Our guest this week, Jeremy Roll, has built his entire 16-year career around passive investing and has more than $1 Billion worth of real estate and business assets. As Founder and President of Roll Investment Group, Jeremy manages a group of over 1,000 investors in the US and Canada who seek passive/managed cash flowing investments in real estate and businesses. Jeremy is originally from Montreal, is a licensed California Real Estate Broker (for investing purposes only), has an MBA from The Wharton School, and is an Advisor for Realty Mogul, the largest real estate crowdfunding website in the US. We go into why Jeremy became an investor, what he learned along the way, and how you can achieve success in your investing career without hitting those common pitfalls. Jump into this episode and learn what the pros/cons of passive investing are and if it's the right choice for you and your personal situation. Are you a passive investor and have something to add to this discussion? If so then subscribe and drop a comment below!
Our guest this week, Jeremy Roll, has built his entire 16-year career around passive investing and has more than $1 Billion worth of real estate and business assets. As Founder and President of Roll Investment Group, Jeremy manages a group of over 1,000 investors in the US and Canada who seek passive/managed cash flowing investments in real estate and businesses. Jeremy is originally from Montreal, is a licensed California Real Estate Broker (for investing purposes only), has an MBA from The Wharton School, and is an Advisor for Realty Mogul, the largest real estate crowdfunding website in the US.
We go into why Jeremy became an investor, what he learned along the way, and how you can achieve success in your investing career without hitting those common pitfalls. Jump into this episode and learn what the pros/cons of passive investing are and if it's the right choice for you and your personal situation.
Are you a passive investor and have something to add to this discussion? If so then subscribe and drop a comment below!
KEY TAKEAWAYS
LINKS
https://www.linkedin.com/in/jeremy-roll-655107/
Steven: [00:00:01] What does it look like to build an entire life around passive investing? Well, today I'm very excited. I've got Jeremy Roll on the podcast, who's going to be diving deep into how he has built an entire career around passive investing. What to do, how to think about it, what are some of the advantages, and as he's a personal investor in some of the deals that we've done, grateful to have him and grateful to be able to share that with you guys. So let's get right into it.
INTRO: 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: [00:00:51] Hey, guys, welcome back to the investor mindset Podcast. I am Steven Pesavento, your host, and I'm super excited. I've got Jeremy Roll in the studio today. How are you doing Jeremy?
Jeremy: [00:01:03] Good. Great to be here. Thank you for having me. I really appreciate it.
Steven: [00:01:06] I am super glad to have you. And I met Jeremy first and foremost in a FIBI event, which was one of my first real estate investor events ever. And Jeremy started real estate investing back in 2002, and left the corporate world in 2007 and became a full time passive cash flow investor, super unique, but super powerful. He currently is an investor in more than 60 different opportunities across over a billion dollars with real estate and business assets. Of course, he is also the co-founder of for-investors by-investors, aka FIBI, which is one of the biggest meetup groups in Southern California. And one of the things that I really appreciate about it is that it's a strict no sales pitch environment. So it's all about connecting. And that's definitely Jeremy's focus, it's about delivering value and providing value. so grateful to have you on today and we're going to be diving into here is this idea of becoming a passive investor. And for you, you're a full-time passive investor, it's 100%, your focus. So before we dive into that, I want to start with something that I always start with guests on. And it's this primary question of, if we start out by taking a look back at what events or influences from earlier in your life, specifically, from your childhood shaped who you are today?
Jeremy: [00:02:20] I would say that I'm a very conservative person, and not just with investing, but overall. And I think if you ask the average investor about me, as an investor, I'd say everybody knows I'm conservative. So I got a lot of that, certainly from my family, and my grandfather, who has a really big influence on me in general, coincidentally, he actually was a real estate investor, he actually did a ton of flips in Montreal, where I'm from, before I was born, even. And then eventually, on some commercial stuff, unfortunately, due to an agreement he had with his partner, and he wasn't allowed to bring any of the grandchildren into the business. There were specific reasons, he was a little concerned about the other side's grandchildren and their actions and all this. So I never really got much exposed to it and I didn't talk too much about it. But I definitely got a little bit of that from him, as well as the conservative nature for sure. And I continue to be ultra conservative today, just as far as how I think and what I look for.
