00:01

Welcome to Episode Three of Season 16 of the Growing Empires Show. Today I’m here with my special guest Michael Guthrie from Pacific Capital LLC. You are going to really enjoy our conversation of how he went from owning ATM machines to venturing into the world of real estate investing and where he’s gone. Since then, Michael has spent the last two and a half decades, immersing himself in all things regarding real estate investing. He’s got a lot of great tax tips and financial strategies that I’m excited to share with you today. So please stay tuned.

00:37

We’ll welcome to Growing Empires hosted by real estate entrepreneur and trusted Investment Advisor Jennifer de Jesus. Growing Empires provides insight to building wealth through passive income producing real estate investments for those who want to build and manage a more profitable real estate portfolio.

00:58

So welcome, Michael to the Growing Empires show. I’m so glad that you’re here. Let’s kick off this episode with you sharing a little bit about your background and the work that you’re doing now.

01:07

Well, awesome. So I am originally I got out of the military in 1996, as an x ray technician, started in that field grew into doing MRIs at a number of trauma centers in the bay area of San Francisco. And while doing that got into placing ATM machines. And so it really started to understand residual income. We grew that business to a little over 8300 ATM machines. And that’s been an amazing ride so far. And we in doing that we created a tax problem for ourselves, which led us to multifamily. And that’s the short version of how we got into investing in multifamily. We look to eradicate our taxes, we figured we were probably stage three of the millionaire. The first one is the guy that makes the first million. The second one is you have a million in the bank. Third one is you get to pay million in taxes. And the fourth one, which we are now we’re saving over a million dollars a year in taxes, because we don’t pay taxes because we invest in multifamily. Very, very good. It’s going to be very interesting to have this conversation. So today, we are definitely going to talk about investor relations, raising capital asset management and a lot of things that you’ve done in your career thus far, specifically with real estate investing. So I’ve asked Michael to join me to share his wealth of knowledge that he’s gained throughout the years on this subject. So let’s just jump right in a little bit of to your like background and philosophy. So can you share a little bit of the story behind your journey into multifamily? So you were talking about what why you got started, right, but what did that journey look like? How did you get started in the world of multifamily? And what drove you to like, you know, focus on real estate as that niche market to really kind of, you know, transform your lifestyle?

02:58

That’s a great question. There’s a lot of, there’s a lot to unpack that. So we got started in multifamily. Specifically just to be limited partner investor, and get k one losses to offset our taxes. That was our whole game plan. And we been making a decent amount of money running our ATM company for a long, long time. And we’d went to a seminar like many of you might have and heard that if you do X, Y and Z, you can become a real estate professional. And then you can take all your k one losses from the money, you’ve invested into these properties and offset your taxes. And so we immediately took myself off of payroll at our ATM company so that I can make more money in the real estate realm. And that way I could off my k one losses could offset my wife’s earned active income. And I think that’s a specific term that they use are an active income. And so then we have not actually paid federal income taxes legally for the last four years. And looking into next year. I think we’re already have enough k one losses in line to not pay taxes again next year.

04:09

Well, I imagine that somewhere in your team is a very qualified CPA that helps you navigate all of these tax laws and benefits to real estate investing.

04:21

Absolutely. We started we learned a little bit from a gentleman who spoke at a conference right his name was Tom wheelwright, and and so we went to a company that he had actually owned at one point in time to use them because I didn’t want to spend the amount of money it costs to hire that gentleman. And so we hired a really great CPA firm to help us navigate these tax benefits so that we would never, not never but hopefully if we ever get audited, we have all of our ducks in a row to make sure that we’re doing things the right way. And aboveboard. Okay,

04:54

so you’ve been in the business in the real estate game. Is it like 2020 Some years 23 or something like that. We’ve

