David Thompson is the founder and general partner of Thompson Investing, operating out of his city of residence: Austin, Texas. As a sponsor in countless syndication deals, David invests capital in real estate projects, particularly multi-family apartments, self-storage, and home parks. He currently manages an investment portfolio of over $150 million. Before starting his own business, David moved between high-level management positions at companies like Dell, AT&T, and Lucent Technologies. In this episode David shares his strategies for dealing with crises like Coronavirus in real estate syndication. We discuss how you can make money in any real estate market through identifying and developing a niche, and how David has turned the pandemic into an opportunity for personal and professional growth. Tune in for an uplifting episode where David's optimistic and pragmatic investing tips help you become a more resilient investor.
David Thompson is the founder and general partner of Thompson Investing, operating out of his city of residence: Austin, Texas.
As a sponsor in countless syndication deals, David invests capital in real estate projects, particularly multi-family apartments, self-storage, and home parks. He currently manages an investment portfolio of over $150 million. Before starting his own business, David moved between high-level management positions at companies like Dell, AT&T, and Lucent Technologies.
In this episode David shares his strategies for dealing with crises like Coronavirus in real estate syndication. We discuss how you can make money in any real estate market through identifying and developing a niche, and how David has turned the pandemic into an opportunity for personal and professional growth.
Tune in for an uplifting episode where David's optimistic and pragmatic investing tips help you become a more resilient investor.
KEY TAKEAWAYS
1. Communication is key to build and maintain trust during a crisis, even if you only have bad news.
2. Building strong business relationships will pay off for years to come.
3. Educating yourself is crucial. Anybody can get started as an investor if they are willing to self-educate and reach out to professionals to ask questions.
4. Slow periods are part of investing. It comes in waves.
5. Take the time during a slow year to focus on building up what you have, strengthening your investments rather than expanding.
LINKS
https://thompsoninvesting.com/
https://twitter.com/thompsoninvest
https://www.facebook.com/thompsoninvesting/
Steven: [00:00:01] In a changing year, how do you deal with uncertainty when it comes to making investments in real estate? In today's episode with David Thompson, we're going to dive into exactly how he thinks about investing in times of uncertainty and some of the upsides and advantages that are really here for us today that we can be applying and using in our investment business. Let's dive into it.
INTRO: [00:00:28] This is the Investor Mindset Podcasts and I'm Steven Pesavento. For as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better, and how we can do better. And each episode we explore lessons on motivation and mindset for the most successful real estate investors and entrepreneurs in the nation.
Steven: [00:00:50] Investors! Have you grabbed your copy of the Passive Investor Playbook yet? If you haven't, I recommend you go pick up the Ultimate Guide to Passive Real-estate investing at the Investor Mindset.com/ passive, you can grab that in the show notes right down below. As we've interviewed tons of the top experts and brought together all of the knowledge that we have on passive investing so that you can lay a foundation for yourself to make sure you're making the right decisions in your investing career. You can grab that guide at the Investor Mindset.com/passive, I hope you'll take advantage of it. Let's get back to it.
Steven: [00:01:34] Alright guys, welcome back to the Investor Mindset Podcast. I'm your host, Steven Pesavento and today I have in the studio David Thompson. How you doing today, David?
David: [00:01:42] I'm doing great, Steven, thanks for having me.
Steven: [00:01:44] Of course, I'm glad to have you here. And as you guys know, Dave is incredible when it comes to putting capital with real estate deals. He's got strong experience in the real estate investing space, both domestic and international projects covering single family, multifamily and land development. And after over 20 years in high tech corporate world, Dave left started Thompson investing, and provides investors with investment opportunities in multifamily apartments, self-storage, manufactured home parks, and much more. To put it in perspective, he has been involved in over 5000 apartments or units of apartments, over $400 million of assets with some really, really great partners. So I'm definitely excited to dive in and learn a little bit about where you're seeing the market going. What are some of the takeaways, and really understanding how we can best position ourselves to take advantage some of the opportunities that are going to be coming up in the future. So you ready to dive into things Dave?
