Journey to Multifamily Millions

Pivoting to Passive Investing for long-term Financial Stability with Jeremy Dyer, Ep 76

December 28, 2023 Tim Season 1 Episode 76
Journey to Multifamily Millions
Pivoting to Passive Investing for long-term Financial Stability with Jeremy Dyer, Ep 76
Show Notes Transcript

Today's guest is Jeremy Dyer, Jeremy is the Founder and Managing Partner of Starting

Point Capital where he leads the company’s investor relations, and strategic partnerships and serves as the director of marketing. He is what I can only describe as a prolific passive investor in addition to his active investing in Starting Point Capital, so I can’t wait to dive into that!

In this episode, He discusses the benefits of passive real estate investing. He provides an in-depth analysis of his investment strategy, which includes diversification, thoughtful risk management, and the utilization of tax benefits. Moreover, he emphasizes the importance of viewing investing as a long-term commitment rather than a get-rich-quick scheme and valuing time freedom as a significant marker of success. 

Jeremy also shares his journey from active investments to passive ones, driven by his desire for a balanced lifestyle where he can spend quality time with his family. Stay tuned!

Episode Topics

[01:17]   Meet our guest,  Jeremy Dyer
[03:45]  Balancing Family Life and Real Estate Business
[05:24]  Jeremy's Current Investment Portfolio
[06:01]  Discussion on Sales and Financial Success
[14:08]  The Benefits of Passive Investing
[25:14]  Jeremy's Experience as a Passive Investor
[30:59]  What is one red flag every investor should look out for?
[33:29]  What is a myth about the real estate business?
[35:41]   Connecting to  Jeremy


Notable Quotes

  • "Crush your day job, manage expenses well, and start investing wisely. Learn from mistakes, pivot to passive." - Jeremy Dyer 
  • "Doubling down on kids means evaluating the cost. Balancing business and family is crucial for long-term success." - Jeremy Dyer
  • "Focus on your day job, but also explore alternative investment strategies. Learn from mistakes, de-risk your decisions, and pivot to passive investing for long-term financial stability." - Jeremy Dyer
  • "Live below your means while young; it sets you up for financial freedom later. Save, invest, and avoid the unnecessary splurges. It's the key to long-term success." -Tim Little
  • "Building a real estate pipeline takes time. Start now, invest consistently, and watch compounding turn your investments into long-term wealth." - Jeremy Dyer


👉Connect with  Jeremy Dyer

👉 Connect with Tim

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[00:00:00] Jeremy Dyer: The nice part about passive investing in real estate is the 27 deals that I'm personally invested in, right now. We don't pay a dollar in taxes on any of those investments because every year we have enough depreciation loss activities to where we're able to use that, paper loss, so to speak, to help offset, the passive income gains that we've made through distributions and the equity profit split that we receive at the end when some of those deals and they do every year, there's a few deals that go full cycle.

[00:01:10] Tim Little: Hello everyone. And welcome to the journey to multifamily millions. I'm your host founder and CEO of ZANA Investments, Tim Little. And on today's show, we have with us Jeremy Dyer. Jeremy is the founder and managing partner of Starting Point Capital, where he leads the company's investor relations, and strategic partnerships and serves as the director of marketing. He is what I can only describe as a prolific passive investor in addition to his active investing with starting point capital. So I can't wait to dive into that. Jeremy, welcome to the show.

[00:01:42] Jeremy Dyer: Yeah, Tim, thank you for having me.

[00:01:44] Tim Little: Awesome. So I gave everyone a little preview of your background, but please get into the details on how you got started on your journey and tell us how you got to where you are today.