05:01

we’ve owned single we owned single families to begin with, I don’t think I touched on that as we are growing our ATM company, we started investing in single families ended up with about seven of those quickly realized I’m not the toilets, termites and trash guy. Which I was for a spell because I was learning, I was learning how to navigate owning my own rentals. And when one bad tenant can ruin your day, I mean, he literally had one that did $25,000 worth of damage to one property. And we got to clean that up, and they disappeared. And so I’m not one of those people that chases everybody down. So we ended up not chasing down paying for it ourselves. So at that point, we’ve started looking into we’d gotten introduced to multifamily, and started investing in multifamily and started selling off our single family and moving into that direction. And as we invested more and more in multifamily, we were in a ecosystem. And some folks have asked me to raise capital on one of their events. And that’s how I really got started. And on the general partnership side is somebody that asked me to raise capital. And so I went to my wife in the other room, she was working, and said, Hey, we’re gonna get married in these ladies for about five years. And she’s What do you mean, I go, we’re gonna raise some capital in this opportunity, and see if we can’t be general partners with them. And what the funniest thing is, is she’s like, well, how much do we have to raise? And I go, well, the One lady said she can raise a million, the other lady on the phone said she could she’s gonna put in 200 grand, but didn’t feel she could raise any money. And Samantha goes, my wife’s like, well, what does that leave you with five and a half million doffed. And I’ve never raised a dime, no pressure, right. So I literally had to jump on my phone and start texting people. And seeing what the interest level was in it. People known that we were investing in apartment buildings, trying to figure out how they could get in and be a part of this. And so literally, they started texting people and found out our database was actually very rich in rich soil, if you will, to go digging for investors. And we ended up raising that five and a half million dollars in four days.

07:11

Oh my God, good for you. It was amazing, incredible. That is incredible. So, so far, in all of your real estate experience and your journey, what what are some of the most valuable lessons you’ve learned today?

07:25

First and foremost, you never say no, for anybody. I know, we all have our handy dandy cell phones, and we have a whole list of contacts in there. And if we look through, there we go. They can’t invest. They can’t invest. They can’t invest. And we and people say no for people all the time. The one thing I learned out of the gate is never say no for anybody and I people that I never thought had money, or would even invest or even trust what we’re doing. Were some of the first people out of the box to jump on board with what it is we wanted to do. So first and foremost, you never say no, for anybody. Very good.

08:02

That’s a great one. So let’s talk a little bit about your investment strategy. So, you know, I was perusing your website. And, you know, you talk about some really core focuses, which which actually really hit home for me and what we do over in this neck of the woods, but I’d like to discuss that a little bit more in detail with you. So you talk about building generational wealth, as one of the one of the core focuses Tell me a little bit about what that means to you, and how you how your services and things that you do with investors actually help them do that.

08:36

For the first the first and foremost, the first thing you want to do with anybody’s investors money is protect it with everything you can, because at the end of the day, even if you don’t make the money, they’d like to get the money they put in back. So that’s my main focus is never lose anyone’s money. And then if we can actually put it into into an asset that will typically gain value over a time period. That way we can return more money to people that that’s very important to me. And for myself, I want to continue to grow my net worth and wealth so that I have a legacy to leave my family when I when I’m no longer here. And if I can help others and educate them along the way, that that this is how we actually do it, how the really rich, rich, rich people do it. I think that’s a great opportunity. I didn’t really get into this niche until right around age 52. I’m now 56. So I didn’t get into it to way later in life, if you will. But I want to make sure that anybody I can reach out to touch that or in any of my groups that are inside of my sphere of influence, if I can at least introduce them to this opportunity to grow their net worth over time. That’s more I believe it’s more stable than the actual stock market. That’s it’s a great thing for me to share.

09:57

Okay, you also talk about investing in optimal market conditions and how real estate investments have allowed you to like regain valuable time. Because now you have this passive income. You also talk about helping people understand financial literacy. So tell me a little bit about those those items as well, those focuses for you. So

10:21

I’m gonna step back just a hair with the ATM business and passive income. It like like a house, an ATM doesn’t need to be swapped out anytime there’s a new tenant in that building, the ATM, you plant it once it makes money every single month, every time somebody uses it, you get a little bit of residual income. The same way when you buy a house, and you put a tenant in there, you’ve you’ve helped a family find a nice safe place to live. And they’re going to reward you for that by paying you rent. So they’re very similar. So even if you’re only doing single families and Robert Kiyosaki said it really well. And it really struck home with me, and you may have heard this before. But if you own one rental and you rent to one family, you’re very selfish, because you can only you’re only helping one. But if you buy a building a duplex, a triplex, a four Plex, or a 10 unit, or 150, unit building, you’re really helping a truckload of, of people. And now you you’re going to reap the benefit of the wealth you’ve shared, and the experience you’ve shared with all those families. Because you’re now you’re helping multiple people, instead of only helping one. So for me, it’s the same part of my mission in sharing this information with as many people as I can. That’s why I love when people asked me to be on their podcasts or their, their webinars or whatever, I love to come on and share what I’ve learned not not that It’s Rocket Science, what I’ve learned, but it’s helping me grow my residual income even better. Okay.

