The Beauty of Build-to-Rent (BTR) with Flint Jamison, Ep 80

Today's guest is Flint Jamison, the Founder of Vestus Capital. He spent 20 years in aerospace as an engineer and program manager. He founded Vestus Capital to help educate other engineering leaders on how they can grow and protect their wealth by passively investing in commercial real estate.

Flint started investing in real estate because he realized the stock market wasn't giving him the strong returns he was looking for. His adventure began with a duplex investment, then he discovered "Build-to-Rent" ventures. 

He places himself and his investors in a thriving market by creating single-family home communities that are run like multifamily businesses. 

Flint's dedication to diversifying his investments away from the stock market and considering other non-traditional avenues highlights his distinct strategy for accumulating and safeguarding money. Stay tuned!

Episode Topics

[01:19]  Meet our guest, Flint Jamison
[02:32] Challenges in the Aerospace Industry and Shift to Real Estate
[04:00] Realizing the Limitations of Single-Family Homes
[07:33] Comparing Real Estate and Stock Market Investments
[14:40] Understanding the Risks and Rewards of Real Estate
[27:21] The Importance of Location in Real Estate
[32:26] What is one red flag every investor should look out for?
[34:35] What is a myth about the real estate business?
[38:30] Connecting to Flint

Notable Quotes

• "The aerospace industry is sexy, but it's a huge grind that burns people out. I needed to find a better way." -Flint Jamison
• "All real estate is local. So don't go by these broad national metrics to make your decisions."  - Tim Little
• "Commercial real estate is less emotionally driven; it's driven by numbers and revenue, giving you more control over your investments." - Tim Little
• "I think most people will just generally accept, if something has higher risk, there's the expectation of a higher reward." -  Tim Little
• "I partner with experts, making me asset agnostic. My portfolio includes Class B and Class A properties, townhome communities, fund funding multi-properties, and now, I'm into built-to-rent." - Flint Jamison
• "Built-to-rent is a single-family development managing like multifamily, addressing the demand for starter homes. It's an A+ category - you get a home." - Flint Jamison
• "Risk is all relative. Developers, relying on real estate for their livelihoods, see it as manageable because it puts food on their family's table. Risk perception often stems from ignorance." - Flint Jamison
• "It's not about the macro economy; it's the micro economy. If you look at macro numbers, things never look good. But you go micro, and you're going to find little gold mines everywhere." - Flint Jamison

Connect with  Flint Jamison

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👉 Connect with Tim

• Linkedin: Tim Little
• Instagram: @tim_at_zana
• Email: tim@zanainvestments.com
• Visit www.ZANAinvestments.com for more info on Tim and how you can passively invest in multifamily real estate
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Transcript

[00:00:00] Flint Jamison: The stock market I realized wasn't doing it for me. I tried that for a hot minute. I've been investing in 401k retirement, blah, blah, blah but when you actually actively try to invest in the realists in the stock market, or when I tried doing just trying to find something that would work. It just wasn't working and I realized even with my retirement accounts, it just wasn't really that great then you start studying the wealthy and you're looking at, real estate as a major staple of how the wealthy grow their wealth and store their wealth edge against inflation, tax benefits there's a lot of great reasons.

[00:01:09] 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 Flint Jamison. Flint is the founder of Vestas Capital. He spent 20 years in aerospace as an engineer and program manager. He founded Vestas Capital to help educate other engineering leaders on how they can grow and protect their wealth by passively investing in commercial real estate. Flint, welcome to the show.

[00:01:37] Flint Jamison: Thanks for having me, Tim.

[00:01:39] Tim Little: Yeah, and it is great to have you here. I'm excited. I have to give a quick disclaimer to anyone watching this episode on YouTube because it is the week before Christmas, so I am wearing my ugly Christmas sweater. I just didn't want anyone to think this is my regular attire if they're watching this, two months from now. but that out of the way, I gave a little preview of your background, but I tried not to give too much away. Please get into the details of how you got started on your journey, and tell us how you got to where you are today.

