Info

Capital Gains - Capitalism.com

How do you go from comfortable affluence to real wealth? Listen to the Capital Gains podcast, by Capitalism.com, with host and professional real estate investor Jonathan Twombly. In interviews with top professionals, we'll discuss alternative investments you might not have known about that can help you go beyond merely obtaining a passive income to growing your asset base and becoming truly wealthy.
RSS Feed Subscribe in Apple Podcasts
Capital Gains - Capitalism.com
2018
January


2017
December
November
October
September
August
June
May
April
March
February
January


2016
December
November
October
September
August


All Episodes
Archives
Now displaying: Page 1
Jan 2, 2018

Full show notes at https://capitalism.com/

D-Class properties can appear to be an unattractive asset class to many investors.

But while they can often seem risky, the requirement for low-income housing continues to rise in America, and with the right property management strategy they can be highly proffitable investments.

Listen to today's show to hear how Tyler Sheff has successfully invested in D-Class multi-family properties.

He explains how to find these D-Class property opportunities in the first place, how making changes that improve the lives of your tenants increases profit over time, and what to look out for in these alternative assets.

Key Takeaways

  • What D-Class properties are and why they are a good investment opportunity
  • Converting D-Class properties into a safe, clean places to live
  • How making the lives of these marginalized tenants better can also be profitable

Connect with Tyler Sheff

Hear more from Tyler at cashflowguys.com.
On Facebook
On Twitter
On LinkedIn

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

--> Subscribe to the Capital Gains Podcast on Apple Podcasts <--

Dec 26, 2017

Full show notes at https://capitalism.com/

You can organize your schedule how you want. Rod uses a paper planner that contains pictures that have been in there for 19 years. Some are pictures of material items (like cars) that he wanted and ended up purchasing because of the success he gained. Some are pictures of the people he is grateful for, like his children.

That paper planner focuses Rod on what he wants, not what he doesn’t want. If you don’t want conflict, focus on how you can help make peace. If you don’t want to be in debt, focus on how to make money.

Visualize what you want and give yourself a clear explanation of why those things matter to you and visual reminders you won’t escape. This means that even with major setbacks - like the loss of wealth from an economic crash - you have the right mindset to build back to success.

Key takeaways:

  • Having the right mindset is essential for success
  • Put time into determining what you want to do in life
  • Stay focused on what matters
Dec 26, 2017

Full show notes at https://capitalism.com/

You can organize your schedule how you want. Rod uses a paper planner that contains pictures that have been in there for 19 years. Some are pictures of material items (like cars) that he wanted and ended up purchasing because of the success he gained. Some are pictures of the people he is grateful for, like his children.

That paper planner focuses Rod on what he wants, not what he doesn’t want. If you don’t want conflict, focus on how you can help make peace. If you don’t want to be in debt, focus on how to make money.

Visualize what you want and give yourself a clear explanation of why those things matter to you and visual reminders you won’t escape. This means that even with major setbacks - like the loss of wealth from an economic crash - you have the right mindset to build back to success.

Key takeaways:

  • Having the right mindset is essential for success
  • Put time into determining what you want to do in life
  • Stay focused on what matters
Dec 19, 2017

Full show notes at https://www.capitalism.com/

Justin Cooke used to build online businesses himself. But after selling some in an effort to scale up profits in his line of work, he stumbled into a new field: creating and managing a marketplace for buying and selling the type of businesses he had been making.

Through his Empire Flippers marketplace, Justin connects sellers of online businesses with buyers. It’s a business that is still in its infancy as the market for the trading of online businesses - sources of passive cash flow for savvy investors - continues to grow.

Taking a number of cues from real estate, Justin shares with us the past, present, and future of online businesses as investments.

Key takeaways:

  • Online businesses can be a great investment for wealth growth
  • Trading in online businesses as assets is like trading in real estate
  • The market is in its infancy, with lots of exciting growth ahead

Connect with Justin

Hear more from Justin at https://empireflippers.com/podcasts/.

On Twitter
On Facebook
On LinkedIn

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

--> Subscribe to the Capital Gains Podcast on Apple Podcasts <--

Dec 12, 2017

Justin Cooke used to build online businesses himself. But after selling some in an effort to scale up profits in his line of work, he stumbled into a new field: creating and managing a marketplace for buying and selling the type of businesses he had been making.

Through his Empire Flippers marketplace, Justin connects sellers of online businesses with buyers. It’s a business that is still in its infancy as the market for the trading of online businesses - sources of passive cash flow for savvy investors - continues to grow.

Taking a number of cues from real estate, Justin shares with us the past, present, and future of online businesses as investments.

Key takeaways:

  • Online businesses can be a great investment for wealth growth
  • Trading in online businesses as assets is like trading in real estate
  • The market is in its infancy, with lots of exciting growth ahead

Connect with Justin

Hear more from Justin at https://empireflippers.com/podcasts/.

On Twitter
On Facebook
On LinkedIn

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

--> Subscribe to the Capital Gains Podcast on Apple Podcasts <--

Dec 5, 2017

Charles Hugh Smith wonders if we will have enough paid work in the future, and what will happen if we won’t.