David: [00:02:38] I am, let's do it.
Steven: [00:02:39] so looking forward, looking at the year ahead, talk to me a little bit about what are you seeing, as far as investors out in the market and operators out in the market? Are we looking at some really great opportunities coming up? And how are you thinking about it when you're underwriting these opportunities on a three to five to seven year timeline?
David: [00:03:01] Great question, especially as we get to leave 2020, which everybody's excited to, after a big COVID year recession and all sorts of crazy stuff going on in the world. But I deal with a lot of operators, I sense a lot of optimism, certainly near term cautious optimism, but optimism, no last q1 tips typically, let's just talk about apartments and I think it's a good bellwether for the different niches that we work in just because so many of our investments are geared towards that. And if you look at institutions, they're not putting money in retail, not putting money in office and it's probably a little early for hotels. Although with the vaccines starting to come out, I think people are starting to try to think about what's going to come back fast.
David: [00:03:41] But the apartments have been a steady eddy, I think overall apartment operators are happy with how they've managed through the COVID. I think if you're in workforce housing, kind of more Class C type of stuff, you're probably still sweating a little bit, hoping for another government stimulus, that we're all hopeful for a little bit more juice to get this vaccine in place, everybody and things start turning around maybe second quarter and second half the next year. But yeah, the pricing and the multifamily what's interesting, because of those sectors are being-- no money is going to those other sectors I was talking about, they're not getting a COVID discount that a lot of the operators were waiting for, give me five or 10% off of the springtime pricing, and I'd like to do a deal. So we're not seeing in fact, some of the stronger markets like Austin where I am, you're seeing cap rates still get more compressed. So a lot of money chasing fewer assets, and maybe a couple particular niches on the flip side that you got super low interest rates. So you got, well listen bills that might not had made sense a year ago with interest rates around four and a half now at two and a half they're making more sense. So you got this kind of crazy dichotomy of expensive markets or something will be on the sidelines, but also, the numbers can make a little bit more sense. I think we have to adjust investor expectations still, there're still investors--I still get emails from ambassadors or concert festers saying "Hey, you know you're projecting 6% this year now it's 4%. We missed a quarter, what's going on?" Doesn't matter how many COVID emails you send to people, It's like, they just--I'm like, Oh good thing you're not in retail, right good thing you're not in office you're getting hammered over there okay. So we kept your money in good spots and recession resistant ditches, which is in retrospect for an awesome thing. But I think q1 is going to be good, we've actually been working in q4 to expand our operator base a little bit. So we deal with about I think there's three multifamily operators in different geographies. So what I thought was Steven would be good is, there are certain markets, maybe secondary, tertiary markets, we normally don't plan. We still like the big markets, it's just a lot more liquid, easy to buy and sell into, but it's definitely more competitive. So we're looking at a few new operators and maybe, let's say give me example, Chattanooga they can do some dash full deals, but they're looking at markets and healthy regions of the country but, they're getting a little bit more yield maybe a little bit more interesting things, maybe not as so picked over and competitive in pricing. So we're expanding our operator base a little bit there and just why? Because we want still a solid deal volume, still opportunities for investors, but also geographically diversify them from a sponsor perspective and geography is a healthy thing for investors in your portfolio. So that's kind of how we're reacting to that.
Steven: [00:06:25] Yeah, that's huge. That's really big. And it's interesting, because everyone was waiting for this COVID discount, people are kept talking about, oh, just wait, just wait. There's going to be these amazing discounted opportunities because of Coronavirus and everyone's just kind of sitting on the sidelines. But as a result of interest rates actually being lower when you compare apples to apples, people are able to offer 15% Premium in some markets as a result of the lower interest rates. And that's just to keep the returns exactly the same for investors, kind of assuming conservative underwriting. So when we're dealing with such a low interest rate environment, it ends up making, it's still pretty great for business.
