With his upcoming new book release, Kevin Bupp is back on the Investor Mindset. Have you been wondering what a Cash Flow Investor is? Is Commercial real estate better than residential? Join the conversation as Steven and Kevin answer these questions and more as you discover the path to your financial freedom.
With his upcoming new book release, Kevin Bupp is back on the Investor Mindset. Have you been wondering what a Cash Flow Investor is? Is Commercial real estate better than residential? Join the conversation as Steven and Kevin answer these questions and more as you discover the path to your financial freedom.
Key Takeaways
Resources Mentioned
Investing to Hedge Against Inflation - Free online training at https://investormindset.com/start
About our Guest:
Kevin Bupp is a Florida-based Real Estate Investor, top Apple podcast host, and serial entrepreneur with over $250 million of real estate transactions. His extensive investment experience spans the gamut of apartment buildings, single-family portfolios, office buildings, self-storage and build-to-rent communities and his two favorites and by far the most profitable, Mobile Home Parks and Parking Lots.
Steven Pesavento 00:05
This is the Investor Mindset podcast 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 Pesavento 00:24
Alright guys, welcome back to the investor mindset podcast. I'm your host, Steven Pesavento. And each week, we share mindset tips, and real estate investing strategies to help you grow your business and your portfolio. And today, I'm very excited, we got a very special guest, Kevin Bupp in the studio with me how you doing today, Kevin?
Kevin Bupp 00:47
Steven, I'm doing amazing, my friend. Thanks for having me on.
Steven Pesavento 00:50
I'm glad to have you back. And I'm really excited to share a new book that you've finally put together to share some of those lessons that you've been learning for like four years 500 plus interviews of people. And finally, some of those lessons down in one place. What's the book called for listeners,
Kevin Bupp 01:07
it's called the cashflow investor, you know how to create financial freedom investing in commercial real estate. So that's awesome. So investments is what it's all about my friend.
Steven Pesavento 01:16
It is cash flow is what it comes down to grow that equity and then create cash flow. And for those of you don't know, Kevin, he's a Florida based real estate investor. Big podcast has been in the game for a long time. And a serial entrepreneur who has over $250 million of real estate transactions under his belt. And he's operated in a bunch of different niches from apartments to single family to Office self storage to parking and a lot of others in between. So today, we're going to be diving in to what is the cash flow investor? Why is it important to have cash flow as a key part of your portfolio strategy, and some other great lessons. So if you're interested in passive investing, or you're actively investing, and you're looking to start making a transition to actually creating what that passive income life is all about, today's episodes definitely for you. So Kevin, tell us a little bit about what led you to this path of putting all these lessons down onto paper?
Kevin Bupp 02:14
Yeah, that's a great, great question, Steve. And, you know, the book is a, it's a compilation of my 20 plus years of experience as a full time real estate investor, lots of lots of lessons I've learned along the way, lots of struggles, lots of challenges, and lots of victories as well. And so it's part that and it's also part, the lessons that I've learned personally, from the, you know, 500 plus interviews that I've done through my real estate investing for cash flow podcast that I've been hosting now for over eight years. And so I've interviewed some incredibly successful commercial real estate investors. And I've learned a ton over those years. So I've kind of compiled all that put it together into this book. And you know, the reason behind it really is I've been an I was always an early adopter of education, getting into the real estate space, reading as many books as I could listen to the podcast when podcast finally came out. And before that, it was just cassette tapes. You know, you're too young Stevie. Don't remember that. But anyway.