[00:02:07] Flint Jamison: Yeah. So we'll go back to the way back machine as mentioned there. We did aerospace design for 20 years, the 77 modified aircraft for the air force, ran a manufacturing shop for a little bit. They're doing composite materials, actually prosthetic feet. it was our bread and butter, but we also made alongside those, we made aircraft parts but it got to a point where I knew that life was a grind. 20 years, every year was a grind. just long hours, and huge expectations. The aerospace industry is not easy. it is a sexy industry. Like you can go to the bar and tell really good stories. But the reality of fact is it's a huge grind, and it burns people out and I needed to find a better way. I didn't want to do that my whole life. I wanted to live my life. started thinking differently. The stock market I realized wasn't doing it for me. I tried that for a hot minute. I've been investing in 401k retirement, blah, blah, blah. But when you actually actively try to invest in the realists in the stock market, or when I tried just trying to find something that would work. It just wasn't working. And I realized even with my retirement accounts, it just wasn't really that great. Then you start studying the wealthy and you're looking at real estate as a major staple of how the wealthy grow their wealth and store their wealth edge against inflation, and tax benefits. There are a lot of great reasons. So I dove there, and I never looked back. I bought a duplex in 2018. It was the BRRRR strategy. Buy, rehab, rent, refinance, repeat. It was a distressed property. I bought it for 80, 000, I put 30, 000 into it, and then, for renovation, then rented it out. Here's the thing about single-family homes that I learned in that process, is, you don't always make a huge amount of cash flow from a single property. There are people out there that, yeah, they paid down their mortgage and all that, and they're making $1,500 a month or something crazy. But on average, you're going to make 200 to 300 a month per door. And I got this statistic from bigger pockets, I think a few years ago. And I was getting that, I was getting 300. I'm like, sweet. I'm above average, above 200. But then you expand that on how do I retire early? How do I live off of this cash flow? I would have to do that 50 more times. The amount of capital. Plus the effort it took me to do that, to get 300 a door was going to take me forever. Then I jumped into syndication from there. So now from 2018 and doing that duplex to here at the end of 2023, I have stopped counting cause I think it's a vanity metric, but there are 1500 to 2000 units within my port spread across.

[00:05:02] Tim Little: Awesome, so I'm going to get into a couple of the things that you talked about, because I see a lot of parallels between, like, how you got into it and how I got into it as well. and I think we made the switch for a lot of the same reasons, right? We wanted to grow cash flow. income from real estate for all the amazing benefits that it holds. tax wise and everything else. And so like you, I bought a duplex, I think, I bought mine in 2014, right? For 85, 000. and what I came to realize is the same thing you did. I had a formula set up. Like I was going to make 200 free cash flow after paying the property manager and the mortgage and maybe some of those additional Costs associated and I was like, that's great. it's 200 cash flow, but someone else is paying the mortgage I'm doing all the right things and I think that's generally true because it's certainly better than doing nothing But all it takes is one Event that's expensive to wipe out even like a year's worth of that profit air quotes that you're getting from that 200 You know in your case three hundred dollars a month, right? I had a tenant move out within three months of owning that duplex, and they just left everything there. They just left in the middle of the night, right? Because they weren't able to pay their rent, and so they're like, I'll just skip. Okay, but then I had to pay between two and three thousand dollars just to get their stuff out of the apartment so that I could then pay to get it rent-ready. To get a paying tenant in there and all of a sudden it hits you. You're like, okay, that $200 a month that I was expecting in profit, that just got wiped out for a while. And then you talk about again, doing that, okay, if I'm buying a duplex each time, yeah, I need to buy 50 duplexes in order to reach my freedom number. re replace my W2 income. And I was like, maybe that isn't the right goal. And maybe this isn't the right way to go about it. So it sounds like you came to some of those same realizations.

[00:07:15] Flint Jamison: yeah, absolutely. And I totally get it. There was a windstorm that took down a tree branch and took out the fence. And there goes six months' worth of profit.

