The Most Dwanderful Real Estate Podcast Ever!

Craig McGrouther and the New Wave of Accessible Investments

• Dwan Bent-Twyford • Season 5 • Episode 381

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Ever wondered how the young guns are revolutionizing the real estate landscape? Craig McGrouther from Lone Star Capital, at just 29, is here to shake up your perceptions of multifamily real estate syndication and equity. Join me in a vibrant discussion where we clink glasses to Craig's shift from the cutthroat world of capital markets to the community-driven approach of raising equity for substantial investments. Discover how accessibility in investment opportunities is changing the game for investors big and small, and why a people-before-profits mindset isn't just nice—it's crucial.

Hold on to your hats—real estate syndication just got a whole lot more interesting and less of a labyrinth to navigate. If you're a landlord tired of the property management grind or a Wall Street skeptic looking for steadier waters, this episode is your lighthouse. We'll reveal the mighty benefits of syndication, from fractional ownership to professional management that frees you up to live your life. Hear my own tale of transitioning from a hands-on investor to someone who leads a team that plays to my passions in the industry, ensuring that every day is as much about joy as it is about profits.

Finally, we're turning up the volume on education in real estate investing and syndication. As we examine the roller coaster of historical interest rates and the inflation beat, learn about the strategies that could shield your investments from economic turmoil. From music to million-dollar ambitions, we're tying in the essence of lifestyle, discussing how alternative rock, Thai food, and morning workouts might just be the secret ingredients to achieving that billion-dollar asset management goal. So, whether you're pondering your next investment move or just love a good mix of business acumen and life's finer things, this episode promises to be as refreshing as a Blood Orange track on a summer playlist.

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Make it a Dwanderful Day!

Dwan Bent-Twyford:

Hey everybody, welcome to the most Dwan-derful real estate podcast ever. I'm your host, dwan Bent-on Twyford. I am America's most sought-after real estate investor and I'm so excited to have another new episode for you. As you can see, I've got a very handsome young man over here, so we're going to find out who he is in just a minute. And if you're new to Dwan-der-ful, I took my name, dwan and wonderful, and I made a new word Dwan-der-ful. So you are now in the Dwan-der-ful zone with me and we're going to talk, hang out, we're going to have fun.

Dwan Bent-Twyford:

Our motto at Dwan-der-ful is people before profits. So if there's something that resonates with you, dwanderful is people before profits. So if that's something that resonates with you, I'm your girl. And if you'd like to get some free things like an e-book and some stuff like that, just go to DwanDerfulcom and opt in. D-w-a-n-d-e-r-f-u-l DwandDerfulcom, opt in. Follow me on the socials Instagram you know all the things. I'm on all the things. So today we have a wicked smart man. So you're the wicked smart man of the day. Perfect, this is Craig Grother. Grother, I got it. Grother. We have to work on our name sometimes. You know, dwan's a tough name too. So how are you today, mr Craig?

Craig McGrouther:

I'm incredible. I'm very happy to be here today to have a nice conversation with you just to unpack what's going on in the ever-changing real estate market, especially in the times that we're in today.

Dwan Bent-Twyford:

So much so. So everyone that watches we have a toast, so everyone grab your drink and you cheers. Thank you for being on the show and spending time with me today. Thank you, guys.

Craig McGrouther:

Cheers.

Dwan Bent-Twyford:

And then everyone just you know, take a deep breath and just you know, stretch out all the stuff that's going on in your mind and just sit down for a few minutes and hang out with us. And if you want to watch us because I mean, who would not want to watch this Go on my YouTube channel and you can watch. And if you're driving and listening and running and all those things like that, I highly encourage you to go watch, because you get to know people better and you know we're going to have so much fun and you can be more part of the fun if you watch us. All right, so, craig, we like to just throw our guests straight into the world. So what I'm going to have you do is just tell us who you are, all the ways to reach you socials, emails, whatever you've got websites and then just give us like a sentence or two of what you do, and then I'm going to ask you questions and we're going to backtrack and see how you came to be Craig, my wicked, smart man.

Craig McGrouther:

Yeah, absolutely.

Dwan Bent-Twyford:

What's your deal?

Craig McGrouther:

Yeah, so grew up in the Bay area, silicon Valley, which is, of course, in Northern California. Before joining Lensler Capital, the firm I'm working with right now, I used to be in residential real estate, so I had that residential acumen that was the foundation to my real estate journey. And then I kind of backfell into getting into the private equity space doing multifamily acquisitions with a firm that I work with now, lone Star Capital. We basically buy apartment complexes, typically purchase price size around $30 to $50 million. We've got over a half a billion dollar portfolio right now and we're looking to grow.

Craig McGrouther:

And then, essentially, as to what I do specifically for the firm is I'm actually on the capital market side where we raise equity for opportunities and I'm spearheading the capital table, bringing in our investors, finding capital partners, finding institutional equity partners like you know, front of the Black Rocks, before you know big conglomerates, things like that, or the maybe smaller bespoke mid-market ones that you know, right, you know somewhere between 15 to 20 million, $5 million checks, and then we go as far as down, as you know, $ dollar checks and kind of one thing that I like to say is I want to give someone I'm going to ask you a bunch of questions.