Automation is becoming more and more widespread, but does it offer a sustainable economic model for the future?

Today’s episode of Capital Gains offers a glimpse of Charles’ provocative alternative system, as well as his thoughts on what the smartest investing approach is to an economy attacked by massive deflation.

As an investor, you have to ask yourself what’s tradable and what’s not. In the future, there will still be an economy for high-touch value services that AI cannot provide.

Learn from Charles Hugh Smith what the advantages of cryptocurrencies are and choose to be an active, disruptive participant.

Full show notes at http://capitalism.com

Key takeaways:

  • Where should investors put their money before automation takes over
  • Key advantages of cryptocurrency
  • A promising alternative economical system

Connect with Charles Hugh Smith

On Facebook
On Twitter
On Linkedin

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

--> Subscribe to the Capital Gains Podcast on Apple Podcasts <--

Nov 28, 2017

Investing in real estate for the first time can be daunting. But with expert advice, there’s no need to go in blind.

On today’s episode of Capital Gains, we are joined by Joe Fairless, real estate investor and host of the world’s longest-running daily real estate podcast “The best real estate investing advice ever”.

Joe will be sharing his advice for taking the leap into multi-family investment properties, and how to choose the right investment options for you.

Key takeaways:

  • How to move from single-family homes to multi-family property investments
  • How master lease investments can be beneficial
  • The key to knowing where to invest
  • Investing in a value-add property
  • The best real estate investing advice ever

Connect with Joe Fairless

You can tune in to Joe’s daily podcast at www.joefairless.com

Joe Fairless on Twitter
Joe Fairless on Facebook

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

 

--> Subscribe to the Capital Gains Podcast on Apple Podcasts <--

Nov 21, 2017

Real estate investment is in an awkward time at the moment. There have been great returns for the past eight years, but there is now a lot more volatility.

With many investors predicting an impending correction or recession, is now really a good time to be putting money into real estate?

On this episode of Capital Gains, we’re joined by the managing principal and co-founder of Alpha Investing, Ross Reagan.

He explains how his company helps clients find real estate investments that stay valuable even in a downturn. He also shares how senior homes and self-storage are the investments to be making—if you want your investments to be recession-resistant.

Having built Alpha Investing from the point of view of an investor, Ross and his team give all of their clients the personal touch. Building trust in relationships has helped Alpha Investing to grow organically.

Hear how you can make your first investment into this space, and how you can make cash flow no matter what the market does.

Key takeaways:

  • Investing for an impending economic downturn
  • Senior housing and self-storage as recession-resistant investments
  • Building trust between investors and investment managers

Connect with Ross Reagan

Go to www.alphai.com for more information on private equity real estate investments.

Ross on LinkedIn

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

Nov 14, 2017

First-time investments can be daunting, especially for the risk adverse. But understanding the real estate market and the types of investments available will help you make the best choice.

On today’s podcast Capital Gains host, Jonathan Twombly, is interviewed by Okeoma Moronu for The Happy Lawyer Project podcast.

Jonathan shares his insight into the real estate market and how you can make a safe, sound investment that, given a little time, can offer a great return on investment.

Key takeaways:

  • The benefits of real estate investment
  • Is buying a home a good real estate investment?
  • The difference between an active and passive real estate investment
  • Making an investment as part of a syndicate
  • What return can you expect from real estate investment?

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

Connect with Okeoma Moronu

Find more episodes of The Happy Lawyer Project podcast at TheHappyFamilyLawyer.com

On Twitter
On Facebook
On YouTube
On LinkedIn

Nov 7, 2017

Full show notes at https://capitalism.com/can-control-investments-financial-freedom-w-jake-stenziano-gino-barbaro/

When Jake and Gino met in 2010, Jake was working in pharmaceutical sales and Gino was running a restaurant. They both knew they could do more.

After discussing their mutual interest in real estate investment, they came together to make a partnership.

In this episode of Capital Gains, Jake and Gino discuss why multifamily apartments are the best investment option if you want control over your assets, the three aspects of investment which you have to get right, and how to source the best deals.

They knew when they started that they wanted to create wealth and gain financial freedom.

By building their business over the past few years, they have both reached a point where financially they don’t have to work, but they love doing it.

Discover how to make huge gains in multi-family investments by listening to the podcast, and hearing how Jake and Gino have done it.

Key takeaways:

  • Why you have more control over your investment with multi-family apartments
  • The three things you have to do right when investing
  • How to source multi-family investment deals

Connect with Jake and Gino

Visit Jake and Gino’s website at www.jakeandgino.com.

On Facebook
On Twitter
On LinkedIn

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

Oct 31, 2017

There are plenty of traditional long-term investment opportunities out there, but where do you look for something different? Is it possible to invest without paying the fees for an active manager?

Global X Funds has a solution which allows you to personally track your investments using Exchange Traded Funds (ETF). It is the latest technology within asset management.

In this episode of Capital Gains, we talk to Jay Jacobs, Global X Funds’ Director of Research.

He tells us how picking an asset class isn’t the only option you have as an investor. They look at themes and trends, diversify the pool your investment goes into, and generate a huge profit for you.