Steven: [00:03:09] Yeah, it's so interesting, because anybody who does know you, knows that you are probably one of the most conservative passive investors that I know out there. You're very conservative in the timing, you're a big believer in investing at the right time with the right operators. And so I'm excited to go into the conversation with that in mind, and to understand how others can learn from that conservative nature and start applying that directly in their own career. But before we get there, tell us why did you go this route of being a full-time passive investor instead of going down the route as an active investor, like so many people are pushed to do?
Jeremy: [00:03:43] Yeah, great question. So it wasn't actually by design. It wasn't some amazing strategy. I went into everything and honestly, I actually love hearing stories about people who are in the corporate world who have this five or 10 year outlook that they want to get out and they go down this path of trying to be it full time, and they get out. I love seeing that happen. But it wasn't my case. So back [00:04:01 Unintelligible] after the.com crash for anyone here to remember that I was a long time ago, I was sick and tired of the stock market for two primary reasons. One is the volatility. I'm just still a great low risk guy, I don't like [00:04:12 Unintelligible] going up 30% in a year down, 30% is just not the right fit for me. But more importantly, it was a lack of predictability as to where my retirement account would be in something like 5/10/20/30 years from now. I just did not know where it would be and eventually concluded that looking for more low risk, passive cash flow would be the best fit for me. That's when I pivoted to cash flow. Now, my intention at the time was to have a paycheck and I was actually working at Disney headquarters middle level manager, a good job at the time. So I decided to look at passive and my intention was to have my paycheck and the passive cash flow with the passive cash flow meant for my retirement account many decades down the line. So fast forward to 2007. I'm working at Toyota headquarters here in LA and same deal, passive cash flow paycheck, and I had the last straw moment in the corporate world with a new manager to come in from the field to headquarters. And I decided to take a risk and leave the corporate world at that point because I was so fed up. And I didn't have any plan. And so I had enough cash flow built up to live off of, and I said, you know what I'm going to give myself but two years of runway to see what happens. And so that's what happened. So I was very comfortable being passive, passive and active is a very interesting discussion, because a lot of it in my opinion is about personality fit, I was completely comfortable giving up control to somebody else, in my opinion, when you're passive, you trade control for diversification. And I was perfectly comfortable giving up control to somebody else, when I was too busy in the corporate world, it was my good personality fit for me when someone else is doing the work, I get to leverage their credit, time, expertise, all types of stuff. And when I left the corporate world, I did not become active, because I love being passive, it was a perfect fit for me. But I am active in trying to find opportunity. That's my full-time job now. So if I'm active in a way then I'm certainly not active in any specific investments of the management of those investments.
Steven: [00:05:59] Well I think that's such a good point here, because it's not like you're not doing anything. It's not like it's not work in order to go out and find these deals. But there's some points that you often bring up. And that trading control for diversification is such an important one to underline because at the end of the day, that's what it really does lead to, because if you're active, you're going to be focusing all of your time, typically to become an expert in something. And if that's going to be multifamily, then you're going to be focused 100% in multifamily if that's Self Storage is 100% Self Storage, which means that most of your assets, most of the money that you have is going to be invested directly in that one expertise, and you're not going to be able to build that diversification. So it's a really strong point you make there.
Jeremy: [00:06:42] You're right. First of all, I work very hard as a passive investor trying to find, because I'm hyper diversified, which I frankly don't recommend. I am not an investment adviser but I don't recommend what I do for everybody, because it's too many LLCs to manage, like as far as having to find something else to put your money in to see what's going on all those LLCs. But the bottom line is it because I'm not diversified. It's a full-time job for me, I'm constantly talking to operators, other investors, all kinds of stuff going on. And so it's definitely a lot of hard work. But the cool thing is my work is done all up front. As soon as I make that investment, then I have to verify and see what's going on with the quarterly reports. But the vast majority of my work is finding the opportunity and embedding it. And I like that part of the process, I don't think I would enjoy managing a piece of property on a full-time basis, just not the right fit for me.