[00:01:56] Jeremy Dyer: Yeah, great. Thank you for asking that question. my journey in terms of where I am now, from a financial perspective really started, very early, even back in my high school college age days, I always had a passion and a desire to sell. And so I've had several sales roles, over the course of the last two and a half decades, with my previous and current employer. I've been fortunate enough to be able to, really sell my way to the top in that organization. And that had afforded me to have some additional cash available on the sidelines, otherwise known as, dry powder. And so I, early on, would try to find the next Amazon, Facebook, Apple, or Tesla stock, and was able to fortunately, max out on my 401k, each year, and invest in some angel investments along the way. My wife and I were blessed to be able to have our dream home paid off. By the time I was 23 years of age, I had a 40-foot RV sitting in my driveway. By the time I was 25. So all that to say, from a financial perspective and a grinding it out, earnings W2 perspective, things were really going well. And then I would say my wife and I got a little bit bored, back in 2012, we decided that we wanted to get in the fix and flip business because that looked really sexy on the HGTV channels that we were watching at night before bed. Okay. So because we had additional dry powder sitting on the sidelines, we were able to really wrestle out and jockey out a lot of other potential buyers. some pretty dilapidated homes. Why? Because we were coming to the table with cash and no contingencies. And so we tried our hand at the fix and flip business on the active side. The challenge came in 2015 after we had fixed and flipped several properties and certainly had some challenges and issues along the way. The greatest challenge that we had in 2015 was that our priorities were not in alignment. because what happened in 2015 is that we also made the decision to double down on kids. So we went from two kids to four kids. My two older boys were really busy with all their various activities, and sporting events. And it was becoming this environment in which dad was working a full-time, day job. Mom was helping out with the fix-and-flip business. And we were spending evenings and weekends actively managing a real estate portfolio. And so it became a point in our journey where we had to make the decision, do we continue to actively be involved in real estate or do we make that pivot to doing it passively? And so in 2015, we made the decision to exit the active real estate business. And instead, passively invest in a real estate syndication. And if you were to ask me back in 2015, what the word syndication meant, I wouldn't even have been able to tell you back then. Okay. The reason is because I knew somebody who was in the business. a longtime friend, he got me interested in the investment opportunity, and I would tell you that I used the shotgun approach on that first deal that I invested in. And that shotgun approach was I held my breath and I plugged my nose. Okay. And then that wire transfer, fortunately. 36 months later, that investment had doubled. We achieved the two X equity multiple, on our money. From that point going forward, I was completely hooked on the strategy of investing in real estate, just not doing it on the active side anymore, but rather doing it on the passive side. So now if you fast forward to today, 2023, almost 2024, hard to believe, but we are. Currently actively in 27, different investments as limited partners or passive investors. 80 percent of those investments are in the multifamily space and the remaining 20 are in other asset classes like assisted living, self-storage, retail, flex office, et cetera. And of those 27 investment offerings that we're in today, they are with six different investment sponsors.

[00:05:58] Tim Little: Yeah. And there are a couple of different things that I want to hit on. First of all, from your experience, I'm always amazed at the level of financial success that people can achieve in sales if they're really good at it. I, you talk to some people and yeah, I had a couple of years sales experience that went on to this, that, and the other. And there's other people that you talk to and they were like, Yeah, I was retired by 25. after, and it's just so foreign to me that it's even possible to make that much money that early on in life because my head was just not there, right? I went straight into the military after high school and the last thing I do is sell anyone anything. it's such a valuable skill to have. And if you can hone that skill and become really good at it. And I think, if you, especially if you do it early on, you build resilience to rejection, which can be beneficial in so many aspects of life. but especially the money that you can gain if you, like I said if you're really good at sales early on. Because I mean let's face it right the more money you make early on the better It's gonna set you up for the future and I think you're a perfect example of that because you said hey Yeah, you started doing the fix and flip because who wasn't you know when it was so hot on HGTV Luckily, I avoided it, but I still watched the shows and Then you went to the passive investing which is that lot more long term focus And that's what I think a lot of young people, I think probably lack is that long term focus. myself included, I'm not, taking myself out of that group. And so I think that's why I like the fix and flip and stuff like that is so attractive and why you don't see more young high earners getting into passive investing. Is that kind of your feeling?