[00:07:24] Tim Little: Yeah, and that hurts. and again, I still think it's better than doing nothing. But, by all means. but I also think there are better ways. and you talked about the same thing as with the stock market. Sounds like you tried to get into active trading for a little bit, picking stocks. Is that right?

[00:07:40] Flint Jamison: it wasn't, it was picking stocks. I wasn't doing options or anything crazy, but I was just trying to find a stock. And I was starting to listen to podcasts of people that are like, here's the formula for choosing a great stock. Ah, cause it's the stock market, you follow the Warren Buffett rule. And you find a really good deal. Then you sit on it for 30 years. And for Warren Buffett at work, cause he started out with a million dollars and just blew up from there and he's buying stocks at discounts, which none of the rest of us normal people are able to do. So you have to take things with the grain of salt with these people that have really succeeded. They started in a different position that enabled them to take better positions than what we can do. And so I came to the conclusion, I'd rather have more, I'd rather have my money working for me than put things in these. 20-year 30 year-long bets and hope for the best when maybe I can retire sooner. And the only thing I was going to mention on top of that is that when it comes to picking socks, like 99 percent of people are just really bad at it. and I was

[00:08:42] Tim Little: a lot of that is just human emotion. Like us, we know we're not supposed to. buy at the top and sell at the bottom, but most of the time that's what happens

[00:08:51] Flint Jamison: We do

[00:08:52] Tim Little: emotions override logical decision making. yeah, and here's the no, go

[00:08:59] Flint Jamison: Yeah, the other thing you mentioned is a great thing, the emotions. The stock market is also driven by emotion. Let's, so I love to use the Elon Musk buys Twitter example, because when he bought Twitter, Tesla stock dropped and it's the business of Tesla, the revenues didn't change overnight. That's not, so why did the valuation change? It's purely because of the emotion-driven behind it. Oh, now Elon's going to be spread thinner and now he's not going to have the ability. To manage Tesla more, and so now it's not worth it. It is, right? It's just this big emotional thing that lasts a hot minute and then Tesla stock came back up and it's I'd rather commercial Real estate is driven more so on the numbers and the revenue versus the emotion of the moment that the stock market is

[00:09:46] Tim Little: No, I agree a hundred percent. And that's why, I'm not one of those people who say, Don't ever invest in the stock market. I don't think it's realistic. I just think more people need to diversify out of the stock market because literally, all their investments are in the stock market. They may say, Oh, I have a Roth IRA and I have a 401k. and I'm like, yeah, but it's all in the stock market, right? yeah, I guess so. And so that's what I try to urge people to do, not necessarily get out of the stock market, but to diversify away from it a little bit so that you're getting into these assets that are less emotionally driven, like you talked about. And I think the other important point is having control over it, right? Even in that, in the case of that duplex, you have the opportunity to add value to it. You bought it, you, you sunk 30, 000 into it, and you were able to get more rent for it. Because of that, it's really no different than what we do with say commercial multifamily. We buy it, we add amenities to it and then we're able to charge higher rents. You just don't have that same control over Stocks because they're companies right. The analogy I like to tell people is it doesn't matter How many cases of Coke I drink. I'm not gonna push the price of Coke. It's just not gonna happen with coke stock. So I have zero control over those assets But with any real estate and even commercial real estate We do have some level of control there as long as we buy right and implement the business plan correctly

[00:11:22] Flint Jamison: Yeah, absolutely. said.

[00:11:24] Tim Little: All right. So let's go into you know what you're doing now in terms of Commercial real estate. There's, and a lot of people may not even know this, but there's a ton of different asset types within commercial real estate. I know a lot of times when we're listening to the news, people just say commercial real estate is down. Commercial real estate is up. And to me, that's so generic as to lack any meaning because they could be talking about a million-square-foot warehouse or they could be talking about A thousand-unit apartment building and they're not making a distinction there. So talk to me a little bit about what asset types you invest in and why you think those are the right choices for you and your investors.