Steven Pesavento 03:10
Oh, I remember. I remember. Yeah. And again, mixtapes back in the day,
Kevin Bupp 03:15
that's it. That's it. Absolutely. And so, you know, I've always been a student of education and just learning from others that have been there and done that. And, and I surely wouldn't be where I'm at today, if it if it wasn't for that. I mean, I had a mentor early on, I've had many over the years. But one mentor that you know, is the person introduced me to, to real estate, David, I write about him in his book a quite a lot. And again, I don't know where I'd be at in this world if it wasn't for meeting David. And so this book is really, it's my, it's my extension of what I've been doing with the podcast, you know, I started podcasting. Just really to give back. And I thought that back then, when I started that there was information out there that I was seeking that wasn't yet in the podcast realm. You know, there's many other podcasts out there today that share similar topics and strategies that I do on my show, but eight years ago, that didn't exist. And I figured that if I was looking for that information, there's many others as well that were looking for that information. And so I thought that I would start that show and help others, give them guidance, where they had voids in their business where they're just getting started or looking for better ways to leverage their skillset and their and their capital by again, investing commercial real estate. And so this book is just become an extension of that man, I really, I found, I found that I really enjoy helping others. And you know, just like I'm sure you get, you get emails from your show, I mean, you're out there, you're impacting 10s of 1000s of people. Over the last eight years, I've received countless emails and letters and just feedback from the listener base, you know, stating of how I helped them throughout whatever part of their journey they were in. In real estate and again, the show specifically is geared towards cash flowing commercial real estate asset classes. and ultimately getting the book is an extension of that. So I think it's helping others,
Steven Pesavento 05:04
it's, it's so powerful, because when you put yourself in a position to be able to go out and share what you learn, you actually end up going into learning that material from a different place. Because when you're going to go and teach it, you actually have to learn it at a much deeper level. So I've personally found it sounds like you found as well that, that your ability to be a practitioner improves, actually through the process of teaching. And so, you know, you've been, you know, 500 plus interviews, millions of downloads, I'm following your footsteps. I'm learning from some of the best here, but tell me, you know, I'm a big believer in going out and creating cash flow, that passive income, and I really also believe in the power of being able to create equity growth, appreciation, you know, what is the cash flow investor? And how should someone really kind of position this in their mind?
Kevin Bupp 05:53
Ya know, that? That's a great question, you know, I my definition of a cash flow investor, it's someone you know, who is who's leveraging, again, for the topic of this conversation, they're leveraging cash flowing Commercial Real Estate Investments, and you know, there's many different asset types that fall underneath the commercial realm. But, you know, again, for the purpose of this discussion, someone who's leveraging cash flowing Commercial Real Estate Investments, to not only build wealth, but really to, to create, you know, the freedom and the lifestyle, that they desire for them, and for their family, whatever that might be. And it's really to stop trading their time for money in leveraging these cash flowing assets. So that they can get their life back and again, build a life of their dreams. And, you know, I can tell you what that like, what does that mean, for me, that means something different for everybody. For me, man family is no family is absolutely number one for me, you know, my kids, I've got a five and eight year old love my wife to death, love my kids a death love My in laws. I mean, it just, I'm a Family Guy, I, you know, I know that every day that goes by the day, I'm not getting back with my wife or my kids. And, you know, for I had kids aren't told me just, you know, enjoy every moment because they're gonna grow up so fast. And you're like, Yeah, whatever. And, and now it's happening to me. And so for me, it's about building a portfolio of cash flowing assets that give me the freedom and time for me times, incredibly important. So I want to spend as much time with them as possible, I want to travel, create amazing memories, and not be limited by a corporate gig or by some other type of endeavor that just really weighs me down and chains me down. In addition to my family note, I'm involved in multiple different charitable endeavors that are near and dear to my heart. So this gives me the flexible flexibility and freedom to, to, you have to spend time and focus and help causes, again, that are that are really important to me. And, you know, and so getting cash flowing real estate, that buying assets that provide cash flow into your bank account, each and every month is is the way to do that, you know, real wealth, it's really, it's, it's created, it grows over time by buying the right assets for the long term. And that's what we do by buying cash flow, cash flowing real estate investments.
Steven Pesavento 08:12
So the definition of a cash flow investor is that drip, it's that consistent paycheck that is going to come every single month, where every quarter from the property from the assets that you own, and in this case, we're talking commercial real estate assets. And so really, if you're a cash flow investor, it sounds like you're that person who's going out there, you're finding ways to put your money into assets that are going to deliver cash back on a regular basis.