Their approach throws out the rigid grid of asset classes and looks at what themes will be disrupting the economy over the next couple of decades.

Listen to how you can change the way you invest and don’t forget to subscribe for more great content on making the most of your money.

Key takeaways:

  • Exchange traded funds - the latest technology within asset management
  • Investing in themes based on demographics
  • How analyzing data can predict future profit

Connect with Jay Jacobs

For more information on Global X, head to https://www.globalxfunds.com/research/

Jay Jacobs on LinkedIn

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

Oct 24, 2017

Blockchain is the technology behind cryptocurrencies and allows any two parties to send and receive money and value without the need for intermediaries.

In this fast-growing market, how do you identify the true investment opportunities over all the hype?

William Mougayar is an investor, researcher, and advisor who is an expert in blockchain and cryptocurrencies.

In this episode of Capital Gains, he explains why you shouldn’t believe everything you read and discusses the two major players - Bitcoin and Ethereum.

Hear how blockchain is less risky than our regular banking system, and William’s predictions on the future of currency worldwide.

Key takeaways:

  • Removing intermediaries from transactions with blockchain technology
  • The financial growth of the blockchain market
  • Bitcoin vs. Ethereum - the two dominant blockchains and investment implications

Connect with William Mougayar

For more information on making the right investment decision with cryptocurrency, go to William’s blog at http://startupmanagement.org/blog/

William Mougayar on Facebook
William Mougayar on Twitter
William Mougayar on LinkedIn
William Mougayar on Medium

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

Oct 17, 2017

Michael Blank believes in the law of the first deal. Once your first deal is done, the second and third come easily.

On this episode of Capital Gains, he explains why multi-family properties are like an ATM machine.

It doesn’t matter how much you earn or how much you have in the bank, the key to being financially free is to generate a large passive income. Michael talks about how to achieve this, and how he is coaching others to as well.

When he was in his mid-30s and working in the software industry, he read Rich Dad Poor Dad and it shifted his entire mindset. He threw away his career and started focusing on earning a passive income from real estate.

Michael began by flipping houses, but his big idea was restaurant franchises. His idea was to plow his net worth into restaurants, but it didn’t go well. He lost 95% of his net worth, and describes that time as a “very painful process”.

He calculated that he would need 50 houses to make a great passive income. That was too many transactions. Michael reevaluated his strategy and started focusing on multi-family, and made his first deal in 2011.

Key takeaways:

  • The law of the first deal: Once your first deal is done, the second and third come easily
  • Why multi-family properties are like an ATM machine
  • Real estate investment without the tax burden through IRAs

Connect with Michael Blank

Head over to Michael’s website for more information and coaching on investing in multi-family properties: http://www.themichaelblank.com/

Michael on Facebook
Michael on Twitter
Michael on YouTube
Michael on Google+

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

Oct 10, 2017

Ken Courtright is the founder of Income Store, the company which helps home or business owners to purchase assets outside of their business for a second stream of income.

The team builds and buys websites which creates a passive revenue for the owner. Managed by Ken’s team, they help to generate a 50% return on the initial funding.

After owning videos stores which declined in profitability, Ken vowed to never put his family through the stress of only having one stream of income again. He wrote a book on business growth and was given the idea to put the content onto a website in tiny pieces to build a site of authority.

It took 90 days to build his own website, and within six months he was ranking higher on Google than some of the big consultancy firms. That’s when he knew he was onto something.

All money generating sites Income Store manages are built using the same model Ken used initially. When up and running, they create a big passive income for his clients.

In this episode of Capital Gains, Ken tells us why authoritative websites equal financial rewards.

Key takeaways:

  • Creating a second stream of passive income through an authoritative website
  • Why good online content creates a good business
  • Growing a passive revenue through an online asset

Connect with Ken Courtright

For more information on generating a passive income from being an authority online, head over to www.incomestore.com, or connect with Ken by visiting www.kencourtright.com.

Ken on Twitter
Ken on LinkedIn

Connect with Jonathan Twombly

Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

Oct 3, 2017

If you haven’t yet invested in commercial real estate, there’s a huge cash flow which you could be missing out on.

Real estate has been a cornerstone of wealth generation for a long time, which is what prompted Jilliene Helman to create RealtyMogul.com.

It is now possible to make a generous passive investment without being an accredited investor thanks to the technology which Jilliene has developed.

Realty Mogul came from a belief that more people should have access to commercial real estate, and since being established five years ago they’ve grown to a marketplace of 125,000 investors and have completed $300m in transaction volume.

How do you take the first step into this kind of investment? Jilliene and her Investor Relations team have one on one communication with investors to help you, and she shares with us some advice on how to make a big return from commercial property.

Key takeaways:

  • What is passive commercial property investment?
  • The growth of crowdfunding
  • Market trends and advice to commercial real estate investors

Connect with Jilliene

Go to RealtyMogul.com for more advice on moving into commercial real estate investment and to sign up for your free account.

Jilliene on Twitter
Jilliene on LinkedIn

Connect with Jonathan Twombly
Find more great content from Jonathan at www.twobridgesmgmt.com.

