that when I started educating myself about real estate, I initially was sure that I would go into the multifamily space. My initial goal, what I really wanted to do was to invest between 50 and 100,000 into 30 different properties after studying, you know, all the sponsors and the locations.

I was going to invest in like 30 different syndications and document my journey. That was what I was. what I was going to do. That was my plan. But then we met, we met this partner of ours, and he had been purchasing real estate on his own for many, many years. And these are just the opportunities that came his way. And we couldn't refuse these opportunities, hence we went there. All right. So why don't you break down for us what your overall business looks like and then what role you're playing in it? Okay. So I still act as a broker on many levels. I'm still, you know, brokering deals representing buyers and sellers. Right now I'm representing my husband,

mainly. He's my main client right now. So that's what I do. I present him the deal and I kind of then take a backspace and he takes it over with his team. So he's acting as the investor on what we're purchasing. He's taking care of what our purchases. I'm taking care of everyone else's stuff. I raise equity for other people. Okay. All right. So you sort of have two paths going on here. You and your husband have a business and you raise money and then he and other people. And that's what I want to get a better idea of what role you're playing in that business. But then in this other thing going on, you raise money and give it to other operators. Is that right? Almost. I am not raising money for myself. We have an equity partner within the group. So I'm not raising for me. I'm raising

for others. Okay. So you raise money for other operators and for their deals. And then you and your husband own properties yourselves and you have a partner in that group that's responsible for the capital raising there, correct? Exactly. Or joint venture. He brings the equity himself. Okay, so when it comes to, like, who does what? Are you doing anything other than the capital raising, or is that kind of your superpower that you exercise in this journey? So you're talking about on the investment, on the capital raising side that I do for others, correct? Or really both. I'm trying to figure out, are you also involved in the analysis? Are you involved in like what areas you're going to invest in? And I'm trying to get a feel for what roles you play in these two. Okay. So I'm talking about raising for others right now. When I raise for other people, I go about it in several ways. The aspect that I had most success with, it was. connecting co-GPs and JVs together. So I have a sponsor that comes to me. I'm looking for

$7 million. I'm finding that $7 million partner that's going to invest with him and they become co-GPs together. They both have an equal say in the deal. They're equal decision makers and they join partnerships together. So initially I'll present like a summary of the deal to investors that I think might be interested. If they have further interest, I'll send over all the documents, all the information. And then if they have further interest, I'll connect the sponsors together and then they see if they can like each other and if they can work together. And then they'll negotiate their terms on their own. So long as I have my agreement in place, I make the connection. I've also syndicated a deal from LP investors, which are limited partners where I am a GP on the deal.

I'm a co-GP on the deal. I brought on limited partners. I did some work on the deal. I'm investor relation, capital relation, capital manager. I vet the deal. I do analysis. I do whatever work I can without being boots on the ground from here. So that's my job on the deal. And I've raised from LPs. I've decided to take it one step further and start a private equity fund to raise money from LPs, which is sort of a fund to fund model and place that money into different syndications as well. So let's let's backtrack a little bit because you're saying LPs and G. And I think people are, some people are so new that they might not understand kind of what those things mean. So I know you said LPs are limited partners and GPs are general partners.

But explain to people kind of what the difference between those two roles are. Sure. A limited partner, someone that's coming in, say with 50,000, someone has a W2. They're working some job, but they would like to get involved in real estate. They'd like to place their money in a solid investment. And we know that real estate is a really solid investment in most cases. So they place $50,000 into a syndication and they receive a PEP equity. Every situation is different, but generally they'll receive a PEP equity and a return on their investments over,

sometimes it's over a monthly period, over a quarterly, over a yearly period. They receive returns on their investments. Oftentimes they won't receive money for the first year or two until the property stabilizes and then they'll receive money year three, four. Every situation is different. A general partner is someone that has an active role on the deal, sort of takes responsibility for the deal, is an equal decision maker, and plays more active roles. Oftentimes they're the key principle, they manage the property, etc. Are general partners bringing money as well?

I like to work with deals that the general partner puts down money. I think that is more appealing to investors that the general partner has more skin in the game. so it's preferable that the general partner put down money. There are situations that the general partner cannot put down money. They often have a harder time raising equity that way. Got it, because most investors, passive investors, these LPs, want their GPs to have some skin in the game as well, right? Exactly.

So the deal that I syndicated personally, all the GPs that were involved, we all placed our own money in as well. So maybe this would be a good point to ask for someone who's listening, how do they know if they should look into investing in someone else's syndication as a limited partner? How do they know if they should start their own as a general partner? And how do they know if maybe just these big deals are not for them and they should stick to maybe the typical single family house, duplex, triplex, et cetera? That's a great question. I think everyone has to evaluate what is going on in their lives and what they could actually handle. Some people that have a W-2 and they cannot

handle getting involved in the daily termites, tenants, and toilets, you know, of the real estate. They cannot deal with that. They would like to place their money into real estate. because real estate is really cool and it has amazing benefits. And they just can't handle their daily schedule being an active role in real estate. So they come in as a passive way. Other people have the ability to get involved, but they just don't want to. They want to receive passive cash flow without doing any work. It's mailbox money. Make money while you sleep. You can sit back and just receive return on your investments, especially elderly people that are they're not as active and they prefer receiving returns on their investments, like receiving that

monthly, yearly, quarterly, however it is structured returns. Yeah, I would say passive income is a bit of a misnomer. If anyone who actually owns properties understands, it is passive compared to having a full-time job. It is not passive compared to how we understand the word passive. Henry's laughing. I'm going to let you jump in in a second here. But I know the only investments I've ever been truly passive in where when I was a limited partner investing in somebody's deal. That doesn't mean that that's the best way to do it or the only way to do it. But it is worth acknowledging that if you are a busy professional or you have other priorities like children, you're raising a family, something.