[00:12:08] Flint Jamison: Yeah. So you made it a great point. When I talk to new people at networking events or just anybody new investor, I say, I invest in commercial real estate. The answer is yes. The instant they hear a commercial, they're thinking of an office building. They're like, whoa, that's a horrible decision. I'm like, what do you mean? There are so many vacant offices around. I'm like, okay. Yeah. Office. I don't think commercial real estate consists of all these things. As you mentioned. I say, no, I invest in the basic human need of multifamily, like apartment buildings built to rent, which I'll get to here in a second. So we'll start easy. I largely raise capital, so I partner with experienced teams. I serendipitously fell into this role, which was great because when I was working my W2 as an engineer and program manager, actually, I was working nights and weekends and it was easiest for me to fall into the capital raising role because I was working, it's a remote position. That, and I can bring not only my own money. My family's money and my investor's money to experienced operators, because if I jump into this, just with a new partnership, me and five other people go buy an apartment, we're going to be like, this is our first deal. It's harder to raise, but if I'm like, Hey, I got these guys that I've done 10 properties already, five gone full cycle. They've got this business plan figured out. They are the experts in this, like the experts in Dallas, and Fort Worth, it can bring a lot of credibility and investors tend to like that position more. So I'm a little more asset agnostic because I'm able to partner with the experts in their given field. but within my portfolio, I have just standard. Class B value ads. I haven't gone super class C like super distressed properties.

[00:14:02] Tim Little: Don't.

[00:14:03] Flint Jamison: I don't, I have class A's I have brand new off of the builder class A's to just like 2009 built townhome community. I have fun funding multi properties. Three properties in the one-on-one deal. And now I'm doing built-to-rent. So I don't know if you've spoken much about built-to-rent, but that's usually a new asset class people haven't heard of, so I can dive in there if you want.

[00:14:30] Tim Little: Yeah. and we'll get into that in a second. you mentioned fund-to-funds. I was going to assume that's how you're primarily raising just for legal reasons. But can you go ahead and explain to the listeners what a fund of funds is and if that's how you primarily raise money?

[00:14:48] Flint Jamison: It's no, it's not primary. I only have one now. It's not saying I'm not going to have more later. so you can think of a single property as a fund, just a single fund. If I want to create a fund to fund, what I end up doing is I raise say a million dollars with my investor's money. And then that fund-to-fund is its own LLC, which becomes a limited partner or passive investor in the primary fund. the primary fund being whatever it is, whether it's a single asset or a portfolio of assets, but I just create this sub-LLC that is its own contained fund. So yes, as you mentioned at that point, I'm only a fund manager and I am. The passive investor or we collectively are the passive investor to the primary investment.

[00:15:40] Tim Little: Okay, so on the other deals, you're a general partner on those.

[00:15:43] Flint Jamison: I do. Yeah, I'm on the GP side co-sponsor. and I do to fulfill my sec duty. I do various levels of either asset management or marketing. I've helped develop websites. It's just. It's crazy because building Vesta's capital, I've become multi, multi-versed in various things. So I'm capable of coming in and filling a gap where either they don't want to do something or helping out where needed.

[00:16:16] Tim Little: Yeah, and just for the listeners, what he's talking about there is, if you're a general partner, On one of these syndication deals, there's a legal requirement by the SEC, S E C, sorry, it's hard to say it fast, that every one of those general partners plays some kind of active role, right? That they're doing something, that they have some level of responsibility in the deal, that they don't just come, say, here are a million dollars, and then walk away, never to be heard from again until the deal exits. That's not what the SEC wants, they want everyone to have You know, we would probably call material participation in those deals. just again, so that everybody's clear on that point. okay. So let's go to Build2Rent because we actually haven't had a lot of folks on the show talk about that. So I'd be interested to hear more about your pitch for Build2Rent and why you think it's a great investment opportunity. for people.