Kevin Bupp 08:37
That's right. It's an annuity. It's an annuity. And I don't want to I don't want to make it seem as though, you know, appreciation. I mean, this isn't a cash flow versus an appreciation model, right? Because you can have both inside a cash flowing asset with forced appreciation we know I don't know if your listener base I'm sure they're privy to what our definition is. But yeah, so we can force appreciation so we can have our cake and we can eat it too. You know, I created this annuity allows you gives you the time and freedom to to make other choices. Maybe it's to start another business, maybe it's again, to spend time with your family to travel. What have you, you know, you and I both know, we've been in this game for quite some time now. And I've got a lot of close friends that that are in real estate. They've got some incredibly successful businesses, flipping homes, wholesaling homes, I know a guy that literally, they rehab, I don't know how they do it, it literally it hurts my brain to think of it but they literally rehab like 300 Plus houses a year, which is absolute insanity. To me,
Steven Pesavento 09:32
that's painful. I did 75 houses a year and I can't even imagine staying in and living that life every single day. But then again, you know, people find out what they're the best at right. And they build
Kevin Bupp 09:42
Yeah, no, I agree that the challenge with that model now don't get me wrong. He's taking that capital. He's very intelligent with his money. He's taking the capital he's making from that business, which is very, very time consuming and putting it into cash flowing asset because he doesn't want to do that business forever. Right? Like this isn't an attorney business for him. This is As a means to an end. So you can stack enough cash, put it into passive investments, so that he can get his time back. But I'll tell you, I think there's a simpler way, Stephen to do it, I, you know, I don't know, if you have to grind away that 15 years, you have to grind. But you don't necessarily have to give up 15 years of your life, which again, I'm not going to mention names. That's what these these individuals do. I know. And I tell you that they're still grinding that 6080 hours a week, and you got to put the time in, but you also like you can't you can't get those days back. And I think there's a smarter way, there's a more intelligent way to do it, and do it from the start and buy these larger assets by these commercial assets that are cash flowing from day one, and can help you achieve that lifestyle goal much quicker than, you know, waiting 1015 20 years to do it.
Steven Pesavento 10:45
Yeah, well, absolutely. I mean, I had the realization, you know, short story was in single family, you know, as flipping building this consistent business, you know, 200 houses in two and a half years and just looked around and realized, there's got to be a better way. I wanted to pause from today's conversation to share something that's been heavy on my mind, as I'm talking with investor after investor. And I continuously hear this concern, it's the concern about inflation. We've seen some of the highest inflationary periods in the last 20 years, up 7.5%, some believe inflation is actually closer to 20%. But what does that mean for you? What the core means when money is sitting in your bank account, or it's not an assets that are hedging against inflation, that you're actually losing buying power? So what does that mean? It means other things around us are getting more expensive. And the dollars that are sitting in your bank account are becoming less valuable. So what do you do about it? Well, one of the best hedges against inflation is investing in real assets, specifically, real assets like multifamily. And why is multifamily so powerful for hedging against inflation? Well, we've put together a phenomenal 30 minute purely educational webinar to be able to share with you why multifamily is such a powerful opportunity right now, why it makes sense to invest in a very hot market, because inflation is so much hotter, and exactly how you can get involved. Now, if you're interested in learning more and educating yourself, and potentially having the opportunity to get involved and actually hedge against inflation yourself that I encourage you head over investor, mindset.com/start, that's investor mindset.com/start. And you can register for this 30 minute presentation, that's gonna be able to bring you through all of the reasons that you need to know and understand to avoid some of the biggest common pitfalls when it comes to investing, while also setting you up to invest to hedge against inflation, through and through, enjoy. And let's get back to the episode. So tell the listeners why commercial real estate is that better way?
Kevin Bupp 13:01
Yeah, no, that's, that's a great question. You know, and I, and I want to say there's, there's really nothing wrong with residential real estate, this isn't a, you know, you know, commercial, the best residential, you're wasting your time, not at all, I mean, in fact, I do think it's, it can be a great place to get started. I mean, that's how you got your start, that's how I got my start. We know plenty of people that still make great money investing in residential real estate, I just think there's a much more scalable model, you know, residential, you know, cost of entry is lower, but there's creative ways to get into commercial real estate, with a low cost of entry as well, you just got to be a little bit more strategic in doing so. You know, residentials got, you know, amazing financing terms. But there's limitations to that as well. Right. And so again, I don't want to, I definitely don't want to pound on residential and say, waste your time. Don't consider it yada, yada. That's just not I
Steven Pesavento 13:52
do I want to I want to pound on a second. I mean, look, I think you go ahead, and you go, but I have to stand up for both. But I think I think it's great. I think it's a great option. But once you understand that it's an entry point. And less, it's much harder to build a business that's scalable on single family, it's just really difficult to do something when a property is so different over and over again, it's great for like the onesie. twosie. But it's hard when you're talking about going and buying 100 Or two.
Kevin Bupp 14:22
There you go. You hit that you hit the the key word there scalable, right. And you again, you had a you had a booming business against 75 homes here that, that that gives me a headache as well. It's just I mean, that's a lot of that's a lot of flips, that's a lot of projects,
Steven Pesavento 14:38
recovering from it, the therapists that oh, it's like, you got to work through that trauma of dealing with that many house flips.