Jonathan Twombly on Twitter
Jonathan Twombly on LinkedIn

-> Subscribe to the Capital Gains Podcast <-

Sep 26, 2017

Entrepreneurs looking for lucrative and impactful investments have an opportunity to solve the mortgage crisis and make massive gains.

Serial entrepreneurs Rick Allen and TJ Osterman are seizing that opportunity. They believe in this real estate investment strategy so much that they’ve built an online tool to help other investors get in the game.

In this episode of the Capital Gains podcast, Rick and TJ show how it’s achievable by detailing their own success and explaining the process for other investors who want to enter this lucrative market.

Why Invest In Non-Performing Mortgages?

For the past five years, they have been purchasing non-performing mortgage loans and returning double-digit profits. Not only that, they have given low-income families the opportunity to keep their homes removing the stress and low confidence that comes with being on the brink of a foreclosure.

Purchasing these seemingly unattractive loans is an opportunity that more and more investors are exploring, and there are educators, resources, and technologies which open the world up to anyone interested in moving into this attractive space.

But, how easy is it to get into? Rick and TJ talk to us about the strategy, how to make that strategy successful for you, and making social responsibility a component of your business.

Earning A Substantial Yield from Untapped Inventory

Five years ago, Rick and TJ were offered the opportunity to purchase their first small balance mortgage loan when a bank agent called them and asked if they wanted a frame duplex. The property had $100,000 of debt attached to it, but they took a chance and bought it for $8,400.

The first five properties they invested in within this market went so smoothly, they couldn’t believe how easy it was. They were contacting borrowers and offering to take their vacant properties off their hands, arranging foreclosure agreements, and paying them for their time.

In one case Rick and TJ acquired a vacant property from a lady who was happy to hand over the keys in lieu of foreclosure. They gave her $100 for her time and sold the property for $28,000.

From contacting the borrower to selling the house, the whole process took 15 days.

The discounts on a mortgage note can range anywhere between 20-50% and can cost from $25,000 to $150,000. Why are the discounts so big? Because no institution has the ability to handle them.

The discounted purchase of the mortgage means that Rick and TJ are able to offer a lowered rate for the borrower. In this episode of the podcast, they say that they have sometimes initially been out of pocket as they work to build the trust with the borrower.

But because of the cut-price they paid out, in the beginning, they are able to create an affordable home for the borrower and still make a double-digit profit from their investment.

Creating Affordable Home Payment Plans For Struggling Americans  

Rick and TJ soon learned that the reward from investing in mortgage notes was more than just financial.

The unexpected but emotional impact of helping buyers to keep their homes was huge. Rick and TJ are passionate about their business because it has the ability to improve the lives of thousands of homeowners. That’s why they launched paperstac.com.

Rick and TJ created paperstac.com to help people find buyable mortgage notes. With around $400bn of unpaid principal balance non-performing loans still waiting unclaimed, it’s a market with massive financial and emotional gains to be had.

Borrowers have had the fear of losing their home hanging over them, and investment serves as an opportunity to remove that fear with an affordable housing plan. The pair has the goal of saving 10,000 low-income family homes in the future. Learn more in this episode of the Capital Gains podcast.

Connect with Rick and TJ

Visit CloudCapitalManagement.com for more information on their fund if you are interested in learning more as a passive investor.

Check out Paperstac.com where you can buy and sell mortgage notes and learn more about what’s available.

More to come soon on the Money With Meaning website: mwmfund.com

Richard Allen on LinkedIn

Richard Allen on Facebook

Richard Allen on Twitter

TJ Osterman LinkedIn

TJ Osterman on Twitter

Papterstac on Twitter

 

Connect with Jonathan Twombly at www.twobridgesmgmt.com

Jonathan Twombly on Twitter

Jonathan Twombly on LinkedIn

Sep 19, 2017

In 2006, a year after selling his first successful internet business, Mark Daoust was on the verge of going broke. No savings, no rainy day funds, nothing for retirement.

Since successfully exiting his first venture, a content-based website called Site Reference, his next projects had not been working out and was hemorrhaging money.

It was at this point, on the brink of pennilessness, that the sale of his friend’s web hosting business was closed - a deal he had brokered after the experience of selling his own company the previous year.

With the commission he made from the sale, Mark went on to start Quiet Light Brokerage, Inc., a marketplace for buyers and sellers of internet businesses, which has conducted over $100million in business transactions over the last 10 years.

Mark discusses the returns available to buyers of existing internet businesses, as well as the risk that comes with buying them. He also shares some very important guidelines for both buyers and sellers of online companies.

Listen in for Marks’ stories and advice after his 10 years in the business. They include a lawsuit and some of his favorite deals that Quiet Light Brokerage has put together.

Lessons learned in the early days

When selling online businesses, finding buyers is the easy part, says Mark. Investors are always looking for new opportunities, so building up that side of Quiet Light Brokerage was less of a challenge.

The more difficult part in the early days was preparing a business for sale. It’s an area that business owners looking to exit often don’t get right. This was one of the most important things Mark learned early on - understanding what motivates buyers to buy and what information they need to make an acquisition.

Sellers are often very proud of the products and systems they have built and focus on these areas during the sale. However, buyers are interested in making a return on their investment and so the information sellers present needs to be shown through that lens.

