Agents Building Cashflow

EP 169: Smart Strategies for Building Wealth Through Multifamily with Justin Moy

Randal McLeaird

In this episode of Agents Building Cashflow, Randal has a chat with Justin Moy, the Managing Partner of Presidents Club Investors. Justin shares his transition from being a real estate broker to managing funds for multifamily syndications. He discusses his strategies for raising capital, vetting sponsors, and finding deals in the ever-changing real estate market. He highlights the importance of cash flow as a defensive play and talks about the role of fund managers in ensuring investor returns. 

Justin also explains how to retire through real estate investing by focusing on value-add opportunities and managing risk. Tune in to learn more about how Justin navigates the real estate space and his practical advice for both new and seasoned investors.

Key takeaways to listen to:

  • Emphasizing cash flow as a key defensive metric in real estate investing.
  • Raising capital by forming strong relationships and carefully vetting sponsors.
  • Structuring funds with flexible debt terms to survive market downturns.
  • Focusing on multiplying equity through value-add opportunities before chasing cash flow.
  • Designing a lifestyle around remote fund management and capital raising.

About Justin Moy

Justin is a seasoned real estate investor who began his journey at 18 in the competitive Bay Area of California. After six months of persistent cold-calling without success, his determination paid off, landing his first listing and a $60k commission. This experience taught him to focus on the process, a philosophy that has led to many victories. Initially thriving in sales roles, Justin realized that being "transactionally rich" wasn’t the same as true wealth, prompting him to pivot towards investing to regain control of his time.

Identifying a gap in the market, Justin began helping sales professionals address their unique financial challenges through commercial real estate investments. His strategies have enabled countless professionals to replace active income with passive income in under a decade. As a speaker and guest on top real estate podcasts, Justin shares his expertise on topics like real estate investing, the #FIRE movement for sales professionals, and how to safely generate passive income through strategic investments.

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[00:00:00] Justin Moy: If you have strong cash flows, you can always refinance your loan. Always. You always have options. If you have a weak cash flows or no cash flows, refinancing is very, very, very tough. And so you might not be able to outlast these deals or outlast these down market cycles. So just understand that when you're investing, most of the time, your cash flow is kind of a defensive metric.

[00:00:18] Justin Moy: The more return comes from cashflow, the more or the less risky investors will generally consider that deal. And it doesn't mean that you're going to make a killing off of your cash flows. You're generally still going to make more on the appreciation of the asset or the forced appreciation, but it's a defensive play.

[00:00:34] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your commissions and turn them into cashflow.

[00:00:54] Intro: Here's your host, Randall. Let's dive in. 

[00:00:57] Randal McLeaird: All right. Welcome back. I am excited to have this [00:01:00] conversation today with my guest, Justin Moy. Justin is, he runs the President's Club Investors and, and he has a lot of strategies for building your passive income up and how to retire, right? Retire quickly. So, He works with a lot of real estate professionals, sales professionals, and he essentially has a fund and he does a fund to fund.

[00:01:24] Randal McLeaird: So every time there's a deal that's out there, he's raising capital for that deal through a fund structure. And so we go into that details on that and how that works and what he's seeing in the market, how he vets sponsors and all of that. So we're talking multifamily asset class today and we are talking funds, how they're structured, the market overall.

[00:01:40] Randal McLeaird: So tune in, perk your ears up, you know, get your notepad out. He's got a ton of information and you're going to learn something from it. So I hope you're getting value out of the show. If you are, please go on, rate and review wherever you're seeing this. If you can give us a comment, one word or more, helps us out a ton, bring on awesome guests just like Justin.

[00:01:56] Randal McLeaird: So let's jump into the episode right now. 

[00:01:59] Justin Moy: I've [00:02:00] wanted to be a digital nomad for, since I heard of the concept. So I've always known I wanted to have flexibility. That's actually what made me transition from kind of real estate agent to More on the investing side is obviously real estate agents is very, very hyper local.

[00:02:15] Justin Moy: And I realized I wanted to move around a lot, whether it was in Latin America or just kind of move around within the States. I know a lot of that flexibility. And so I started kind of creating that lifestyle and this is the first, you know, month that we could do it. We could take the plunge. We committed to doing.

[00:02:29] Justin Moy: You know, the rest of the year. So we've got six months in total, Latin America. And I'm just, I'm fortunate that now, you know, the business is in a spot where I can do that and I can work a hundred percent remotely and I'm not too far from the States where we have emergencies or something like that. It's pretty easy to hop back on and go.

[00:02:48] Justin Moy: I like traveling, so it's not that big of a deal. So yeah, it's just kind of lifestyle design. I just, like you said. 

[00:02:53] Randal McLeaird: Interesting, man. So you went from brokerage to investing and what kind, are you doing syndication [00:03:00] mainly or capital raise? Yeah. So 

[00:03:03] Justin Moy: I do fund management for syndications, so I don't operate deals anymore.

[00:03:07] Justin Moy: I don't, I underwrite deals just kind of been part of our due diligence, but I used to underwrite full time and I did asset management was my full focus in the business. And now over the past four years, it's just been fun management. And I know I've known this was kind of my North star from the start, but getting started in the business.

[00:03:24] Justin Moy: I felt like I wanted to have a really good base and underwriting and financial modeling and how assets are managed, ran, what's it like to, you know, I've, I've lived in the complexes that we've managed and, you know, things like that. So I, I've, I've always known it was a means to an end of making me hopefully a stronger fund manager and being able to invest better, uh, with both my own money and our investors money.

[00:03:46] Justin Moy: And so I'm kind of at that culmination point where I'm doing the nomad thing. I'm fun managing, which plays into my strengths way better. And yeah, I'm just, like I said, design design. 

[00:03:57] Randal McLeaird: So fund management and you can break it down in [00:04:00] almost three different things. Like you have a capital raiser, you have an asset manager, and then you have a fund manager, right?

[00:04:04] Randal McLeaird: So, It's interesting that you have gone through the gambit, I guess, of all three of those things. Did you do stuff on the asset management side and the operator side? Yeah. 

[00:04:13] Justin Moy: And I think, uh, unless you have a different business model that I'm aware of, I think most of the time people consider the buckets to be like acquisitions, which is a lot of underwriting, managing banks, loans, all that stuff, and then asset management and then fund management.

[00:04:25] Justin Moy: So for me, fund management being great in capital, that's what I do. You know, my primary focus now is two main buckets is I raise money and I do due diligence on the opportunities that we get. So we see about 30 to 60 deals per month. We typically do about two to four deals per year. So a lot of due diligence process and a lot of that comes from, yeah, my time in asset management.

[00:04:47] Justin Moy: So, you know, I managed to see class properties and all the glory that comes with that type of job and, and, you know, working with tenants in that sphere, but yeah, asset management was a big part of it. And, you know, I knew it wasn't what I wanted to do long [00:05:00] term, but it's made me look at deals in such a different way that a lot of people who go straight into fund management Maybe don't have those types of reps.

[00:05:08] Justin Moy: So I think it's, it was effective in the longterm, but it's definitely a different set of skills for sure. 