Kevin Bupp 14:44
Yeah. And so you know, and that was probably a tough go. You probably you managed a lot of those roles when you're the first couple years and just really challenging to hire people when you don't have a lot of revenue coming in. Right. And so, it's one commercial real estate deal. Again, you could go out and buy a tenant million dollar property, and just from the asset management fees alone can probably justify being able to hire some additional staff, maybe a an assistant or maybe someone else in your team that can help start taking those responsibilities away from you. And so buying two three commercial deals, you might have an entire team underneath you now that allows you to focus on what your best skill set is, maybe that's raising capital, maybe that's finding deals like you don't want to spend time in the minutiae behind the scenes, the operational side of business, you want to be out there doing what you're the best at whatever that might be. And so I think you can get there a lot faster by buying larger assets, you know, ie commercial, commercial real estate. In addition to that, you know, it's, I'd say that, it again, there's many different asset types of falling into the commercial umbrella. And so I want to make sure that there's no confusion here and so multifamily, I know that that's the space that you're in Steven. And so I'm going to take that out of the equation for this particular part of the conversation. And you have the remainder of the asset classes, most of them again, industrial retail office hospitality. Yeah, yeah, I mean, like, there's a lot of other ones there. For the most part, and hospitality is a little tricky right now. COVID, right, it's one that's been impacted fairly significantly. But generally speaking, if you're buying a prime piece of real estate, you're getting a much higher tenant base that you're dealing with. And those types of assets I just mentioned, and lots of times, you're getting longer term leases as well, you're not necessarily doing just a annual lease, these are 510 15, sometimes 20 year leases, there's an opportunity to buy properties that are on Triple Net leases, which is literally about as passive of real estate that you can have. So you can have really high quality tenants that have incredibly long term leases. And their triple net leases, again, that's just one type of, of commercial real estate investment, but like that, those types of investments are about as passive as real estate becomes. And so again, just many different ways to skin, the cat with Commercial Investments. And I just, I think it allows you to get bigger, much faster, and hire the team, right? Hire the team that's necessary to operate your business, it doesn't have to be a huge team. But hire those necessary skill sets that allow you to not have to grind that 50 6070 hours a week to give you the freedom give you the lifestyle that you so choose.
Steven Pesavento 17:17
Yeah, I think that's such a great way to put it, Kevin, I couldn't agree more. It's, it's interesting, because, you know, single family, people need to live in homes, and even big companies like Blackstone, and some of these other invitation homes have found a way to scale, buying single family homes, and they're creating a profitable model. And so it's absolutely doable. But when you go into something like you're talking about on the commercial side, non residential, you know, there's some big advantages, I'd love to hear about, what are some of the advantages in your eyes of going after something like a triple net, or an industrial or, or one of these types of properties that are different than what a lot of people think of when they think of real estate? And just kind of compare and contrast? Because I know you've invested in quite a few different things.
Kevin Bupp 18:04
Yeah, no, I think I just mentioned a couple of them. So you know, using the, you know, the triple net or in that could be that could be a retail triple net, or that can be an industrial triple net, I mean, both of them are, you know, commonly have triple net leases in place. And again, I think one of the big ones is the, you know, the quality of the tenant, you know, instead of having a individual that's, you know, working a job or renting a home from you, or an apartment from you, that they lose their job, you know, they're not gonna able to pay their rent, and you base it on credit scores and things like that as well. But with a with a commercial tenant, again, let's maybe it's a Walgreens, or maybe it's another national brand that's in a retail location you have or if it's on the industrial side of things, it could be a fortune 500 company, a large manufacturing company, but basically, you're dealing with most of the times, you're dealing with a higher, higher class of tenant, someone that's going to have a corporate guarantee in place, which gives you a much needed security on that lease agreement, because again, these leases are, you know, can be as short as five years and can be I've seen leases as long as 25 years. And in that scenario, again, just you're dealing with, you know, Betty and Bob that are renting the apartment have a job, chances are they might lose their job versus you dealing with a Walgreens on the other side. So I think that there's the risk associate associated with one is much greater than the other. So yeah, one could also argue the point I, you know, I can argue from both sides of the table, and that's why
Steven Pesavento 19:31
let's hear the cons. Well, that's what's the downside of that. And how do you overcome it?