Steven: [00:07:26] Yeah. And it's so important for people to understand what are you the best at, what gets you excited, because if doing the operation side of the business is not the thing that's going to really light you up, then that isn't where you should be focused, I can relate a lot on that I love the beginning. I love the middle, I love the end, but I don't love operating that business. So I always have to have partners or employees or somebody who's going to manage those pieces. And so if you're an investor, and you're thinking to yourself, where you're going to best fit in, start understanding how that personality is going to play into what you do.
Jeremy: [00:08:00] 100%. And that's why I say the conversation or the thought process behind "should someone be active or passive" is a very important point. And we don't get into a lot of details here. But when you're investing passively, you're going into an illiquid investment, it is not to be taken lightly, that if you're not sure, if you want to be active or passive, you try a little bit active, you try a little passive, you cannot unwind from either very easily, because both of them are somewhat liquid passive being even much more so illiquid, that's something you really need to take a lot of time upfront to sort out for yourself as a personality fit
Steven: [00:08:31] And so how does somebody go about figuring that out for themselves?
Jeremy: [00:08:35] For example, let's say that you've been a business owner for 30 years, and you now either want to retire or whatnot. The question is, do you want to be the type of person who says okay, I'm only comfortable investing within driving distance, I want to be able to see the properties I'm investing in which there's nothing wrong with whatsoever, just another way to do things. And you might be that person and say, Look, I want to be invested within an hour driving just to where I am, you cannot really be passive and properly diversified across operators and asset classes within an hour where you are, that's not realistic for most people. So by definition, you'd probably end up being active at that point to solve that problem. If you have trouble trusting other people, or you're not comfortable trusting other people to run things for you, you're obviously not going to be passive. If you're too busy, and you're in the corporate like I was, and you're like, I have no time to do this. But hey, I love that cash flow. Maybe passive is good for you, as long as you're comfortable giving control to somebody else. So it's a question of thinking through what is the best fit for you up front? And if you're not sure, you can certainly try it. But just put as much thought upfront as possible into it before you just decide to willy nilly try one or the other.
Steven: [00:09:38] Yeah, I think that's such good advice. And so what are some of the upsides of going this passive route? You mentioned a couple of them earlier, but let's wrap around those.
Jeremy: [00:09:47] Yeah, sure. So I would say the obvious ones, I get to leverage someone else's expertise and years of experience in an asset class. I get to be spread across a whole bunch of asset classes that there's no way I could run as effectively myself and learn all those, how many years it would take just to learn one well. So there's no way I can be in the mobile home parks, self-storage, apartments, student housing, apartments, senior living RV parks and others that I'm in right now, I could not be running those all myself and be as effective as all these other people. It's just not possible. So being able, if you really want a lot of diversification, it's a really great way to go. It's a huge plus, I get to leverage someone else's time and all the operating time they're putting into this and actually making in property success and operating well, I get to leverage someone else's credit, that's a huge piece. Because all going to invest in a 300-unit apartment building, an 800-unit self-storage facility and a 200-lot mobile home park, I doubt I would qualify for buying all those myself, and I certainly don't have any track record to support it. So I doubt anybody would be stupid enough to lend me money for that. But I get to go leverage other people who are able to get that because they spent years building up the track record to be able to get access to that. And of course, with the right type of leverage when you're being cautious, you can get much better returns than with no leverage as an investor as long as you're careful. So there's a lot of huge benefits to that. Another thing is I get to be geographically diversified, which would be very difficult to do yourself. But I've actually now in either directly or indirectly, meaning either direct asset investments, or through fun investments that own assets and multiple states. I've been exposed to 43 states as far as my investing. And even if I wanted to, that would take...how many years would that take somebody to do? Can you imagine understanding each market well enough, so I get all this geographic diversification, asset class diversification, and once you're going to go down this path, it's really critical that operator diversification as well, meaning you have to purposely say to yourself, I am not going to be the next person and invest in a meat off where all my eggs in one basket no matter what so because things can happen, even intentional or unintentional etc. So you're going to want to spread your eggs across a whole bunch of baskets from a different operator perspective as well, just to reduce your risk. And I will say that, that's a very important point because the one thing, the additional risk you have when you go past it, is you always have an additional risk of fraud on the schemers management, if you don't have control, you can never get rid of those. So one of the ways to reduce those is to be spread across more and more people.