[00:05:12] Randal McLeaird: Yeah. So, all right, tell me then when did you get out of, I guess, the broker side of the business and what did that business look like? How long were you in it? You know, like, and then you transitioned into what asset class?

[00:05:24] Randal McLeaird: Multifamily multifamily. Yeah. So 

[00:05:27] Justin Moy: I was very fortunate that I stumbled upon real estate as a career. Very, very early I was 17 years old looking for my first like office internship. I was sick of working, you know, till midnight at the grocery stores and, you know, sports stores that I worked at. I always knew I was very good at sales.

[00:05:42] Justin Moy: I worked at like GNC. I was like the top salesperson in the nation. Like every week I sold home gyms. 

[00:05:49] Randal McLeaird: That's laying in a lot of vitamins, man. Yeah. You got 

[00:05:52] Justin Moy: to sell a lot of vitamins, man. And I, you know, I was in the mall, so I was hustling, you know, there was a lot going on, but I, I always was good at like retail sales.

[00:05:59] Justin Moy: [00:06:00] My very first like retail sales job was selling like shoes and I would get bonuses for like shoe inserts and stuff like that. And you know, so I was confident enough that I said, Hey, like what's the bigger scale thing? How can I make a career out of this? And naturally I always had this kind of interest in real estate.

[00:06:14] Justin Moy: So when I was 17 years old, I started looking for internships or like for office experience, landed an internship at a commercial real estate company. That company is called Cassidy Turley. It's been bought and sold many times. It's, I think it was ultimately bought by like CBRE or something like that.

[00:06:28] Justin Moy: But it was a small office. I was helping brokers with their investment decks, with their underwriting packages, ordering stuff for their presentations, you know, just, just like random stuff that you do with your own office that intern does. And I just got super addicted to watching them and just looking at their careers.

[00:06:46] Justin Moy: One thing that really intrigued me is they were in and out of the office all the time. I kind of thought to myself, man, I don't want to sit in an office all day. It's kind of stuffy in here. It's kind of boring. So they had, they were in, they were out, they were having lunches, they were celebrating big closings.

[00:06:58] Justin Moy: And I just thought this is so cool. [00:07:00] Like this is nothing like I thought an office job would be. My, my mother hated her office job. And so I kind of had these low expectations. And when I saw everybody was kind of fun and have a good time, I thought, this is what I want to do. So I got my real estate license when I was 18.

[00:07:13] Justin Moy: This was in the Bay area of California where you don't need to sell commercial properties to have seven figure listings. So I went on the residential side. I loved it. After about six months of batting zero, I started to kind of get my feet under me and had a good journey there. I did that for about. Say about six years in total.

[00:07:30] Justin Moy: But I went into the military for a short stint. I went to college for a little bit, so I was always kind of involved in the business. But full-time, I'd say I was about four years. 

[00:07:37] Randal McLeaird: Yeah. 

[00:07:38] Justin Moy: And then after that went to multifamily. 

[00:07:40] Randal McLeaird: Yeah, I was gonna say that was what, four years ago? You look like you're 22. How old are you?

[00:07:44] Randal McLeaird: Yeah, . 

[00:07:45] Justin Moy: So I'm gonna be 31 soon. Yeah, right. So I'm gonna be 31. I got good skin I think. 

[00:07:49] Randal McLeaird: Yeah, man. Yeah, it's solid . All right. So you transitioned and you went into, how did you get out again? What was the catalyst of getting out of the [00:08:00] single family residential brokerage side? Yeah. 

[00:08:03] Justin Moy: I loved Being on the real estate transaction side.

[00:08:07] Justin Moy: I think it's so cool. Even to this day, people ask me like, what should I do if I'm interested in real estate? I'm like, dude, become an agent. I think you get to play in so many aspects of a deal. You get to see transactions. You get a little piece of every part of the transaction. So you don't really specialize, but you get good enough at every aspect of a business that I think it's a really good stepping stone to anything that you want to do in this space.

[00:08:29] Justin Moy: If you have kind of what it takes, but it's commission only it is hardcore direct sales, you own your own business. So. You know, they require certain strengths of somebody and a certain thickness of your skin. But if you can manage those things, it's a very good entryway into the business. Now, ultimately, what made me realize I wanted something new is this was a very, very, very specific moment in my career.

[00:08:50] Justin Moy: For whatever reason, I was getting really, really burnt out. I was working a ton and you see me. I don't know if you'll post the videos. I have a super thick head of hair. I actually started going ball. I was super [00:09:00] stressed out. I was living at home. So at the time, cause you know, I'm 19, 20 years old at this point in the Bay area and my mom's like, Hey, you got to figure this out.

[00:09:08] Justin Moy: I mean, you can't be going bald. You're stressed out. You're not sleeping anymore. I've always loved the gym. I wasn't going to the gym anymore. And she's like, dude, you just got to like figure something out. Why don't you take a day or two off? And just think about what you want. And I said, okay, fine. So I was sitting at home during the middle of the workday.

[00:09:23] Justin Moy: I had a, uh, a college football game on TV and I was just thinking, you know, what do we want to do? And at that point, the camera had panned over to like the student section. And everybody was going crazy in the student section. They're having like a super good time. And I just thought to myself, man, all of my friends are in college right now.

[00:09:41] Justin Moy: They're kind of going through a certain path and I'm, I'm in my hometown. If I set down roots here as a real estate agent, it's hard to pick up and move. You know, you can be very established, but you can't really take your book of business with you. And in that exact moment, I kind of felt like the walls were closing in on me, and I just, I don't know if panic is the right word, but I kind of said, okay, I'm going down [00:10:00] this path that's very, very specific, and I don't know if I want that right now.

[00:10:04] Justin Moy: I might want some of that flexibility. So, you know, I took the rest of the day to think of what can I do that's still in the real estate space that gives me that flexibility that lets me move around that lets me do different things. And naturally I worked with a lot of real estate investors kind of accidentally.

[00:10:18] Justin Moy: So now that rabbit hole started, then it turned into bigger, bigger properties. And, you know, next thing we know we're doing, you know, only about 200 unit plus apartment buildings, but it was a very specific moment in my career after a big bout of burning out, where I just thought, dude, I got to change something like right now.

[00:10:33] Justin Moy: What's my new trajectory. 

[00:10:35] Randal McLeaird: Good for you for having that introspective moment because, yeah, you can easily burn out if you are running through a ton of transactions or stressing out about a commission or something because it is a boom and bust. I'll second your advice that you're giving people starting in the business of starting at as an agent of some sort, just because, you know, I mean, if you buy the wrong property, most likely you're going to come out okay if you bought it right, but you could lose [00:11:00] money.

[00:11:00] Randal McLeaird: And if you go into it on the agent side and you work with investors, you get to de risk your learning. Like you can see what they do, learn what they're doing, learn what works. Work with them. You can see a lot of transaction by doing that. 

[00:11:14] Justin Moy: But you also see too, like what, like the headaches of it, right?

[00:11:16] Justin Moy: Like I sold a lot of homes of people who were very, very, very successful real estate investors who were just like, dude, get this one off my books. Yeah. Like I'm done. And for whatever reason, you know, those things happen. And so it's not always this. Instagram passive income by 15 houses a year kind of thing.