Trying to invest in real estate, especially when you're trying to learn it, is very difficult and very time consuming. What's your experience been like with that, Henry? Man, that's 100% true because people say, well, it's passive if you have a property manager. And that's still not even true because your job, if you have a property manager, is to manage your property managers and to make sure that they're doing a good job. So there's always some level of activity that you'll be doing within your real estate investment business going the traditional route. And like you said, yeah, it's not like having a nine to five for

sure, but passive is absolutely a misnomer. But one thing I wanted to ask was like, so like how did you even get from kind of where you got started as, you know, an agent and you said you were showing 50 houses and got fed up? How did you get from there to raising money? Like that's, that's not the normal path people take. And that's kind of cool how you jump there. By the way, when I mean passive, I mean totally passive. You're investing in as a passive, passive, passive. You're not doing any work on the deal. That's how I mean by passive. How do I get involved? Great question. It kind of rolled into me. Like, it kind of came to me. I never expected to get involved in raising equity. in connecting capital, it just sort of happened when this, when the client that I had sold a property

to Connecticut, it was six unit properties within one area. He came to me and asked me to help and raise equity. I actually had no idea of the whole business of raising equity. I had no concept of this whatsoever. He asked me to raise an equity so much so that when he asked me, I was like, sure, I'll do you a favor. I sold you the property. I got a nice commission. I'll help you find equity. I'll do you a favor. That's how I looked at that time. I had zero knowledge that is such a profitable business. And obviously at that time, I didn't know all the rules. So, you know, once I realized all the rules, and it's a heavily regulated industry, I actually gave back that money because I didn't want to have anything to do with that property, because I was,

you know, I didn't know. I didn't have the knowledge at that time of all the intricacies of raising equity. And there's so much to know. There's so many things that one, one, us to abide by raising equity. It's not simple. So what are some rules or regulations that a new investor might need to be aware of on the front side before they just go and say, hey, new investor, I found a guy with a bunch of money. Here you go. Yes, always consult with an attorney, especially an SEC specialized attorney. And many attorneys will say that they're specialized for they're not. So plugging that in there, always talk with your attorney. But in terms of sponsors reaching out, it depends if they're doing a

syndication if they're raising through a fund or if someone's coming in with their fund into the syndication. So there's so many ways to go about it. But there's also exemptions to all these regulations like the reg D 506B, 5606C. So one has to know all those laws that before they're starting a syndication or raising from a fund. If it's a 506B, then they are not allowed to advertise it. They are only allowed to raise from family and friends versus a 506C that can be advertise and they can only raise from accredited investors. As a capital raiser coming in, if one is not certified, meaning if one is not a broker dealer, they are not allowed to get a percentage based on how much they raise. They are only allowed to get a set fee per deal,

which has to be discussed prior. So there's a lot of that people need to know before getting in. I highly recommend anyone listening to this before you get into that market study as much as you can. There are great books and podcasts that one can listen to. before getting into this. So at what point does it become regulated by the SEC? So I understand that if I'm raising money and I'm providing it as a security and people are getting equity in this deal, that's very clearly under the SEC. But I can also go take a loan from my friend and have this secured by a promise story note.

And that wouldn't be SEC. But are you very experienced when it comes to knowing at what point real estate secured loans are going to now be regulated by the SEC and all these rules fall in place. There's a long list of do's and don'ts, but also as a fund manager, I had to learn, you know, at what point does it become SEC regulated? So the fund cannot last for over a year. That's one thing. And then it has to be under 150 million before it becomes SEC approved, meaning before you

have to apply with the SEC, before you can apply with an exemption. So those are in terms of funds. those are things to know. But in terms of dues and don'ts, Kimblessa Taylor puts it all out there and you can check that book. I highly recommend that. What was that? I missed it. Kimb Lisa Taylor writes how to raise money legally. And Matt Faircloth also has a book, Raising Private Equity. Okay. So in addition to mistakes that can be made raising money for deals when you're not familiar with how to do it, what are some other mistakes that you've made in your journey that you've learned from, you can share with our audience. Oh, plenty. In terms of brokering deals,

I had to learn that I have to get the client to sign exclusive because it was a lot of wasting time there. I had clients that I dedicated my soul to. I would go around, show them properties. I've traveled like an hour away from my house to show them properties. I picked up myself up at any whim. I worked really hard on the client's behalf. And then they remember that their friend was a realtor, subtly. So that was one thing that I had to learn how to get the client's sign exclusive. At first I was like, oh, I don't want to. I'm like super committed and I'm working hard, which I do. I am. I'm super committed. I worked very hard, but not everyone's as nice as I am. So that was something that I had to learn really quickly. Let's dig into that one for a second before