Kevin Bupp 19:36
Yeah, so I gave it a great example of the downside. So getting locked into a 10 year triple net lease, most of these leases have annual increases or escalators in them and most of the time, it's, it's not directly tied to CPI, a lot of times it's just a percentage. If it's a smartly release, then it's actually tied to CPI, which obviously there's there's some, there's some changes that can occur and got ebb and flow with CPI. And so Right now with this high inflationary environment, one could argue that if you've got a triple net lease, even if it's with a Walgreens, that's great. And you've got eight years left on a 10 year lease, but the annual escalators only 3%? Well, you and I both know that inflation knows what the real number is. But one could argue probably, then it's, it's double digits, right. And so you're actually losing out in that scenario being the landlord, because you're locked into this lease that can't be changed. You know, now, at the end of that term, you know, you can ultimately reset if you're going to sign another lease, whether it be a Walgreens or another credit tenant, you could obviously reset it to whatever market is at that point in time and hopefully, start trying to recapture some of that value that you lost over the years. But in a in a in a residential scenario, you've got annual leases, assuming you've got a new lease that some people have month, a month, but in a normal sense, you've got an annual lease, guess what you can reset that rent to market, which we know has been happening a lot over the past year or two, in the apartment space in the single family rental space. And so you're not stuck into that long term lease that doesn't allow you to capture, you know, inflation, which is again, just running rampant this present time. So again, kind of pros and cons of both. And again, that's why this isn't a one's better than the other. However, I do think that again, commercial is a much more scalable option. You know, going out and buying $10 million worth of commercial real estate is a much easier feat than deploying $10 million of equity into single family homes, going out and trying to buy a package or you know, assembling a package of single family properties. And then in addition to that, the management inefficiencies that exist with the, with the single family, you're buying a bunch of single family homes, that even if they're, you know, in the same area, you know, if they're within a couple miles of each other, the inefficiencies are real. And and they catch up to you fairly quickly sound like you weren't you weren't in a rental model, were you mostly flipping your homes? Or did you actually build a rental portfolio as well, when you're in the residential space.
Steven Pesavento 22:00
So we built some rental, we built somewhat of a rental portfolio, but we really focus heavily on flipping, okay, and we started holding on to properties. And that's when I really saw that, hey, I thought I had built this pipeline of deals. And it was really difficult to hold on to something to get a couple $100 of cash flow, or potentially even breaking even, versus flipping it making 20 3050 grand. So we were definitely heavily focused on flipping, but we really saw how tough it is, and how really expenses can go wild. And, you know, I think a lot of single, I think a lot of people, when they think of real estate, their first thought is, oh, you're talking about buying a rental home. And then they think, Oh, it'll be passive, because I'm going to put a property manager in place. But then they forget that the property managers incentive is only 6%. Right? There's not alignment of incentive, or alignment of interest. Because you know, if it's $1,000 a month in rent, they're making $60 a month, they don't care if the maintenance guy comes out there and that cost 250 versus, you know, sending someone out to just check on something for a few bucks, it ends up really kind of creating a scenario where you really do have to asset manage your properties. And that's I think what drives a lot of people who have experience, and they have a bad experience. Yeah, renting or managing single families leads them towards, you know, people like us who are experts in our space and go out and, and take care of the rest.
Kevin Bupp 23:32
Yeah, and I agree with you. And I think it sounds like you've had that that experience, I've had that experience at years past when we owned over 100 single family properties and had them as all rentals. And you know, what you start finding is that that, that misalignment of interest, again, they're charging five or 6%, you know, they're going to beat you up on the other line items, either they're just not going to care at all, and I couldn't do anything, they're going to handle maintenance issues, or they're going to handle them and they're going to be at an inflated price and ultimate, you're going to find that your cash flow is, is going out the door it's going into maintenance repairs, that are probably inflated prices that might not even need done right like things might not have never never broken but you've got an invoice you're eight states away, you're not going to fly there just for just a check on the single family home that suppose these a new water heater and a new stove. And guess what that one single family home if you've got to replace a water heater and a stove and one you know one year period of time, that's probably going to wipe out a good portion of your of your cash flow that for that entire year. So it's just you know, and then if you lose that tenant, that's the big part that we didn't need you to hit on it head on yet if you lose that if you have we're talking about single family homes here and you lose that tenant. You're effectively 100% vacant at that point in time. And you know, right now there's an incredibly high demand for for rentals and so we're at a you know, kind of a unique time and that even in tertiary markets, you know, rental homes are flying off the shelf, there's demand for if it's a decent market, not in declining area and people aren't moving out in droves, then there's a huge demand for for housing. But when you turn a single family home, you and I both know when you turn when the single family homes, if it's a standard, you're 1500 square feet, you're probably going to have to probably do either replace flooring, if it's got carpet, or you know, if you put vinyl on there, maybe not, you got to pry repaint it, you're gonna have to do some other odds and ends, it's gonna be vacant for probably two months while you turn it. And more than likely that the cost of that turn would have eaten up the majority of the cashflow that you would have made in that one given year. And so you just start all over again. Now I know that, you know, tenants are typically stickier, we're starting to talk about single family homes, and they might be in an apartment space. But it doesn't matter that cashflow goes out the window incredibly quickly when you have to turn a unit or when you have to deal with a property management company and repairs and maintenance and get all the efficiencies that exist on that side of the coin.