[00:11:34] Justin Moy: Like there's a ton of work that goes into it. That's a big piece of my educational content is. Like, don't invest in properties for passive income. There's certain strategies you can do for passive income, but you know, if you buy property, that's not passive. You're buying a job. You got to work it. So, you know, naturally I work with a lot of salespeople and a lot of real estate agents who understand that thankfully, but you know, it's not always super glorious.

[00:11:56] Justin Moy: And so when you're a real estate agent, you get to see all of those things. You get to [00:12:00] see the big, big exits that somebody is going to sell like a home flip like you for massive profits. And you get to see the guy who, this is a real story, who a tenant poured, uh, cement down the drains and the 

[00:12:10] Randal McLeaird: home is 

[00:12:11] Justin Moy: almost worthless.

[00:12:11] Justin Moy: Yeah. Crazy to think. I mean, nobody talks about that on Instagram, right? There's no, this is the worst passive income ever. You got to dig through the ground. I mean, break up everything. So you get to see both sides and you kind of get to decide if you want that life or not. 

[00:12:24] Randal McLeaird: That's funny that you mentioned that.

[00:12:25] Randal McLeaird: I literally was at a lunch with some high school buddies yesterday. Like, Hey, what are you working on? Are you doing any section 8 housing? I was like, uh, I was and then this 1 thing happened and I never will again, you know, probably soiled the whole bunch just because yeah, once they lose their. They know that you're going to like report them for not paying rent, then they're like, okay, just burn the house down.

[00:12:45] Randal McLeaird: It doesn't really matter. I know. And then they put cement down the deal. Oh, man, it was luckily a peer and beam house, but it was like, you know, nightmare. That's funny. Okay. So let's talk then on multifamily and I'm just kind of curious. So what was the year that you were kind [00:13:00] of making a big push into that world?

[00:13:02] Randal McLeaird: Because it's a much different time now than it was. Sure. 2020. Yeah. So I don't know when you started. 

[00:13:08] Justin Moy: That was pretty much right after I had started wrapping up my full time career in the broker. So I got my license at 18. What are you? 19, 20, 22, about 20, 23, 24. Let's say, you know, so about six, seven years ago.

[00:13:21] Randal McLeaird: And 

[00:13:21] Justin Moy: I wasn't all in right away, right? There's a learning period where, you know, I underwrote a couple of deals, but I knew I wasn't going to buy something in the near future. I was talking to brokers. I joined some groups. I paid for mentorship programs just to really see if it's what I wanted to do. And so I wouldn't say that I hit the ground really hard at that point, but I started easing into it.

[00:13:40] Justin Moy: And then, you know, over the past, you know, about four or five years has been really, really heavy into, you know, fund management and, you know, coming after acquisitions and coming after underwriting deals. And essentially you mentioned, you know, section eight, the very first deal to be bought was a section eight play and it looks great on paper.

[00:13:57] Justin Moy: And that was the first deal that I asked and managed and, you [00:14:00] know, Like, wait, are you going to make 

[00:14:01] Randal McLeaird: me 

[00:14:01] Justin Moy: seem like the bad guy here or what just happened? No, no way. I mean, it's, it's tough on paper. It seems great. Cause in this market section, it actually paid more than market rent. And so the sentiment is, Hey, it's above market rent.

[00:14:14] Justin Moy: It will always be full guaranteed payments. It will always be full. There's a wait list for section eight. And while those things are true, you know, it has its own unique set of issues and things that you got to deal with. So yeah, it's, I would say, yeah, this was about maybe six or seven years ago where I started kind of getting my feet into it.

[00:14:33] Justin Moy: And then it took me about a year or so kind of him and Han in it before I. I really dove in and hit the ground running with it. 

[00:14:39] Randal McLeaird: All right. So let's talk then. Is it a fund? Yeah. Explain to me the sound structure that you got because, uh, fund of funds or whatever it is. I don't know. 

[00:14:47] Justin Moy: Yeah. So fund of funds is a word that people will use special purpose vehicle.

[00:14:51] Justin Moy: I think a lot of people, when they hear fund, it gives off maybe what we're doing. Maybe not. A lot of people, when they think of a fund, they think of, Hey, you know, I'm going to [00:15:00] give you money. You take that money and do whatever you want with it. You know, hedge funds are pretty common or like a Fidelio or Schwab or something like that.

[00:15:06] Justin Moy: You know, our fund is a little bit different. We don't do what's called a blind fund, which is kind of that scenario where, Hey, you give me your money and I'm going to kind of buy what I think is a good opportunity with it. We do individual funds for individual opportunities. So, you know, let's say you're, you know, flipping a house and you need, it's a big project, you need a million bucks, you know, you might come to the guy like me and say, Hey, Justin, we need a million bucks for this deal.

[00:15:29] Justin Moy: You know, if you and your investors are interested in it, I'll give you a special terms because now, instead of you having to go find a million bucks, I find that whole million bucks for you. There's usually some preferred terms with that. And then I can pass those preferred terms down to our investors.

[00:15:42] Justin Moy: So you do that at a really big scale and you get to have access to a seat at these big tables with, with other seven figure check writers. Even if you're not writing a seven figure check yourself, cause we kind of pool money together. Yeah. So that's what we do fund to fund or special purpose vehicle investments or kind of words that people might use to describe.

[00:15:58] Justin Moy: Yeah. 

[00:15:59] Randal McLeaird: So [00:16:00] typical check size. Yeah. Yeah. Yeah. 

[00:16:05] Justin Moy: You know, at this point where, if we're going to do a class C, it's got to be like, C you know, it's got to be pretty much right on that cusp of a B. 

[00:16:14] Randal McLeaird: In an A neighborhood. 

[00:16:15] Justin Moy: Yeah, exactly. Yeah, that's what everybody says, right? This is a C in a B neighborhood. Exactly.

[00:16:20] Justin Moy: But, um, it's got to really, really be on there. So, we will do mostly hanging around the class B areas. Typically 200 plus unit multifamily, but I would be okay going lower unit counts if there was other scale. The reason why we want 200 plus is you can really scale your staffing. Okay. But if you have a hundred unit apartment down the street and you're going to buy another hundred unit apartment a block away, okay, you kind of get the same scale.

[00:16:46] Justin Moy: So we're less strict on that and more strict on, hey, we need to see certain level of scale that we can achieve right away. 200 is kind of typically is that magic number. You know, we like B areas. We don't like apartment buildings that police are familiar with, [00:17:00] so it's actually part of our due diligence process.

[00:17:01] Justin Moy: We actually call the police department there locally and just kind of ask them if they've been there, when's the last time they've been there, kind of what goes on there. We don't like places where people don't have jobs to support themselves. You know, we like to see cars gone during the day and, you know, people busy at work and, you know, come home at kind of typical times and just have a good routine.

[00:17:22] Justin Moy: So there's certain due diligence like that, that we look at and deal, but we're pretty much in class B. Neighborhoods and apartment buildings right now. 