I move on, but don't forget your thought there because this comes up a lot. I hear clients say, hey, with a listing, it's kind of understood that you're going to sign an exclusive agreement with the agent because they're putting some of their money into that deal too. They're paying for advertising and marketing and stuff like that. But with a buyer, it's not as clear how much the agent's going to pay. Like the gas and their time isn't value the same as when you're actually spending money for the sign in the yard and the pictures and stuff like that. Curious to get you both of your opinion. Well, we know Esther's opinion is that you recognize that you need to protect yourself by having your buyer client sign an exclusive

buyer broker agreement so that they were committed to using you and only you for a specific period of time. Henry, I don't believe you're in the real estate agent side. So I'm curious, as someone who works with real estate agents, what's your gut reaction when you hear an agent say, hey, if we're going to do this, I want you to be exclusive to me for the next six, 12 months, whatever it is. Yeah. So the way I look at it is this is a, it's a relationship between two people. And as an investor, when I go to buy or sell a property, I want somebody representing me who has my best interest in mind. And the more confident they are in our working relationship, the better they are probably going to do. And so I don't see a problem with that.

I like to sign my deals on a deal by deal basis, right? And so if we're talking about a specific property, I have no problem signing some exclusivity to you for that property so that you can do the best job you absolutely can for me in representing me with this property. That's just part for the course, man. I think that's very wise. here's what I think a lot of people don't understand. When they're an agent, they're afraid to tell the client, I want you to work just with me. And often that comes from they know that they're not giving their best. And so their conscience bothers them to ask for that because they know that this is not a priority for them. This fits in around the other things in life they have. And so many people take a part time approach to real estate that that comes up. They're not an Esther who's like, I will get in my car and drive wherever you need to go when you say, because Esther's that type of person. And then, I think clients don't understand that every relationship ends up being a two-way relationship, either or it becomes no relationship. There is no relationship that lasts where one party's happy and the other party's not.

So if you are sending the message to your agent that I am not committed to you, I will buy a deal with you if it works for me, but I will go use my cousin if I want and I'll go use another agent if I want also. That's probably why your agent's not saying whatever you need, I'll do it for you. They're not answering your calls late at night. They're not dropping what they have to go schedule. you, they're giving you the same effort that they feel that you're giving them. And that's just human nature. We all do that in everything, right? Like if you think your boss doesn't care about you,

you probably don't work that hard. If you think your spouse isn't trying hard in the relationship, then you stop trying hard in the relationship. It's just kind of common sense. But for some reason, when it comes to real estate, we throw common sense out the window and we act like human beings aren't that way. That's why I wanted to get both of your opinions on that matter. One thing I did start doing the end of my residential journey is that I would take them out once or twice before. asking them to sign the exclusive. So I'd give them a taste of what I can offer and show them how committed I am before I'd present them with those documents.

Yeah, just like you date somebody before you ask to go steady. Do people say go steady? Is that a, I don't know that that's, you know what I'm saying though, right? Before you ask to be exclusive, I don't know. Committed, yeah. You don't do it on the first time you meet somebody. You have to get to know them a little bit. Yeah, exactly.

Can't just get Facebook official right away, right? Facebook official. That's the new going steady. Oh, is it? I totally dated by somebody. myself by saying that. By the way, that was like, I heard that when I was in third grade. It's not like I talked that way all the time for the people that are wondering. They're like, that David got a shirt with a collar on it. Is he now talking all old school and fancy? So I just want everyone to understand

that. A lot of them are frustrated with what they get from a real estate agent. That is usually the agent's fault because the agent did not set clear enough expectations with the client. And then the client doesn't know what they should be asking for. But often if you try to be in an open relationship like that, you're going to get burned. You're going to be disappointed. They're not going to be just as committed to you. And Esther, I think that's very wise of you that you recognized. I am a person that gives everything I have. So residential real estate sales might not be the best for me because I can't get clients to give me everything that they have. Did that have something to do with why you moved into this capital raising space? That didn't have what to do with how I got

into capital raising, but the commercial space also has those challenges. And I can write a book about this, just, you know, the disappointment of how many people you work with and how often you work on a deal that doesn't, and the client doesn't come through. That's a whole, another story. But getting into the capital space was, number one, it just came into me. It fell into my hands. And also, I think as a commercial realtor inventory is lower these days. I know people say you have to look out for it and you have to go find it. It is harder to find very, very good deals. So that was just another factor of me going into raising equity. And I just feel like I have that knack for it. I like connecting people. I like connecting people with money, people with properties,

people to people. I'm a matchmaker. So how about your portfolio? What are you and your husband and whatever other partners you have in that company? What are you guys buying and why? So these are properties that the main partner we partnered with was purchasing before. So it's office. Obviously location has to be right these days. Industrial is a very hot market right now. And triple net retail. Retail is also down, but triple net retail with long-term leases is something very desirable. And we look out for those. So you're looking for triple net. And so let's explain to the audience what triple net means from the commercial space.

It's pretty much the tenant takes care of all the responsibilities. They pay all their electric bills. They maintain the property. All the landlord does is receive a check every month, pretty much. Okay. So you go out and find these deals that fit a certain. certain criteria and then you go out and raise money for the deals as well. So the properties that we're purchasing, we have an equity partner already.