11:56

So give me a little bit of your take on why why multifamily and specifically why they historically do outperform other popular investment options, like the stock market cryptocurrencies and stuff like that. Why real estate? Why is real estate such a good, stable investment opportunity?

12:15

Here’s my belief. And I’ve seen it happen over over my lifespan is even regular housing. Let’s just take pick a market, any market, but you pick a market, you go, Okay, we just had a housing boom of 30%, every all of all housing went up 30%. It triggered a little bit of spike in an interest rate. So now we had a little bit of a reprieve of, say 10%, downflow, you’re still up 20%. And then it’s gonna go up another 10 or 15%. So, real estate typically continues to go up, up, up and up, where other assets can go up, down, up down a lot quicker. But real estate seems to be a more slow and steady increase in value. So for me, this is a marathon. This is not a sprint, I’m not trying to get rich overnight. I II, the cryptocurrency fame. I mean, I have friends that bought crypto in April, I think it’s 2020 or 2021, when he was $67,000 a share. It hasn’t seen $67,000 A share since then. And so when you’re putting you put a lot of money into an asset and you think you’re going to, you’re going to ride that wave, you have to be able to ride the downturn also. And in real estate, the downturn never lasts as long as the upturn. So you’re always going to get more gain than you’re going to get last as long as you have this the luxury of time. And if we try to shortcut that time element in any of these in any real estate investment, I think you’re going to short short circuit your ability to have a better end result. Okay,

13:59

good points. So what specific criteria do you use to vet properties for investment? And how do you make sure that they meet the needs of your investors.

14:08

So for me, we need to we need to be going into a market where we can add value and bring value to the tenants because just because we go in and just as a landlord, just because you go in and spend $10,000 to increase the value of that unit doesn’t mean you’re it’s going to increase the value for the tenant. If you don’t increase the value for your client and I say tenant customer and they don’t feel that value. You’re not going to get that value. Just because you increased the beautification of it or upgraded it does not necessarily automatically mean you get two or three to $400 more a month in rent. You have to be you have to know your market. You have to know your clientele, and what their currency is what’s important to them. Is it is it granite countertops or is it a dog park, they prefer a swimming pool, or a new stove. I mean, which one which one brings more value to the tenant? Not to me to the tenant. And it’s the same thing, when you’re talking to other people that are looking to invest in real estate, we have to understand what they need. Not what’s important for me, but what’s important for them. And most, most, most often I get is capital preservation. And hopefully, you bring it back with some, some, some new babies that are growing, or interest, if you will, for lack of a better way to say it, but everybody wants you to do everybody wants you to succeed. And they want to trust that you’re going to do the right thing. But you also have to be listening to what it is your clients want. And as a capital, capital raiser an investor, my I have two clients, I have my investors and my tenants, tenants are first investors or second. And as long as we take care of the tenants, they’ll take care of the investors, and then we can all win at the end. Okay,

16:04

so how do you reduce risk for your investors when it comes to multifamily? So you know, like, for example, what strategies to employ to ensure a steady stream of passive income for them,

16:16

one of the things I do is really vet the property that we’re buying at the right time, based on what is going on around within a two mile radius of that property, you can’t really work. So if you’re buying in, say, Dallas, it doesn’t really matter what’s happening in Fort Worth, and Fort Worth is getting Intel and all these other companies to come in. That means nothing to a market in Dallas, it means a lot to market in Fort Worth. So you want to pay attention to what’s really going on within a two mile radius, what other properties are doing, what kind of rents they’re achieving. Because within a two mile radius, you’re gonna have the same demographic of tenants for the most part. So you want to make sure you’re bringing the value they’re looking for. So I those are the things I really watch out for, number one, number two, the team that’s bringing the deal better be liquid enough to withstand short downturns in the market. literally nobody in 2021 and 2022. Everybody’s buy, buy, buy, buy, buy, buy, buy. And right now with interest rates being higher, everybody’s like, let’s sit on the sidelines, there’s been capital calls, there’s been uncertainty in the market. But there’s still some amazing deals still happening. Regardless, let me back up to this this same time last year, there was 80% more deals done in that same time period that compared to what’s been done this year. So it was more of a seller’s market today, it’s becoming more of a buyers market. Because there’s less buyers and the sellers are there’s similar amount of sellers, but they’re not all having to sell. But they’re selling when they when they feel this crunch. So it’s watching what’s going on. And so you can protect your downside. That’s the biggest thing is as long as you have a team that understands how to operate in bad times, they’ll really flourish when the good times come. And right now a lot of people are saying survive till 25 Because that’s when institutional money will start coming back into the market. At least that’s what the experts I’m following are saying. So, for me, it’s still a great time to buy, as long as you’re making sure you can cashflow regardless of what the interest rate market and the insurance markets are doing out there.

