is similar to what we usually do in the past where we're talking about our real estate projects we have a very special guest here and so I hope that you guys are going to find the information uh really valuable it's going to be a healthy and fun conversation uh I'm just going to give it another 30 seconds while I see people trickling in here uh and then we'll get started you made yourself a cup of coffee where's mine dang brought water do you need a coffee no I'm your energy no no no I have good energy do I look like a guy who doesn't have good energy what about a new Tropic you really set this thing off no no no no Placebo stuff for me all right all right let's go ahead and get this thing started again welcome everybody uh to our webinar uh we have a very special guest here I'm going to give her a quick moment to introduce herself uh the theme of this conversation is uh something we get asked a lot uh oftentimes we get asked questions about investing in real estate versus investing in the stock market the pros the cons why you should do one over the other uh Mikey uh my partner you know he's the real estate guy uh Christina who's our guest here today uh is a financial adviser and so we're gonna have you know a little bit of both worlds I am moderating this conversation today because I used to be a cfp who became a real estate guy so I can understand both worlds and so I'm going to try to keep the peace uh as we have this conversation uh but before we get started I want to turn over to you if you want to just kind of quickly introduce yourself to our audience I'm Christina Lindsay orta I am the CEO of Lindsay and Lindsay wealth management and uh I have a background in real estate myself as well uh I spent about seven years in private Equity was also a branch manager at Countrywide back in the day so um been on the financial advisory side now 11 years um so I do have a background in real estate and I focus now on mostly highet worth and estate fing amazing all right uh Mike you want to introduce yourself for those that may not know you oh man so if you don't know me my name is Mikey Taylor uh I am the principal and president of commune Capital uh I'm also a council member for the city of Thousand Oaks so if we get into any Politics on this conversation uh I get my toe there all right so let's kick this thing off with the better investment right because that is the that is the question we always get oh let me let me take a pause for a moment while I get started there's going to be a lot of investment related conversations uh over the course of this webinar let's take a moment to say that nothing that is discussed here should be construed as investment advice you should seek uh the advice of a professional because everybody's situation is very unique to where they are and what's going on with them so this is more of an educational conversation take it uh for face value and then make sure that you're speaking with a professional as it pertains to your particular situation before making any kind of decision so we want to make sure that our compliance group loves it and yours as well so you know we and we'll give this disclaimer again at the end so back to the question on the better investment you're the real estate guy I have to start with this you have to start with you know explaining to our audience why they should go real estate over stock well it's interesting because Christine I and I had different paths I I was at least from an investment standpoint I started off all stock market and I would say for the first six or seven years that's where all my focus went until I got to the point of being able to kind of you know write a check large enough to get you access to real estate because the Barett entry is much higher and then I spent the next 15 years kind of moving a little bit more towards in investing in real estate plus business so I would say you know business and then real estate was my passive vehicle um look like anything like to keep the Nuance uh intact there's pros and cons to both uh why I like real estate one I always liked that it was tangible I I know that doesn't necessarily mean that you're going to see a better return but I just like that I was physically seeing or I was able able to see a physical property so I like that side I like the fact that it was a need like I I just you know looked at population growth and went if people are always increasing you're going to have a need for this product I like that it was easy for me to understand and then I would say third I like the tax side of it I liked the ability to borrow against your Equity so that I could either not show a taxable gain or defer it out into the future so I would say those were the kind of three reasons that drew me towards real estate okay Christina for you obviously uh I assume as a financial advisor when you go through asset allocation I think you're one of based on how you introduced yourself one of the few advisers that is allocating some of their clients dollars into real estate uh we read something where I think it was 6% of financial advisers you know put their clients dollars into real estate so it's a very small percentage of the population that are actually ex exposing their clients to these tangible assets uh why do you have a heavier allocation if assuming you do into the stocks and bond market over real estate what's the what's the value proposition there you know I think it really comes down to the individual and also the overall plan and so so I think that it's not a yes or you know stocks or real estate it's a yes and and I think for a lot of clients it's understanding their risk tolerance