Dwan Bent-Twyford:

We just want to quick and then tell us how we find you. I need your, I need all your info at the very top of my show notes cool, yeah, so you can find me probably anywhere.

Craig McGrouther:

you find anyone else on youtube, just the full name, craig mcgrouther, or if you go to the lone star capital, I'll be able to find us on YouTube as well. Find me on LinkedIn, just full name, craig McGrother, or an Instagram, as you know, we're there. That's more personal, I would say. But for the meat and potatoes of real estate stuff, you can find me on Facebook or, of course, linkedin and YouTube.

Dwan Bent-Twyford:

And YouTube. Yep, that's it. So you guys put up all kinds of videos and talk about the multi-units and raising the money and all the things. Yes, now I'm going to ask you how old are you? Because you look I'm 29 29.

Dwan Bent-Twyford:

I swear to you every year. It's like y'all just keep getting younger and younger and younger. It's like, oh, wish I would have known all those things back when I was the age that you are right now. So that's amazing. All right, right. So you guys work in the multi-units. So are you in the business of buying the multi-units or are you in the business of funding them? Are you in the business of bringing in partners and like doing syndications and things like that?

Craig McGrouther:

Yes, we buy them and we typically syndicate the equity for the opportunities.

Dwan Bent-Twyford:

Okay, okay. So because I heard when you start talking about the different checks and levels to come in, there are people that would be brand new and they would say I thought syndications are only for super wealthy people. And I, you know, I've interviewed a few people that do syndication. The thing I love about it is it's not necessarily for super wealthy people. You have smaller and you have like accredited. So for a newbie, like really first time they're ever hearing this kind of a syndication concept. Explain briefly what that means.

Craig McGrouther:

Yeah, so are you saying for just syndication at large or accreditation? What specifically?

Dwan Bent-Twyford:

would you like to know? Syndication at large.

Craig McGrouther:

Yeah.

Craig McGrouther:

So essentially what we try to do is basically pool money together, right?

Craig McGrouther:

So if you think about if you're in New York City, if you're in Texas, if you're in Miami, if you're in Des Moines, iowa, you see a beautiful commercial building, right.

Craig McGrouther:

So of course there's some REITs and big institutions that buy these. But then there's people like us who kind of come in or kind of somewhere in the middle of that, where we pull together investors that might be in their first real estate investment, who've never invested before with $50,000, or someone who wants to write a million dollar track, or a big group that might want to throw in several million dollars into the opportunity. We pull it together and then the investor with a $50,000 check can get the fractional interest in that investment. And the beautiful thing is that it's direct to us. There's not a ton of intermediaries need to get paid, and because of that your returns are, generally speaking, a little bit more creative and higher than if you were to kind of invest on Wall Street, on Main Street, if you will. So the private sector and way to do this, in our opinion, is the way to go and way to do this in our opinion, is the way to go.

Dwan Bent-Twyford:

Now, see, I agree, I did, and I've been investing for almost 35 years. I did not know much about syndication at all until like the last five years. It's just not anything that was like in my wheelhouse or I was around people that were doing it. But I tell you, since I started my podcast, I've interviewed a few people that do do that and I, even as an investor with a lot of experience, thought it was for people that had like a bunch of money and they had to be accredited, and it was things that, like you know, the Wall Street people do and, like, a regular person can't get involved in things like that. So, as I've learned more about it, I was like, oh, I didn't even really know that that was a thing.

Craig McGrouther:

Yeah, no, and you're totally right. There's so many misnomers pertaining to that, and so there's basically two structures of deals for syndications, for what we do. So there's 506Bs and 506Cs. So let's unpack that. A 506C is for an accredited investor. Well, what's an accredited investor? Someone who's got a million dollar net worth outside of their primary residence. So let's say you've got a brokerage account with a million dollars in the S&P 500. Okay, great. Well then you're accredited. Or other syndications, other investments like that, maybe into a hard money account, you name it.

Craig McGrouther:

There's so many angles out there. Maybe it's in cryptocurrency and Bitcoin. Those are credit investors. But, typically speaking, the deals that we do are 506Bs. 506bs are for sophisticated investors who we have a pretty existing relationship with. So, hypothetically, if we speak today and then we've got a deal coming up in three months, since that month-long relationship has been started, you would technically be able to invest in one of our private offerings where you wouldn't have to have a million-dollar net worth. You'd basically just have to have $50,000 to meet our minimum check requirement in order to get a seat at the table to invest in an opportunity like what we're doing.

Dwan Bent-Twyford:

And then they get interest checks monthly.