So we're not actively looking for more equity. I mean, I think we're going to get to the space that we're going to need to look out for more equity because at the rate we're going, things are happening so fast. But right now we have an equity partner. Okay. So in that portfolio, mostly triple net and then what else do you look for? Like what makes you go? That's when I want.

So right now that we realize that we have something going and things are moving so fast, we decided to only look at properties 5 million and up. We are looking at properties that are portfolios that are even up to 200 million, which is really exciting because, you know, this is all brand new and things are happening so fast. But what we look for is either a very good story where the property is vacant and it's in a good location or it can be partially vacant with upside or cash flowing and has a decent cap rates. So we're looking at the whole picture. It's not just the cap rate, not just the occupancy, not just the location.

It's the entire picture that we evaluate. And we're pretty opportunistic. So we're keeping our eyes and ears open. We just went under contract a few minutes ago, actually, at a mall in Indiana. So that's a new thing for us. That's cool. Yes. I'm actually the broker and the buyer on it.

So it's exciting. So what's your favorite kind of commercial property to buy? Because I know when COVID hit, everybody. was like, oh, no, real estate's going to crash. And then everybody was like, well, especially commercial real estate's going to crash, right? And so I know that's probably created some opportunities in the commercial space. So what do you like to buy the most there? The favorite asset is industrial right now because as retail, retail was going down before COVID, but I think COVID just made that happen quicker. So with retail going down,

the industrial market started booming because everyone was trying to sell everything online. We know Amazon's opening more places around. So industrial. in my opinion became the hottest asset. And as a realtor, I get a request almost every single day, people looking for industrial properties, especially around like large cities. People are moving all their inventory, and they're looking to expand their online businesses.

So 100% industrial. That's super cool. Now, you mentioned that you got into some single family properties, I believe is a short-term rental. Can you tell us the story of what happened with that one? So initially we bought this property because we were planning on expanding our home. So we bought this house to move into while we expand our home.

We figured it would take time. And the rent over here is very high. So we figured instead of renting another space and putting that money towards rent, it could take six months. It could take a year. We figured we'll purchase our own house and we'll move into it. Anyways, plans changed. We decided not to go ahead with the renovation.

And this is after we paid the architect and did all the plans. We decided not to go ahead with it because we live on a high slope. And just putting in heavy retaining walls would be so expensive. and we wouldn't even be able to expand that much more. So instead, we're building ourselves a new house. That's a side point. So we purchased this house for that reason. And once we realized that we weren't going to expand the house,

we decided to make it an Airbnb. We purchased the house for about 1.1. We put in $2,000 to $300,000. We added two bedrooms at a bathroom on the roof. We painted. We made it really, really nice. And a month later, the village outlawed Airbnb. in this area. So it's just a, we learned a great lesson. After putting in all that money,

and we furnished the place beautifully. It's a gorgeous, gorgeous properties overlooking the Hudson River, overlooking Manhattan. It's absolutely beautiful. But we learned a great lesson there. We just don't know what's going to happen. And I heard something someone said regarding Airbnbs, and that kind of clicked with me. They said that if you're going into the Airbnb business, going into areas that are already regulated because they won't make more regulations and you're not going to be caught by surprise. You're going into something that you have to follow the rules already, whereas to areas where the rules can change on you. I tell people that all the time, man. With Airbnb, if you can get into a market where the economy is already based on tourists coming

and living in vacation rentals, you're playing a safer bet than some of these other areas. Now, I think most areas are going to come around eventually to Airbnb and having it be more predominant in their cities and municipalities. But until then, the safest route typically is to find some place that's been doing this for years before Airbnb was a thing because their jobs in that area are based on this money. Like the infrastructure is. Like, they're not going to make that change. I think that's a big component that isn't being talked about. And that's why I'm really glad we're bringing it up here. I listen to real estate podcasts all the time, YouTube channels.

I don't hear anyone talking about someone who bought a house and then wasn't able to use it for a short-term rental. But it's going to be happening more and more. And it already is happening in a lot of places that everything can look great on the spreadsheet. And if that's the only thing you're using to make your decision, you can still lose money in real estate. And that's what I want to highlight is I pounding the drum. I know people may be a little tired of hearing it, but it's important. the rules of real estate, the rules of economics, the rules of how you build wealth in America are changing. They are printing more money. Regulation is changing. People are putting pressure

on politicians to create different rules and regulations. And there's things that you would think are completely intelligent and reasonable that out of nowhere, it's a village says we don't want Airbnbs for some reason. And the stigma may be that wealthy people buy short term rentals. And so we don't want to help them become wealthier. And boom, you've got a million dollar property that you just dumped a ton of money into that you're stuck with. Then you did nothing wrong. You know, what I want people to take from this is that you've got to think a step ahead of what's on the spreadsheet. What could change that would stop this plan from working? And what will my backup plan be? Do I have an exit strategy? Will this specific property work if I have to use it in a different

way than what I intended? And my fear, because the market is doing so good in so many places, everyone right now is crushing it. There's hardly anyone that's losing money is you start to like just get sloppy with what you do. Just people raise money and they go throw it into deals and they're like, well, it's going to go up in value. So we'll just refinance it if it's a problem. And sometimes the music stops and you can't do that. I mean, do you guys have a different perspective? No, I 100% agree, man. I was just giving a talk about this with some students who were looking to buy properties because they wanted to use them as Airbnbs and then around their college campus. And I told them Airbnb is great. There's two things you need to remember.