[00:17:29] Randal McLeaird: Yeah. And check size, what are you guys typically looking at? What is it? 

[00:17:35] Justin Moy: How many? It depends. You know, we just wrapped up a deal in Jacksonville. It was about 25 million bucks.

[00:17:40] Justin Moy: Check size about 12 million bucks. We did a deal in Dallas before then, you know, 40 million deal, 20 million check size. So, you know, we might not do the whole 20 million or 10 million, but you know, we'll be a part of it. And I say, for most people, you hit the best scale. When you hit to about the $2 million mark.

[00:17:59] Justin Moy: So [00:18:00] whether you invest in a fund like ours where we're gonna go and commit $2 million to a project, or you're an individual, just ultra high net worth guy or girl who can write a $2 million check by themselves, that's probably where most people are gonna see the top level kind of returns, where you can really negotiate some really strong terms.

[00:18:17] Justin Moy: And make up pretty well ahead. 

[00:18:19] Randal McLeaird: So you're typically going into a syndication deal, right? They need a capital stack, 20 million cash equity position. Right. And you're coming in with two, just to explain it and break it down. You're coming in with two and you're able to go to the sponsor who brought the project and say, Hey, look, you know, we're, we're writing a big check.

[00:18:38] Randal McLeaird: We need a side letter or side agreement that you may be offering a 70, 30 split with your people on a seven prep, but we need a, you know, like, what do you typically see 

[00:18:46] Justin Moy: Yeah, so we're very fortunate that at this point, you know, good track record and good reliability. So typically we're looking at either an 85 15 or maybe a 90 10.

[00:18:57] Justin Moy: Yeah. With some additional preferred return as well. [00:19:00] So you know, if you're going to go invest directly, you might get, like you said, a 70 30 split, let's say a six prep. 

[00:19:05] Randal McLeaird: Yeah. 

[00:19:06] Justin Moy: You know, our fund is we're going to gun it for like a 90 10 split with maybe an eight prep or a nine prep. Now part of that is how we make money, right?

[00:19:14] Justin Moy: As we take a little bit of that difference, but for us, there's always going to be a Benefit, whether it's in better terms, whether it's in higher equity split, whether it's in a safer equity position or something with our fund that is more advantageous to the investor. So it's not like we're just a middleman who is holding deals hostage.

[00:19:32] Justin Moy: We are negotiating some type of better economics for our investors. That's going to be an additional benefit to them. 

[00:19:39] Randal McLeaird: Yeah, yeah. There 

[00:19:40] Justin Moy: is an economics there. Then, you know, we get paid. Of course, there's a bit of a difference there that we can take home as our payment for our time and our efforts. 

[00:19:48] Randal McLeaird: So what kind of fund is it?

[00:19:49] Randal McLeaird: Is it five or six BEC crowdfund? We do a mix. 

[00:19:53] Justin Moy: Yeah, we do a mix. So we like to do accredited and non accredited deals. In my ideal world, you know, we do about [00:20:00] half and half on the year. It doesn't always work out that way, but you know, I think the accredited designation is, So foolish. I mean, on one hand, you have some people saying that figure hasn't been adjusted for inflation.

[00:20:12] Justin Moy: And at this point, if you do kind of feel like that's an important metric, a million dollar net worth or 200, 000 income, the real income now, I think it's like 500, 000 and the net worth is closer to 3 million. So there's people talking about updating with that, which kind of wipes that type of fund out.

[00:20:25] Justin Moy: That's not that many people. And then there's other people who say, Hey, and I'm in this camp. You know, what you make and what your net worth is doesn't mean you're more or less sophisticated than somebody else. 

[00:20:34] Randal McLeaird: You know, 

[00:20:35] Justin Moy: there's somebody out there who studies real estate, knows what they're doing, who's more well versed than somebody else who maybe just because they're an engineer, have a high degree, you know, they make good money.

[00:20:44] Justin Moy: So I don't agree with it, but there's still kind of the rules that we have to play by. But yeah, we like to do both. 

[00:20:50] Randal McLeaird: Yeah. Educate me on this. Okay. So a syndication comes up and it's a five or six B offering, right? No advertisement. You go out, can you do a five or six C? [00:21:00] Cause your vehicle is a fund, right?

[00:21:02] Randal McLeaird: So can you do, you know, the answer, you 

[00:21:04] Justin Moy: know what I mean? Yeah. So think of it this way. If a syndication comes out and it's a 506B, so there's no advertising, you can take non accredited investors. We will have to honor what that sponsor structures their deal 

[00:21:18] Randal McLeaird: as. 

[00:21:18] Justin Moy: So I cannot say, well, my fund is a 506 C, so I'm going to go advertise.

[00:21:23] Justin Moy: No, because we, at the end of the day are from a legal structure perspective, one big limited partner. So we're one big investor, so we cannot bend the rules around the deal. We will honor what the deal does. So no, it's going to be even throughout. 

[00:21:39] Randal McLeaird: So if you had 20. Non accredited sophisticated investors, right?

[00:21:43] Randal McLeaird: And that out of the 30, what 33 or however many can have in there. Does that count against the lead sponsors number? Do we know that? That's an 

[00:21:50] Justin Moy: interesting kind of gray area that some lawyers say, no, some lawyers say yes, because that's another benefit too, as to why a lot [00:22:00] more sponsors are now running it this way, because there are some opinions that say, no, those do not count.

[00:22:05] Justin Moy: So the way they see it is. Almost like a little loophole. Like, man, we could have these funds. It's just one, but really within those funds, there's more than those other lawyers that will say, no, you can't do that. So. In these scenarios, sponsors tend to hire the lawyers who have opinions that they align with.

[00:22:23] Justin Moy: Um, and so, you know, it's a bit of a gray area. So that's something that hasn't really been worked out that well yet. I'm sure we'll kind of have some changes in regulation here at some point, but it's tough to make that happen. Having that 30 cap. Cause every fund is going to have a couple, you know, so I imagine they'll hopefully treat it just as one, but, uh, yeah, it's a little bit of a gray area.

[00:22:42] Justin Moy: There's a little bit of my 

[00:22:43] Randal McLeaird: take on it. If it hasn't been worked out in the courts yet, it only will work itself out or become an issue if deals start falling apart and investors get upset. And yeah, that's, that will, and 

[00:22:54] Justin Moy: then it's, it's always more regulation after that, right? So they probably will say, no, you can't do these.

[00:22:59] Justin Moy: So. [00:23:00] And then there's also regulation that's been proposed to go away from net worth and go into some kind of test or some kind of aptitude or educational test that you can take just to show that you're not getting, you know, swindled out of your last 50 grand or something like that, that you kind of know what these are and then you have a certificate.

[00:23:15] Justin Moy: But so, you know, maybe it won't even matter in a couple of years. I personally think that way is better than some kind of. That to me doesn't mean that you're more sophisticated or not. 

[00:23:24] Randal McLeaird: Let's move in since you're doing the capital. So when you first said fund manager, I also was thinking, okay, so in my mind, you have capital raising and a fund manager.