Craig McGrouther:

Yeah, it just depends on the opportunity. Yeah, it just depends on the opportunity. Generally speaking, we're doing monthly checks, monthly distributions, monthly kind of dividends on cashflow on the property. So that's number one. And then, secondly, what also happens as well, too, is we do monthly reporting and then quarterly reporting as well. So it's a really dialed and buttoned up operation. As I was kind of saying earlier, we want to give the same person, or we want to give the same experience as someone to be writing a $10 million check or a $50,000 check, with their reporting, with their communication, with their distributions, to make sure that they're getting very good care on their investment.

Dwan Bent-Twyford:

See, I like that and, like I said, I always knew I knew a couple of people that ran some syndication. I don't know Sidoti I don't know if you knew Jill Sidoti, but she was like a and I think in the REIA the REIA, the Real Estate Investors Association like in that kind of group. She was big into all that and I just never really, really, really truly understood it and I'm just like what a great way for people that are sitting on money Like there's a million baby boomers, millions and millions and millions sitting on money that don't know what to do with it. There's no money in the stock market Like it's crazy and they think like, oh, I don't want to like work on a house, I don't want to do that, but I want to park my money somewhere so they can make money. There's just so many people sitting on money that don't know that.

Craig McGrouther:

Without a doubt, you're right, and so let's unpack that actually, because that point that you just brought up is super crucial. So there's a multitude and a spectrum of investors who'd be interested in kind of a syndication as to what we're doing. There's the tired landlord. What do I mean by that? Well, the people as you alluded to. They don't want to change the things, they don't want to deal with property management. They don't want to do anything management. They don't want to do anything. They want to sit on the beach, sip a Mai Tai and read their Kindle.

Craig McGrouther:

There's people like that. Then there's people that have got money sitting around in their account. They have a distrust with Wall Street, a distrust with the stock market, and they're kind of sick and tired of seeing the volatility that we get, maybe in mainstream assets, with stocks going up and down where there's not really much control of it. And then there's kind of what we have which is, hey, you can come invest in this deal, have fractional ownership, let us do the hard work, let us manage it, let us collect the rents and you get all the benefits of real estate exposure without having to do the nonsense and the tedious nature of fixing sinks, of taking care of everything going around, because it's a very comprehensive process.

Craig McGrouther:

I always say this is one of the taglines that I have and you're going to appreciate this, being such a long investor but appreciation is not free. Properties require a ton of upkeep, a ton of maintenance to make sure that you actually have value associated there, that these properties aren't being run down to the ground, that everything is going well with these. So appreciation is not free. There's a ton of work associated. There's a lot of sorting, accounting and processes associated there. It's a lot of hard work and if you're not experienced at that, you really do need a professional to help you out with that, with the best debt structure and the best equity structure and the best business plan to make sure you get paid for your money. Pay the pros to be the pros.

Dwan Bent-Twyford:

Now I agree, I tell people all the time like it's not as simple as just. You know, buy a house and fix it up and you know, get your first little like starter home. You need to know about the money and the problems and the repairs and da-da-da-da, because people can lose everything in a single deal. And if you don't, and if you have money but you don't really want to take that risk, you need to get with somebody like this. But it's hard for people to find syndications because y'all can't advertise.

Craig McGrouther:

Yeah Well, I mean, you can, you can't you sporadically can if you have a 506C. But the other thing is we want to make sure that we've got people that are really bought into what we're doing and typically speaking, that means we want referrals. We want people that have kind of worked with us have an organic relationship there, as opposed to just spraying and playing, because we don't want every investor to work with Lone Star. We want someone who trusts what we're doing, knows that we're going to take good care of them and knows that we are putting the best structure possible here. And then just another quick point there, duann, pertaining to why this indication process. Well, another kind of great thing about it is getting loans signed. Working with lenders is a very comprehensive process. It's very intrusive. Getting pushing paperwork, tax turns the whole nine. Well, as opposed to us, you don't have to worry about any of that. It's literally served up on a platter for you to say yes or no to the opportunity. So it's an incredibly streamlined process.

Dwan Bent-Twyford:

I agree and people don't that when I first started investing and after I had made a little bit of money, the very first person that I hired was a bookkeeper, because I can't stand paperwork. I don't understand a lot of what was happening. I didn't have any background in business and I was completely overwhelmed by paperwork. It's like, oh my God. And then you know everything you need for the closings and the title companies and I thought, okay, I like all everything about real estate, except for this piece over here.

Dwan Bent-Twyford:

So that was my first person that I hired was someone that said listen, please do the paperwork, please do the accounting, do this, do that, get things ready for the closing. I just want to show up, I just want to go there and I don't mind working on the closing, I just want to show up, I just want to go there and I don't mind working on the house, I don't mind any of it. And to this day it doesn't be all stack of paper. I'm just like, oh God, I can just feel my chest clenching. It's like I hate paperwork. So I'm with you on that and you know, and that's the thing about investing you don't have to be good at everything. Find what you like and find somebody else that's good at it.

Craig McGrouther:

Yeah, find a team. And you really hit a point there that I want to unpack a little more as well, that I cannot agree with more, which is there's some things in life that you do that you hate doing, but you kind of have to do it. There's some things in your jobs that you hate doing that you have to do. There's pieces of real estate that I hate doing and I actually don't want to do it. I choose not to do them.