One, it's more the hospitality business than the rental property business. And two, Airbnb is great. Just make sure that your property has more than one exit strategy. If Airbnb is the only exit strategy and something changes, you can find yourself in a tough situation. But if you can still cash flow as a long-term rental, as a short-term rental, or if you sell it back on the market, then you're safe, right? Make sure that you're buying it at a price point that would allow you to have more than one

exit strategy. I think what you said, David, in general, in real estate as a whole is so important for people to know. I always tell people that I think that real estate's a really good investment. We have the tax benefits. You can depreciate your taxes. You can appreciate on the land. You have the fact that it's tangible is a very big factor in real estate. So I always tell people that it's a great place to invest in. But there are things that we cannot control. Look at what happened in New York now. You know, with the eviction moratoriums, people were taken by surprise. the government decided to do change the laws and push off the evictions and all the courts are closed.

So it's not just an Airbnb rental space, but it's in all a commercial. And those are things like I tell people going in, yes, real estate's a great investment, but there are things that cannot be expected or foreseen getting into any real estate investment. Yes. And that is why I always tell people, A, don't plan on just changing your active income for cash flow, because cash flow is wildly inconsistent. It's great. It's not meant to support you. You don't want to build your house on the foundation of cash flow from real estate

because anyone of us who's owned it for a decent period of time knows you might have a property. The cash flow is amazing for four years. And then the air conditioner goes down or the roof goes out. And the next two to three years of cash flow is gone replacing something that broke. Right. One tenant that you can't control trash is your place. And the turn is nine months of cash flow that's gone just to get it back to where it was before.

It's never good to build on something. that you don't control. And cash flow is something that a spreadsheet can give you an idea what to expect, but you don't have control. So I advise people, look at cash flow like a defensive metric. That is a thing that keeps that property,

keeps me from losing the property, but it's not where I'm gonna make my wealth. So look at real estate for purposes other than just cash flow. What are the tax benefits? Where is it going to appreciate? How good of a tenant can I get in an area like this that aren't gonna destroy it? And the second thing is,

always be preparing for the worst. You have to have money in reserves. So like what you guys were just mentioning here, laws changed such like New York City. Who saw this happening? No one could see COVID coming. No one knew that New York was going to just become completely trash and everyone was going to be leaving. Just like no one knew everyone was going to go to Florida. 10 years ago when we talked about Florida, it was just bugs and humidity and a swamp.

That's all anybody ever mentioned. Now Florida is like the mecca that everyone wants to go to, right? You cannot foresee these things happening. So don't beat yourself up if you invested in New York. Don't think you're a genius if you already own property in South Florida. Just make sure that you keep reserve set aside. So no matter what happens, you can survive while you pivot. There's always like a pivot.

Like Esther's got to figure out what am I going to do with this place overlooking the Hudson River that seemed like the smartest investment ever. It's Manhattan. Is there a better place to invest in our country than Manhattan, right? You can survive that if you give yourself some cushion. It's this new trend with a razor thin margin, paying way too much for properties just because you see everybody else doing it. Those are the people that are going to end up losing, in my opinion. 100%. Also, don't place all your eggs in one basket. Don't put all your money in one asset. Don't put all your money in one location. Even I love real estate, spread it out. Put it a little bit into tech or a little, a tiny bit in the stock market or into other investments. Put your eggs in many, many baskets.

So I want to try and experiment here. Henry, if you are going to invest your money with Esther, what would you ask her to feel good about, trusting in her and her company as the partner that you would use. Oh, that's a phenomenal question. I would want to know how many deals they have done previously. So what's the track record or the history? And then what? So let's start that. Why don't you interview Esther? Well, that'll be the first question. Yes. Esther. So how many deals or what kind of track record do you have on getting these syndications done? So I raise money for other people. I'm not raising money for myself. So I can talk for me about every single deal is different that the sponsors are presenting to me. I have people coming to me and asking me to help them find equity investors. So if I'm

looking at a property that doesn't mind bringing on another partner, I will look at it differently than a property that I'm raising from limited partners from. So from limited partners, I'm more picky. Obviously, it's my responsibility to bring a solid deal to my investors. So when I'm raising from limited partners, I'm going to vet the sponsor, 100%. I want to see, first of all, I want to see what type of person they are. That's super important to me. I want to see if they're honest. I want to see if they're transparent. I want to see if they're nice to people. Their character, that's number one for me. Once I like their character, I'll check their track record. If their track record checks off, you know, they've done properties in that area before. They've gone full cycle on a similar

properties. I'll check that. I want to see their whole portfolio and who they're involved with and who's the KP on the deal, the key principal, who's going to manage the asset, et cetera. So once I figure out the people, because I think that the sponsor is number one, then I'll check the actual deal. I hired a top underwriter to underwrite my deals. I hired a top, top mortgage broker who did about $1.5 billion this year. So he underwrites my deals for me because when I'm raising from limited partners, I'm going to do my utmost to make sure that I'm presenting my,

my investors with a solid with the best deal out there. I will not bring a deal to my investors that I personally won't place my own money in. And therefore, I also place my own money in to every single deal that I raise for. That's huge, man, because that's really what people, especially if they're going to passively invest, that's what they're looking for is some security, because you don't have any control over anything else, because all you're doing is giving the money. And so people want to know that If I'm giving you money that you would be willing to put money into because it provides that comfort people are looking for. Right. I also am very transparent.