Steven Pesavento 25:54
Yeah, yeah, it's so it is it's it's a challenging place to be. And that's why it makes a lot of sense to really figure out hey, what's going to be best? What are the best places for people to put money? And so when you're looking at asset classes, from your perspective, and from your experience, what are some of the asset classes that you like the most for cash flow right now in today's environment? You know,
Kevin Bupp 26:17
that's, that's a great question, you know, and, you know, the simple truth is everyone needs a roof over their head. And I think that you know, anyone that's coming from a single family or residential investment space, and moving into the commercial side, the two asset classes that are incredibly easy to understand, as multifamily and mobile home parks, they're both they're both multifamily investments, this one looks slightly different than the other one, right. But one cannot argue that everyone does need a roof over their head. And so I think it's much easier to understand both those asset classes. And and they're both phenomenal places to use to generate cash flow and significant returns on your capital. You know, I think it takes a slightly better understanding of the marketplace, and also the various industries that you might be serving when you start venturing into, for example, like industrial space, or retail space, because in those scenarios, now, you're not just you're not just basing your investment on the marketplace itself or on the asset class. But now you're equally as much underwriting the actual tenant in a very different sense. And what you might be actually doing a creditor background check on a residential tenant, now you have to get a firm understanding of the you know, company's financials, the chances the chances of them succeeding or not succeeding, what have you, which takes a slight higher level of sophistication. So not not that you can't go that route right out of the gate. But I just think that housing is much easier to understand. And again, everyone needs it.
Steven Pesavento 27:48
So enter, enter the space through housing, because it's really easy to understand, we've all lived in a house, we can understand where some of those core things we look for, we've kind of dealt with that, as somebody moves from that place, right? That's where our focus is, that's where your focus is, as someone moves into another asset class, say something that isn't based specifically on people, how should they go about thinking about the process of selecting the right operator or the right team to kind of enter that space and really understand, Okay, we're gonna, we're gonna do well
Kevin Bupp 28:22
here. Yeah, I'm gonna back up a little bit, you know, you can make you can make a ton of money in every different asset class that that, that we've discussed, and then getting into like more than niches, you know, commercial side of thing, you start talking about, like assisted living and and you'll parking lots, which we also invest in medical office space, or self storage, and you know, the list goes on and on. And you can make money in any, there's, there's not one right or one wrong place that you can or cannot make money, I think what you have to do is get a general understanding of all the different types that are out there and find one that you feel is best in alignment with your skill sets your interest, I mean, for example, assisted living, don't get me wrong, like I love taking care of people, but I'm not, I don't have a caretaker mentality. And I think you actually really need that to thrive in that space. It's a real estate play, but it's equal amounts of business play, but it's a people play and I, you know, we care for our tenants, we, you know, you'll provide them with amenities and try to give them a great experience living in our mobile home parks. It's a very different world in the assisted living space. And I would say that, that space, if you're going to get into it, it might not be best suited for your personality type. And so don't don't, don't follow the shiny object. And, you know, listen to Steve and talk about multifamily and think that that's the only way to make money or listen to me talk about mobile home parks and parking. I think that's the only way to make money Kevin's killing it. That means that I can kill it there too, because you can kill it. And just about any asset class that's out there. Maybe not. Maybe not hotels during tears or COVID unless they were like resort hotels on the beach down here in Florida, but generally speaking, you can make money In any asset class, so find the one that is best in alignment with you, your personality, your lifestyle, and, and there will be one in there that that fits your needs. So again, that's a very vague answer to your question of like, where do they go after multifamily mobile home parks maiocco anywhere. It's not that one's better than the other. And so maybe they find that just like