18:37

Yeah, that’s so true. So how do you ensure transparency in the investment process for your clients? You know, because obviously, you’re talking about raising money from all different places, not necessarily the state that you’re investing in, you’re investing in areas that, you know, make the best return. So how do you provide transparency to your clients, and, you know, show them the performance of your assets that you have, you know, to keep them comfortable with, you know, not only investing but continuously investing, we,

19:11

we actually put out newsletters for all of our properties, usually on a monthly basis with the months and financials that come directly from our property management company. And we add that to our monthly newsletters. And for me, I’m always available to my investors, if they want to see the weekly downloads that I get from each property that we’re invested in. I’m more than happy to share that with them just so that they can see what are they what our vacancy rates are, what are trending occupancy, what kind of rents we’re collecting. You want. You want to create that transparency so that there’s no question that what you’re doing is the right thing for them.

19:52

The episode will continue in just a moment.

19:55

As an investor, we know it’s important to stay on top of market trends and real estate opportunity He said add value to your portfolio. We also know that having a trusted source of reliable information to help you stay a step ahead of other investors is critical to your success. If you’re interested in having these types of resources, as well as access to me and my team, I invite you to join the Empire Investment Club, a free service that gives you an easier way to make sense of today’s and tomorrow’s real estate opportunities. As a member of the Empire Investment Club, you’ll get access to relevant resources and investment focused experiences, such as live interactive webinars, market trend presentations, and investor socials designed to equip you with what you need to succeed. So whether you’re an active investor, passive investor, a combination of both are just starting out the club is where you’ll get what you need to build a portfolio you love to join, just head over to Jenniferdejesus.com, sign up, and we’ll see you in the club, where everyone’s on a journey to becoming a better investor. Let’s talk a little bit more about your tax strategies, I find this to be a topic of general interest across the board and investors. And for the ones that don’t know how to do it, they should. So give me some of your advice on or ways that you have mitigated tax penalties or you know, taxable income with your investment properties.

21:17

We do cost segregation studies with bonus depreciation on all of our assets, so that we can and we share that equally depending on so if we have 10, investors, everybody puts in 100, grand, everybody gets 10% of the k one loss. So it’s not like the general partnership team gets a exponential higher k one, everybody, it’s all based on whatever the limited partners put in. And we split that equally based on the amount of money you put into the deal. And they can take that if they have other passive income, that k one loss can offset any other passive income. Or if they can’t use it on the passive income today, they can store it with their tax professional on their tax returns, and use it down the road when we actually sell that asset to because that will be a capital gains income. So they can take that capital, that k one loss and offset those. So passive, passive loss can go against passive income, unless you’re a real estate professional, and there’s certain criteria to become one of those. And then you can actually take your passive loss and offset your spouse’s or other active income.

22:28

Okay. Any other tricks? For besides the Cost Segregation studies that you’ve used before? You mentioned, you mentioned capital gains? Do you do a lot of 1031 exchanges when you do liquidate and sell assets?

22:43

We don’t? And that’s a great question. Because when I liquidated my seven single family properties, I went to my CPA, and because we liquidated seven, in 1031, of those, so I have done 1031 1031 of those into five properties in the state of California. And I was going to 1031, those into five or six, seven more properties in the state of Arizona. And my CPA said, It’s better to pay the tax today, because the rates will never be cheaper than they are today. And that was his first first piece of it. My second one was, if you 1031 out of California, in Arizona, when you sell that Arizona property, you’re going to owe that tax back to the state of California. So it’s better to he said it was just better to cut the umbilical cord for lack of a better word. That’s exactly what he said. But to cut that into 1031 exchanges do have a place I mean, I’ve literally run into a couple of those chasing properties this year that we’re trying to buy. And people at 1031 money are overpaying for property just so they can 1031 They’re huge gains. But that’s typically more like a like if you had $500 million, and you bought 10 properties, and they were just owned by you. And that tent, one of your $10 million properties gained 5 million, you don’t want to pay two and a half million dollars in taxes. So you’ll 1031 into your next opportunity. Where me as a syndicator everybody owns a smaller piece, it’s easier for them to go out and find another syndication to invest in enough of their gain to offset their current tax problem versus everybody trying it because if you tend to do one thing, everybody in the syndication has to 1031 and not everybody wants to say and some people just want to get their cash in and out of different opportunities and that’s why they choose the syndication route.