Steven: [00:12:05] It's such a good point. We're able to leverage other people's expertise, we're able to leverage all of the years that it took for them to build that expertise, the time that they're putting in, and the diversification that comes along with that. But as someone's thinking and hearing all this, they're thinking to themselves, well, obviously there's all these really good reasons one of the downsides of going the 100% passive route, like you've done.
Jeremy: [00:12:31] yeah, so downsides. A lot of downsides also. So A, you have a lack of liquidity. So if you're, let's say, well into your retirement age, you may want to reconsider whether this is the right fit for you because you can't just press sell on your screen and get your cash in three days, like you can with the stock. That's a big problem. And without getting in too much detail, you know, there might be right to refusal to have to sell to the manager or the other investors first, if you need to get out an emergency could take a couple months just to be able to do that you may not find a buyer, you may have to sell a discount, because no one's going to typically pay for an appraisal to know what the property's worth at the time. So a buyer will typically negotiate and say, look, I'm taking a risk, I don't know what your shares are really worth, I'm going to have to get a discount to be fair. So there's a lot of downside in terms of liquidity. There is downside as far as lack of control, because there are times at which I will tell you, I've been on the sidelines, mostly since the end of 2016. So a lot of my energy in 2017/18/19, and even 20 went into lobbying my operator to sell, and I was involved in over 30 sales in the last three years alone. But it's a lot of work because some like I'm one little investor in the deal, I can be less than 1% of the deal from an equity perspective. So my vote is almost meaningless. And that's one of the negatives is that your vote isn't very substantial. But if you say, look, sell this asset it's 2019, there's going to be a downturn soon. And the operator says no, I want to keep grooming it, I don't think it's a good time to sell, you got to go along for the ride. That's one thing you have to be comfortable with. And that's why having more and more diversification will help you in those situations where a certain percentage of things may not go in the direction you want but overall, it's hopefully going in the direction you want. Again, you have that very small percentage of votes so even if you vote for something you think makes sense, it could be the majority of investors don't agree with selling at this time, then you're just stuck. So you have to be okay with that concept that you're going along for the ride, you're giving someone else control. And there's definitely some downsides that are associated with that. So those are some of the quick downsides, there's definitely some important things to consider as well.
Steven: [00:14:26] That's the thing about it, is you have to understand yourself; do you have the personality to be able to handle that lack of control? Are you somebody who can say you know what, I'm not going to be the one making the decision on this and I'm okay with that? even know that you're thinking that another person is the expert. that other person is the person that I'm giving all that trust to? That's probably one of the biggest things that I see a lot of folks on the passive investing side have a challenge with, if they are so used to being in control everywhere in their life, and they go down this path. It's until they kind of let go of that control once they invest, that they can start to really enjoy the benefits of passive investing.
Jeremy: [00:15:08] I agree. And I have two quick examples that come to mind of deals that I am in right now that I lobbied to sell in 2017/18/19. One of theme’s a retail strip center. And I said to the guy, like retail is heading downwards, we have a brand new lease with the bonds, which is a very big grocery chain here in California, now's a great time to sell, he's like, no I want to try to fill up the other space, before we sell, we missed a window, and then retail became less in favor. And then next thing you know, we're still holding the property. Now he's doing a great job managing it, but I think we should have sold it five years ago, literally. And it just didn't work out because he decided to wait and by the time you kind of agree with me put on the market it wasn't getting the price he wanted because we were already starting to get the less in favor retail, I was like, ah, but you know what it is what it is, I had a self-storage property, same thing, they wanted one more year to groom up the vacancy, the occupancy, because they waited that year, the market fell a little bit out of favor, we missed the window property's worth less now. But that's not my call. But you know, if that's going to happen, if I only have two examples of that out of 60, or 90, like I had over 90 investments until all these went down. And so if I can deal with that, it's frustrating, but I can deal with the grand scheme of things. That's why diversification is so important.