So Mark and his team set to work making more compelling cases for their clients. That meant showing more than a simple P&L statement. It meant monthly reports going back three years, dissecting the accounting and financial sides of the business.

It also meant highlighting the growth potential and analyzing the threats that the company faced.

And finally, it was about communicating what the asset was and why it was worth investing in. Online businesses are all cash flow based -- there is no physical asset that you can sell if the business fails --  and so presenting it correctly is vital.

They also learned pretty quickly the processes needed for keeping clients’ information safe while providing proper access to potential buyers.

Preparing to sell

Mark breaks down the process of preparing a business for sale into four categories:

  1. Get into the buyer mindset -- buyers buy for ROI. This return comes in two parts:
    1. The financial return. Online businesses typically sell for multiples of 2.5-3.5 times earnings so buyers are looking at around a 33% annual return.
    2. The lifestyle associated with owning an internet-based business. Being able to work from home with a very light team is a big draw for investors.

So when buyers are evaluating the ROI, what do they want to see? Firstly, they want to see that it is not a risky investment. Online businesses are inherently risky and buyers need to be aware of that, but from the seller’s perspective, it is about clearly identifying and mitigating areas of risk.

What are the areas of risk? Are there any factors of dependency in terms of a technology or platform, e.g. is the business dependant on Google rankings or is it entirely based on Amazon? Changes to these platforms could have huge implications on the profitability of a company that is dependant upon them.

Once these risks and dependencies are identified, the seller must come up with systems to mitigate those risks.

  1. Growth

Buyers want growing businesses, not declining ones, so is it growing currently?

Outside of that, what areas of future growth have not yet been explored? Using tangible, tested experiments and examples is much better than hypotheticals here.

  1. Transition

How easy is it for the business to transition to a new owner? This often comes down to ‘key man’ dependencies -- if the success of the business is tied to a personal brand or a key partnership between the owner and a supplier, then that complicates the process of purchasing a business.

  1. Documentation

Clean financial records and documentation of the business is the easiest area to control, and often the lowest hanging fruit for sellers to look at to increase the value of their business.

What are you getting when you buy an online business?

Most of what you’re buying is good will, says Mark. Often buyers will ask, ‘should I build this instead of buying it?’

In some cases, it does make more sense to build, but by purchasing an existing business, you are buying the brand, the reputation, the relationships and partnerships that come with it.

You’re also buying all the decisions that went into getting it to where it is today. What worked and didn’t work along the way. And the systems and automation that has been built to run a lean online business.

Generally the more staff a company has and the more systems and procedures that are in place, the higher the value is likely to be. It’s worth noting that the more staff members there are, the more friction is created in the transfer of ownership. And the more processes that are in place and well documented, the more attractive an acquisition is.

What online business a good fit for you?

Outside of the risks within the business you’re buying, is there anything you should know about yourself to identify what sort of business you should purchase?

Firstly, it’s important to understand if you want to buy a big or a small online business. After his first exit, Mark bought two businesses for low five-figure sums and it became clear that the work he needed to put into them was not worth it for the money they were returning. So it’s important to match the scale of the acquisition with what is worth your time and effort.

Secondly, know what your strengths are and invest in something where those strengths are an asset. For example, if you’re great at negotiating deals with vendors, look for an e-commerce company where that skill is valuable. Don’t enter the world of a software as a service company where you’ll have to become good at working with developers creating new product features, which may not be a skill you already have.

Online businesses as passive income sources

It’s true that many online business owners have created companies that create mid-six figure bottom lines that take just 10 hours of work per week to maintain.

In Mark’s case, for instance, he was able to take his entire family out to Europe for a month while working remotely from his phone without impacting his businesses at all.

Mark does stress that it takes a lot of work to get to that passive level, with a lot of automation, good people, and strong processes in place to allow it to run seamlessly. A buyer shouldn’t expect to be able to walk into an acquisition that is immediately passive and low maintenance, some ground work is always necessary.

But it is possible to get there relatively quickly -- and doing that is all about systems and procedures.

You can reach Mark and his team at www.quietlightbrokerage.com

Sep 12, 2017

We all hear stories of highly lucrative angel and venture capital investments. But without an existing portfolio and a Rolodex full of Silicon Valley contacts it can be hard to identify the right opportunities.

So what are the telltale signs of a founder or company that is destined to succeed? Or the warning signals of one that isn’t? And how do you meet them in the first place?

To find out we spoke to Tristan Pollock who, after successful exits from his two previous companies -- Social Earth and Storefront -- has made the move into the venture capital world.

Tristan is the entrepreneur in residence and venture partner at 500 Startups.

500 Startups is the world’s most active venture firm based in San Francisco with nodes and investments across the globe, with nearly 2,000 investments in their portfolio since starting out six years ago.

In this episode we talk about Tristan’s successful exits from his two companies, Social Wealth and Storefront; his transition to venture capitalist and advisor to startup businesses; and what green and red flags he looks for when evaluating new investment opportunities.

Entrepreneur in residence

This is a title we’re seeing more often in the venture capital world, says Tristan.