[00:07:55] Jeremy Dyer: Yeah, it totally is. And I'm glad that you brought up that point. I think the fix-and-flip business and actively managing a single-family portfolio, I think that's for young kids. Okay. When I say young kids, I'm referring to people that are, maybe in their twenties and thirties, but it's really difficult to actively manage a real estate portfolio or manage a fix-and-flip business while at the same time, Having a full-time, day job where you're grinding it out every day, you're becoming a better version of yourself. you've got roles and responsibilities, and then you've got children alongside you as well. That one day you hope not to wake up and say, Wow, my kids are out of the house now and I barely know them because I've been too busy, managing my active day job in combination with the side hustle, otherwise known as a real estate portfolio. So I think that's a really great point. my encouragement to the younger audience really is to really focus on your day job, crush your day job, and manage your expenses well. And when it comes to investing, whether that's investing in Wall Street or Main Street, right? You've just got to get to the point where you get started. You're going to make mistakes along the way. I made mistakes. Okay. I used to day trade stocks when I was in, was when I was in college and I just got absolutely burned, right? Burned to the point where I was even using my college tuition, today I traded stocks and I was doing it on margin. So when stocks would go down, those losses were just amplified. We all have warts. We all have stories like that. But at the end of the day, when it comes to investing, making wise investment decisions that have been de-risked, partnering with people like Tim and myself to learn about what some of those are alternative investment strategies are that may exist outside of wall street, is really going to be your best bet, especially when you get. To the point where, maybe you've got one kid, two kids, or four kids like we do, you just have to eventually pivot, more towards the passive, side of investing and not doing it on the active side.

[00:09:59] Tim Little: Yeah, I think that's such great advice. Like you said, crushing it in your day job. try to make as much money early on as you possibly can, because like you said, it sets you up well for later, but then it also just gives you the opportunity to invest for the long term. And I think again, we don't think about this as often, but I think the other piece of it is living below your means while you're still young, like I know all I was concerned about was having fun when I was in college. And I was not exactly pinching my pennies. If anything, I was probably borrowing, You know, for school, and a lot of that money was not going to school. It was going to be alcohol. I'm not proud of that and I think about if I would have saved more money back then because that's what I Reverted to later, right? Once, I had a job and I was living below my means while everyone else was getting brand new cars and houses that were way too big for them, I was living a level below that, not a hermit or anything, but just within my means, that way it allowed me to save more of my income, which again, you could put to maxing out your 401k, just like you talked about, Or, saving up for something else, or even kids, right? Once that comes along, that changes the entire calculation for everyone that I know. Anyways, and, that's why, one of the things that you said really resonated with me, which was that, when you doubled the kid, doubled down on the kids, it went from two to four. The cost of that time in your business became too high, right? And you weren't willing to pay that price. And so you were looking for a way out, like flipping, for example, is a very intensive way to make money in real estate. and I, a lot of people don't realize that until they start doing it. but even, I had, an atriplex that I was self-managing. Because it was close enough that I could do that. And I was like, I'll save 10%. From paying a property manager. I don't need them. And so I was working full time as well. So it became after work, on weekends, I'm dragging my three-year-old daughter to this apartment to go fix something, but also try to show her. And it was just taking up so much of my time that I was like, you know what, that 10 percent isn't worth it. And what am I doing? So I'm really glad that you mentioned that as well.

[00:12:24] Jeremy Dyer: Yeah, absolutely.

[00:12:26] Tim Little: All right. So a couple of other things that you talked about, the transition to passive investing. I think it's interesting because sometimes what I more often see, I guess is people, start off as passive investors. That's like the first time they discover real estate. and then they move in. Active investing and then they say, eventually like I don't want to do this anymore and they retire. But your journey has been a bit different. you were active in the sense that, you were fixing and flipping and did you do any deals as a general partner before you passively invested or was it, what was the timeline there?

[00:13:09] Jeremy Dyer: Yeah, great question. So the answer is no. So I never was never in partnership with anybody. So no joint venture deals. I was never the general partner of a real estate syndication. All of the experience that I had, up until the point That I took the plunge into passive real estate investing was really all on the single-family side. Okay. And really, again, that decision was primarily made as a direct result of meaning to have more margin in my life. I desire to have more free time. So I had the freedom that I wanted and the bandwidth that I needed in order to spend time coaching kids, hockey, games and practices and, going to my daughter's, figure skating competitions, spending time with my family, versus continuing to spend more time away from them.