you, I mean, mobile multifamily apartments like this is it, this is a space and I'm passionate about this place I enjoy being I enjoy the team that I'm working with, I've met some phenomenal people that partner with over the years, and this is it, this is for me, I feel the same way about mobile home parks. I know that sounds kind of goofy to say, but like, I really enjoy the space, I enjoy the industry. I enjoy the people that we serve. We provide a phenomenal type of affordable housing to the different marketplaces that we are in. And it's it's suited for me, it's allowed me to create a lifestyle of my dreams. But also I've been able to positively impact a lot of our residents that we that we provide housing for, right? And so it's a win win all the way around. So that again, there's not like a well, where do I go after that you might not go anywhere. And I will continue to say that, you know, parking lots, you've heard me mentioned parking lots, we started investing in parking lots about about two years ago. Now, this is me, this is kind of my philosophy, I, I've always considered myself a little bit of a contrarian investor and going the opposite direction of the herd. That's not a good or bad thing, you can make plenty of money going with the herd as well. But mobile home parks 10 years ago, it was not sexy, institutional capital, private equity firms, they could care less about that asset class. I mean, everyone's thumbing their nose up at it, it was really challenging to get financing most, you know, maybe nine or nine out of every 10 banks you talked to didn't understand it, you'd have to find that one that actually would lend on it. It's a very different world today. Now there's billions of dollars of institutional capital pouring into the space. And it's a little more challenging to define the opportunity. And so what once was a, a kind of an undiscovered niche, now it's been discovered. And so parking lots became that other undiscovered niche for us, you know, again, kind of a contrarian investment, finding cash flowing parking lots that are owned by Mom and Pop operators, which mobile home parks were incredibly fragmented a decade ago, that space has become very consolidated apartments 30 years ago, were very fragmented. Now they're very consolidated self storage 20 years ago, was incredibly fragmented Mom and Pop ownership, it's quickly becoming consolidated. parking lots, parking lots are probably the most fragmented niche that I know of at present time. And so there's opportunity in the niches, you know, there's someone wrote a book says, There's riches and niches, and I believe that and your parking lots fits that need for us and our philosophy and how we like to invest. And so again, there's nothing right or wrong about that. But that's just that's kind of how we go about finding asset classes that are best suited for us. Well, I
Steven Pesavento 32:55
love the philosophy. And I, when we first started talking about parking lots, I already knew the model and looked at it and just thought, yeah, it makes a lot of sense. You know, there's definitely cash flow, you're buying an asset, you're understanding what's the usability of it, how can we improve it? Where can we add value, I think that's really, really smart, I want to just further back up your view that it, it makes a lot of sense, figure out something that you're passionate about, that you care about, that you can learn something about, so that when you're investing those dollars, into your, whatever asset that is that you have some interest in the end result that you know, enough to know that it's a good deal that you have enough interest to be able to look at it. Now, many people I know they're not interested in getting that deep. But you got to get at least deep enough to be able to build that relationship with a sponsor to be able to know that they're going to be a good shepherd of your dollars. Now we invest heavily in multifamily. But really what we're investing in his value add, we really believe that that ROI is created that we go and discover it and then we created out of thin air. And we can apply that model to just about anything. I mean, we very separately have a an NF T fund do Am I an expert in NF T's? No. But I went and found somebody who was an expert, we put together some capital and we went and raised money in that space. And we've you know, made a four or 5x return within a very short amount of time because that space is insane. Now, I wouldn't bet my life on it. But it's sometimes you need to understand what money is going to go into what buckets and I think a big mistake and maybe you've seen this with some of your clients that I hear people talk about is they say, Well, I've got one multifamily property. I've got one mobile home property. Now I need to go find something and another asset class. Yeah, and there's benefit with that, but there's a lot of downside. And talk to me about what you think the downside might be.