David: [00:07:05] Yeah, I would say that's exactly right. I think it gives our operators an opportunity to work on their business this year, their processes and infrastructure and growth and ready for the next wave. So it wasn't a lost year is probably a good way to Hey, where I have challenges in my business, let's focus on that, we're not acquiring more properties let's make sure we take care of the properties that we do have. So all in all, I think looking back on it, I think I'm pretty happy with the overall perspective and we were probably in 25 to 30, maybe syndication deals in the multifamily space and across several different operators. So just understanding how they've all responded well, I think overall, there's always an apartment or two and maybe a part of the country or a region or a demographic that's a little bit more struggling. But I don't think we're concerned about losing any property, which is a great thing and that's why people love multifamily people have to live somewhere, that key ingredient is still there. So yeah, I think that's the outlook, I think this year, we'll continue to try to get more volume going in our business with the operators there just reading a lot of things.
Steven: [00:08:08] Yeah, it's important to be able to be diversified. I think that's one of the big benefits of people like you and I, David is that by partnering and working with folks like us, you end up being able to have access to a wide variety of different options without necessarily needing to build those individual relationships with those operators because that's really where firms like ours really come into play. So when you're looking forward, obviously, you're looking to do a little bit more volume, you're looking at some smaller mid-tier markets that might have a little bit of opportunity available to or maybe a little bit advantaged because of all these folks moving out of the big cities. What else are you looking for that might be different this year than it was in maybe years prior? Is there anything else that comes to mind?
David: [00:08:50] let’s just stay in the multifamily category a few more minutes here. There's a couple things I did want to share with your investors and I see it working. But not every operator wants to go to the trouble or hustle but I have one group I work with and they are killing it in East Lansing Michigan, right and like "Lansing Michigan, what's there? I've never been there". I'll put it that way, nothing against Lansing but it doesn't come into that, top 20 exciting growth cities that you always see every week in real estate where it's happening where people are moving to. I think an important thing for listeners are, you don't have to be in the sexy markets in fact, people can make money in all sorts of different markets and all sorts of different platforms and strategies. This particular operator said I don't want to play with these 200 unit apartments, that's where all the competition is, it's hard to get a good deal, and you’re fighting with 30 companies get a deal. What about these 40 unit apartments? These 25 unit apartments? We're finding--when they started looking into this, they actually found a couple guys who were in Lansing kind of doing this in a small scale and then this company/guys I know came in and brought you know brought some professionalism to instruction and told them about a scaling business. Where if you could put in, if you can grow a 400/500 unit portfolio by taking off these 25, or 40units typically owned by mom and pops, typically, they're cash flowing, but there, they haven't been upgraded in years, the folks are running them, not bad people, not they're not smart. It's just they're not keeping up with the latest and greatest, like software about revenue generation and, sophisticated property management software, or, hey, when I aggregate a big portfolio, my services cost to pest control can go down. Simple things like that, when you put all these little factors together, and you can create an awesome business, they're killing it, and they want to do more. So that's an idea for if you're an operator you're looking at, maybe you don't play in the Big Boy or big girl space, maybe you come over here and find a niche that you find you can carve this out of, and they actually believe over time they could IPO these things, they can get these big portfolios and sell to institutions. Where before you would even think about institutions in the same sentence with a 25 unit apartment but they've created this infrastructure and they vertically integrated. Steven so they own their own operating company, and it made it really efficient. So that's kind of a cool concept, and they're in Lansing Michigan. So that's pretty cool.
Steven: [00:11:05]I love that, that's very, very similar to one of the operators we work with, exclusively focused on mid-size multifamily in the Denver market and it's so interesting, because you often think when it comes to institutional style deals, that that's where you're going to end up having the best return. But because of the size and scale and being able to dominate in that market, they're able to get deals at a much better rate. They're not dealing with that same competition by being able to roll them up all together, it ends up leading to really, really good upside for investors, and really good downside protection, because when you're buying something at such a low basis, you're able to really build that equity for it right from the beginning. So I'm glad you brought that up.