[00:23:33] Randal McLeaird: So the fund manager is almost running like the auditing the files, make sure that everything's there, make sure distributions are happening. All of that stuff is, you know, that's the fund manager's job. I see what you're saying. So let's talk more, I guess, nuts and bolts of the business of raising capital.

[00:23:47] Randal McLeaird: What are you doing right now to attract investors? Yeah. Especially that you're traveling like having an awesome time overseas. 

[00:23:55] Justin Moy: It's so interesting because I'm actually meeting up with somebody who I [00:24:00] had an investor call with tonight. We're having dinner together. He's in Costa Rica. So, you know, I don't think you should let those things hold you back.

[00:24:07] Justin Moy: Personally. I'm very introverted. I've always been. So to me, I don't really thrive in environments where I'm networking or conferences or, you know, I do go to those things almost out of necessity. I'm usually not like the first one there. The last ones I'll leave, you know, I'm very introverted. So I tend to do really well doing things like this.

[00:24:25] Justin Moy: Like I really like doing podcasts shows and doing our own podcasts. Our show is called passive real estate strategies, which is all about syndications and funds and being a passive investor in deals. Those have done really well for us. I'm very, very active on LinkedIn. You can always look me up on LinkedIn.

[00:24:39] Justin Moy: I post every single day. I engage a ton. I message a lot of people there. So to me, those are the two biggest avenues beyond, you know, referrals and kind of people that I've already known to bring on like newer investors. And they've done really well for me and thankfully I can be anywhere in the world and, and do those things just like I do now.

[00:24:57] Justin Moy: So again, it's a design thing, right? I saw a lot of people do [00:25:00] rely on conferences to get a lot of investors, but I know I like to move around. I like to travel a lot. So it's about picking the kind of avenues that, that work for you and that you can commit to for the longterm. 

[00:25:08] Randal McLeaird: All right. Let's say we've got somebody who wants to transition into being a capital raiser on, again, just super nuts and bolts.

[00:25:15] Randal McLeaird: You're posting every single day on LinkedIn. Let's just take that one avenue and that one, one lead source in the funnel. Okay. What are you seeing is getting the most type of response, I guess, break it down for us is your goal to like grow an audience. And then when you have a, an offering, then just push it to the whole audience or you specifically, yeah, 

[00:25:33] Justin Moy: break it down for me.

[00:25:34] Justin Moy: So, you know, I don't have this massive audience, right. I actually just made a post today. I crossed over like the 4, 000 follower mark, which on LinkedIn is a little bit more esteemed than, you know, like on Tik TOK, I think I have a couple thousand, right. But like, it's not as focused. So. You know, I don't think the goal is to build this massive Grant Cardone audience, right?

[00:25:53] Justin Moy: Where I got millions of people looking at me. The goal is to build a small following, you know, people who resonate with me and my [00:26:00] message because of my background in sales, they tend to be salespeople, real estate agents use a lot of LinkedIn B2B sales. People use a lot of LinkedIn, our company presidents club investors, you know, that's kind of a big sales moniker.

[00:26:11] Justin Moy: So it's salespeople who specifically fit in a one of two categories. They either want to be work optional faster. So they don't want to work until they're 65 or 70, whatever the age is going to be at that point. You know, they're always talking about raising the age limit to working, or they have fully optimized their conventional retirement strategies, which are like their 401ks are maxed out every year.

[00:26:34] Justin Moy: They have some fidelity stuff, maybe, and they have cash leftover. And they're always thinking like, what's the next thing. Like, how can I keep building on this? And they kind of come to us. So when it comes to posting, when it comes to having that, like you want to just have a very clear message of who follows you.

[00:26:49] Justin Moy: Because if I'm just Justin, the real estate guy, there's 2000 real estate guys and girls on every platform. I mean, you can't stand out. So to me, I have a few kinds of layers, I [00:27:00] guess, of people that tend to be attracted to our message. And when you think of it that way. I'm kind of an audience of one because there's a lot of capital raisers out there.

[00:27:08] Justin Moy: There's even fewer that specifically cater to salespeople and understand why we would want to invest in stuff like this. There's certain risk mitigation strategies when you're commission based that, in my opinion, you should invest differently than somebody who's maybe an engineer who makes the same salary every year.

[00:27:23] Justin Moy: And then there's even fewer people who speak to sales professionals who want to be work optional fast. The goal is to replace a high income fast. So you really want to figure out who your message is going to resonate with and understand that if you're talking to everybody, you're talking to nobody and really get narrowed down and focus in, you know, that guides your posts that lets you know what kind of podcasts to put out that lets you know, what do my people want to hear and what do they like to see that really helps with like a lot of the content creation, a lot of the marketing just like that.

[00:27:50] Randal McLeaird: Yeah. Builder, your avatar. I agree with that wholeheartedly. Awesome advice. Yeah. So, okay, now you've built your avatar, you're targeting them. They're interacting with your posts. What are you doing to [00:28:00] convert them into, like, what does your sales cycle look like from somebody responds to you on LinkedIn?

[00:28:05] Randal McLeaird: Hey, cool post, man. Awesome. I agree with you 100%. To like, Hey, I've got this offering and I need 50, 000 check. Are you in? What does that look like, that life cycle? 

[00:28:15] Justin Moy: You know, it's so interesting is, and I learned this when I was in real estate sales and I don't remember where I learned it from Tom Ferry or something like that.

[00:28:24] Justin Moy: Essentially there's two ways to build a business like capital raising, like real estate agent or whatever it's going to be. The first is. Speak to a ton of people on some kind of massive stage. This is like the Grant Cardone method. Well, Grant Cardone's got thousands of investors. He makes posts. His whole shtick is marketing.

[00:28:42] Justin Moy: If you invest in one of Grant's deals, like you're never going to call Grant Cardone the deal going? Like he has this massive, massive, massive stage that he stands on. And he, he talks to a bunch of people. The second way is thinking of growing your sphere of influence. You know, like your friends and family, [00:29:00] people who really, really, really know, I can trust you people who you would have dinner with and really growing that sphere out, pulling people closer into the center of that sphere from never heard of me to this guy's kind of interesting to we've met to I've done business with him or her to like, I got to tell my friends about all this, you know, on one hand, you're going to create this massive marketing machine.

[00:29:21] Justin Moy: Thanks And make big teams. On the other hand, you don't really need to do all those things. I don't have a big team. It's me. And I have a virtual assistant. I know every single investor that I transact with. I'm on a text message basis with every single one of them. I know their face. I'd recognize them in the store.

[00:29:38] Justin Moy: You know, I don't want this massive, massive audience. I want a close following of people who really, really bought into what we do and we're on the same mission together. So for me, it's all about messaging and getting the conversation offline. You know, if you came to my LinkedIn profile today and you liked one of my posts or you commented or something like that, I would DM you tomorrow.

[00:29:57] Justin Moy: And I would just say something like, Hey, you know, Randall, thanks so much for [00:30:00] engaging. I really appreciate it. As I'm growing my profile, you know, what brought you to my profile? How did you come across my profile? And just see what happens. You know, people say all sorts of things. Those conversations tend to go into, yeah, you're kind of interesting.