Craig McGrouther:

Property management and asset management I don't want to do that. I want to build relationships, like what we're doing here. I want to speak and educate investors. I want to talk about the deals and the opportunities. I want to go out see the opportunities, place cash. I want to do that. I want to build the relationships and harvest that I want to call. I want to get everyone fired up for an opportunity, but I don't want to do any of that backend stuff. I don't want to do accounting. I don't want to do that at all. So, divide and conquer and find the team and find people that are complimentary to what you're doing. So I couldn't agree with you more.

Dwan Bent-Twyford:

I do, I'm still that way. My husband now we've been married 20 years and we've owned a bunch of buildings and companies and everything together and every year when it comes around he averages like dude, just hire that. No, I like to. He likes paperwork, he likes math, he likes paperwork. I'm like you have asked that and I'll just be over here, like, if you need me, yell for me. Um, now you were talking about doing multi units, so what would be a typical deal?

Dwan Bent-Twyford:

I'm like hey, I heard you on the podcast. I've got $50,000. I've got a hundred thousand bucks. What are you going to buy with it?

Craig McGrouther:

Perfect, yeah, so it's a great question. So what we look for just at Lone Star Capital for my firm it was we're looking to buy deals in that 30 to $50 million price point and there's three buckets of deals that we buy. So we buy value-add opportunities. It's very straightforward Buy it, fix it, sell it. You've got some sort of mismanagement on the property. You've got maybe some units that are original that need to get turned over. You've got some sort of mismanagement or inefficiency with the property that you're looking to capitalize on. It's a very competitive business because there's no free launch. But we're looking to buy value-add deals. We're looking to buy core plus deals, which is a beautiful apartment building, probably 2000s or newer, 2000 to 2024. That's below replacement costs, meaning you're buying it for less than what it would cost to build in today's market. Core plus deals at a discount. And then the third and final deal that we buy in Texas.

Craig McGrouther:

Obviously there's a lot of high property taxes, but we have relationships with housing authorities to actually eliminate all the property taxes in exchange for affordability. So we get a very big NOI bump. And then not only do we get an NOI bump, but we also, most importantly, preserve affordability, which is a very big issue in this country, especially with all the inflation going on around right now, with the dollar being really tighter than that before people getting laid off, being able to preserve affordability while also having us kind of make some dollars off of it too. It's called public-private opportunities. It's the best blind. It's the way I think more government things should be run.

Craig McGrouther:

But those are the three buckets that we buy. We like to kind of give you somewhere between a 14% to an 18% IRR internal rate of return and if we're doing a five-year hold, we're looking to hit kind of that boilerplate 2X equity multiple and try to return annually between 5% to 7% of cash on cash over the hold period. So let's say, if you can give us $100,000 in investment, we're looking to give you about five to seven grand a year divided by 12. So it's about call 400 to $500 a month in monthly distributions roughly, which is really beneficial because so many of our investors really do rely on this for their monthly income and their livelihood as people that have retired and whatnot.

Dwan Bent-Twyford:

They do, I remember. So my dad is 86 and he, so my family is from ohio, so where are you at right now? It's called long story.

Craig McGrouther:

You in texas so we buy in texas. I'm actually in oregon right now, funny enough, because it's my brother's wedding, um, so yeah, we buy exclusively in texas I was like it's long so it's gotta be texas um yes but in ohio, like you know, and I high school, so hold your seat here in 1977.

Dwan Bent-Twyford:

So back in those days Ohio and Michigan were the car companies.

Dwan Bent-Twyford:

So we went to graduate high school, get married, have kids, work at the factory and work for the man, and that's what you do. So, and you know, I got out of high school, I was engaged. I worked at a factory and, like a weekend to it, I thought there is no way. I'm doing this for the rest of my life. This is the worst, miserable. They're hot, they're standing all day. It's like who? Why would anybody want to work in a factory their whole life and listen, if you did it, god love you, but it's not for me.

Dwan Bent-Twyford:

But the point of that is my dad and my stepmom they did that. They worked for the companies and they worked in the factories and then they retired and then they have all their. A lot of their time is in the general motors stock and then you know all the things happen. I remember my dad calling me and he was probably like 70 so he's 86 now and he's like, well, lois and I sat down, we went through everything and we're literally going to run out of money in two years and I was like, wow, how scary is that when you know you retire at 60 and you're running around and you're like, oh, we're retired, you've got money and then, all of a sudden, you know the stocks and the things are what control your income. I was like what do you mean? He's like no, based on just everything in the. The stocks and the things are what control your income. I was like what do you mean? He's like no, based on just everything in the housing and all the things, because we're going to run out of money. And I'm like okay, what do you want to do? He's like, well, I don't know.