David: [00:11:45] that’s a great point and this same group is on the hunt, there are kind of like specialists, they kind of go find things and they create the structure, and they manage all the investor part of it, but they need capital. So I'm like, that's where I kind of come in. So we have a great relationship. So what else are you looking at? Because it does take time and so they may have an opportunity in 2021 but, I like to do more deals with them. And they said, well, we found this operators kind of early on, we've got this operator, think they are down in southeast somewhere, there's a construction company. And what I've seen this happen when markets get tight, people have to get more creative, and maybe take a little bit more risk. But these guys have done a really good job over time and they'll go in and go into a Midwestern city for instance, and they'll go by up four or five or six properties and they put the construction group and they call it deep value add, call it distressed assets. They're really looking for an operator that got in over their head. The market's not bad, it's a D--again, we're talking Midwest, we just talked about East Lance, you can make money there, and they find them 30 or $40,000, a door. I asked him, I said "Are these like really bad areas?" This is like a gift from my investor discussions but he says no, oftentimes they're not. They're just kind of--there's a lot of work involved and so a lot of value operators shy away from them. You may be talking about $20,000 a door and some of these things, but you're buying at such a low basis. But they have, that's what they do and they've been very successful over many years, and its couple of older guys that are kind of like we don't want to keep looking for capital and all this kind of stuff. So this is where we're interested in, maybe coming in and helping out and do three to five deals a year. They feel that they can--this is the volume that the business that they've shown in the past is successful. And I think even now in the marketplace, where we're talking about, it's still very competitive, and pricing is still kind of tight in the multifamily space. This is the kind of thing that's a little off the beaten path, right, they're not getting a lot of competition, who wants to go in there and spend. They just leave them in two years Steven, so you're probably not going to get much cash flow for two years. But when Ben is done [Phonetic Spelling 00:13:41], it’s like, boom, they've created an asset in a decent area that people want and so that's their strategy. So call it d value add, call it distressed assets, those are the kind of, finer tuning things we're looking at this year.
Steven: [00:13:55]Great, great, great, great points, it's good for people to be reminded that there's other opportunities out there that they can get invested in and that can really be a good way to diversify that portfolio. So I'm curious from you, David, you've obviously dealt with a lot of different challenges this year, from the operator side, as scaling, we've all been dealing with challenges and COVID. Talk to me a little bit about how you look at dealing with challenges, what is going through your head when there is uncertainty in the market or in your business? Talk to me a little bit about what that thought process is because I think that's going to be really valuable for listeners.
David: [00:14:30]Yeah, I think one of the things that reminds me every day is that I'm in 35 deals I am personally invested in and I have lots of investors in those deals. I mean, really, I look at my poor earlier data, its $150 million of investors in deals. That's a lot of responsibility, right? So I feel like I can't just listen, I have a great business, I can take my vacations, but I don't really feel like mentally I can just check out for a couple of weeks, right because people have questions on these deals, especially more questions this year with COVID right?
David: [00:15:00] you know, a lot of the deals we were paying monthly, now we're going to have to go to quarterly distributions, but we're going to pay something or we may miss a couple quarters. So, communication with the operators and they were always--I didn't really have to coach him much on this but the more communications, the better. That's just number one, when we're talking about investors and the concerns, more communication is better than going quiet on investors. Just because things aren't going well doesn't mean you should be quiet.