what's comfortable to them do they want to be touch feel tangible Hands-On or do they want to be passive so what type of real estate makes sense for them do they currently own real estate that we're trying to you know solve for you know cash flow getting a better cap r or getting a better cash on cash return or deferring a capital gain so it's really looking at the indiv idual situation and um from a from an allocation standpoint it really does come down to each financial plan so we like real estate as a satellite um but you know real estate is capital intensive so you also have to make sure that you've got liquidity especially if you're doing direct management versus a passive real estate acquisition you have to make sure you've got Capital set aside for tenant improvements or you know a 60% increase in property insurance because we're all seeing the the Skyrocket in property insurance rates so um you have to have liquidity which requires allocation to stocks bonds ETFs other asset classes in addition to real estate yeah I actually I I totally agree with that right because if you have exposure into everything you're also gaining from diversification which goes into my next question it's a lot easier to diversify in my opinion in the stock market and in the bond market through ETFs or mutual funds or whatever the case may be with real estate how much of that is a driving force in the decision-making process for you in terms of what you would recommend somebody allocate like is is the diversification of having the dollars spread out over multiple Investments a major driver for you yes and no I mean diversification is important but I think it really comes down to so many advisers Focus too much on the individual Investments and you know oh this is our model you should have X amount in real estate where that's not going to be one siiz fits all it really comes down to okay let's extrapolate your income needs let's look at your tax situation let's look at your distribution rates where is your income going to come from what's your tax sources what you know do you have the the liquidity and do you have the income streams um to meet your needs and adjust that for inflation and adjust the costs for inflation so I think it it just comes down to the plan and a lot of advisers aren't looking at everything holistically where we look at their real estate holdings we look at their stock portfolio we look at their income needs inflation adjust everything and put a whole plan together for cash flow and go okay how much can you afford in real estate how much do you currently have are you Overexposed or are you underexposed and do you ever have clients that look at you and say hey look I get uh what you're suggesting for me I want to go heavier on real estate I like real estate I mean when I was an adviser I know I dealt with people like that how do you how do you typically respond to situations like that be a me yeah yeah I mean it's GNA be some people are just they like the Hands-On and so it's just it depends on but is the handson going to prohibit them are they overallocated for their retirement plan do they have enough liquidity in the retirement plan so you know it's trying to help the client understand these are your wants this is what your risk tolerance is but this is what's prudent and is it the right mix okay yeah that's good uh I'm gonna have you bring your mic a little bit closer somebody commented they're having a little bit of a hard time sure she's very soft spoken guys she you know uh also uh I didn't mention this before but feel free to start populating questions uh I have a number of them here but we really want to hear from you guys uh with whatever questions you have so feel free to load them up uh I've got a feed going here so I'll make sure and I'll incorporate them uh as we go through this conversation so question same question for you I want to go heavier on real estate what do I do yeah so I it's funny because I had to go through this personally right I I was young and and thankfully had somebody that was really helping me out right and once I got my hands on real estate I was like what you just said I want more of this like I love this and I remember the first time I asked his name was Randy Randy can I get more and he actually took a different position that you that you did he looked at me as being overallocated towards that certain asset class and he was looking at basically the you know if you're looking at my total let's call it I don't know total category right I'd have certain percentage in stocks certain percentage in real estate and the percentage that we allocated towards real estate alone he felt like I was capped at for me it felt small right and I was young I I had the ability to kind of push maybe short-term risk out and I didn't need cash flow and I remember asking why can't I put more in this and he finally got to the point where he said I can't recommend you go further into a tangible asset it felt like it was more a requirement from him being a cfp than it was me wanting to go heavier and so once I figured that out then I kind of changed my outlook and it was more I want to go heavier in this what are the things I need to be considering if I do so and if something goes wrong what type of kind of position is that put me in so it almost moved into a maybe I was getting more involved with his guidance verse you tell me what to do and I'll do it if that makes sense um because we get asked this question all the time right people always say well how much should I invest constantly every time we're talking to an investor about coming in on one of our deals the question