Dwan Bent-Twyford:

So now, after my whole family was like you need to get a real job. They're like, oh, so tell me about that real estate investing that you do, and that would have been such a great time to put them into syndications, except I didn't know about those yet. So and I know they're really handy I was like, well, why don't you guys get a couple of rentals in town and you can putter around and work on your rentals and this and that? But they ended up getting a few, maybe four or five rentals, but they ended up their monthly income went up to like $10,000 a month and they didn't owe a dollar to anybody. So now they're taking these like world cruises and like, oh, we're so good with our money.

Dwan Bent-Twyford:

It's like y'all literally said you were running out of money two years ago. But that's the people like that. They're depending on that monthly income and that 500 or 400 a month. If they have those in a couple of different places, they do rely on that. And people that work for all the man they're, they're losing money left and right. And people that are, you know, seven years old are having to go back and work part-time.

Craig McGrouther:

Well, to your point there. This is such a fascinating conversation. So, tony Robbins, there's a reel going around on Instagram. For those who like Instagram, I'm sure it's on TikTok. I'm not a TikTok person, I'm millennial. Don't want against me, not a TikTok guy.

Craig McGrouther:

But Tony Robbins said this. He's like if you put a million dollars in the stock market 35 years ago, which was obviously 35 years ago, that wasn't a million dollars, it was actually a million dollars. Don't get me started on inflation, but yes, a million dollars is a million dollars. Back then that million dollars in the stock market would turn into. If you put in the S&P 500, which I'm a big believer in kind of doing that, let that work hard for you, very challenging to pick individual stocks, but if you put that $1 million there, that would turn into $26 million. Conversely, if you put that into just average private equity, that same $1 million over that 35-year period, that would be over $100 million now. So the amount of hands that is trading for you to make money is a lot.

Craig McGrouther:

So doing syndications, doing things like this, are more direct to the source. So if we're looking to achieve and basically return to you about five to 7% cash on cash on our deal. That's basically just a little bit below what the S&P 500 market beta would be giving you, which is just general stock market appreciation over time gains, but then you also get the lift on the back end. So it's basically just a substantially more creative and you know time money compounding interest is really one of the craziest phenomenons for people to be thinking about there. So you know, I couldn't agree with you more, just a smoother way to go. And direct ownership has a lot of benefits.

Craig McGrouther:

You know, I think, also something else you mentioned. It's kind of the premise of kind of being diversified as well. You know, if you've not gotten kind of your hands in that, you know syndication world into the real estate world, you know you're doing yourself a disservice. I think just real estate is such a fabulous vehicle for wealth creation. And also the other you know loopholes that are around it. You know there's two big drivers for really not paying taxes and more accretive returns. So oil and gas is actually the best. We don't invest in that but it's a little more risky. But oil and gas gets you really outsized depreciation that anyone can apply. And then secondly is real estate. So if you provide energy or shelter, you will get deductions and the government will basically incentivize. And the way to think about that is the government doesn't care if you invest in oil and gas or real estate, but it incentivizes you to do so if you really study and understand the tax code.

Dwan Bent-Twyford:

Yeah, now, every year, when they do like you know how many million I think Forbes has a list of like new millionaires or something, and then the number one asset class forever is always real estate and there's always people that did like, you know, you always have like the Facebook guys or the this or that, but like the number one asset group for new millionaires every year, since I think the beginning of time is always in real estate. So like, listen, that's how we started our country and that's it. If you provide housing, I tell people all the time you provide housing for people, you'll always have something happening, because that's what people need and you know, and all the stuff that's happening right now, like you know, our country's on fire. A lot of people can't afford to buy houses. Interest rates are too high and you know, and it's hard, it's like it's hard for well, hard for to your point there.

Craig McGrouther:

To your point, there it's. I saw something as well on twitter x I guess it's called now from unusual whales, which is a very interesting uh twitter follow x follow if you're familiar with it, and basically the statistic was it's 80 harder now to buy a home than it was about four years ago. So why is that? Well, obviously so many homes now are owned for inklair. Hedge funds have gone into the marketplace to suck up inventory, so these houses will be going to nice. You know factory workers. You know the common person. You know the, the average. I guess you know income producing household in America. Well, now that's considered ghost inventory, meaning it probably won't ever sell again. It's basically just treated as a commodity or as a stock. It's going to appreciate and also give you a dividend of cash flow. So you're double dipping there on.

Craig McGrouther:

You know wealth creation tools that real estate provides, but if it's going to get that much harder, it's not going to get easier. Things generally rarely go backwards and you've had so much of the housing market as well. That was sucked up by, of course, groups like that when Zerp got really low and also there's basically, I would say, over 80% of the marketplace as well, either owns their house free and clear or has sub 4% interest rate long-term 30-year fixed rate debt where those houses they're not going to trade because you could rent them or keep them because it's too expensive to move elsewhere to that point. So I feel very fortunate. I just sold my house and I'm buying another house right now. My mortgage payment's a lot higher, but I know that if you can buy a house right now when the markets and the rates do go down, well, real estate is an interest rate sensitive business.