Steven: [00:16:18] Yeah, that makes sense. You don't have all of your eggs in one basket. So all of your net worth is not tied up. And whether or not that person sells or not, it's only one piece of many different pieces of the pie. And overall, people are going to make the right decision more often than they're not when you're investing with the right operator. But there's always that risk that they make the wrong decision, or they try to do the things the right way. And the market changes. And so by being able to separate that out, you're going to be in a much, much better position.
Jeremy: [00:16:46] Yes, for sure.
Steven: [00:16:47] There's so much that we could go into. And I think we could spend an entire episode getting into due diligence. And I know you are one of the kings of due diligence, I definitely look at Hunter Thompson as one of them. And I know that you've taught Hunter a lot along the way. But talk to me about if I'm going to go down the path of being a passive investor. And I'm going to be looking at these deals and looking at the operators that are putting these deals together. How should I be thinking about vetting these deals and the operators that are going to be running these properties before making an investment?
Jeremy: [00:17:18] Yeah, great question. You're right, we can easily spend an episode on due diligence. So I'll try to keep it really high level. First thing is, for those of you who are passive investors out there, or maybe considering becoming passive investors, I just want to throw this out up front, please do background checks on the managing members and have the opportunity, I just find a very small minority of people do it. It saved me a number of times and some obvious ways on some checks sometimes. And it's an important step that I think a lot of people don't take for whatever reason it does cost money. But I think it's definitely a very small percentage of what your investment being I think is very important to do. So that's a part of it.
Steven: [00:17:49] Before we go forward on there, just to be clear, what are we looking for on that background check?
Jeremy: [00:17:54] Great question. So okay, so there's a couple things I look for. First thing is whenever I'm going to do a background check, somebody always asks each managing member for the name, home address and date of birth. And the reality is that if they have an odd name, I don't really need any of that. I could just find them. But I ask them those questions just to even understand, like, who am I dealing with? Are they Okay, giving me that information? If not, why are they hiding it? you're starting to learn, you have to read between the lines of this. So that's a test that I do. Another test that I do is I say before I run this background check, is there anything I should know? And that's a very important test. Because if somebody says, look I had a bankruptcy in 2003. This is what happened. And obviously, there's a long time ago, but I want you to know about it, because it's probably going to show up, and there was a pretty good reason for it. Okay, reasonable, I'll see it. But it's reasonable, that was 20 years ago. But on the flip side, if someone doesn't tell me about their bankruptcy, because they think that it's off their credit report from seven years ago, and I'm not going to see it. Well, you know, what else are they hiding? So I had this happen. In fact, an investor I know called me a couple months ago and said, I asked that exact question, did the background check person have a bankruptcy 2007 but they didn't tell me about it. What should I do? My suggestion was look, you got plenty of people you can invest with, you don't know why they didn't tell you. I suspect they didn't tell you because they thought it wasn't going to show up. And what else are they hiding? Just move on to the next. It was that simple. So sometimes there's actually really good explanations. I've seen people have tax liens. And I saw this recently, somebody had a tax lien, they were in a divorce, they couldn't quite figure out who was supposed to pay for it, it dragged on for a few years. And you look at and say that's a big number but then when you hear the actual circumstances or any other legal [00:19:31 Unintelligible] to figure out if they should be paying it or not. That's pretty reasonable, so it's important to ask those questions up front to frame some of the context, but I'm looking typically at liens, judgments, any criminal or even civil type of cases. What happened? I think it's true to say that if someone's not guilty of something then if they have a case, and they were, you shouldn't really assume that there was really a case there. But I saw an instance once where somebody was sued by about 15/20 people in the state at one time. I mean, roughly individuals. And I didn't even look into what happened in those cases, because like two years later there were sued by another 20 people in another state. And what's happening is that it appears to me as though someone is defrauding investors and moving to a different state and starting over. And frankly, even if I'm completely wrong, do I want to actually go invest with someone who's been sued by 40 individuals in the last five years? Probably not. I don't even care if the individual is all