[00:17:12] Flint Jamison: Yeah, built to rent is a single-family home community. You basically do a single-family development, with the end goal of managing it as if it's a multifamily property. So we put it in place. Property management, on-site maintenance, we have a clubhouse, we have the pool, all those amenities, but every house is, rather than tenants living in an apartment, tenants are living in their own single-family home. And these are largely starter-family home sizes. where this fits is there, there's a huge demand for single-family homes, especially the starter home. After 2008 There was a major slump in house building for starter homes. The reason is that developers made very slim margins on starter homes. So they started just building bigger homes, like 2, 500 square feet or bigger. They make bigger margins. So there's a major slump in starter homes. And then the housing prices go up and you've got a whole bunch of millennials and their peak family building years who are trying to move from an apartment into a house. There's not enough market for houses or starter homes. So we feel this is the best solution to fill the market with more starter home size homes, but they can rent them because homes these days are still out of reach for a lot of people. So this kind of is The best solution to enable people to get into their own home and how they make it feel like a home. They have a little front lawn, a back lawn, the amenities. So it's a, it's like an A plus category. If you're thinking of class A apartment buildings, now we have class A plus, which means you get a home.

[00:19:01] Tim Little: Yeah, and that makes a lot of sense. I think most people, at least those who are listening to the show, are well aware of the housing shortage, and that has not gone away at all. It's still pretty cute. some of the questions that I think through, because I'm coming from the multifamily lens primarily, is how does it differ? as an investment. In most deals that I've done on the commercial multifamily side, there's a hold. It used to be three to five years. Now it's veering more towards the five to seven, just because of market conditions that money is locked up. and you may get quarterly distributions, but you get that nice big check at the end. What does it look like from the investor perspective? These are built to rent because they are more like a development.

[00:19:44] Flint Jamison: yeah. Okay. So a great point. There's a differentiator here that we actually, in May of this year, closed on 2009 built-in 2009, a townhome community, 94 units, and we actually pitched it as built to rent. So it was like a value-added class A property. so you can consider the same formula for that as apartment buildings. It's just townhomes and it is a five-year plan on the flip side. What really built to rent the majority of the opportunities out there in particular, what I'm doing as well is development. So we go in and we buy a piece of land. We entitle it, zone it, permit it, engineer it, and then, yeah, we build. There's a lot, it depends on this, but a classic case of, Hey, we're going to build 150 homes in Phoenix, Arizona. We believe we can be done in 18 months and then we're going to turn around and sell it. So this is a much different play, a development play. Versus a stabilized play. we do want to ultimately just sell and get out. There's no cash flow. This is you're putting your money in and you're waiting. And the goal is with development because you're starting off with a piece of dirt and you're building things at cost and then selling things for what the value is. In the end, you tend to get a much higher yield on cost that tends to happen quicker than your value-added assets. Now, you have to contrast that to the risks of development, which is a bit nuanced, and I think the general public just assumes development is super risky when in reality, I think risk is more built around ignorance, more so than what the actual risks are.

[00:22:09] Tim Little: Yeah, and that's interesting because I remember a conversation I did have about development in general with someone on this show and he's actually the opposite, right? He's because we have to account for every element of risk going into these projects because lenders just won't lend. If it's not super conservative, in the underwriting and multifamily, we always try to say we're conservative too, but he said it's like that on steroids when you're talking about development because banks, lenders in general are just more nervous about the risk. So they want to be 100 percent sure that that operator developer is very good at what they do. very competent, but they've also been super conservative in their underwriting out the gate.

[00:22:56] Flint Jamison: Yeah, very true. And there's an interesting thing with the interests. That you're paying on construction loans, because normally we'll raise say 40 percent and then the bank comes in with the 60 percent loan to cover the cost. We'll flood the construction with the investor capital first before we start drawing on the loan. And just like a home equity line of credit, you only pay interest on what you draw. So you're, throughout those 18 months, you're paying a little bit of interest. Unlike when you buy a multifamily property or buy a single-family home, you're paying max interest right out of the gate. With construction, you work your way up until you're almost done, where at that point you're paying max. So the interest rates are less impactful. On construction then you would see in a standard just buying whole, but then back to the risks thing. I always like to say look how many developers are out there. This is their company. This is their job to put food on their kid's table. If you ask them, you're just in a risky business. They're going to be like, I understand it. It's actually not that risky because it puts food on my family's table and I count on it. So risk is all relative. And back to the knowledge of versus ignorance of

[00:24:13] Tim Little: Yeah, and I think most people will just generally accept, if something has higher risk, there's the expectation of a higher reward.