[00:30:12] Justin Moy: Like what exactly do you do? And then, you know, you have this tiny little pitch and Hey, if you're interested, you want to carve out 15, 20 minutes just to get to know each other, see if it's right for you. You know? So just bring that relationship offline and that's really the method value. So I'm not looking to build out this massive, you know, Grant Cardone or Alex Formosy platform.

[00:30:28] Justin Moy: I want a very intimate platform and following of people who are really bought in and that's the way that I structure my business. 

[00:30:34] Randal McLeaird: Yeah, that's awesome. That's that is. We talked a minute ago about lifestyle design and it seems very much in keeping with the way you have structured things and the way you want things to happen.

[00:30:42] Randal McLeaird: Yeah. So person here in Costa Rica that you're meeting for dinner were, were they just happen to be in Costa Rica at the same time, or you, you're getting investors from all over. 

[00:30:51] Justin Moy: Oh, no. So American. So we do only work with American investors. I don't know the nuances of getting foreign capital into deals.

[00:30:58] Justin Moy: Different tax implications, different legal [00:31:00] implications. So we just, we don't do that. So yeah, this is a guy who I met on LinkedIn, just literally the same path that I just laid out now, engage in my profile in some way, just DM for a couple of times, and then, you know, when I started sharing my journey, Hey, I'm in Costa Rica, this is why I invest.

[00:31:15] Justin Moy: So I can do X, Y, and Z. You know, it was, Hey, I actually go to Costa Rica a couple of times a year. Cause he has some work out here. The company is in America and in Costa Rica. And then it just came up, Hey, I'm bringing Costa Rica this week. You know, you're free this day. So it's just so interesting. I would never have thought that something like that would happen.

[00:31:31] Justin Moy: Like what are the odds of somebody I meet through LinkedIn being in Costa Rica, being interested in what I do, have an investor call with me and then meeting up for dinner. So it's all, you know, things just happen in these weird cycles and everything happens for a reason. So it's not normal that I don't target people in Costa Rica or something like that or like where I'm going to be vacationing or something, but yeah, it just happened that 

[00:31:51] Randal McLeaird: way.

[00:31:52] Randal McLeaird: Yeah. Nice. All right. One more thing on LinkedIn then. So is there a type of post that you. Or set number of different types of posts that [00:32:00] you are going for again on the tactic side. Like this is a personal one. I have to do it by 9 a. m. And then, or is it 

[00:32:07] Justin Moy: organic? It tends to have a certain schedule just because I have a typical daily routine.

[00:32:12] Justin Moy: I'm not super picky about when the posts go up. But again, they tend to go out generally at the same time. Most mornings I happen to do text based posts. I don't do a lot of videos. I don't want to pay somebody to edit it. I don't want to edit it myself. You know, I don't personally engage with a lot of videos.

[00:32:28] Justin Moy: I like to skim things. So to me, it's just finding the thing that works for you. If you love to make videos, I love to do podcasts. I love to talk, but to me, I don't want to edit videos and I don't want to deal with uploading them. And I don't want to deal with different software. So to me, I just write, I like writing and it just kind of works for, again, the longevity.

[00:32:45] Justin Moy: If you're going to go down a path of any type of business you want to build. You have to put yourself in a position for longevity. So to me, that's the biggest thing. So I write, you know, one post a day. I write one day a week. I kind of, so I have most of the posts figured out in the morning when I'm going to post it.[00:33:00] 

[00:33:00] Justin Moy: And I'm at a point, it's kind of copying and pasting and, or maybe make some slight updates, but no, it's a pretty simple formula. I do my best to keep things pretty simple. 

[00:33:08] Randal McLeaird: Yeah. Awesome. Okay. All right. We'll leave LinkedIn now. I just, again, I like getting in the weeds with certain things just so that somebody that is listening and thinking about, Oh man, I should really start raising capital for X, Y, and Z or whatever it is.

[00:33:19] Randal McLeaird: And this will speak directly to them and they can use them. Yeah. One strategy at least, you know. Yeah, definitely. Start building that funnel. Yeah. Okay. So, I mean, we can talk about the market, man, because I'm kind of curious what you're seeing now. You're obviously, you said you're seeing three deals a month buying four, right?

[00:33:35] Randal McLeaird: And so you're also in an interesting position where you are allocating capital. So you're not only vetting a deal, but you're vetting a sponsor. So I've had a number of conversations with fund managers doing similar things, but I'm curious your take on just some cursory level due diligence that you have to do on sponsors and kind of who you're looking for to partner with.

[00:33:56] Justin Moy: Yeah. So, and sponsors, that's really where a big chunk of it is, [00:34:00] right? You want to make sure that you have. A good amount of due diligence on there because it's old saying great sponsor can make a bad deal good and a bad sponsor will make a great deal bad. So that's a big part of it. And I think that's actually a really big relationship building phase of it.

[00:34:14] Justin Moy: So the last deal that we did, it was a deal in Jacksonville and it was a relationship we were building with that sponsor for over a year. And they've had many deals over the course of that year. We just weren't really comfortable with yet. We were kind of watching them. Seeing how they react to things, seeing how they've reacted when deals have not gone as planned, which every deal doesn't go 100 percent as planned, but I mean, in a, in a lost capital scenario, what kind of things did they learn?

[00:34:38] Justin Moy: How did they communicate with their investors? Were they pulling out all the stops, including their own money to preserve investor capital? You know, a lot of those things I really like to focus on, how have you responded in down cycles and how you responded when deals have gone sideways in a lost capital event.

[00:34:55] Justin Moy: And you know, what have you done to die on your sword before you had to go to your investors and say, Hey, we have to cash call [00:35:00] or we have to, you know, unfortunately lose some capital on this deal. That's a really big portion of it. Other things I look for is what does the actual team look like?

[00:35:07] Justin Moy: Personally, I don't invest with individual operators. I like to invest with companies with formalized systems and teams, at least 20 full time U. S. based employees because I like to see, uh, I watch a lot of Shark Tank and Kevin O'Leary has this saying with solopreneurs, he says, you know, what happens if you walk down the street and get hit by a bus?

[00:35:26] Justin Moy: What happens to my investment then? It's unfortunately some of the things that we have to think about. So to me, size matters and that's not always the right answer for everybody, but that's the right answer for us. Financial ability matters of both the part, the name partners of the deal and the company itself to be able to outlast and put a capital when things are needed.

[00:35:46] Justin Moy: Organizations, operations. Hey, I like to see a system in place. I don't want to see a side hustler or solo guy or girl who's just kind of winging it. I'd see that track record is of course, big, everybody's got a good track record over the [00:36:00] past couple of years. So I look a little bit deeper than that. I look at the markets that they're investing in, why they're investing in it.

[00:36:06] Justin Moy: I really want to know how they think, I really want to know why they picked this business plan or why they picked this property or why they picked that market and see how thorough those answers are. You know, you'd be surprised. Some people are willing to throw down seven figure checks and be, I don't know, it's a good deal.

[00:36:20] Justin Moy: My friend's doing it, you know, and there's just no due diligence to it. So I like to see how they think that part takes. A lot of organic getting to know somebody and then some formal sit downs and formal questions about deal specifics or company specifics, things like that. 