wrong, but like something is provoked, that these people spend time and money doing that. So you're looking for some things that just may stick out that don't look right. And besides the items that I outlined below; I think it's very important. So those are some of the thoughts about the background check. What I'm effectively trying to find is people who match my personality, I want someone who is conservative, who is under promising in their projections, being conservative and everything they're laying out as far as expectations and looking to understate over deliver, and kind of build long term relationships with investors like me, what I'm trying to avoid is someone who's great at marketing, marketing these really big numbers is making it really attractive for someone to invest with being very aggressive in their assumptions, and they're being aggressive, they're probably going to under-perform but they don't really care. Because of the long term, they are just going to kind of move on to the next investors that are going to find for their marketing. So high level, that's what I'm trying to sort out. And of course, you're going to want someone who's experienced in that asset class, etc, you're going to look at the track record, but I'm saying high-high level. So there's a few ways you can kind of figure that out. And it's not really straightforward. There's a little bit of tangible and intangible ways, tangible ways or you can go and look at the pro forma and the summary and say, Oh, I agree or disagree with all the assumptions they put in here. They're either conservative or they aren't right. And there's some obvious ones, what they can see factor they use when rent growth, or they assume what inflation growth, they assume, what exit purchase price, are we going to get at the end what they assume you can play with all these numbers and make a deal look good or look at make it look conservative. That's the easy part, the hard part is figuring out are you making a bet on someone conservative or not? In general, is this a personality you want to be dealing with? You can get to some of that by reading between the lines and looking at the summary. And looking out some things written they might say in the summary, we used 10% vacancy factor, even though the property is currently 100% occupied to be conservative, that line alone gives you a bit of the mindset of who you're dealing with, versus if you ask some questions and say to somebody, why do you use a 3% vacancy factor? If they say, look, the property is 100% occupied, we're coming up along this train that is being built in the hot town solid area of town. And we think that we're going to be highly occupied in the future. So a 3% vacancy factor, we didn't see any need to go any further down. That's not someone who's conservative. I'm not saying they're wrong, but they're not conservative. So that's an important thing to consider. And you can get a lot of these types of questions and answers and read between the lines by talking to people either via the phone, or in person, or through video conference now, to get a sense of who you're dealing with the reading between the lines and understanding who you're making a [00:22:49 Unintelligible] is vital, because the most important thing to consider is the operator, I think it's even more important than the actual property itself property being a very close end.
Steven: [00:22:58] So as you guys can hear, the process that Jeremy is going through is really getting to know who he's investing with. It's the people that are behind making the decisions. Because when you're in a passive investing position, you don't have the power to make those decisions after you've decided who you're going to invest with, the operators in that position that's the control you're giving up. So everything that Jeremy is going through here is to understand who he's investing with and how they're going to make those decisions. Therefore, he can have a better feeling of how they're probably going to perform, and that they're going to be making the right decisions even getting into that property itself. Is that right?
Jeremy: [00:23:36] That's right. And I wanted to use a couple of really salient examples like I can invest on the best block I live in LA. Okay, so Beverly Hills, Rodeo Drive pretty well known Street, very high end, I can invest in the best asset on Rodeo Drive with the best tenant base at the best timing, but if I have an operator, I made a bet on who just runs into the ground, it just doesn't deal with a client's tendons at all, we're going to get foreclosed at some point, it didn't matter that it was the best property going in, like all the characteristics going in. And same thing with startups, if you're a startup investor, and I tend to dabble that just a little bit, you can have two different people come up with the concept of Uber. But if one of them doesn't execute well, and the other one executes really well, guess who's going to be the one that ends up being the right company to make a bet on. That's all, the idea was identical execution is all that matters. So you can have two properties that are identical; execution is going to matter. Like I'm going to make all the difference. And it's the same concept with real estates, really critical.