[00:24:22] Flint Jamison: higher reward.

[00:24:23] Tim Little: in terms of that timeline though, you said that like on, on average 18 months. so is that how long an investor is wrapped up in that deal or does that

[00:24:32] Flint Jamison: Yeah. So normally it's going to vary, but I would say the 18 months to build and stabilize, we'd have to occupy it as well before we can sell. So, we normally target two to two and a half years to give ourselves that buffer, but we actually start listing it or teasing it for sale before we're even done with verticals. In the past, I haven't been part of a deal that's. Gone full cycle or sold early yet, but, I've had friends that have a 600-unit built-to-rent community, which is massive.

[00:25:05] Tim Little: Yeah.

[00:25:06] Flint Jamison: they just finished the entitlements and engineering permitting ready to just cut dirt and they got two unsolicited offers. They doubled investor money. so there's a huge demand. The people that are buying these are like the big financial institutions. There was. Two years ago, there was a metric that there was something like 500 to 700 billion of investor institutional money that was targeted to buy these built-to-rent communities. So there's a lot of demand,

[00:25:37] Tim Little: Yeah. And so I guess you just mentioned, so the intent is to get them all rented out prior to selling, because if so, then that significantly would reduce the risk to a buyer. 

[00:25:48] Flint Jamison: it depends on the buyer. As I said, some buyers are so itchy to get the property that they will actually buy you out and then contract the GC to just finish the bill. there's been stories of I'm 50 percent built and I got an offer. They bought us out. So that shows there's a ton of demand. But we don't plan for that. What we plan on is we build, we stabilize, we have it up for sale. If it doesn't sell whatever we do, once you're stabilized, you refinance and then you're sitting on it and you have a stabilized asset and you're cash flowing, you own essentially a multifamily property, so you can play the same exit strategies.

[00:26:30] Tim Little: Yeah. And so I guess it has something about, Has your bill to rent thesis changed in the current real estate environment, or has it pretty much stayed the same?

[00:26:42] Flint Jamison: It's interesting. I did shift to a different location. I switched operators but also switched different cities. That's the big one that was really there. I still feel strongly that Build2Rent is going to be here for a long time. There are a lot of developers that are ramping up now doing Build2Rent communities in more and more areas. I think it's here to stay.

[00:27:10] Tim Little: Yeah, okay, so when it comes down to locations, is that primarily because the number of new units that came online was too much too fast in some of those areas? And it made more sense to move elsewhere? Or what was the reasoning behind that?

[00:27:24] Flint Jamison: there's a couple of reasons. One of them I mean, it's got a town that can definitely handle 150 units in this given location. It can handle it, but the growth of doing more and more in that area was like, this might just be a one-off built rent community and it's a one-off success, but I don't see it being a long term, we'll just continue in that given area. Where I switched was actually with a different operator as well. It's Phoenix. And this is the interesting thing because Phoenix blew up and,

[00:28:00] Tim Little: Yeah, for sure.