I raise per deal basis. I'm not doing a blind pool fund where people just hand me money and they're like placed or wherever. It's very intentional. It's very specific. It's very transparent. They get to see everything. I'm not hiding anything from them. They get to decide where to place their money.

So I'm going to be doing a Delaware series LLC where I can have several SPVs within one fund. It's like a buffet of opportunities. for people to invest in. Actually, I'm putting on my first deal on the fund. My fund's fairly new. So I'm putting on my first deal, hopefully one of these days. I actually have two opportunities coming up. So I would have investors that can see the opportunities. And once I verify that they're accredited, because my fund's going to be a 506C, they have to be accredited investors. Then they can see the opportunities and decide where and how much they want to place into each deal. Awesome. So transparency is something you want to look for in someone who's looking to

connect the money to the deals. So you want to be able to understand what each deal looks like and what exactly I'm getting into. And what you said that I like is you're vetting the sponsor because you don't want to put people into business with someone who you wouldn't want to go into business with, correct? Yes, 100%. I think the sponsor is always the most important part of the deal. A great sponsor could take a horrible deal and turn into gold and vice versa. Any other questions you'd have, Henry, before we move on to the deal deep dive? No, man, I think that's it, man. Just trying to understand how you're going to connect my money to something that's going to make me money.

And kind of one of the other questions I had, which I'm sure gets ironed out on a deal-by-deal basis, but other investors are going to want to know, how do I get paid? When am I getting paid, right? That can vary from deal to deal, right? Exactly. It does vary from deal to deal. And I act as the intermediary where I provide all the reports to my investors that are coming from the sponsor. I provide all the reports.

and it is a deal-by-deal basis. I also go off the waterfall of the sponsor that I'm raising for. So is it the responsibility of the sponsor of that deal to iron that out with the investors? Or are you getting that information from your sponsors and relaying that to the other? Exactly. I'm relaying the information to the investors. You know, I have one question I want to ask you, Esther, before we move on. It has to do with the person listening to this that's thinking, you know, I think I probably

want to invest in someone else's deal, maybe to get started, right? I'm just not comfortable with the market. going up this fast or with like David was just saying all this change that's happening. I'm going to go with an experienced person until I feel some, some sort of sanity returns to the real estate market. And I actually think that's wise in many people's cases that I like investing in boring environments personally. I like to know what to expect.

I like to know that this can be repeated. As things get chaotic and wild, you need more experience to stay in that market. If you're not able, if you don't have the reserves, the experience, the resources, It's not the worst idea ever to say, I'm just going to keep saving and I'm going to wait until I know what to expect. But you want your money to be doing something for you in the meantime, right? So what advice do you have for the person who's trying to figure out? Well, I want a big return, but I know that comes with risk. This operator could lose money.

That's something people need to understand in syndications is that you're getting the upside, but you're also getting the downside. You're not protected versus borrowing somebody on like a note where even if the investment does poorly, you can still set that up where it can be personally guaranteed by the person that you lent the money to. And maybe you're not getting as big of a return, but you are getting more of a safer bet that you're going to get your money back. How do people make that decision when it comes to how risky they want to go? So number one, every investment is a risk, right? Always. Anytime you put your money into an investment, there's risk there.

Some investments offer more risk than others. That's why I like real estate because most of the time the income and expensive. are sort of predictable. So we can kind of expect, you know, what's going to happen. Sometimes we're in for a surprise. Like you said, the roof goes out, the HVAC goes out. You never know. But when evaluating, first of all, also when people invest in as an LP, I kind of recommend investing as an LP, especially when you're getting started. You want to take a backseat while you're investing. So I always tell people, when you're just getting started into real estate, start investing as a limited partner, but be that active limited partner where you're asking questions. You're doing

your due diligence. You're finding out information. So you're watching what's happening, but you're observing a learning. So I just wanted to throw that in there. In terms of risk tolerance, I think everyone has to, I kind of evaluate with people and people have to evaluate that for themselves as to what they can handle. And also the term of the investment. Do people want to go into ground up? Ground up is a longer term. It's more risky and it offers better returns. versus a steady cash flowing property that has less risk per se. I mean, obviously it depends on the condition of the property and the look, you know, so many factors.

It's cash flowing. And the least term is generally three to five years where ground up may be longer. So everyone has to evaluate what works for themselves. There's also a property that was pretty cash flowing, newly built, but the returns were lower. So would you prefer lower returns, more risk? Longer term, I think it's everyone has to evaluate that with the person that they're investing with. Henry, any insight you want to offer there? Yeah.

I like what you said about understanding the risk. And so if you're going to consider being a limited partner, right, communicate the things or the risk tolerance that you have to someone like you who can help connect them to a deal that fits their comfort level. Right. And the other thing that you said that I really liked was that if you want to get started as a limited partner, be that active limited partner. And kind of how people can do that is when you are when you are a limited partner in a fund like this, a lot of the times there's going to be a yearly or a quarterly or a, you know, a semi-annual meeting where they're going to go over some things. And you can be in those meetings and ask questions. There's also usually reports that come out that report on the assets that you're invested in and how well they're doing. And so if you're actively looking at those and then actively asking questions to learn why decisions are being made or what's happening, you can start to learn some of those things so that you can go do some of these on your own.