[00:36:35] Randal McLeaird: All right. You mentioned something one great advice, like cross the board on all those things.

[00:36:39] Randal McLeaird: Definitely take that to heart. If you're going out and you're trying to find a sponsor to invest with, do those things. One thing that I want to drill down on is the. You mentioned, look, it's a down market, certain people, certain sponsors losing money on deals. How are they handling it? And you said you want to see how they have handled that communication.

[00:36:56] Randal McLeaird: How, if I'm an individual LP coming into a [00:37:00] deal, not a million dollar, two million dollar check writer, how am I going to have that due diligence or that access to how that sponsor's handling the communications on a deal? Maybe they Yeah, they don't necessarily want to talk about, yeah, 

[00:37:13] Justin Moy: that's a little bit tricky.

[00:37:14] Justin Moy: I can't speak for how all sponsors will handle that, but what I can say, very broad strokes in a business perspective is we work with great sponsors who have access to a lot of capital. Great sponsors always get a lot of capital for their deals. If you're an individual retail investor 000 check, it can be more difficult for you to get these things.

[00:37:37] Justin Moy: Just from a time perspective, and I'm not saying it's because you're a bad person or, or, you know, you got to bring more money to have more value, but at the end of the day, kind of right, because if you're raising 50 million easily every year, and then somebody comes in with 25, 000 bucks and is asking for a laundry list of items.

[00:37:54] Justin Moy: You know, I don't know if there's a lot of motivation to bend over backwards for that person. But again, we're coming in with seven [00:38:00] favorite checks. Yeah. We're going to get all the due diligence that we need in one. So it's tough if you're an individual investor, you always want to ask those questions because again, that also tells you, you know, if they're kind of brushing you off because you're a small check writer, that's probably not somebody you want to deal with anyways.

[00:38:15] Justin Moy: So from a business perspective, yeah, it might be hard. You might have less leverage than we do to get different answers. Right. And you might have less knowledge. Like you might not know to ask for these things. You might not know to ask, like, Hey, do you audit your financials or not? You may not even know what that is.

[00:38:29] Justin Moy: So there's a knowledge perspective, but there's also a leverage perspective where if we ask and we're bringing seven figures to the deal, you know, we're, we're going to get 99 out of a hundred requests that we get, unless it's way overbearing or something like that. But yeah, it's hard to leverage your way into those situations.

[00:38:44] Justin Moy: That's another benefit of kind of a fund like ours. But when you ask these questions to sponsors, Part of what you're looking for is how they respond to it. Everybody has deals that went sideways, but if you're open about it and you're willing to share and you're willing to share what you learn, that's better than just saying, yeah, let me get to that info [00:39:00] later and then just never hearing from you again.

[00:39:01] Randal McLeaird: Yeah. Solid advice. Okay. All right. So that's on the sponsorship side of things. If you're looking, let's talk vetting deals now. Like what are you seeing in the market? Because again, if you got into 2018, you're, you know, cutting your teeth on some deals and underwriting and that sort of thing. Market has changed significantly in the multifamily space from then to now.

[00:39:21] Randal McLeaird: So what are you guys looking for in deals right now? Like what markets are you guys in? Just kind of break it down for me. Like, what are you seeing as far as returns go? Are you, are you guys more cash on cash focused? I'm going to ask you 50 questions before I let you respond. Yeah. Sorry, dude. 

[00:39:36] Justin Moy: No, that's great.

[00:39:37] Justin Moy: That's great. I, and I'm going to forget most of them. When it comes to deals, you know, I'll teach you how to throw most deals in the garbage in a couple minutes right away. Just go straight to the debt portion of the investment deck. Go straight to the debt. The debt is the number one deal killer in commercial real estate.

[00:39:54] Justin Moy: It's the biggest thing that will kill your dreams. It's called leverage for a reason. It's because it amplifies things. It's going to [00:40:00] make a good deal. Great. And it's going to make a bad deal really fricking horrible. So we look at amount of leverage. So most investors would consider, you know, 75 percent loan to be a pretty even teal area, that's pretty good.

[00:40:15] Justin Moy: Below that, most people consider very safe. So really the less leverage you can get on a deal, the more safe it's going to be. It might eat into your returns a little bit, but that's kind of a question you have to ask yourself as an investor is what's my appetite for risk versus what am I looking for for returns?

[00:40:32] Justin Moy: Generally speaking, 75 percent or so is kind of the most that will ever go unless something crazy special deal happens. But that's, that's like the top level. What's the flexibility on the loan afterwards? Do you have extension options? What needs to happen for those extensions to happen? What is the cashflow on the deal?

[00:40:49] Justin Moy: Cashflow is king, not because of that's where most of your returns will come from, but because that's how you survive. If you have strong cash flows, you can always refinance your loan. Always. You always have [00:41:00] options. If you have weak cash flows or no cash flows, refinancing is very, very, very tough. And so you might not be able to outlast these deals or outlast these down market cycles.

[00:41:09] Justin Moy: So just understand that when you're investing, most of the time, your cashflow is kind of a defensive metric. The more return comes from cashflow, the more, or the less risky investors will generally consider that deal. And it doesn't mean that you're going to make a killing off of your cash flows, You're generally still going to make more on the appreciation of the asset or the forced appreciation, but it's a defensive play.

[00:41:29] Justin Moy: The cashflow is always yours on your side. We don't do no cashflow deals. We don't do new developments. We don't do very, very, very heavy, you know, condemned buildings or anything like that. It's just. They're great. It's just not in our risk appetite to do those things. We don't like to feel like we're working against the clock when you have no cash flow, you're always working against the clock.

[00:41:49] Justin Moy: So when you have cash flow again, it buys you time. So those are some of the big ones on the deal specifically when it comes to the market. That's also another big thing you want to focus on where a lot of people are missing the beat on [00:42:00] market is a couple of things. First is rent to income ratios. You have some of these markets.

[00:42:05] Justin Moy: Where tenants are paying 40 to 50 plus percent of their income to rent. You can't do that. That's not sustainable at all. You get a flat tire and you're not going to get your rent that month. So keeping at an absolute max about 30 percent rent to income ratios of where your pro forma rents are is going to be really, really big for us.

[00:42:23] Justin Moy: You want to have tenants that have cash. Diversification of economies in that area are really big. I like to look for single points of failure and having one big employer, in my opinion, is a single point of failure. Even if that employer is a government building or military base or something like that, you know, the government does shut down bases.

[00:42:40] Justin Moy: Like what's the one point of failure that's going to make this market useless. You got to ask those questions. And so debt to income ratios market on their, Oh, supply coming online. You have these white hot markets like Nashville, or now way overbuilding, you have 11 percent plus vacancy rates at this point, and still about 10, 000 units coming [00:43:00] online on that 10, 000, I think 1000 more coming on this year.

[00:43:03] Justin Moy: It's just not looking good from a supply and demand perspective on them. So if you're investing in these white hot markets, understand that that's where builders are going to builders are going to these white hot markets to meet demand, and sometimes they're going to overbuild. So understanding that if you are going to invest in those fields, make sure that you're kind of infill where there's not a lot of new developments near you and you're kind of insulated from that stuff a little bit.