[00:28:01] Flint Jamison: it, there was a huge amount of migration from California and, now it's stabilized, there's been a recorrection cause it was so hot too quick and now it's cooling off because it's normalizing, but the amount of industry that's moving to Phoenix, Phoenix just became the. Fifth largest city, it's the fourth or fifth, but they just upgraded themselves and they kicked out, I think it was Philadelphia. and they've got billions and billions of dollars of tech industry going there. So they're going to need an incredible amount of housing. You got to think about right now we're in this correction, they call there's like this, there's an economic surplus. of housing. but when you really dig into it, that surplus, like in COVID times. There could be a surplus of housing because people are willing to live with roommates or willing to live with family. They come up with alternative solutions. But as soon as the market starts shifting again and more and more people want to get into houses, all of a sudden, supply-demand shifts the other way simply because the economy has shifted. but in general, there is, as you mentioned, a massive shortage across the U.S. Something like 3 million housing units short. yeah. So, I think shifting to Phoenix plus this operator is going to build a ton. The goal is to do 10 years worth of development. That's the fund I'm doing. I'm not trying to pitch my fund, but. We're building built-to-rink communities in Phoenix with the option to shift to Dallas and some other big markets for the next 10 years. It is a one-time investment for the next 10 years and it's a huge amount of growth potential.

[00:29:53] Tim Little: Nice. Yeah. and the story in Phoenix sounds very similar to Tampa, where I live, except we got all the East Coast people during the COVID times, moving south, coming to Tampa, significantly raising, prices, which, benefited me, front because I own a house, but then you get the golden handcuffs You can't sell anyways because right now interest rates are too high but I think that's going to continue because again because of the fundamentals, right? It wasn't just a temporary blip once people discovered Tampa then businesses started moving down here because maybe they wanted to get out of California or Get up from an up east favorable climate You know, I'm sure that the city and counties were offering tax benefits, et cetera. And of course, once you have the companies come down, then you have the employees and it just creates this flow. So it certainly slowed down since the anomaly that was COVID, but it still maintained that, that growth. And I think it's becoming more popular as a destination because people look to Florida and they say, okay, now Miami is too expensive. Or I just don't want to live there. What's another option? And that's why Orlando and Tampa have grown so consistently, I think, over the past, five years, I'd say.

[00:31:10] Flint Jamison: Yeah.

[00:31:11] Tim Little: Alright,

[00:31:12] Flint Jamison: not about the macro economy. It's the micro economy. Because if you look at the macro numbers, things never look good. But you go micro and you're going to find little gold mines everywhere.

[00:31:23] Tim Little: Yeah, and I think that's why it's so important for the passive investors if they're looking at these deals. They need to say why this market is right and most pitch decks will spend at least a page, sometimes 10 pages on the market But they need to understand why that market Makes sense. What are the fundamentals there? Right again is Job growth as good as population growth? Good. Is there a diversity of employers in that area? So that if one goes under Everyone's still doing okay, because renters need jobs to pay rent. That's just the way it goes. so I think that's really important to understand that, as they say, all real estate is local. So don't go by these broad national metrics to make your decisions. All right, it's been some awesome conversation, but we do need to move into the turbo round. Are you ready for this?

[00:32:17] Flint Jamison: Absolutely.

[00:32:18] Tim Little: All right, so I'm going to ask you three questions that I ask every guest that I have on the show, and I just want some quick, honest answers. Here's the first one. What is one red flag every investor should look out for?

[00:32:31] Flint Jamison: So I made a mistake. Actually, I was taught by a guru. I won't say who that guru was, but they were teaching that, and they were even doing deals, including my first two passive investments. they calculated the cashout refi halfway through the business. Deal, two to three years after your renovations are done, you get a cashout refi. So that was right in the middle of COVID and in the fall of 2020. And then two years later, we have this big economic challenge with interest rates skyrocketing and cap rates start changing. guess what? When we went to cash out refi, not only the cap rates changed, but the interest rates changed, and that wasn't correct. Accounted for in the underwriting, even though at the time it was conservative. So the deals would not probably have been penciled if they didn't have the cashout refi calculated within the underwriting. So here's the red flag. Never jump into a deal that accounts for a cashout refi. You always want to cash out the refi option. all GPs are going to do it, but it's icing on the cake. It's a bonus if it happens, but the property needs to be able to withstand itself. For the entirety of the business plan. And then some, yeah,