And I'm always happy to explain to the investors or to anyone interested, you know, the process of what's going on and what to look for. One of the reasons I decided to start a private equity fund was I'm coming from the education field and I love teaching people and I'm passionate about this. I absolutely love the idea of commercial real estate and investing in it. And I love teaching. So for me, I figured this is a great opportunity to be able to teach people about investing in real estate. So I'm happy to answer anyone's questions. I love it. People have to know, right?

They got to know that someone's there looking out for them. So ask the questions and you'll get the guidance you're looking for to learn. Good stuff. Let us move on to the next segment of our show, the deal deep dive. This is the area of the show where we will dive deep. deep into one individual deal that you have done. Ms. Esther, do you have a property in mind we can use? So since we're talking about raising equity and syndicating,

I'll discuss the latest deal that I syndicated as a co-GP. Sounds great. First question, what kind of property is it? It's a Texas multifamily apartment complex, garden style, and San Antonio. All right. Second question is, how'd you find the deal? So the team was actually eyeing this deal for a while. It was on the market, but the price was very, very, very.

high. So we put it in an offer initially and the offer wasn't accepted. The property remained on the market for over a year. Several times we revisited the property, but the seller refused to lower the price. Eventually, after a year or so, the seller and the broker came back to us because they knew that we were looking out for this property and they came at the price that we had originally offered. All right. And how much did you end up paying for the price or the property when they came back to you. So we ended up paying about 10.7 where they initially wanted over 12. So we waited it out. Awesome. So the next question is actually, how did you negotiate it? You kind of covered a little bit of that, but did you do any extra negotiating after they came back to you? We didn't negotiate. We kind of went in for

the price that we initially offered. Was there any though, like did you go back and say, hey, based on inspections or based on our due diligence, did you change anything? Based on whatever we thought we can pay for it, that was our offer. And we didn't negotiate further. We just gave our final offer. And they ended up coming back and agreeing to that price. So there wasn't that much negotiation here. And then you closed at the $10.7 million then. Exactly. Okay.

How did you fund that property? So that was a syndication. We took a bridge loan and then we raised private equity from about 30, 40 sponsors. We raised about $3.5 million. Awesome. So what did you do with it? And I know it was for a syndication. But sometimes for these syndications, there's like a five-year plan or a, you know,

kind of what was the plan for that property? So the property, the plan was to increase rent. When we bought it, the occupancy was about 90%. So the goal was to increase rents after doing some renovations. So the property needed some interior and exterior capex, some renovations. So we were fixing the roof currently. Things are going as plans, going great. We're doing some interior work from the ceiling to the floor, cabinets, trims, et cetera. And on the outside, landscaping and roof, pier and painting the outside, just making it really nice. So that's going to, so there's some value add there and increase occupancy and raise rents. And then you'll rent it or you'll keep it and hold it or will you sell it? So the plan is to hold it for five years and then sell it. But we may sell it earlier than five years. Yeah, that's happening a lot these days with what's happening with prices and how much competition there are for these cash flowing assets. Exactly. So what was the final outcome? How did it turn out? So there were a lot of challenges involved.

Especially once we got into the property, we realized that there was a 90-page report of violations with about 20 liens that we had to go fight. But we committed to clearing those lanes no matter what it took. So thankfully, the seller cleared most of them himself before he sold the property, but there are still some liens that are present. But with the illegal team and the lenders, we were able to still purchase the property with several liens that are on. The money's in escrow. Whenever these people come and sign, they'll receive their money. But we have the property. So that was quite a challenge. Awesome. So what lessons did you learn from this deal? Well, persistence. Keep to, persistence. Keep to, you know, what works for you. Don't pay more for something that you cannot afford. Also, you know, just treating people's money like your own. You know, you're going into a deal with money that's coming from limited partners. You want to ensure that you're providing value on their money. And, you know, you're going into a deal with some money. You know, you're going into a deal with money. You know, you're. You know, you're doing right by their money. That's another lesson we can learn. Also, perseverance. We decided to go for that property no matter what the challenges were with the property. And we went for it. It's a great

property. It's going great. I am thankful that I partnered with amazing sponsors. I trust them. They're working hard. We're together. We're making this happen in a great market. All right. Thank you for sharing that. Deal, Deep Dive. We're now going to move on to the next I'm going to have a show. It is the... It's time for the fire round. All right. In this segment of the show, we take questions direct from the Bigger Pockets

forums and ask them here. So if you would like to be on the podcast, get in the forums and start asking questions. Henry, I'm going to let you take number one. Awesome. Question number one in the fire round. I am a newbie and I want to raise private money to buy deals. How can I do it? So number one, you need to associate yourself with a good SEC attorney.