David: [00:15:28] it’s like you want to be out in front and that's a pretty basic crisis management technique. You just need to be out in front, be honest with people, you're invested with them, you're aligned with them, make sure there's no shenanigans going on, this is the business reality of where we are in this market. This particular deal, it's a five year hold, we're you're one, okay, let's not get too excited, right, you have a profit you're accruing. If we can't hit your number, we're accruing that you're going to get paid first, when we sell this asset before the GP gets profits so there is a little bit of some of that going on. The second thing we talked about earlier, it's a good time, if deal volume is going to slow down a little bit, It's okay, as long as you're explaining to investors and a lot of them are naturally cautious during this time. When there's a recession going on, they see people losing their jobs, they say they can't go to a restaurant, have fun, you can't get together with your family on the holidays. It's not a hard story to tell people it were also the apartment space. So these other deals may not be progressing as a normal year. Right? So I'm impressed with my investors So far, I don't really think anyone's out there, really not understanding what they're doing. But it's a good healthy reminder to all of us in business, that businesses have cycles in them, they can come out of nowhere, a black swan event, like we had this year, can come out of nowhere and make sure you're taking care of your customers, focusing on your customers. The operators focus on the customers from what?A standpoint of helping them maintain health, extra cleaning at the facilities, basic stuff, putting up signs, showing that you care about me as a renter as a person right, that's a goodwill that goes a long way versus where's my rent, and also in a red category, having flexibility on people who lost their job, we're not kicking them out. Obviously, it was eviction moratoriums going on, but the human side of it is, you know, how can we help you? Do you know that this isn't accessible? I have one operator down in Houston, he's very good. it's a kind of the workforce housing a little bit more impacted by service jobs, right, he did a really good job getting out in front telling people about government websites they can go to get some short term relief and things like that. Course it helps his business, of course, but from a humanistic story, you can do that in a right way to show your renters, I care about you from a person too, your health, I want to make sure you get through this, you don't have to move your family, we don't want to kick you out. Work with me, kind of work with me, obviously, there's a couple of people that don't want to work with you but, by and large, people don't want to move through there for a reason. Schools are close nearby, kids have friends nearby, they work nearby, and shopping is convenient for them. They're in those places for families close by, they're there for a reason. They don't want to move typically, so a lot of it is just inward focus this year on operations and things like that and this is a personal story with me. My daughter works for Disney out in California, I've had to lecture her since March. She flew back to Austin, she's hanging out, and she can do her business from online. She's a computer expert so my oldest daughter who's supposed to go University of Washington in the fall, she ended up staying here and taking her fall semester, so they're best buddies, they've been having a ball and I’m looking at this whole COVID year yeah, I can't go see my parents in Denver, where you are Steven, I cut off of those kinds of things but everybody understands that. But also look at the flip side, what are the positive things that came out of this, and it was like, man, we got Bonding time that I didn't think I would ever have anymore, for an extended period of time with my kids and it's great. And they're young adults, they got opinions, they got ideas and we went to the presidential election it's a lot different but it was fun and it was really enriching. And I told my wife to say I love my job, I didn't have to go somewhere, I could be around this all the time, we worked it into my schedule and routines, and we spent a lot more family time together. It's a little bit off the beaten path with what you suggested, but I think it's a good time during situations we don't think about it. But there's a lot of positive things that's going on and you can really kind of recharge your batteries, understand what's important in your life, fix your business, work on your business a little bit, and take care of the ambassadors. They're understanding you'll have a deal every month and you're not promised, things aren't going great guns.
Steven: [00:19:27] Well, it's like when we go through these challenges, sometimes people have this feeling and that's the reason why I wanted to kind of focus on this for a second so I'm really glad you brought that up. People focus on this feeling of, oh, well, maybe there's a problem so I'm just going to not address it, and maybe it's going to get better. And so they don't communicate with their investors, they don't communicate with their team, with their spouse, with their friends, whatever that might be. They just kind of internalize it and when we go internal, that's fine but when you do it for too long, and especially when there's other people involved, it can end up leading to a lot of uncertainty, a lot of mistrust. Because when you're able to get ahead of it, when you're able to go through, like you said, the crisis communication of being really clear upfront to people, "hey, this is what we're doing, We're going to communicate with you early and often, we're going to let you know what's going on", people start to feel a little bit better, even if you're giving them bad news. Unfortunately, I don't think you've had to give too much bad news and fortunately, we haven't had to either. But it's when you can clearly communicate, you don't hold back, because there's nothing worse than that feeling of, Hey, I keep following up with this person, I can't seem to get a response, or they're always waiting five days to respond to me, which I know is unusual. So clearly, something is up and people start to have that feeling and that feeling grows, see you definitely want to get ahead of it. It's easy when we look around and we see that the world is in a state of change and some of the things are not the way we want it to be to look at the negative. But you're absolutely right, that there is so much positive, I mean, personally, just like you were mentioning, I spent more time with my family this year than I have in nearly a decade, I moved to Colorado in seven or eight years ago, and I was able to go back and spend six weeks with family just because it was an opportunity that I wouldn't normally take. And so I thought you know what, I'm going to go step out of the normal comfort zone, it was a year that was really important to be able to be there with them, and be able to really connect at a deep level, you know as a grown adult being able to step back in and spend time with people is really, really important. So I think that's the big takeaway for people is communicate clearly and don't be afraid to take advantage of the opportunity instead of looking at as like, this is a negative.