[00:14:01] Tim Little: Yeah. So we talked about some of your motivations for getting more involved in passive investing. What are you hearing from your investors in terms of what's motivating them to come into passive investing and really what problems are they trying to solve and how do your investment opportunities help them do that?

[00:14:22] Jeremy Dyer: Yeah, I guess great question, Tim, I would say there are a few different reasons why investors make the decision to invest in our passive real estate investment opportunities. One is maybe they're an active investor, maybe they have a single-family portfolio that they're managing. Maybe they're themselves doing a bit of fix and flip on the side is a side hustle and they're just tired. they still want to be in real estate, but they just don't want to be, swinging hammers on, evenings and weekends, so to speak. The other type of investor is that individual that's really looking to diversify outside of Wall Street and what I call in the main street, right? So it's that investor that, maybe maxes out their 401k every year, maybe they contribute. to their IRA, each calendar year, maybe they're trying to find the next Tesla, Amazon, Facebook stock, and ride it to the moon, a thing, or maybe they're investing in cryptocurrencies and other alternative investment opportunities and it, and they want to diversify. So the moral of the story is that investors want to diversify outside of Wall Street and in the main street, it's not that they're looking to kick Wall Street aside. It's just, that they want to be able to provide, somewhat of a hedge, against the downward, propensity of Wall Street oftentimes. And they really want to escape that roller coaster. We also have a number of investors that are really seeking cash flow, right? They appreciate some of the investment opportunities that we bring. Our investors can regularly receive cash flow through those investments that are taxed advantaged. And obviously, when I say tax-advantaged, it's through the depreciation side, of the investment opportunities that we bring where investors reap the rewards, of that depreciation loss activity, which obviously helps offset some of that cashflow that they receive, on the investments during the whole period.

[00:16:08] Tim Little: Yeah, so there's a couple of things I heard you say there. one is just diversity diversification, right? And I think that's a really important point because if you listen to CNBC or Bloomberg or any of those you would think there is nothing else to invest in other than the stock market and So it's really frustrating that a lot of people just aren't aware of it And that's why I enjoy doing this right just to one open their eyes up to other options and there's certainly You know, benefits and drawbacks to different investment types. I think we can all accept that. That's why I'm not an all-or-nothing, kind of guy. It's not just stocks and it's not just multifamily or real estate in general, because each has its own benefits. stocks, you have the benefit of a high level of liquidity, right? you could sell it within seconds if you want. And some people do. but with real estate, you have other advantages like you talked about, which I think is important. They are very tax-advantaged. you have depreciation, accelerated bonus depreciation, all these different types of depreciation that you can use to offset some of your gains that you just don't find, on, on Wall Street. So I think that's a really important point too. And especially with high-income earners, I think the distinction sometimes we in the field, I hear people oversell that aspect of it. They're like, Oh, are you a high-income earner? I've got a deal for you. You can invest in real estate and you'll be able to write down all these taxes. you'll be able to offset investment, and income. And I think that's not a big deal. It's just, we have to be very transparent with that, that, hey, you cannot write down your W2 income. with the depreciation that we offer through something like a K one, which is just the tax form that says, Hey, this is how much depreciation you got on this thing that you invested in. But how I put it into perspective for a lot of passive investors, I say, we'll think about it this way. You might get enough depreciation from this investment that it completely writes off any of the cash flow That you just talked about. The cash flow from that investment. you essentially just got tax-free profit. That's pretty good, right? That's one of the ways that I try to put it into perspective for people. Because, especially when the only frame of reference that they have is stocks. their 401k and Roth IRA and all these things. They're not used to looking at it that way. It is what I found anyway.

[00:19:25] Jeremy Dyer: Yeah, that's a good point. And I, yeah, it would be great if I could receive some form of a tax benefit, maybe stocks that I purchased 20 years ago, and I'm sitting on a 200 percent gain. But the reality is I'm going to have to pay taxes on those, on those gains. And that's the nice part about passive investing in real estate the 27 deals that I'm personally invested in, right now. We don't pay a dollar in taxes on any of those investments because every year we have enough depreciation loss activities to where we're able to use that, paper loss, so to speak, to help offset, the passive income gains that we've made through distributions and the equity profit split that we receive at the end when some of those deals and they do every year, there's a few deals that go full cycle.