24:31

Okay. What other benefits or tax strategies do you use in addition to the couple that we’ve talked about other any additional ones?

24:42

I take advantage of the 6000 pound vehicle offset, because I run I run a company so I can actually have a vehicle that is used for business and if you have a SUV that weighs over 6000 pounds, it can be used for delivering of things to your car plexes I also have friends, I haven’t implemented this one yet, but they’ve went out and bought Ferraris, or Lamborghinis. And they join clubs. And they use that car to get into that club. So then they can raise capital from those people. And that becomes a complete tax write off benefit to write off that car, and your membership, because now you’re using it as a business tool to like people they buy jets to, so they can get from here to there. But they are there to do business, because their time is more valuable. There’s so many different ways that people spend their money to avoid paying tax, that can actually have personal benefits. I always say, I’m not a CPA, make sure your CPA is on board with it. And if you’re not you ask your can we write you never asked your CPA? Can we write this off? The question is, how? How are we going to write this out? This is what I’m going to do? How do we structure it so that we can write it up? That way you have that you give them the opportunity to give you the parameters to make it happen? Because if you ask them, Can I they’re gonna say no. Because because you don’t you haven’t created the opportunity for them to say how that you can actually get that done. Okay.

26:19

So for somebody looking to start investing in multifamily properties, what advice or steps would you offer to them to help them begin their journey toward financial freedom, I would say, go to go to at least a weekend seminar and learn all about the ins and outs of investing in alternative investments IE, multifamily or apartment buildings, and be specific and where you’re going. So then you can, they’ll give, they will give you the education, there’s a ton of online free education. Just be aware of what you get for free, it’s worth what you pay for it. So I always say go to the professionals that have done it, they have a track record, they wouldn’t have, they wouldn’t be spending money to put on a production for a weekend to other other than to get you to come in and buy into their educational program. I don’t have an educational program, but I provide some education to my investor database. Just by visiting my website, there’s some ebooks and whatnot that you can download. But I say get educated. And once you’re educated, once you’re in your first deal, it’s actually really weird, because you get somebody into the first room, they want another one, they want another one, they want another one, it’s, it’s it’s amazing how people become a little bit more. I need to do more of this because I trust it. And I actually have an investor I’m meeting with this afternoon. And he’s invested in I probably think seven of my 12 general partnership deals that I raise capital on. And he literally will get on a plane and fly to where that property is and touch it and take pictures of himself with it. And talk to the management company say Hey, I heard this is buildings up for sale. Baba, Baba, boy, they go Yeah, it’s been back. And obviously, it creates a whole different level of trust. Because it’s an actual physical asset, with an address that somebody can reach out and touch. And when closing date when the transfer happens, they can log on to the county and go yep, this is the new ownership team. And this is why I invested with and it gives it a little it gives it a lot more credibility, as to say, look at this, I bought $5 billion with a crypto What do I have? I have air, nothing tangible. I have nothing tangible to touch. Okay. What do you see

28:36

as the future of investing? particularly concerning multifamily properties and or financial strategies with, you know, the current interest rate environment and the economic landscapes? What do you what is your prediction of what to see over the next maybe six months, the next year, so on and so forth? Great

28:58

question. What do I see? I see. And I shouldn’t know this by now because they’re supposed to, they’re supposed to have announced it to an hour ago, with the with the if they were raising interest rates again today, they’re supposed to announce that an hour ago. So I don’t have that answer at the moment. And I’m not going to google it while we’re on. But what do I see? I think interest rates are actually going to relax next year. That’s what the forward curves Chatham and pennsburg are both showing that things are going to start to come down. And as we get to 25, they’re going to probably take a little bit of a nosedive. I don’t think they’re gonna go down to two or three where we were, but I think we’re gonna get we’re gonna get into the fours, maybe the low fives, and interest rates, number one, number two, we’re still seeing 1415 20% rent increases in most of the markets I’m in. So what does that what does that tell us? The value of those properties are going up even though the interest rates are going up. So Even though the interest rates spiked quickly and interest in property values are going up slowly based on it rental increases the the increase in the in the rents will drive the property values up. And if interest rates take a dip, that’ll spike the property values even more, because people have more, they can buy more. They can buy more property with less money.