of how much should I put in we always have to look at them and say right we can't tell you because we know nothing about your situation and what's going on and you know you have to think about liquidity and exit and what are your needs talk to a financial advisor talk to talk to a professional and um a lot of them are just focused on return turn and how much money they can make for their dollars and not taking into account a lot of investment decisions should be based on risk not just reward or maybe even you know arguably a little bit more risk than reward because you know I always said if I double my money what really changes in my life it's great I'd be happy but am I really going to do anything significantly or monumentally different probably not but if my wealth got cut in half that's a bad day right um and so I think I think there's a lot of people out there that are just kind of looking at the at the returns and making an investment decision and we always have to say to them stop talk to an adviser and then come back to us with what you think you want to invest yeah that's right and look I what I'll add to it is I knew that I wasn't the normal if you want to call it Avatar like the way I was investing my risk tolerance kind of my goals I very quickly realized that's not the normal way to do it and so if you look at how I invest like I don't know if I'd recommend you building out your Investments the way I am it's it's very very lopsided it's business in real estate you know uh but I'm aware of what it is and I'm aware that there's potentially greater risk with that that's just that's that's the that's the path that I saw cleanest to get to where I want to go have you ever had a client tell you they don't want stocks or bonds they just want real estate I have a client right now that we're in the middle of divesting her entire apartment folio because she's got too much real estate and now she wants to liquidate it and enjoy her wealth in retirement and she's like look built this huge portfolio couple hundred million dollars wor the real estate and now I want to go enjoy my wealth and I want to liquidate it and I want to do so in the most tax efficient way but the only reason that they could do that much real estate is because they had significant cash so they didn't want stocks bonds they wanted cash in real estate but they built up their entire cash Reserve to afford that much real estate so again it comes down to the individual client it's not necessarily okay you have to have stocks or real estate or you have to have this much in stocks if you're going to have this much in real estate but if you're G to have that much in real estate you have to have some liquidity right right 100% uh I want to jump into accessibility uh the argument could be made that in investing in the stock market is readily available for way more people than investing in real estate uh what are your thoughts on that how much ises that play into your decision how do you find real estate opportunities for some of your clients that couldn't otherwise access it in fact one of the questions that came in was isn't real estate investing geographically dependent Us in La have no chance to invest in real estate even as high earners so what do you say to someone like that you know real estate is regional it always has been Regional Real Estate has never been you know this is the national answer or this is this is what's happening in real estate re real estate is a regional game always has been always will be um so it depends on whether you're talking about you know industrial or multifam I mean most of our investors are investing passive at this stage most of our in our clients are not actively looking to buy individual rental properties and manage them some are but most often they want to be passive especially as they get more towards pre-retirement retirement um becomes more important to be hands off and so a lot of times it's institutional multif family it's industrial warehouses it's um student housing and I'd say that most of the institutional private Equity um is focused on the sunb Belt areas that are high population growth High job growth that are affordable that um have a good business economic climate for buying real estate now there's the exception where you know there's they're not making any more land in California there's they're they're not opening it up for more development very often so it's usually Redevelopment or zoning or permitting and so there's different challenges and it becomes difficult to access unless you're going in as a passive investor with Partners yep uh Mikey uh liquidity and exit strategy is what this person was asking stocks can be bought and sold quickly providing High liquidity real estate on the other hand uh can take months if not sometimes years to sell given that how can real estate be considered a more advantageous investment well Christina kind of nailed it it it you cannot get your cash out easily and so you have to plan for things going wrong in your life knowing that if you need cash you can't always sell the asset to get it so it definitely takes more planning in my my perspective the barrier to entry you know question that you just asked her I would say is probably the the biggest challenge to real estate because it's not necessarily that you can't buy an apartment or even a house in today's you know landscape individually most people can't invest passively with companies like us so there's still a lot of Regulation where if you're not an accredited investor these opportunities aren't even available to you so I would say hopefully now that we saw that pass in the Congress