[00:43:23] Justin Moy: But other than that, those are some of the big highlights. There's there's sheets of due diligence that we do on all these deals. I don't want to bore people with like a due diligence episode, but if you check those boxes, that's going to get you 70 to 80 percent of the way there to get to having a pretty good deal.

[00:43:37] Randal McLeaird: Yeah. Solid. Good advice again. Okay. So I'm digging through some of your stuff, right? And you've got retire in 10. Is that like, what would, something branded, what's it called? 

[00:43:47] Justin Moy: Yeah. We have a package called a retire within 10 bundle. It's not, you know, retirement calculators, pretty much see how fast you can replace your income for passive income with, with kind of our layout of a [00:44:00] strategy.

[00:44:00] Justin Moy: It's got an ebook for you to kind of read more about the strategy and kind of. What's the fastest route to retiring with this type of strategy, like, like passive investments, and it's pretty specific. So definitely read the ebook and it has a, another tracker, like a investment tracker in there. So yeah, that's, you know, part of our shtick is, is how fast can you replace your income and be work optional.

[00:44:19] Randal McLeaird: All right. I'm going to pin you down on it though. I want to know, like, yeah, give me a bridge version. Like how do you retire in 10? On what type of investment strategy, because replacing as an LP, replacing your, your income, you have to have a pretty big nut to go into some of these deals, I would think. Uh, to be able to retire.

[00:44:38] Randal McLeaird: So 

[00:44:39] Justin Moy: that's part of it too. Right. Part of it is, you know, you got to have money coming in. I'm not a big believer in the invest with no money kind of thing. I think that's ultra risky for people to do. I don't think it's a healthy investing strategy. So, you know, yeah, the caveat is, Hey, you got to start out with some money.

[00:44:53] Justin Moy: You don't have to be a millionaire, but you got to start out with some cash to start investing in deals. And really the big secret that a lot of people [00:45:00] miss is. They focus on cashflow too early, meaning, you know, you read these things from real estate investors or from real estate influencers that are saying, Hey, buy for cashflow.

[00:45:11] Justin Moy: Yeah. Those real estate investors have seven figure checks that they're going to go make 6 percent cashflow on. Yeah. That's good money. It's, you know, 60 grand a year. If you go in with a hundred thousand dollar check and you're getting 6 percent cashflow, you're getting six grand a year. It's not no money, but you're not really moving them.

[00:45:26] Justin Moy: You're not walking away at any time. Yeah. Yeah. Yeah. Yeah. So really the biggest secret is. Switch the way that you see things. Don't look at cashflow first. When you're in your building period, look at your equity gain. I'm not saying ignore it. So what I just said about cashflow is kind of a defensive play.

[00:45:41] Justin Moy: So you want a little bit of cashflow in there, but if you're building and you don't have those big checks to write yet, you need to grow, you need to look for ways to multiply your equity, multiply through things like value, add real estate, like value, add apartment buildings right now have very big multiples on equity and grow that pot [00:46:00] of equity before you look for cashflow.

[00:46:01] Justin Moy: If you stay consistent on that trend, the biggest thing that you want to look for is when do I get to, you know, let's call it a hundred thousand dollars of passive cashflow a month. If you look at the heaviest cash flowing, passive investments, That are the most risk adjusted that pay the most consistent returns.

[00:46:18] Justin Moy: Cause when you're living off your cashflow, you can't have distribution stop, like you need something very consistent. You're probably looking at a debt fund. That's going to pay you every single month. That's going to pay the same every single month. Our debt fund has not missed or underperformed on a monthly distribution since inception in 2014.

[00:46:34] Justin Moy: That's what you want. You're going to get about 9%. On that paid every year. You need about 1. 2 million bucks to clear a hundred thousand dollars of passive income there. So if you don't have 1. 2 million bucks. Look for ways to multiply your equity until you do. That's the biggest secret to doing it fast in a risk adjusted way.

[00:46:53] Justin Moy: Don't look at the 9 percent cash return. If you got 50 grand, you know, look at that when you got a couple of million bucks to play with until then [00:47:00] you're in growth mode. 

[00:47:01] Randal McLeaird: Yeah, no man. Solid advice. It is. You literally have to build up your nut that you can invest so that you have enough that is going to pay you on the passive side of things.

[00:47:09] Justin Moy: Yeah. 

[00:47:10] Randal McLeaird: Yep. Yeah. Because you can take 50, 000 and I had a guest on and we were talking about it and he was like, You know, getting into one of these deals and being like a 0. 001 percent owner of a deal is not really going to move the needle for you as much as you taking that 50 grand and you go and you buy a single family house and flip that thing, turn it into.

[00:47:29] Randal McLeaird: 90, 000 in six months, like that return is insane compared to, you know, and then once you've built it up enough, then throw it into something else. So I don't know if that's kind of the strategy, but 

[00:47:40] Justin Moy: I think it is. I think it is. I don't know if always flipping is the strategy because at some point I think people, I respect people who recognize their strengths.

[00:47:48] Justin Moy: House flipping is not for everybody. It's not for me. I don't like it. The time commitment, the risk associated with it. Generally speaking, if anybody's kind of wants a sliding scale of risk to return, the shorter [00:48:00] term a deal is, the riskier it's going to be seen. So yeah, you could totally buy a flip and flip it in six months and double your money, but just know.

[00:48:06] Justin Moy: That's generally a little bit riskier than what most people would consider in like a couple of years long deal. So, you know, recognize your strengths. If you like to do that stuff, that could be a great option. If you don't, if you want stuff passive, look at the passive stuff. You know, don't go buy a flip for passive income.

[00:48:20] Justin Moy: Say, Hey, the contractor will do all the work. No, the contractor is going to steal all your money if you're not there. So really understand what your strengths are and what you're willing to do and then lay into that strategy. 

[00:48:30] Randal McLeaird: I've never heard of a contractor taking anybody's money, man. I don't know. Yeah.

[00:48:34] Randal McLeaird: Yeah. Me either. Well, hey, man. It's been a good conversation, Justin. I really appreciate you jumping on, sharing your knowledge, talking about your business, how you guys have it structured. I am very envious that you are down in Costa Rica right now enjoying the sights and the scenes. Well, kudos to you, man, for being able to do it and structure your business and life in a way that you are able to do that.

[00:48:54] Randal McLeaird: So I'm going to put all your contact info in the show notes. So if you're out there and you're looking for [00:49:00] an investment or a vehicle, an opportunity, definitely reach out to Justin and have that conversation with him and check out some of the opportunities that he has coming online. 

[00:49:08] Justin Moy: Cool. Yeah. I appreciate it, man.

[00:49:09] Justin Moy: I hope this was helpful. 

[00:49:10] Randal McLeaird: Did 

[00:49:11] Justin Moy: you 

[00:49:11] Randal McLeaird: know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional? If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now.

[00:49:25] Randal McLeaird: We'll catch you on the next episode. 

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