30:22

Right? Correct. So with this economic landscape change and interest rate environment, how do you adapt your strategies for investing? Knowing that changes coming in? Because I’m assuming you’re you’re looking at investments today, a little different than you will look at them maybe a year from now as interest rates and the climate changes and demand changes as well. So how are you adapting your strategies in these different in different environments?

30:56

So two strategies, one, you could place fixed debt on the property for 510 year period, and the scope. I’m comfortable paying this interest rate for the next 10 years. And if I keep the rental payments, the same, I can cashflow this. So then you can structure your whole deal based on where we’re at today in the market. And if the market gets better, you can always refinance and return capital. And while people still stay in the deal, that’s the one strategy. Second strategy is floating debt always outperforms fixed debt fixed that has the up and down priced in. And if you believe we’re at our high, I say, buy without much fear. But I also think you should be buying it with keeping in mind, your interest rates could go up another two or three points. And if you can stomach or the property can with state sustain, paying a dividend with three points up in interest rates. By with by with floating debt is because if it comes down, you’re right, your your value goes completely or go up a lot quicker with the amount of cash flow you have, because your payment will go down. So I have a friend in the business that owns about 18,000 units, and they buy only floating debt. And it’s because floating that always outperforms fixed. And I have another friend that’s doing a deal right now 300 unit deal he wanted me to raise on and he’s putting fixed debt on that six and a quarter percent for 10 years. And he’s going to hold it for seven and then let it go. That’s that’s the plan. And he’s like, I can sleep better at night knowing that I have a fixed payment for my investors for the next 10 years. And I don’t have to worry about the interest rate environment at all. So that he has less liquidity than the people that are doing floating debt. So I totally understand the model from both sides. So you just want to make sure the team you’re on the way they’re going, can we maintain a dividend based on those sorts of criteria? Because in 2021, and 2022, nobody’s seen interest rates spiking the way they did, and nobody underwrote for that. But today, they’re we’re not getting surprised anymore. And we’re going to underwrite if we’re going with floating for a certain percentage over where we’re at, and I say minimum three points up, if we can, if we can sustain three points up and continue to operate the way we’re operating today. And make it can make dividends. I say we go with floating. If we don’t want to stomach that or we don’t feel that that’s it’s going to stop at three might go through the sky. Put fix that on that property and know that you’re going to be able to sleep every single night knowing what your payments are.

33:40

Sure. So what markets are you invested in now?

33:43

I am in Arizona, Texas. Do I say Texas, San Antonio Houston and Dallas. I am in Nashville. And we are in Jacksonville, Montgomery and we’re trying to get into Atlanta at this point in time. Okay, hot market right now. New Braunfels, Texas, because it’s in between San Antonio and Austin. And Austin is growing really big San Antonio is growing really big and right now the only affordability is in New Braunfels. So what’s that going to do? It’s going to drive prices in New Braunfels up and everybody will win. So that’s that’s another focus place for us right now.

34:22

Okay, what do you typically buying? I mean, I know you’re buying multifamily. But is it? Is it any of the ground up construction? Are you repurposing buildings buying buildings that are not stabilized? I know you talk about value add. So obviously they are not stabilized. What are you doing any construction, new construction as well?

34:38

We are I am not doing I’m not involved in any new construction. We are looking at motel to apartment conversions. I think that’s the quickest way to go from a distressed asset that could be influenced by the environment to a actual home. And we can take those kinds of units and put five to 10 grand into each door if you will. are key as they call them as in the in the hotel world and turn that class C hotel into a class A, a more studio apartments, and it with amenities because most hotels come with pools and nice workout facilities, if you will. So you can, you can turn those around, and we’re doing a lot of value add B and C property. I’m not really hot and heavy into the class A at this point in time. But I do think there will be some class a property coming down the road in the next 12 to 18 months, that’s going to be distressed enough that it’s worth taking a hard look at, because it’s a property not gonna have to do that much work on. It’s just going to be a hold and lift it it’ll lift itself. Wow,

35:41

I’m actually very intrigued by your comment about the motel to apartment conversion, because that’s something that I’ve been looking at as well. It’s such an untapped, untapped opportunity. It’s amazing. And I’m sure in Pennsylvania, so I you know, I’m not familiar with necessarily with Texas or Arizona or, you know, Nashville or anything like that. But at least in our marketplace there they were talking places that have been abandoned for decades or more. Like, it’s nobody’s buying it, right. Somebody should give it to you.