the SEC will start adopting that in to where people can become accredit investors not based by income or net worth that might make this a little bit more uh accessible still doesn't change the liquidity issue though um you want to add something that I was G to say and there's there's there are some options now for non- accredited investors at least that have you know quarterly liquidity or you know lower requirements for income so at least there there is a few more options than there used to be it's getting there it's just the good stuff in my perspective isn't available yet it's like the the stuff that we're all excited about that's usually private offerings there's some regas out there some cool stuff but it's just far and few between um the question you asked how is Real Estate more it's where I agree with Christina it's I don't think it's one or nothing I've just looked at one the returns that I felt comfortable getting in real estate mixed with I'm not like an individual stock guy like I was not sitting around underwriting companies I was investing in funds and so I felt like I could beat the index on real estate but uh yeah the liquidity is a that's something you need to be mindful of you don't have it uh let's see here ah uh Christina real estate is tangible and you can touch it and you can see it stocks are way too abstract for me uh how can I go against the tangibility being able to touch something over a stock where I don't understand what makes it move you know it's interesting it's it's um it's also kind of goes like crypto you know there's you don't understand we haven't even opened those floodgates yet it's just you don't understand what drives crypto so you know there at least with real estate and with stocks you know there's fundamental analysis with with real estate you can do price to rent ratios you can do you know historical analysis what's the average price to rent ratio been are is this Market hitting a threshold that's never been able to support um what's happening with interest rates and you know debt financing in that market you can also look at the cap rates whereas with stocks there's a whole different set of fundamental analysis that can be done you can be looking at their their um Roe their their their cash flow projections their future cash flow discounted projections um you can look at high growth stocks and you might look at okay their their cash flow is not as good but you can look at their the price earnings ratios and earnings per share growth and what's been their um cash flow balance sheet look like so stocks are predictable with some fundamental analysis it's going to have a historical volatility to it that's going to be more so historically than real estate but they also it goes back to risk reward you know if you were to invest in the S&P 500 Index in January of 2008 and going through yesterday's close of business you'd be up to 183% well if you were to invest in the Vanguard index for Real Estate you'd be up 31% so it goes back to risk reward and so stocks might be more volatile it took 26 months if you invested at the peak of the stock market before the the Great Recession it took 26 months to fully recover if you stayed invested now that required a lot of discipline to to stay invested and not sell but if you invested in the real estate index it took 52 months to recover it's almost twice as long so just goes back to you know what your comfort level is with volatility risk reward but there is analysis that can be done on tangible Blue Chip stocks I mean shares of Apple shares of Microsoft shares of Google shares of Amazon we know what the historical financials are we know what their um fundamentals are and you can look at a at an entry point and go okay that's my risk that's my reward just like you can with real estate so I do think that there are tangibles even though it's not a hard asset there's still still things that are tangible in the analysis that don't exist with something like a crypto yeah the crypto one well hold off on that for another 10 or 15 minutes I want to stick on the discipline uh topic that you brought up though because uh I remember as a financial adviser when markets were going into you know a volatile scenario there was a lot of people we had to talk off the ledge you know remind them we came up with an allocation there was a game plan here we want to make sure that we don't let emotions Drive our decisions and some of them listen and a lot of them you know unfortunately didn't uh we have that in the real estate world too where you know some projects construction gets delayed or we go over budget or perhaps it didn't start on time and people call and say I want to get out this is not what I you know invested in what's going on and so we kind of have to you know go through that process are you finding that with the wealth of information that's out there is question for like I would say in the real estate side and the stock in the financial Market side do you think that the amount of information that's out there is making investors more emotional or less emotional I think the real time amount of um information that's available is making investors more emotional because you're getting information fed at you 247 from multiple different sources and it's just constantly there so unless you're able to remove some emotion with your Investments and go okay this is my my long-term bucket of money whether it be real estate whether it be stocks they both require discipline and you to remove some emotion from your investment I mean you have to I think every investment has to be looked at as mostly longterm if you're willing to part