David: [00:21:36] right, this sucks.
David: [00:21:38] that’s right. Now, that's a great spend Steven, and I think we're all excited to move on. I mean, I'm sure my daughter at January 1 actually goes to Seattle, she's going to give it a shot and so I'm encouraging all of that. But we've been blessed, and really looking forward to the New Year, though, and new experiences for them and looking forward to new operators, I'm working with new experiences and get on with it.
Steven: [00:22:03] So I'm curious, on the capital side of the business, for the listeners that are investors, what do you recommend when they're looking to find new operators or new fund managers, or new capital placement agents to work with? How can they go about going out and finding different people who do what we do? And then also, I'm curious from the flip side of that, how can people who do what we do, do a more effective job of connecting with the right clientele, the right people who are interested in what we're looking for? I think both of those really play well together. I'd love to get your take.
David: [00:22:38] yeah, yeah, I don't think sometimes that can be difficult, right. So these are private placement deals, and they're not typically public advertiser. New people are doing some of that with the 506 c stuff. But I would say in general, they're not as widely advertised, it's hard to find a deals on it's changing over time here, but just probably like anything, how do you know she's a doctor? How do you know you typically just don't go in the old days it was the Yellow Pages. But now maybe you go online now and maybe your health care provider tells you what your list of doctors you can choose from, but you could pick and choose their based on geography, somebody close to make sense that would be one criteria. Maybe for me, I don't want to drive all across town. Do I want to work with operators who are kind of close? I want to see these properties. I'm in Austin Texas, like you could probably do your first deal in Austin but you can look in San Antonio, Dallas, Austin, and Houston. I was in Houston on Monday these are all from San Antonio, it's a 90 minute drive, Dallas three hours, Houston, Texas, I'm fortunate to be here but there's a lot of places you can be in the country and be close good markets around you might want to start thinking about connecting with as simple as going to a multifamily Meet up group in these areas, would be one idea. Going online there's like bigger pockets and we've talked to online forums where you can actually criteria people who live in work in your area that are also real estate interests have real estate interests were you kind of have meet up groups that are meeting in real estate. Start understanding who some of the players are, making relationships there, I never say you need to jump right into something just start finding out you by talking to people you'll find out. Maybe your peers have already invested in these deals and that's how you hear about syndication. Hey you know that's how I get referrals right? It's like this guys have over success or she's had success and all sudden they want to tell them about me and I have a process around how I reach out to people once they reached out to me. So getting started I just wouldn't be in a rush I would just get educated there's so much good information out there. Just spend the first several months educating yourself on what is syndication and different things like that and what niche do I want to be focused on, I can tell you apartments is very popular, but there's a lot of different syndications going on, what resonates with you?
David: [00:24:49]I think at the end of the day you look at yourself as an investor and you say, What am I not exposed to? I'd like to be exposed to, way too many people are exposed to stocks, right? IRAs, 4YKs all sudden they have a rental house. By accident, or they tried it, they didn't like it and they're like wow, people over here doing this thing called syndication I don't even know what that is. But I've heard of passive investing kind of explain that to me and that's what the wonderful thing of syndication is all about just educating people. So getting yourself educated, I have a blog, easy to steal, there's just a lot of information out there, and we’d mentioned bigger pockets. So just start putting real estate syndication, just start researching. Ultimately, I do have a process for vetting sponsors, I think I've shared that with you before, we can definitely share it again, and it’s like a 10 step process. But I can boil it down to simple go to their website, man, that's like the storefront, in the old days when we had retail, you could actually go to a store and see all their wares in the front window. Kind of thing with the website, I could tell you by experience, I could look at a website in less than five minutes and see if I even want to have a conversation with these people or not. Is it website orderly, just orderly? Is it focused on a strategy? Maybe it's a niche, maybe it's a one or two markets or it's like a couple different niches. They get there in five or six different markets, there's one person like, where’s your team? Or what's all this about it? it's really easy that way, if I do like that, then I may go to the next step of having a conversation with them, kind of get to understand what they're doing, what's their track record, what markets they like, just have a conversation with them find out if you get an example of some past deals that they've done and kind of go through, but that's me looking at a deal. And then I think you were talking your other question was around capital raising kind of like, what am I?