Typically, the entrepreneur in residence (EIR) will be brought in on a salary or stipend to assist the firm with their portfolio and in evaluating new potential investments. Usually, the firm will also be investing in the EIR’s next company.

This is all a part of the 500 Startups program but in addition, their EIRs will spend time with their accelerator program, advising younger founders and companies on a weekly basis.

The 500 Startups accelerator program

Through this four month program, Tristan predominantly helps startups in three main areas:

  1. Growth

For the first two to three months, the focus is on trying every growth experiment possible and on testing and iterating on every available acquisition channel.

  1. Storytelling

In the last month or two, the focus shifts to how the startups are pitching their companies. This can be a challenge for founders at first because they are so deep in the weeds of their product that it can be difficult to take a step back and simplify their story.

Investors need to be able to quickly understand what is interesting about them and what differentiates them from other companies.

It’s also important to be able to communicate the problem or pain that a product solves. People need to feel a pain, says Tristan, in order to adopt a new product -- as an investor, or as an end user.

  1. Fund raising

As part of the program, founders will be introduced to the investor network in San Francisco and coached through the process of finding funding.

Bootstrapped vs. venture funded

Tristan has experienced both forms of entrepreneurship. His first successful company, Social Earth, was self-funded. Whereas Storefront, his following venture, was backed by 500 Startups and went through their accelerator program.

There is no one-size-fits-all route. Some founders want to maintain control of their companies and stay true to their vision for the product.

 

Others feel that there are skills that they need or a network they need to build, which they can only get access to through an incubator or accelerator program.

Tristan describes the 500 Startups accelerator program as an important part of getting him and his company up to ‘San Francisco’ speed, as he calls it.

Tristan Pollock’s entrepreneurial story

Tristan is a Minnesota kid. He and his co-founder Erik Eliason bootstrapped their first business, Social Earth, with no outside funding and without an existing network.

Before Huffington Post’s ‘Impact’ section, there was a huge gap in reporting positive news around the solutions affecting social change. Around the same time, social entrepreneurship, purpose before profit, and the ‘triple bottom line’ were becoming widely recognized terms.

They launched Social Earth, a content business, which grew organically and became the leading source of news in the social impact niche and a strong brand, allowing them to be their own bosses and work on a project they really cared about.

Three years in, they were approached by a number of potential buyers and sold the company to 3BL Media, which gave them the funds to transition into their next company, Storefront.

After taking a break, the co-founders got back together. While walking the streets in Minneapolis and speaking to friends and family, they noticed a trend of vacant storefronts. It turned out that 10% of stores in the US are sitting empty.

At the same time, the pop-up retail trend was growing. Many small businesses who couldn’t commit to five-year leases, were looking for short term rentals to hold art exhibitions, launch a fashion brand, etc.

Triston and Erik saw an opportunity to create a marketplace to bring these two needs together. In the summer of 2012, they tested the idea in their local area as a basic MVP (Minimum Viable Product) while interviewing for AngelPad, a San Francisco accelerator.

They were accepted into the program and at three days notice moved over to California and spent 10 weeks sleeping their four person team in a one bedroom apartment, hacking the first version of Storefront together.

After the accelerator program, they reached demo day where they had the opportunity to pitch their new product to investors in just three minutes. Through networking at the event and setting up meetings, they went through a period of five investor pitches per day and were able to close a round of $1.6million in March 2012.

They successfully sold the company in 2016 to a French company called Oui Open who was expanding globally and wanted access to the US.

After this experience, Tristan wanted an opportunity to give back to the entrepreneurial community, and so came to join 500 Startups.

Identifying early stage startups for investment

With financial projections and limited quantifiable information, it’s more of an art than a science at the early stage. Tristan talks us through the flags he looks for.

Chief among them at this point is to look at the founders and core team. One of the first and most obvious signs is previous experience and past successes. If a founder has proved that they have what it takes to execute by grinding it out on something they care about, then you can feel more confident about their next venture.

Listen in to the interview for more.

Red flags

Tristan relies on pattern recognition to identify warning signs of an inexperienced or untrustworthy founder.

Things like:

  • Being very salesy in meetings;
  • A combative relationship with their co-founder - perhaps they haven’t been working together very long; or
  • A know-it-all character that isn’t easily coachable or is closed off to feedback.

Instead, he would prefer to see a strong sense of empathy from a founder that can empower people and inspire diverse teams.

Tristan has written an article on Silicon Valley etiquette which you can read over here. He has also compiled a list of some of the strangest pitches he has seen, which are certainly red flags.

Investing in startups for the first time

500 Startups offers a course through Stanford called VC Unlocked, which can be a good starting point.

Outside of that, it’s important to start building a network around VCs and founders that you trust to get introductions to potential opportunities. When you’re starting out as an angel you will need to piggyback on other people because your check size is smaller.

You’ll want to get in on opportunities early with founders that have some of the positive signals mentioned above. You may not invest in the first opportunities you are exposed to, but they will give you a valuable learning experience.

In many cases, investing in startups is similar to investing in real estate. You may want to have 25-50 investments in your portfolio to increase your odds of one of them bringing a positive return.