[00:20:14] Tim Little: Yeah, and I think that's the difference between doing taxes and having a tax strategy, which took a little time for me to learn to, I think about it as very, I thought about it before as very black and white until, I started to realize Oh, when I sell this duplex, that's a huge taxable event, right? I also passively invested in this real estate deal that is going to give me this much depreciation, which is actually going to offset. that taxable event that I had. And so it becomes part of this larger strategy, not just like a one-off thing. So people need to remember that too. Having a good CPA can make a huge difference, especially as you get more of these investments and they become more complicated.

[00:20:59] Jeremy Dyer: That's right.

[00:21:01] Tim Little: I think another thing that I wanted to mention, you talked about how people can't just do this in their retirement accounts. And one thing that I'm always preaching is, self-directed IRAs because I find it's a way that people have more money to invest than they do. and it gives them control as well, which they lacked before. And for those that don't understand what I'm talking about, basically, so many of us have hopped from job to job, right? Especially recently. My wife now doesn't stay at her job for more than two years because that's just the average term. and so when you leave these jobs, you often have a 401k. with that employer and once you leave that employer, it's just sitting there. I call it orphaned, right? I'm just alone and afraid. and it'll continue to do its thing in whatever it was invested in. But that may not be the best use of those funds. And what I always tell people is, hey, you have other options and that's what I like to present options. You can put it into a self-directed IRA, and then you literally could have checkbook control over that money to invest it in things like passive real estate opportunities like the ones that you and I offer. Now, you don't get those tax benefits that we talked about, but that's fine because it's already a tax-advantaged account. you don't need depreciation. So that's another thing that I really like to tell people because a lot of them just don't know. And again, those 401ks are often just sitting there neglected. And you really empower people when you say, Hey, you don't just have to put it in fund A, B, and C that your old company offered you back then. Now you could put it in virtually anything that qualifies. Of course, there are always qualifications. So I don't know if that's something that you talk to investors about, or if you have a lot of folks that invest with you from self-directed IRAs.

[00:22:53] Jeremy Dyer: Yeah, we absolutely do. And obviously, the story is, very much the same as, the picture that you've painted here, where people feel like they're setting that money free. It was shackled before they couldn't touch it until they were 59 and a half, but now they actually have access to some of these funds that they can get into, the real estate investing game or strategy, without even coming to the table with liquid cash. So they're able to, to your point, they're able to take some old IRA money or old 401k money and roll it into a self-directed IRA. And through that strategy, they're able to deploy some or all of that capital into our passive real estate investment opportunities. So it's a wonderful strategy for people to consider. I can tell you just this week alone, I've gotten two phone calls from people that want to deploy that strategy. Potential investor. Number one. said that their average annual return over a five year period in their IRA was 7%. Passive investor potential number two told me that their average annual return in the last five years was 4%. Okay. We all know where inflation has gone in the last two years. So correct me if I'm wrong, but I would say that both of those investors are more than likely, upside down, meaning they've lost a significant amount of purchasing power over the course of the last five years on their investments because their investments have not exceeded the, the inflationary rates. That's

[00:24:21] Tim Little: Yeah, absolutely. And we can. We can talk about potential returns for real estate, but it far exceeds the numbers that you were just talking about. So I think that's the other important thing too. People don't understand how quickly these numbers can compound. In my personal experience, I invested with a solo 401k. that was a rolled-over, TSP, from a previous employer. And I doubled that money in less than three years. Now, this was during COVID, so the Black Swan event, may, or may not ever happen again. But still, it just goes to show the potential. Even if the next deal that I, more recently invested in about a year ago. Even if it takes five years for that money to double, I'm okay with that. That is still great returns, especially compared to the numbers that you were just talking about.

[00:25:12] Jeremy Dyer: right.

[00:25:13] Tim Little: Yeah. And so now I want to go into your experience as a passive investor. 'cause I think it's just a case study in the potential that's there,  and potential that one day I would like to capitalize on and become as professional as yourself. So talk to me about it. how that has compounded because I imagine that with, every investment that has, matured, the deal has gone full cycle, I imagine, most of the time you probably reinvest that money and then you can talk about maybe the different, strategies With putting that money to work, how you talked a little bit about the diversification within your passive portfolio, which I also think is important. So please expand on that a little bit.