Steven: [00:26:37] Yes. Well, it's for the listeners who are more on the operation side or maybe they're more capital placement type folks. What would you recommend to them? I know, obviously, you started the game and when you were getting going, obviously, you had some great relationships. But for those people who maybe don't, what do you recommend there?
David: [00:26:56] Yeah, well, I mean it kind of depends on what you want to do. If you're looking--if you're interested in getting into the cap raising world, like kind of, doing what you and I do, Steven, I think, again, educating yourself on syndication, what is it? If you never done it before, you can just-- there's lots of good courses you can take on understanding some of the skills that you would want to do to get going on it. Also, man, it's going to come down to finding a partner, an operator partner, maybe for the first part of our discussion, I found a group, oh, hey, by the way, this group, I want to like just be an investor in this group, maybe I start that way as a limited partner. But I found out over time there in my area, I really kind of like these people, and they really have the same philosophy I have, and they're going to do more, and how can I help? And that's how I got started syndication, I asked one of the syndicated partners, how could I help them? And I actually went to a mentoring course that he was at so there's a lot involved. So I just asked him a question, because I was like, that's kind of not figuring out where I was going to go with all this stuff. The original plan with that he had told me about was free, how would you buy your first apartment? I'm like, well, that's a big scary thing. It looks like there's a team of people doing that, not just me on my own. So I thought the best way I did Steven was just join him. I'm like, how can I help you? Not looking for conversation. Like just how can I help you, I found out that they needed someone to help them raise capital for a deal that they had in Dallas, it was a pretty big deal and I went out there without a lot of training without a lot of Just-- who do I know that might be an accredited investor and have a relationship with it and have that discussion. He offered up the good opportunity, to good market a good deal, I didn't have to figure all that out, I educated myself on it and talked to a few people and found that I was really good, or I really liked just sharing these ideas with people who had no clue that this opportunity was even available to them, right.
David: [00:28:39] this is in the back room somewhere, someone smoking cigars talking about special deals. No, this is open to the public and you have to read if certain accredited investor criteria and all that. But once you get beyond that, Hey, are you doing a stocks over here real estate's been pretty good. I get back to choosing a really good partners, that was still one of my key philosophies is take your time to find someone that you respect and like and maybe invest in a deal or two at them, and then see if you can help them and if that opportunity never presents itself, you're going to be farther along learning about other operators that do the same kind of thing and before long, you might have an opportunity to raise capital. I think it's a fantastic business, it’s something you could do while you have a full time job. It's something you could do part time and put your feet in and see how you like it. If you are a former teacher or you're like an instructor or a fitness instructor, you might be surprised it's not a complicated field, you don't have to overcomplicate it with people. My favorite story with these industries have never been here is just like, Hey, you watch all the flipping house shows, right? You watch those flipping house shows, they go in there, they fix it up and at the end of the day they typically sell it. It's typically three or six months, nine months of selling them Steven you know it’s your business right when you start. But as far as the same thing, it's just bigger and we need more money these are 20,30 $40 million assets, it's not going to be Steven and I get together With our own pocket money and buying these things, we need help, We need investors. We need investors to do that but we're essentially doing the same thing where we're fixing it up, we're renovating a little bit, we're streamlining operations and in two years or five years, we're flipping these things we are off to another one it's a slow motion flip. This is what they "oh that sounds pretty interesting". Tell me about, maybe how it works, and how do I get paid? That kind of stuff.