It’s important to appreciate the passion, grit, and resilience that founders need to display in order to create their companies and so fostering a relationship of respect between investors and founders is key.

You can reach Tristan on Twitter @Pollock or his website.

Sep 5, 2017

Today’s guest, Paul Moore, left a successful career at the Ford Motor Company to create financial independence through entrepreneurship. He successfully exited several businesses over the years and is now in the process of building a platform for investing in multifamily real estate.

Paul is a co-founder of Wellings Capital and author of the book “The Perfect Investment: Create Enduring Wealth From Historic Shift In Multifamily Housing.”

In this episode, Paul talks about how difficult it is to find good investment opportunities in the current environment -- particularly when your objective is to preserve capital. He also talks about the surprising ‘big why’ behind his investment business, so tune in to hear what that is.

Investing in multifamily housing

What are class B and class C properties?

Paul’s business, Wellings Capital, purchases class B and C properties to update them, brings on investors, updates the buildings to standard, increase rents and returns a profit for those investors. But what is a class B or Class C property?

Typically commercial sized apartment buildings from the ‘70s, ‘80s, and ‘90s in Paul’s case, they fall into two categories:

Class B

A class B property is typically outdated. Between 10-30 years old they (not always, but usually) have some level of functional obsolescence or that are in some way dated.

Class C

A class C property might have some additional things going against it. For example, it could be in a less desirable area. Or it could be very outdated or have some major deferred maintenance required on it.

How Paul got into the real estate business

After getting his engineering degree and MBA, Paul went to work at Ford headquarters for five years. He enjoyed his time there but wanted more.

He knew that he was built to be an entrepreneur and so set about creating a life of independence with a classmate and colleague. Together they started an HR outsourcing company.

Fast forward another five years and their Detroit-based business had sold to a publicly traded company.

With his new found freedom, Paul moved his young family out to Virginia and became involved in flipping houses, building homes, and rental properties.

Having caught the investment bug, he began experimenting. In 2010 he put some of his money into oil and gas in North Dakota. While visiting the area with his partner, they noticed there were limited places to stay, so they decided there was an opportunity to build a multifamily property.

The project did well, but Paul later realized the risks associated with the volatility of the oil and gas market.

After they had sold the asset, and following the oil and gas boom, the value took a nosedive. This combined with other experiences -- such as a Hyatt Hotel development that didn’t work out as he had hoped -- convinced Paul to avoid development in future, which led him to the current strategy of Wellings Capital.

The transition to value add, multifamily properties

In 2013 Paul and his partners came across 37th Parallel Properties out of Richmond Virginia. Rather than building a portfolio from the ground up, they decided to partner with 37th Parallel who mentored them into the business through their programme, which is how they got started.

Wellings Capital as a group are extremely risk averse and so are as yet to find their first, perfect multiplex investment.

Risk aversion

As has often been mentioned on the podcast, when investing in real estate, you must invest for cash flow and base your projections on the current market conditions and assume that they won’t improve.

Paul’s philosophy is to shoot for singles and doubles rather than swinging for the fences.

His group opts to invest in large and growing markets. They have a 24-point screen for markets and look for things such as:

  • A positive net population migration
  • Low unemployment
  • Diverse economy
  • Job growth
  • Income growth

They look to avoid:

  • Areas dependent on a military base where a change in government can dramatically change the outcome
  • States like California, Nevada, Arizona, and Florida that have seen more volatility in real estate prices before, during, and after the recession

Investing in large markets also gives them access to a choice of property managers, which is a key part of their formula.

What Wellings Capital looks for in an investment property

Paul looks for stabilized properties. He stays away from properties with less than 85-90% occupancy.

Paul also avoids buildings with things like aluminum wiring, asbestos, lead paint, etc.

Underwriting metrics

When they are underwriting a deal financially, the metrics that they’re looking for include:

  • A debt service coverage ratio of 1:1.5 or better (typically the banks look for a ratio of 1:1.3, giving themselves a 30% margin of safety)
  • A break even occupancy of 80% or less - meaning anything above this level of occupancy they have a strong positive cash flow
  • A cash-on-cash return of 5-10% net to the investor (growing over the years)
  • A total return of 14-20% or more (total return includes the cash-on-cash return, plus the principal paydown, plus appreciation)

Aside from forced appreciation, Paul is looking for appreciation of equity. This has two leverage factors. These two factors combined can allow properties to appreciate at a good rate.

The simplest of these is leveraging with debt:

If there is a 67% loan to value ratio, the equity is being leveraged at a 2:1 ratio.

The second is related to net operating income. For example:

If rent is a $1 and the cost of managing the property is 50¢, we have a 50¢ net operating income.

If you raise the rent by 5%, it goes to $1.05. The net operating income has now been raised by 10% because we have reached a 55¢ margin over the original 50¢ margin.

Wellings Capital look for properties where they can raise rents to see a net operating income increase of 20% or more for a strong ROI.

The challenges in finding these deals

Given Paul’s strict criteria, it is a challenge to find suitable opportunities. This is due to a number of reasons:

  1. There are a lot of new players entering the market
  2. The cities that they target draw a lot of attention and so there is increased competition
  3. They are not willing to take on smaller or larger properties than what they are already targeting because of the model they operate
  4. There is a lot of competition from foreign investors who are willing to simply break even and lose out on a profit in order to move their money into the American Dollar

Paul’s surprising ‘why’

One of the things that Paul and his partners at Wellings Capital are passionate about is stopping human trafficking.