Kevin Bupp 34:48
Yeah, well, I mean, focus Come on. I mean, just you're never going to master anything. If you can't keep focused on it for a period of time and that's that's not gonna that's not like four months. You can't like you know, little Seeing the podcasts reading books, go buy one mobile home park. And now all of a sudden, like, You're the master of mobile, home parks or multifamily, whatever, you'll pick the asset class. And now you're moving on to the next one, at some point, you're going to be more prone and maybe made isn't that second gear, you're gonna be more prone to make a mistake, maybe buying a bad market, maybe not fully understand the operational side of that particular new business that you're going to buy. Because again, you haven't taken the time to master and the only way that you can do that is by this repetition, literally just buying more assets, understanding the industry, being your knee deep in the industry, knowing everyone the hitters in the industry and networking with them, and learning, you know, the challenges that they face, the mistakes they've made, how to avoid those same mistakes, right, like don't just don't reinvent the wheel, just follow those that are already on the trajectory that you want to be on. And again, it's hard to do that when your focus and you know, you're shifting all over the place all the time. And so again, like the you know, I spoke to mobile home parks, but then also us buying parking lots, it literally took us eight years, eight years to actually even consider you kind of going out of our our little comfort zone and buying another asset class. Now don't get me wrong, I've got passive investments as an LP in multifamily. I've got it in assisted living, I've gotten a medical office and self storage and, and a few others. And I understand all those asset classes from a high level, I've taken a lot of time to get to know the sponsors, understand the track record. And you know, there's the ones that have kind of picked out, I mean, I'm betting on the horse, I'm betting on the horse in that scenario, I'm not a master in any of those other asset classes, I stay in my lane, and I'm a master in the mobile home park space. But again, it took me eight years even consider letting another space come into my brain, you know, for us to actually take on as a company. And we studied parking lots, we literally attended conferences, national conferences, there's there's three industry associations, for two years flew experts in the Tampa spent, you know, a day with them, you know, just literally picking their brain spent two years doing this before we bought our first parking lot, right? Not that I didn't want to buy one sooner, but like I just, I didn't know what I didn't know. And maybe that was a little too slow. But like the park, the parking assets that we purchased that present, you know, up to this point in time have been phenomenal winners, right. And so, but it's taken time to get there, and I don't think you can ever get there. If you're, you know, all over the place looking at a million different types of asset classes. So anyone just this might kind of my two cents there. Again, back to the whole point of you can make money in any different type of real estate, right? Pick one, pick the one that is best suited for you. And just forget all the other noise, just tune it out, do local social media, because everyone's making a ton of money on social media and all the different types of investments that they're doing. Just try to try to zone it out for that period of time. Now, if you're just if you're just a high if you're a high income earner. And so let's there's two different sides of this coin here. So we're kind of talking to, like, you know, your business and my business like, these are our businesses like, like we're operationally involved in these businesses. You know, if we're speaking right now, in this, through this power listener is
Steven Pesavento 38:08
high income earning a high
Kevin Bupp 38:10
income earning, invest passively. That's it. That's it. So a little different, a little different there. Right. And so, I do think that one can, you know, learn enough get comfortable with particular asset classes in a shorter period of time that two years, like I said, with parking lots, study the asset classes, figure out who, who did different sponsors are within those particular asset classes, and, you know, interview them, get to know them, get to know the team, you'll go view their projects that go out in the field, you'll spend, spend intimate time with them. Because again, at the end of the day, your track records important, and you're betting on the horse, you're betting on that sponsor to, you know, you know, treat you well and you do right by your investment and run the property like they say they're going to run it and I, you know, you absolutely can do that be diversify. Like I just mentioned, I am I've got investments in a bunch. I wouldn't know how to run an assisted living facility. But I've got, you know, good bit of money and a few different assisted living facilities, I would have no idea I have no space from high level, feel comfortable with it. Love the sponsor, track record speaks volumes, and I'll put my money there all day long. So
Steven Pesavento 39:18
I agree. And I think that diversification is phenomenal, and we definitely promote it toted as a feature and a benefit. I think sometimes people focus on diversification for the sake of diversification. And actually, when you're focused in one place, even as a passive investor, you can end up finding different nuances that will allow you to create a higher rate of income faster. So wrapping up, this has been phenomenal. The book is called the cashflow investor, Kevin, where can people get a copy?
Kevin Bupp 39:49
Go to Amazon, go to Amazon, just type in my name or cash flow investor or go to cash flow investor.com Either one of those two places you can grab a copy.
Steven Pesavento 39:59
Awesome well Thank you for joining us really awesome to dive in. Everyone should go out and grab a copy of the cash flow investor and take some action with the lessons that we learned today. Thanks, Kevin. We'll see you guys next time.
Steven Pesavento 40:17
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