[00:33:55] Tim Little: Most sponsors, general partners, whatever you want to call us. We'll put it in there As an option, but it's you know conditions dependent, know If the market is favorable, then we can do this, but I've rarely seen it be the exit plan and if it was the exit plan, then that's It's not a good place to be right now because most cash out refinance are now cash in refinances just based as you said on cap rates changing and the, the rates it's at a point now where a lot would have to put money in order to refinance. That's an expensive place to be so all right next question What is a myth about this business that you would like to set straight,

[00:34:40] Flint Jamison: So we're talking risks and maybe I should delve into that a little bit more. I think that the financial institutions, I talk about this a lot. I'm convinced the financial institutions over the last 40 years have been changing the way we as a society think about investing. Alternative investments, air quotes, are perceived as risky. And I don't know. It's that we're born just thinking of alternative investments. There must be risk. What's crazy is real estate has been around for millennia longer than Wall Street. So that's something that has taught us that real estate is risky. Everything has risks, no matter what, never. Okay. Red flag. If someone says guaranteed returns or there's no risk run, that's a scam. but. Real estate doesn't have to be risky. Real estate can actually be less risky than Wall Street. So get educated on it, get with the right team and, you can have asymmetric returns, low risk, high return.

[00:35:44] Tim Little: There you go Yeah, it can be less risky and I would also say it could be a lot less volatile now That's all you know dependent on

[00:35:52] Flint Jamison: is actually there. I have a great chart that shows the data on real estate from 2000 to 2021. There's a Marcus and Milichap chart versus. Wall street. And if you put a million dollars in the year 2000, how would it grow? And one of the lines is super bumpy and the other one is a little more smooth. And one ends up actually way higher than the other. And it was the commercial real estate that ended up winning out.

[00:36:20] Tim Little: Yeah, exactly. I mean don't get me wrong real estate has its moments where the ride gets a little bumpy, but it's much more of a roller coaster and You know over the long term when you're looking at Stocks just the frequent more frequent ups and downs Okay, final question Flint. What does success look like to you?

[00:36:41] Flint Jamison: Actually you get to take this in so many different ways. I'll talk personally. Success to me is getting to that freedom number where. I can choose to live my life a hundred percent how I want to live it. And that could be still working. I guarantee I'm still going to work and still working might be, or will be, putting back into charity. I like Engineers Without Borders where you go and build clean water filtration systems in Africa or something. and traveling the world. I'm a huge traveler. I've been to all seven continents, and I just think it's hugely valuable to experience other cultures, experience the world, and I want my kids to see that. So give back and travel and then work whenever I feel like it.

[00:37:27] Tim Little: That's awesome. Yeah, I'm right there with you. We're gonna be taking our first family international trip. I'm not really counting a cruise. We did a Disney cruise That had one-day ports of call, you know at a beach that you know is not really by any of the locals anyways But we're going to be taking a trip to Germany this spring break already bought tickets for my me my wife and the two kids who are five and eight we wanted to wait till they were old enough to remember it

[00:37:56] Flint Jamison: remember.

[00:37:57] Tim Little: and enjoy it so I think this is a good time. So we're gonna check out Germany, try to make it over the Czech Republic And see what else we could do.

So I think it's going to be an awesome experience for them.

[00:38:08] Flint Jamison: We took a two-year-old to Germany and Portugal. That was Yeah, I don't know how much value added was for them at that time, no, it wasn't, and it was, yeah, it was a learning experience for us. It's okay, we need to plan our trip differently now.

[00:38:23] Tim Little: Yeah. Alright, Flynn. Hey, this has been awesome. Please tell our listeners how they can get ahold of you and if there's anything else you'd like to share with them.

[00:38:30] Flint Jamison: Yeah. The easiest is just go to investwithflint.com it'll take you right to my site and Festus Capital, but it's easier for people to remember to invest with Flint.

[00:38:39] Tim Little: Alright, we'll have all that in the show notes for sure. hey. Thanks for coming on. I appreciate you being here and having this chat with me and look forward to continuing to see you do big things on your journey.

[00:38:52] Flint Jamison: Thanks for having me on.

[00:38:54] Tim Little: All right. Have a great one.