[00:25:59] Jeremy Dyer: Yeah, I'd be happy to. So I'm a real big fan of, not putting all of your dollars into, one basket, so to speak. And so I would never encourage another investor to take all of the liquid cash they have sitting on the sidelines and to deploy it, into one of our investment offerings, or for that matter, self-direct all of their old IRA or 401k money into one deal. Okay. I'm a huge fan of diversification, not only. of the sponsor, but also asset class, obviously, the location in which that asset is located are all good strategies. So the 27 investment opportunities that I'm currently invested in, that's six different sponsors. It's probably 10 different states, right? It's five different asset classes. So I'm a big fan of obviously, diversifying, in that stance. But now that I've been investing since 2015, I've had deals go full cycle. I have deals that pay, regular consistent, monthly, and quarterly distributions. My own strategy is to take that distributable cash that I receive, at the first of every month. Have it all go into one account. And then once that account balance reaches the minimum level for the next investment opportunity, I just redeploy that cash into the next deal. Okay. When I have an existing deal that I'm invested into, I either use. a 1031 exchange strategy or a lazy 1031 exchange strategy again to defer or delay, the tax consequences, on the profit that I receive when that deal goes full cycle. So I'm very much a big fan of redeploying that capital. It's a rinse-and-repeat effort. It's the seventh wonder of the world. And that's this word called compounding. And it's amazing what happens. It's amazing what happens if somebody just makes the decision to get started today, investing passively as a real estate investor. It's amazing what can happen in just a five to 10-year period. Okay. This is not a get-rich-quick scheme. Okay. People don't get rich in real estate overnight. People get rich over time. But not overnight. And so you always have to have this long-game mentality. You have to determine, what is your end goal and then reverse engineer, what the strategy is that you need to deploy to get there.

[00:28:18] Tim Little: Yeah, I couldn't agree more. And I think it's a really important point. And I would say this goes for both passive investors and for active investors. A lot of active investors get in thinking that they're going to replace their income within one year, and it's No, bro like that's not how this works and I sometimes, you just buy into the hype at first, right? And I get it and there are fees and stuff that you can get as a general partner But in reality, it takes time also and the reason is because the timelines associated with most of these deals are between three and five years And I think we're seeing with the current market that's extending out to now probably five or seven. and so if you take that into account, just like you said, the earlier you get started, and it took me a little while to understand this, okay, if I get started now and I do one deal this year and say one deal next year and maybe two, two deals the year after that, what you're doing is you're building this pipeline, right? And so you may not see a ton. In between right, you may get some distributions and that's great the bigger your investment the bigger the distribution is going to be but Hey, maybe distributions are slowing down right now because multifamily is facing some headwinds. That's okay because you still have to look at the long-term picture but you know at year four when your first deal goes full cycle you collect a big chunk there and then oh There's that second deal that you invested in it matures at year five And then all of a sudden you have this boom You've built that pipeline that now never stops as long as you start and keep doing it.

[00:30:03] Jeremy Dyer: Yeah, absolutely. And once you get started, you're right. You can't stop.

[00:30:08] Tim Little: So it's very difficult to get out of real estate, once you've gotten into it. And it is a strategy that the very wealthiest of wealthy people use. But once you're invested into real estate, you're just, it's very difficult to get out of it because.

[00:30:23] Jeremy Dyer: You need to continue to find a place to put those dollars into, the next tax-advantaged investment. but most people that get invested in real estate, never want to get out because of the opportunity cost of where else am I going to put that money and get, similar, returns that are really, risk-adjusted,

[00:30:43] Tim Little: Yeah, absolutely couldn't agree more. We do need to transition to the turbo round So I am going to ask you three questions that I ask every guest that I have on the show. And I just ask you for a quick, honest answer. Are you ready to go?

[00:30:56] Jeremy Dyer: ready to go.

[00:30:57] Tim Little: All right. First question. What is one red flag every investor should look out for?