Craig McGrouther:

When those rates do get cut, I will refinance. I'm sure the market will stay stagnant with where I'm buying or at least go up and I'll have a lower monthly payment. But it's just going to suffocate and make the process that much harder to acquire. So I'm going to tie that back just to investing in real estate. I don't know if rents are going to go up or going to go down, but what I do know is that it's going to be more expensive in five years than it is today to build. Wages will be more expensive, rents will likely increase and cost per door is going to go up. So you're hedging against the negative aspects of inflation by investing in real estate and, as Mark Twain says, I'm not making more land to buy real estate. So this is your opportunity to do so and to kind of put your capital into that and work it. So that's kind of my two cents on the matter. Yeah, no, I agree and back.

Dwan Bent-Twyford:

I don't even know how many years ago the rate was like 2.2 there for a minute. Was that like-?

Craig McGrouther:

I mean, I sold less than that. Actually I think it was basically about 2021 is at the interest rate low. I sold a buddy a house. He put 3% down and got a 2.6% interest rate and he put nothing down on the house. I mean his equity multiple on that. Granted, this is a very rare occasion, but he put less than 15 grand down and has made over $300,000 in equity on that deal. It's incredible and his rate would never exist again and probably won't. So he's going to let the thing amortize his payments. Nothing. He could live there, he could rent it out, he could Airbnb it, he could do a multitude of things to make it a very profitable investment.

Craig McGrouther:

Um, and then also provide some shelter, which everyone has to solve for you cannot, and just generally from real estate perspective, you know. You think about what's going on right now. Well, you can outsource. You know offices, because people are working from home. Now you can outsource. You know many things, right, retail well, amazon's kind of taking that but you cannot outsource where people live. So you know you can't automate that. There's always going to be a need for that, so it just goes back to, you know, providing shelter and buying in the market and letting you know the market do its thing, letting American growth happen, is the smartest thing you can do.

Dwan Bent-Twyford:

Yeah, when those interest rates were really low, like that. We have a house in Colorado and I was like we're gonna refinance that house because we're able to refinance it, pull a little money out, use it for some other things, and it rates like 2.6. It's like I've never seen it after 30 years. And here it is. So we're gonna take advantage of it, because you might not ever see it again and if we do it'll it's gonna be a minute. That's gonna be a minute, but like you can't get money that cheap yeah, you can't and you probably won't be able to again yeah, yeah, I mean, I don't know.

Dwan Bent-Twyford:

I remember back in, I'm gonna say maybe the 70s or the 80s, uh, how interest rates on houses were like 18 and people still bought houses. But it's like, oh my god, there's so much interest, this is a crazy amount. And now I don't know what's interest rate right now like seven and a half today, do you?

Craig McGrouther:

know? Yeah it just it just depends where you are. I'm getting rate locked on my house in a buy right now at about a 6.8 because my buddy's a wholesome mortgage broker. But generally speaking they're just a couple of basis points above, maybe 10, 20 basis points, bips, as I call it, above 7%. So probably around 7.1 to 7.3%, depending on your credit score and whatnot. I would say.

Dwan Bent-Twyford:

That's not even terrible.

Craig McGrouther:

Well, it's all that we've been trained for right. And the other issue, too as well, is real estate is a very dense, bad, sensitive issue and commercial real estate. There's obviously not a secret that there's a ton of distress going on right now. Well, when interest rates go up over three times in a very short period, there has to be a workout process that needs to be unpacked and unwind and unfortunately that's not going to happen overnight. So it's certainly problematic for the industry, but I do know that people are going to need a place to live. I do know that we're buying good real estate with a very good business plan to create value there and over time, when rates get cut, value creation will be had.

Dwan Bent-Twyford:

It will be so if someone's listening to this and this is the first time they're hearing about like a syndication, does someone just call you? Do you have educational calls for people? Like how would someone learn? Instead of just saying, hey, I heard you on Dwan, I want to give you some money because there has to be some, you have to somehow educate people a little bit on what it is they're actually doing.

Craig McGrouther:

Yeah, well, rob and I the founder of the firm and I do a weekly podcast pertaining to what's going on in the world of multifamily commercial real estate. Rob, additionally, has written and published two books that are very niche and specific to commercial real estate. They're bestsellers and get sold over 40,000 copies collectively between the two books. So one of them is called the Definitive Guide to Multifamily Underwriting. One of them is Structuring Debt and Equity for Real Estate. So these are two very great fundamental books that are very lean. They're like about 100 pages. You can crank them out in a day or less. If you're a good reader, you can read it in a week, no problem. Not too comprehensive, no extra fluff there, but those are great resources, as well as our YouTube page. If you follow us on LinkedIn, we're always posting there as well, too, to kind of educate, attract, nurture folks.

Dwan Bent-Twyford:

That's nice. So they call you up like, hey, I want to put some money in, I just want to learn more about it. You've got a couple of books, you've got some videos, do you have?