Steven: [00:24:29] So I'm curious, as a full time passive investor, what are some of the habits, the things that you do on a regular basis over and over again, to help lead you to having success when picking these deals, going out and finding operators and really building your business the way that you have?
Jeremy: [00:24:45] Yeah, I'd say two really key things come to mind immediately. Number one is patience. If you're going to be selective, you've got to be patient. And I don't just mean that you have to look over X number of deals before you invest what I mean you have to invest at the right time in the cycle and that's one thing I very much admire about Warren Buffett. And right now he's taking the public in the media because he's been sitting around for years not deploying a lot of capital. But he is going to have the last laugh, because he's only going in at the right timing with the right valuation. And if you look at his indicator, his indicator for the stock market recording, this is September 20, as an example, has never been more highly valued ever, on the buffet indicator, and he is just sitting around waiting for that to get adjusted. And for his time to come in. I kind of tried to be the same way. I've been mostly on the sidelines for four years now. That is a very-I mean, you go through literally stages, I mean, you go through stages of frustration, anxiety, and all that just waiting and waiting, waiting. But if you have the right patience you are going to do really well, because timing is really key and understanding the cycle is key. The other thing in combination with patience is understanding where we are in the cycle and educating yourself on what's going on as far as economic data and what's going on out there. So I actually personally, and I don't expect everyone but I read about two to three hours a day very consistently, I almost feel anxiety if I don't do that reading, because I don't stay on top of what's going on. And so I read a combination of traditional mainstream media as well as just general data, and get out of the weeds of the media to understand what is going on. And where are we in the cycle? And looking at it I look at things at a very high level. So I made a mention I've been on the sidelines since the end of 2016. That's a high-level look at the cycle to say we're very long in the [00:26:23 Unintelligible] compared to an average economic recovery, we're going to eventually hit some type of wall because everything is cyclical. And I'm okay sitting around at the end waiting, I was waiting from 05 to 08, same thing. It's a very long, agonizing wait, but at the end of the day it pays off. So the patience combined with the data to support when you should be patient and when you should be aggressive is very important. And I feel like a lot of passive investors don't get the high enough level perspective, meaning that they kind of just get on to a distribution list, get a bunch of opportunities and say this one sounds good. Like I can see why the projections make sense, but they're not ticking the holistic view in mind. Where are we in the cycle? And what's your strategy of investing today? Never mind how good this deal looks right now. That's a bit of a challenge.
Steven: [00:27:08] Yeah, that's really powerful. So we're just about to wrap up here. But you mentioned that you're reading every single day, you're looking at mainstream media, you're diving into the details. Now, some people might feel like they have a limiting belief that they can find that time. But if they didn't, and they jumped on board, and they said, that's a habit I want to start implementing in my life. What are some of those specific sources that you're looking for to get a high- level understanding about where things are at from a data perspective, and from a general readability perspective?