money whether it be in the stock market or whether it be in real estate you have to have a Time Horizon that's going to handle that investment Ian unless you're investing in bonds Treasures short-term fixed in you know fixed income Investments stocks and real estate both come with risk in a Time Horizon yeah 100% what do you say to the this person phras this question if I want to get into real estate and I want to exit in five years what do I do how do I do real estate in the short term timing of that's pretty pretty good actually well yeah you know what I actually don't like real estate on the short term I would tell you don't do real estate you know it it like here's the thing about real estate real estate done well is very boring and the return is actually very small if you're looking at like buying stuff all cash right the returns are kind of comparable to what like a bond would be it's not great it's although the investment is nothing like a bond No but I'm just saying if you're looking at at the return profile they're they're similar in some regards right it's debt that makes real estate somewhat exciting from a return standpoint right but there's different kind of ways to attack it most people look at the greatest return as a flip right I'm going to put my money in I'm going to get out of this thing in nine months I'm going to double my money right that's like where I think people are the most excited what I don't like about that is every single time you sell it you're having to find something new a new job right so I actually like the idea of buying or building real estate and owning it for as long as you can and then you know pulling Cash Out along the way so I would say no if you're trying to get in and out in real estate don't pick real estate pick something else well then then the tax consequences if you're a California resident are significant I mean if you if you figure you know 35% cap gains especially if it's short term it's just going to be not worth I mean if it's shortterm you'd be looking at 53% right yep in a highest tax bracket in California so Y shortterm is typically not advised for Real Estate yeah I was uh I I met this guy three weeks ago right he's doing a new project in West like a big one right 700 units I think he's probably worth 20 billion right big big player and he's talking to me he's like what do you do telling him about my business and he goes what type of real estate do you do though I'm telling him multif family storage and he goes no no no what how how do you do it and I was like look we build it we stabilize it we refy and we hold it he goes how long do you hold it I'm like we typically hold for a long time and he goes you're a smart one I'm like what do you mean and he goes my dad taught me that when you buy real estate you never sell it you just go to the bank and they give you money in replacement of equity I like Okay so look there's a there's a legacy strategy with real estate and then there's I think what a lot of the newcomers get hung up on which is giving me my money quick that's not how we do it you can go day trade for that right or you can you know yeah want to talk about options trading now too get that uh all right Mikey what is the work quote unquote uh to better rewards for real estate for example minimal minimal work can expect minimal gains or a big long deal that takes a lot more work development Etc or lot of work on an older property equals better returns okay I think I know what he's saying um yeah look if you put a little bit of maybe the lowest amount of work which is probably also going to mean the lowest amount of risk is buying a stabilized property with very low leverage right you're buying something at a five cap maybe you get natural appreciation you walk away with this thing what 7 8% return that's probably your like core core Plus type of return then the heavier lift you do in theory the greater the risk and what should see the greater the return um if you're going to do a value ad right now like taking something old and renovating it I don't know what do you think 12% irr maybe 133% irr depends on my double digits yeah that's the other thing if you're gonna well look you're doing leverage you're still taking out Bridge debt you're still taking out pretty you know pretty good risk so I would say to keep it simple your like core Plus very low leverage like trophy style assets you're you're looking at single digit a light you know light value ad you're going to maybe get around nine start doing some value ad you're going to touch 1213 you start developing you should see High Teens maybe even touching 20s I would say what I would uh just add to that comment or question uh that came in is that uh what we always tell people who uh are looking at real estate when they ask you know similar questions to this is look two variables one if you know how to find the deal and two you're willing to put in the time because it is a lot of time that's often very underestimated with real estate you have the potential of making great money but do you know what you're looking at and do you know how much do you have the capability to put in the time necessary to make it happen if you look at real estate as a passive investment you have to look at it through a different lens than an active investment so that's one of the things that uh you want to make sure that you're very mindful of that I think a lot of people you know their their minds they see people that are flipping homes that are coming into you know you know five six digits on some Deals they don't realize there's a tremendous amount of work those guys are doing on those property