Craig McGrouther:

and you have a podcast, so so people can listen and learn that way, because a lot of people I feel like would do syndication and more people knew about it. Yeah, no, it's certainly. Uh, it's funny, I'm so knees deep in the industry I feel like everyone should know about it. I definitely think it is known, but I don't. Yeah, but the issue is that there's not that much out there and as much as as I think that's the case, I'm proven wrong once more.

Craig McGrouther:

Like doing shows like this that you know, not everyone realizes that's there. And I think another kind of factor as well, as if it's not, with some you know mega conglomerate corporation that they've seen no like trust for their whole life, they're almost feel like, oh well, it must not be a good idea, it must be too risky. That's that where you know. I understand that, but you know you, if you want to get outsized returns and better economics, it's probably with working with stuff like this. But there obviously is. You know it's very easy to lose money in this business, um, but you can also make money as well. So just do your research, do your homework, go slow into anything. Never be too rich, uh, too quick or too rushed to make an investment.

Dwan Bent-Twyford:

Yeah, no, I'm with you on that. All right, so we're going to switch up topics for a minute. What's your favorite band of all time?

Craig McGrouther:

That's a great question. I'm going to have to go with 1975. I love them.

Dwan Bent-Twyford:

That's the name of the band. Okay, I see it. Right there. I'm showing my age. The band's called 1975?.

Craig McGrouther:

Yes, they're modern, though I assure you they're from Manchester.

Dwan Bent-Twyford:

I believe, yes, they're, they're modern, though I assure you they're from uh, manchester, I believe. Yeah, they're great youtube listening to them today as you should because almost everyone, everyone had like two people getting you're like one of three a name to ban. I didn't know. And I stay up with me. I love music. I love music my whole life. I stay up. I've got grandkids. I'm teaching them all the stuff. I was like I'm 75. What kind of music is that?

Craig McGrouther:

It's like alternative, alternative, slash rock.

Dwan Bent-Twyford:

Nice, I like alternative. Okay, well, now see, I've learned something new there myself, so I will. I've had a few people give me a couple and I never heard of it and I went and listened I was like, wow, I really love that music.

Craig McGrouther:

I'm curious, what were the band's names?

Dwan Bent-Twyford:

uh, one was uh, orange, something um.

Dwan Bent-Twyford:

Gosh, I'd have to go back to my nose blood orange maybe maybe yes, and there was another one I can't think of off the top of my head and I had never, like never, heard of it anywhere. And I thought I listen to lots of music on lots of different places and even the newer bands. I usually know pretty much a little bit about everybody, even country, and I didn't know and I was like, wow, okay, I love it, because now I'm going to listen and I'll probably like it. What's your favorite food?

Craig McGrouther:

Specific food or food type.

Dwan Bent-Twyford:

Food type.

Craig McGrouther:

Thai food Thai food.

Dwan Bent-Twyford:

Thai food. Mm-hmm Is that what you said.

Craig McGrouther:

Yeah, yeah, I love Thai food.

Dwan Bent-Twyford:

Oh, thai food, Thai food, yeah, okay.

Dwan Bent-Twyford:

I was like Thai food. What is that? I love Thai food too. This little town that we're in right now, in Clinton, they opened up a. They took an old building, so it's like on my block that I'm on right now. They took an old building and they turned it all into lofts. Took an old building and they turned it all into lofts and the entire downstairs is um set up with little kitchens where people can come in and like do a little startup restaurant and, I guess, test the water before they commit to like a building or something like that. So it's kind of like a food court, but not anything like at a mall. These are little people that would like to start a restaurant maybe.

Dwan Bent-Twyford:

Anyway, they just put a thai food restaurant in there and I just ate there the other night for the first time. I'm telling you I think it might have been the best type you'd have ever had. There's like a little grandma that works in there and she's in the back and she's making stuff and jim's beginning english and like maybe the grandson is at the front taking orders and I was like you guys can never leave the downtown, so now I'm walking down there every day and getting some, some Thai food. It's just, it's all so good and this little restaurant is amazing. Mr Craig, what is your favorite time of the day? What's your favorite part of the day? Where's your happy spot?

Craig McGrouther:

Wow, that is an incredible question. I you know I really like to work out. I just think the endorphins you get from it and how it sets up the day is super crucial. So I've been trying to be as militant as possible while away from my home home, Uh, while I'm here in Oregon and I typically like to do this in general, but try to wake up at like six, 15 every day wake up, roll out of bed and just go straight to the treadmill. So I think the mornings are really nice, my energy is highest. I'm the biggest fan. I like to be a productive person. So certainly I would say the first half of the day is my favorite part of the day.

Dwan Bent-Twyford:

I like that. Everyone is so different on their times and what they like and don't like. You see all these people like oh, you got to get up before you. I and what they like and don't like. You see all these people like oh, you got to get up before, am, you got to work out and stuff, and I was like no, it's whatever's good for you.