36:13

But, and you might be able to work with the city because we were chasing one in Houston, we’re working with Houston to get tax abatement on it for 10 years. Yeah, while we fix it up and turn it into something that’s actually more beautiful. So that’s, that’s another road, you can go down with your local municipalities is get some sort of a tax abatement, you’re going to come in, you’re going to take this old building, and you’re going to repurpose it into something beautiful. Okay.

36:39

So what questions? Should I have asked you that I didn’t? Anything that you can think of? I always I always get everybody with that one.

36:52

Right? I don’t think that was on the sheet. And I’m just gonna, it might have been what questions should you have asked?

37:01

Or just to rephrase it? What what do you what else do you want me, me and the listeners to know my listeners to know that maybe I didn’t ask you or talk about. There’s,

37:11

there’s, there’s other assets outside of the multifamily. There’s single family, there’s duplexes or triplexes, there’s triple net leases that we we do some investing in, and I raised some capital for those. That I, I like to target things, for the most part for myself as especially at this point in my life, for cash flow, at least some cash flow for investors and for myself, so that we can continue to build more liquidity for a next opportunity. And we’re always looking for more and more. And one thing that people never think about is, they will, I’m just going to take my time, nobody in business that I’ve known over the 28 years of running the ATM company, say I should have taken my time and went slower. They always we all we all look back and go if I knew what I know, now I would have gone faster, bigger, quicker. And so like, another friend in the business says, Take your cash and Racket, stack it and invest it in that order. stack it up, invest it, and you probably know who that is. But I’m not gonna say his name. It’s not his podcast, it’s yours. We’ll give this one that one’s yours.

38:29

Yeah, absolutely. Oh, that’s wonderful. Actually, I was getting my next question for you. And my last question for you is going to be you know, if you had any great words of wisdom, right, and I think you shared quite a few throughout this, this recording for sure. But any other comments or any other, you know, either must do or don’t do for investors that we haven’t yet talked about?

38:54

Too, there’s a couple of things. First one is a year from now, you’ll wish you started investing today. Yep, that’s true. Number two, proximity is power. Get in proximity with people that are doing what you want to do, and learn from them if you can’t learn from them if you don’t get near them. So proximity, that’s a Tony Robbins ism. But proximity is power. And so get around people that are doing what you want to do. Success leaves clues. That’s I mean, if you see somebody that’s successful in what they’re doing, follow what they’re doing and shorten your own learning curve. So then you can get there faster.

39:32

I love it. I love it. So how do my my listeners get a hold of you if they’d like to find out more about your syndications and things that you’re doing?

So there’s two ways. First one is probably the unethical way, but this is what I do. I learned this from number one best selling author Bob golf. On the last page of his book. He’s got his cell phone number, so I give out my cell phone number and if you want to learn more from me, text me I want to learn more from you. And then we can jump on a call. So my cell phone is 509-270-6701. Again, 509-270-6701. That’s the first way. Second way is go to my website, and just sign up on my newsletter. And you can actually set an appointment with me from my website to actually have a zoom, call a 15 minute, get to know your zoom call, and I can understand what you’re looking for and maybe help you find people that are doing what you want to do, and get you connected. And so my website is Pacific Capital llc.com. That’s Pacific Capital llc.com. And I’ll just put in my email, it’s Michael at Pacific Capital llc.com. So three ways to reach out to me I’m happy to help any way I can. I didn’t know what I didn’t know until I figured it out. And I want to share with as many people as I can.

40:55

Oh, wonderful. Well, Michael, it’s been great having you you’ve been such an incredible wealth of knowledge. I love your story about the ATM transition to multifamily syndications and just growing your your wealth. So thank you so much for everything that you brought to the show and I wish you all the best in the future for sure.

41:16

Thank you so much.

41:19

Thank you for listening to my special guest interview with Michael Guthrie. I hope you enjoyed today’s episode and until next time, take care.

41:29

For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio visit growingempires.com.