like I mentioned. And together you can form a PPM, which is a private placement memorandum with exact rules of how you would go about the property and the raise and what you're offering, what returns you're offering. So that would be number one. And then make sure your numbers are right, that you can actually provide what you're promising. Sounds good. Question number two. How do you help manage expectations from deal to deal? Is it with clear documents and upfront communication. Communication is key. I'm a speech-language pathologist. I have that communication backgrounds. I think most of the issues that do come around are from communication, but like you said, also have everything in writing. Everything has to be clear from the beginning. Always state your point

upfront. Don't wait for later on to change things. Have everything clear from the beginning. Awesome. Question number three. What are some resources to learn more about the rules of raising capital. I know you mentioned a couple books earlier, but what else is there? There are some great podcasts that talk about raising capital. And it's not being afraid to ask questions. Before I started my funds, I spoke to about 14 SEC attorneys. I decided, once I decided to go ahead with starting this fund, I wanted to know everything I need to know before getting evolved. So I read those books. I listened to podcasts. I asked a ton of questions. I read a ton of documents. There are some groups that you can join that are focused on raising capital. Do all of

those. You know, you want to know what you're doing a thousand percent before you get into taking someone else's money and put place to get somewhere. Okay. Last question in the fire round. Which areas are you most bullish on when it comes to choosing where to invest? That's a great question. Well, are you talking about an asset? Which assets? I think they're asking about which areas should you be looking for assets in. Okay, so I think right now we have Texas being really hot. Arizona's pretty hot. Florida, like you said. Literally. Those are very, very hot in the states. Literally and theoretically, investment wise. Yes, you do want to invest in those landlord-friendly states. All right. Awesome there. Okay. It is now time for the last segment of the show.

So The Famous Four, where we ask the same four questions every single week to every guest that we have. Question number one, what is your favorite real estate book? So now, like I said, I'm willing to raising equity and funds is all I'm about. So raising private capital by Matt Faircloth and how to raise money legally by Kim Lisa Taylor. Those are my go-to bibles right now. Awesome. I love Matt E.F's book, man. I love that book choice.

So second question, what is your favorite business book? So I think business is all about mindset and how you act in a personal life, kind of translate to how you act in business life. So the books that I like that make me feel like a better person in general, whether it's between people or or in business is a new earth by Eckartoli. And he also has a book called The Power of Now. That's what I was trying to remember. The Power of Now and a New Earth by Eckartoulli.

He tells you how to live in the present moment and how to just stay with a task at hand and whatever you're doing, be fully, fully present. It's a challenge for me as a mom of eight. I have children and I have businesses going and have so much more going on. We're also building a new house and some spec homes, which I didn't even discuss.

It's so important for me, especially to be present with the task at hand. Also, there's a book called Feeling Good Together by David Burns. It's actually meant for marriage, but it's also discusses how to communicate with people and how to work together on a team, how to build a team and maintain a team through communication. So I actually highly recommend that book. Awesome. And I know we're in the fire round, but you just skirted something past us real quick that I think people should hear. You're a mom of how many? Of eight children.

A mom of eight. And you still found time to get involved in real estate and learn how to do this and build a business that's. successful. So that's amazing, man. People can really do this. Yes, 100%. Could do some of what I'm doing. And the next question is, what hobbies do you have? Like I just said, I'm a mom and I work like a crazy lady. So I have no hobbies. As crazy as it sounds, raising equity became my latest hobby. I actually love it. I love the thrill of it. I love the challenges. I love challenging myself. I'm super goal oriented. I want to see how much I can achieve. So that, as crazy as it's sounds became my latest hobby. And otherwise, it's whatever my kids' hobbies are. Those became mine,

too. So I really have no latest hobbies otherwise. I have kids. I understand. All right. Last question from me. In your opinion, what sets apart successful investors from those who give up, fail or never get started? So number one, successful people take no excuses, whether your personal fitness or, you know, raising kids or in business, there are no excuses. Get up and go. Cut the excuses. That's number one. We take responsibility.

The blame word doesn't exist. We do what has to do. We're solution-oriented. We're goal-oriented. And we don't get easily discouraged. So even if things don't work out as planned, which happen very often, like how Elrod says, you're allowed to sulk about it for five minutes. But then no more.

You move on, you get on, you brush yourself off, you pick yourself up, and you move on to the next thing. I love it. I love it. I agree 100%. So tell people where they can find out more about you. I am all over social media. You can find me on LinkedIn. I'm pretty active over there.

I'm on Instagram as SD Loewin-Bine. I'm on Facebook. You can reach out to me on any of those platforms. And I'm happy to answer any question you have. Thank you very much, Esther. Henry, where can people find you on social media? Yeah. best place to find me is on Instagram. I'm at the Henry Washington on Instagram. You can reach out to me there.

Wonderful. And I am on all of them at David Green 24. So Esther, any final words for we get out of here? I'm so excited to be here and just getting started. My journey is just getting started. And if anyone wants to hop along and join and learn along the way, I'm here to help. All right. Awesome. Well, thank you very much for sharing what you did, especially I love that, you know, you showed that even very successful people still have the ball bounce the wrong way sometimes with your Manhattan property and giving us the opportunity to share with people that it's not all roses, but it is usually all good. You can stay in the game for long enough. And also, Henry, thanks to you as well for some pretty amazing support. All right, we are going to wrap this one up. This is David

Green for Henry Washington. Signing off. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube. Apple, Spotify, or any other podcast platform, our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment

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