Craig McGrouther:

I've just noticed that if it's 4 pm for me, not am but pm, I'm not going to want to run 30, 40 minutes like I did today, so I'm not going to want to do it day. Get my cardio in. I'm more inclined and likely to also go back to the gym, maybe steam sauna, get some weights in and enjoy that there and just kind of double up, if you will.

Dwan Bent-Twyford:

Yeah, no, I like to work out. If I don't work out first thing, I get up and say I'm going to do this one thing before I do it, and then that thing turns into 85 phone calls later.

Dwan Bent-Twyford:

It just doesn't get done Like I have to do that before I even look at my phone, it's like doesn't get done, like I have to do that. Before I even look at my phone, it's like once I'm on there, I'm shot. What is the biggest goal that you are working on right now, and how can the D'Wonderful family help you reach that goal?

Craig McGrouther:

Yeah, I think the biggest goal we're looking at right now from a firm level is getting to a billion dollars of asset center management. So we're about 600 million right now. Depending on what the market looks like and holds for the next couple of years, that could take us probably two years to get there, to kind of climb over that. So we're looking for more investors, as always. So reach out to me the email is craig at lserecom if you're looking to learn more and I can give you some information happily.

Dwan Bent-Twyford:

Awesome, I love it. Well, we always like to help and encourage other investors, because I've been investing for almost 35 years and people are like oh, you know, I think a lot of speakers and trainers are like there. So I am a big believer in like listen, share the wealth. Someone calls me about syndication. I can't help them with that. I'll be like listen, I don't even know, I don't know, I don't want to know, it's not my thing, but I know a guy named Craig and he's got it going on. So I am all about referring and helping and that's why we always want to know what your goal is, because I want all my family, all y'all out there that are like asking me questions when did I put my money? Well, right, here's your guy.

Craig McGrouther:

Perfect.

Dwan Bent-Twyford:

Put some money in with what you've got going on, all right. So first I want to thank you for being on the show. I've got one more question we're going to take just real quick. If you, if you all like the show today, I want you to do me a favor and I want you to find the podcast. Subscribe, leave a five-star review, write something, go to my youtube page, subscribe, hit the bell, do all the things so that every time I put up a new video or new training and and craig as well you are notified and you are in the loop. We we always have training for you over here. He has a lot of training over where he's at, and this is all you know.

Dwan Bent-Twyford:

Podcasts are a labor of love. We all work very hard to have podcasts, so all we want you to do is follow and share it with the other people. You don't need to be a secret agent. Tell them like hey, I heard this podcast One was amazing, craig was great. Share and tell them like hey, I heard this podcast One was amazing, craig was great. Share it around, help share the wealth, because they are a labor of love, don't you think?

Craig McGrouther:

I couldn't agree more. It's a lot of effort that goes into these and it's nice to see it grow and all that good stuff.

Dwan Bent-Twyford:

I do too. Yeah, I love it too. All right, now I want you to leave us with a parting word of wisdom, but only one single word Urgency. Hmm, okay. So everyone that listens knows you're going to get your little yellow sticky. You're going to write the word urgency. You're going to put it on your mirror. So urgency is going to be our word of the week in the wonderful universe. So what does urgency mean to you?

Craig McGrouther:

Yeah, I mean, I feel like things need to get done accordingly and promptly, and we're in the service business. If you're taking investor capital and anything you do, time's always slipping away. So I don't think you can be out to lunch if you want to really get ahead of life. So, although you might be listening to this at lunch, that's fine, but have a goal, be impactful and make it happen. So, although you might be listening to this at lunch, that's fine, but you know, have a goal, be impactful and make it happen. So I think if you had urgency there to get things done as quickly and as promptly as possible, you can achieve a lot more as opposed to just, you know, procrastinating and waiting. So I think urgency is a very high indicator of someone's success.

Dwan Bent-Twyford:

I think it's a great word I always like to have. I used to ask people like, give us a parting word of wisdom. But some people go off for 20 minutes and talk to you about stuff. It's like, okay, listen, let's just get a word, Give me a word, and then what does it mean? And then so everyone knows that listens regularly, but that's the word.

Dwan Bent-Twyford:

This week we're going to focus on urgency and you know, I'm sure, like you, I've met people you know for two years. Oh, I'm going to get started, I'm going to soon, soon, soon. It's like they still haven't done anything. It's like, listen, it's emergency Light, a little fire there, because you know, today's the best day to start. If you haven't started, today's the best day. I love your heart and I love your spirit and I love what you do and I love that you're so young and you're like all in on this and so smart and educated. It's like you're great. You remind me of my kids. All my kids are millennials and they're all into business and they're all into real estate and they're just so amazing. And then you see other kids that are just like they're doing nothing. It's like come on, man, the youth is our future and right now, all the people that we have up here running everything, they all need to go and get some young, fresh blood in there.

Craig McGrouther:

I'm going to drink more.

Dwan Bent-Twyford:

I need some new blood. All right, folks, we'll be back next week. Same bad time, same bad channel, and remember that the truth is in the red letters. All right, everybody, Ciao and Craig, thank you. Thank you, come back next week.