David: [00:30:21] how do I get my money back? The basic questions and like, on my website, put like frequently asked questions, 25 frequently asked questions of syndication. That's all the good stuff you would need to know as a capital raisers. Here's the kind of things that Steven and I hear all the time and as you get more comfortable answering that and handling, I don't want to say their objections, I just say there're just good questions. The best part about this business is the things that you're showing people, they really never seen before, at least the newbies like, I've never seen it before but they're smart people. They're just like," wow" Sally told me about this thing that you're doing, it sounds really cool. So it sounds like you're selling them on a car, or a house, they've already been through that process, they probably been burned a few times and they have this negative perception of you. What I love about my business, and your business, Steven is like, I can't think of too many conversations I've had with people were they're like, Man, this is really cool, or thanks for sharing that with me. I may not be ready right now, I may not be qualified, and those are the questions you typically have. But keep me on your list, let me know, I may be qualified soon or I don't have money today, cause I just bought some, but in three months, I may. So they're going on my newsletter, right? They're going on my newsletter and I just always tell people in this business when you're starting out, every relationship can count and you don't know. I did a podcast like this Steven, my biggest investor came from a podcast, I was on the receiving end of just discussing on the podcast, the guy heard me and he says--You know I don't know what we talked about on that podcast, but he said, you just sound down to earth like, when you're investing on your deals sound like a good regular person I could talk to not a highfalutin finance person up in some big city, trying to sell me something like, Oh ,I think that's-- so here's my values and I can send them something on why it dusted me or why whatever but at the end of the day, people want to know, you're a human being, and you're talking to them on educating them. I had no sales experience, when I got in this business, I don't even like to use that word really, maybe a marketing comes in a little bit but I really never feel like I'm selling buy, because this isn't the way the business is done. These are $50,000, $25000, $100,000 investments. These are serious people's money, you want to be a good steward of it and you want to treat them the right way.
David: [00:32:27] that’s a process. Okay, that's like I'm selling your shoes today here, you're not tomorrow. I'm with these people five years, they're in these deals for maybe five years. That's a relationship.
Steven: [00:32:41] Exactly. You got to build that relationship, you can't just jump in, you got to really have somebody have true buy in. And that's one of the big things that people often feel like, Oh, I'm going to be sold, or it's going to be a high pressure situation. Not at all, it's actually quite the opposite. Because we--in my experience, actually, I'm usually pushing people away and it's not as tactic, It's not a strategy, it's as if you're not 100% in, if you're not sure of yourself, then you probably shouldn't take the leap. Now is that fear because you aren't sure of the investment, is that fear because you're just trying to hold yourself back because this is new and different then you know you've got some things you got to work through. But I think this is all really, really important and I'm so glad that you're able to join us today because, it's such a good reminder that the world is going in a new direction, regardless of whether or not we want it to, that we get to choose how we're going to show up and that if we want to go down this path, there's a lot of different ways to navigate it.
David: [00:33:40] That’s important, you hit the nail on the head. Things can change, the river can go this way or that way, when normally it doesn't do that. But you're still going to stay afloat and develop some new skills and ideas, but stay relevant to your investors. You don't have to have all this great, great advice for them, they watch what you're doing through your newsletters, through your day to day stuff and what you're doing as long as you're staying cool, confident and being honest with them that that's really the way to go. And your prudence is the perfect way to do it. Yeah.
Steven: [00:34:11] Huge. It's so true. So thank you so much for joining us. Where can people find out more about you or get in touch David?
David: [00:34:17] Yeah, great Steven. So thompsoninvesting.com is our website all one word, "thompsoninvesting.com". Find a lot of things there. We got some books you can download. We actually have an old capital raising course that people are really inclined to kind of think more about that process but I'm at David@Thompsoninvesting.com. So love to talk to you about what you're doing and share some ideas.
Steven : [00:34:41] Wonderful to have you, it's a pleasure catching up again my friend and I hope you have a beautiful rest of your day.
David: [00:34:46] Thanks for having me on. Appreciate. Always a pleasure.
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