If you take the record annual profits of GM, Nike, Starbucks, and Apple combine them and multiply that number by 2, that is the approximate revenue generated by human trafficking in the world. It’s a $150billion business.

They are working with organisations like Harvest Home, Exodus Cry, to provide funding to fight the human trafficking industry.

Find more information about Paul

You can find Paul’s book, “The Perfect Investment” on Amazon.
You can also visit the Wellings Capital website.

Aug 29, 2017

There’s a lot of talk about a forthcoming economic downturn.

People can’t seem to wait for the bubble to burst. I even told Capitalism.com founder and CEO Ryan Moran on his podcast, Freedom Fast Lane, that investors should take caution in the current market because real estate prices are incredibly high.

That’s why it made perfect sense to talk to someone who’s been through an economic meltdown holding a significant real estate portfolio, and have him share what got him through it.

Damion Lupo used a Visa credit card to pay for his first house. He bought up 150 homes in seven states in the five years leading up to the tsunami that was the Great Recession in 2008.

It was this experience that led Damion to realize that riding the wall street roller coaster isn’t the best way to take control of his financial future. So he set out to solve this problem for himself and others by establishing a financial technology business called Total Control Financial.

Here are three important tips from Damion to take away from this episode:

  • Why you should look into alternatives to the traditional 401k;
  • What having total control of your financial freedom should look like; and
  • Why we shouldn’t wait until we’re at retirement age to create and live the life we want.
Jun 13, 2017

The world of the future isn't as far off as it may seem, which is why we pose the question -- how will automation impact investors in the future?

To address this massive question, today’s episode features a deep discussion between myself and Charles Hugh Smith about what it will mean for investors when automation dramatically reduces the number of jobs for humans to do.

Smith is the owner of the Of Two Minds blog where he writes about economic trends. The blog is ranked No. 7 by CNBC as one of the top alternative financial sites on the Web.

What can investors do now to prepare for economic changes driven by innovation? Is there a clear answer? To find out, tune in to this episode of the Capital Gains podcast.

Subscribe on iTunes, Stitcher or Google Play to get the latest episodes downloaded directly to your device!

Jun 6, 2017

Take it from someone who has sold over $1 billion in real estate -- we are at the top of the market, and investors looking to buy now should take caution.

Pat Hiban is a former real estate broker turned investor. He's best known as the host of his own podcast, Real Estate Rockstars, which interviews the top real estate agents around the country.

In this interview for the Capital Gains podcast, Hiban shares his views on the right way to go about investing in real estate, where we currently are in the market cycle, and what that means for the real estate investing climate.

At Capitalism.com, we believe the key to financial freedom is building a business and investing the profits. If you've already built a business and are looking to learn the ins and outs of alternative investing opportunities from real experts, you must subscribe to the Capital Gains podcast. Each episode is jam packed with investment strategies - beyond stocks, bonds and mutual funds - to help you build wealth.

May 23, 2017

Today's guest is a true self-made man. A pioneer in the realm of website investments, Ace Chapman.

In this episode, we explore how Chapman found himself investing in his first website way before most people realized this was even possible.

Chapman got started 17 years ago buying websites. He left college to pursue website development against the wishes of his parents.

Chapman also talks about how the website investments business has evolved over the past two decades.

It's a truly fascinating story that I guarantee you'll love.

Subscribe to the Capital Gains podcast on iTunes!

May 16, 2017

Jason Hartman has built a real estate empire, purchasing hundreds of single-family homes around the country since he was just 19 years old.

In this episode of the Capital Gains podcast, Hartman shares how his marketing skills helped him build his own real estate empire, and helped him create a business around helping others invest in real estate.

Hartman also teaches investment, and makes it possible for people like you invest in turnkey properties without having to put together the deals or the management teams yourself.

I hope you enjoy today's interview as much as I did. I'm really inspired now to try to replicate the success he's created. If you like this episode, please subscribe to the podcast, and be sure to leave us a positive rating and review.

May 9, 2017

Today's guest is John Roy, the country's leading broker and consultant in parking lots and the head of JNL Parking.

In today's podcast, John tells us how he got his start in parking lots while he was a student — buying some dilapidated houses across the street from the Notre Dame football stadium, tearing them down and putting in parking lots instead.

And he also tells us why you should never do what he did to get started.Instead, like other real estate assets, John says to go for the current cash flow.

John has been featured on CNBC as a parking industry expert. He's co-written a book on parking acquisitions, and serves on the Board of the National Parking Association. John is often a featured guest speaker for the National Parking Association and other events throughout the country.

John specializes in teaching parking asset valuation. He helps investment groups acquire parking assets. He's a Certified Parking Professional (CPP), earned a bachelor's degree in finance from San Diego State University and an MBA from the University of Notre Dame.

Learn about the highly fragmented market of parking lots from John Roy in this episode of the Capital Gains podcast.

1 2 3 Next »