Jeremy: [00:27:36] First thing to know, consumer sentiment in the US is very important. Consumers make up about 70% of GDP as consumer spending. So you're going to want to really understand from a mainstream perspective, consumer sentiment, what's going on out there. So anything that's really mainstream, I personally like CNBC from a financial mainstream perspective, I think it's probably the best one there is. I actually and I don't vote so [00:27:58 Unintelligible] it looks, I'm actually looking at Drudge Report, which I realized is a little politically slanted one way. But the reason why I like that, because it's a portal and has a whole bunch of links, that you can just add a glance, find 40 links to stories, you can find a few of the economic ones. And that's a big mainstream economy, just looking at that it's not as politically slanted to get into. So you can look at CNN and whatever your favorite ones are. That's easy and you'll get a sense for what the mainstream is reporting. I look at a few other sources, though, regularly that are non-mainstream. So one is if you just want the data of what's been reported today without too much of a slant at all, and a lot of charts behind it, I really like calculatedriskblog.com. And because they don't just say, Oh, the unemployment rate today is 8.4, they'll actually create charts of historical, you'll see exactly where you are, you'll see a few months back and add a little bit of value from that they add a little bit of slant to it sometimes, but most of it just very objective, just look at it yourself. I really like a very odd website called Zerohedge.com, which is a very negative website in general. And frankly, I would just ignore three quarters of a lot of there's a lot of conspiracy theory, all this stuff that goes on, it's somehow interesting but these guys are extra wall street guys. And when they slice and dice the data, there's nothing better to read if you want to know how the unemployment rate dropped x to y. Well, what was behind it? Was it part time worker or a full-time worker what type of salary range and they just go into everything. So that's another great source nail, so link off to some other great sources who are equally detailed from there. That's another one I always definitely would say is one of the things I look at every day. Then there's a bunch of others, but I'd say start with those. It's very important to get a perspective of mainstream and non-mainstream together.
Steven: [00:29:37] Yeah, I think that is such good advice. Because at the end of the day, you don't want to be sucked into the news. You don't want to be sucked into the negative biases or the fear that's going on within the world, but it is important to understand what is happening and how that might impact your investments or the investments you're going to make. So I think that is really powerful.
Jeremy: [00:29:55] All right, let me just interrupt and add one more very important thing. I also find that investment doesn't think far enough ahead. So if you're going to get locked into a deal that's illiquid, you've got to think 10 years down the road. Let's say you're investing in a 10-year timeline with a 10-year loan. Personally, I'm thinking 10 years from now it's 2030. What's going to happen, we may have flying drones. I know it sounds crazy, but it's true. Uber is working on it right now flying drones, self-driving cars, more robots take away jobs, probably more people working from home and a whole bunch of other things that are coming up. The question is, when you invest in asset x today, is that going to be interesting to somebody in 10 years to buy based on all these things shifting? What's the predictability of what you're investing in? And how can you get pummeled because you can't change that investment once you're locked in. So another important thing is to read a lot of news to understand technologies, what's coming up, and it's a lot about reading news and also thinking far ahead, in combination. I forgot to mention that as well.
Steven: [00:30:48] Great clarification. So in closing, if somebody is going down this path, they've already been investing, they want to become even a better passive investor. What's the advice, you'd leave them with Jeremy?
Jeremy: [00:30:59] I would say Be patient, be very thorough in reviewing your opportunities, do background checks, understand who you're making a bet on, read as much as possible. And be very careful right now because it's September 2020, there's an election coming up, we're in the middle of a pandemic, we're in the middle of a recession, recession seems to have a lot of stimulus behind it, that's kind of hiding some things under the surface. If that stimulus goes away, we're going to finally see the dominoes fall for this recession, we're going to actually have this delayed recession finally come into effect. And therefore, asset prices can adjust if a certain party gets in asset prices going to adjust. It's a very, very interesting time right now. But it's time to be very careful. And let some of this unfold before you do anything.
Steven: [00:31:39] You've been calling in for five years, we might actually be there, Jeremy. So it's definitely exciting. And I say it's exciting because it means that we're at a new time, a new chapter, it can lead to really great things in real estate and can really lead to some really terrible things. So you want to make sure you're on the right side of that. So where can people find out more about you or get in touch?
Jeremy: [00:32:00] Yeah, the easiest way to get in touch with anyone feel free to reach out if you're brand new and just curious to learn more if I can help anybody in any way. If you're another investor that wants to network or if you're an operator that has deals [00:32:10 Unintelligible] investor group with another group that wants to network with me, whatever is best for everybody. Feel free to reach out my emails the best way to reach me, which is Jroll@rollinvestments.com
Steven: [00:32:27] Thank you so much Jeremy, we'll definitely have to dive deep into some due diligence another time, and I'll look forward to it.
Jeremy: [00:32:33] Great. Thanks again for having me and I hope this was helpful for all the listeners.
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