[00:31:03] Jeremy Dyer: It's tough to come up with one because I could probably come up with 12 of them, but I'm going to pick one. And that is oftentimes, investors like to just go straight to the deal deck. They like to compare investment A against investment B. And when they compare those two different investment opportunities against one another, they tend to go toward the internal rate of return and the equity multiple. And oftentimes they might look at the equity multiple on deal A. And it says it's a three X equity multiple, and then they look at deal B and deal B is presenting a projected two X equity multiple. So of course they're going to go with a because the equity multiple is larger, right? The challenge with that thinking is investment number A has a 10-year projected hold and investment B has a three to five-year projected hold, right? A two X equity multiple. Over a three to five-year hold is not the same thing as a three X equity multiple over a 10-year hold. So I would just encourage investors to be savvy, in terms of what some of those projections are. and obviously, the biggest thing is stress testing the assumptions that the sponsor is using. In their investment presentation, there are a lot of very simple assumptions that investors can take a look at and say, does this smell right? Are they really going to be able to burn off that much loss to lease? As an example, are they really going to be able to implement the value-added strategy and increase rents by 500 per unit? Those are some very simple questions that, you know, investors that aren't in the space. Can they really be asking themselves to determine, what type of investment, are they willing to put their hard-earned money into?

[00:32:43] Tim Little: Yeah, that's a great point. And I think a lot of sponsors now are starting to just head those questions off at the pass, And put in a stress test slide. We've already told you what our assumptions are. Now here's a stress test to show, hey, worst case scenario. Say we don't meet this rent bump every year. What if it's only this? What if the cap rate is this instead of that? That way you could show that even if there is a downturn or whatever the case may be The deal still performs maybe just not at the level that they're projecting and it just shows that you know You're thinking through it a little more conservatively And thinking about, I don't want to say the worst case scenario, but maybe it's the worst case scenario. So a really good point there. All right. What is a myth about this business that you would like to set straight?

[00:33:33] Jeremy Dyer: Yeah. I already mentioned it before. So I'll say it again. And that is, investing passively in real estate is not a get-rich-quick scheme. Okay. It's not going to replace your active income, or your W2 income overnight. Okay. That's not what's going to happen here. Could it drastically offset your active income over a five to 10-year period? Absolutely. Okay. But it's not going to happen overnight. And the reason for that is because while you can day trade stocks. You cannot day-trade apartment buildings.

[00:34:04] Tim Little: So true. All right. Final question. What does success look like to you, Jeremy?

[00:34:12] Jeremy Dyer: Yeah. I think about this question a lot, right? I would say that the most important, or one of the most important, factors of success for me is really what I like to refer to as time freedom, right? we all only have a certain amount of time that we're going to live our lives. Okay. We can all manufacture. More money. We can manufacture more things. Okay. But what we cannot manufacture is more time. And so that's really the only asset that we have that we can't create more of. But if I can make investment decisions today that allow me to be able to have more time freedom tomorrow and into the future, that is really at the heart of why, I'm investing, into cash flowing, assets that, come with all the great benefits of depreciation and diversification and all those things and the equity upside that I get. Thank you. Is really so that I can have more time in my life. It's not because I want to become rich. It's because I want to be able to have more discretionary time to spend the time on the things that I want to spend time on and with the people that I want to spend it with.

[00:35:25] Tim Little: Absolutely. All right. Hey Jeremy, this has been awesome. Really appreciate your insights, especially when it comes to passive investing with the amazing amount of experience that you have there. Please tell our listeners how they can get a hold of you. And if there's anything else that you'd like to share with them.

[00:35:41] Jeremy Dyer: Yeah, no, great. And Tim, I really appreciate you having me, on the show today. I'm relatively active on LinkedIn. You can find me there under Jeremy Dyer. I also host a podcast by the name of the freedom point, and you can also learn more about our company at startingpointcapital.com. Again, that startingpointcapital.com.

[00:36:03] Tim Little: Yeah, I hear you have some amazing guests on that podcast, by the way. And don't worry, we'll have all that contact information in the show notes. Again, I appreciate you coming on and look forward to continuing to see you do big things on your journey to multi-family millions.