they're there you know 40 60 hours a week right somebody who's working full-time you know it's a lot harder for them to make that that happen and so those returns aren't necessarily readily available for everybody especially with labor cost and and and the cost of materials postco you know putting the capital in unless your job is construction and you can cover some of the labor cost I mean it's very Capital intensive to do you know a capex and get the return yeah and then think about all the time and money it takes before I mean just think about entitlements right this is years there's Capital At Risk there's a lot that goes into developing real estate so uh I I would say that's you know building real estate in California that's the hardest yeah I mean let's shamelessly plug the fact that we closed on a property today yeah we closed today on proper Clos today on a property in Ventura and we've been working on it for at least a year and a half yeah right and we probably have another year estimated until we start construction and then maybe another year and a half to two years of constru I mean you're talking about five years which is fast which is fast which is fast yeah the person the person that we bought our last proper off with seven and a half years in on his entitlement yeah I used to work for the largest developer and entitlement zoning company in North America so they owned the most amount of land they were the largest land owner in most you know Dallas Fort Worth area Austin Texas area Phoenix area um they had a little bit in the Inland Empire but they didn't touch California mostly because of the zoning and entitlement risks and time frame and it requires a lot of political you know influence it requires a lot of time Capital but I'd say that the average project in a in a in a prog growth Market is g to take four to five years of just zoning and entitlements so it's it's a very time intensive investment if you're going to do zoning entitlements it historically has the greatest lift in return but it takes the most amount of time right um Mikey asked me this question when we did uh our uh pinh High Golf episode and I want to redirect the question over to you why is it that so few financial advisers are allocating their clients dollars into real estate obviously you had indicated that you do it so you're kind of an exception to the rule but as I mentioned before there seems to be an overwhelming amount of financial advisers that are not well you can add to it you can to a total of Alternatives it's private Equity private real estate private credit it's the whole gamut of alts you just don't see a lot of them do it so why do you think that the financial advisor are so reluctant to participate in that for their clients to the the honest truth is that um most wirehouse advisors big Banks um you know that would be you know the ubs's the Morgans the wells the um the insurance companies the Edward Jones the um fidelities of the world those advisers that or those even that work at Vanguard you know they are not authorized to sell any alternative Investments that aren't authorized by the company so if it's not making the company money in the big bank it's not making BFA you know or Merill money it's not something that they're authorized to sell and unfortunately in the wirehouse world you have the least amount of cfp advisers you know only 15% of the industry roughly 15 to 20 is a certified financial planner that is a fiduciary and lot of Education that's a lot and and then not only are they held to a higher fiduciary standard where they're actually looking at things holistically and comprehensively at the individual's level then you have to look at okay are they actually independent are they beholden to a employer that there's an inherent conflict of interest if you're an employee based financial advisor you've got conflicts of interest because you're incentive to sell what's on the Shelf of the company and so they also unfortunately the average advisor's tenure in the industry at the big wirehouses is three years or less so they're managing to the least common denominator and they're not managing in the best interest of the average client so that's the honest truth is that most financial advisers have an inherent conflict of interest are not independent are not fiduciaries and are not looking at the ability to bring alternatives to the table that's a good answer it's a great very good answer uh there is somebody that asked the question I just want to make sure that uh we answered your question because I saw it trickle in as I think we were talking about it when you say time is that twofold one length of time into how many hours or days working on a project uh we talked a little bit about that as we talked through entitlements but if there's more to that that you wanted to have answered uh throw another question on there and we'll get to it uh Mikey when we invest with you after 10 years is this an investor that's currently with us I don't know when we invest with after 10 years is up how do you pay out if you are holding the properties and not selling them okay good question um what we typically do is something called a tender offering and so our company will put up uh a certain amount of dollars or a certain amount of shares that we will buy from our investors at market value so that gives some investors the choice to uh get money and and you know liquidate their investment and it gives others the ability to carry forward without having to sell a property so that's typically what we do we try to do it every five years sometimes it's a little bit sooner sometimes a little bit uh longer but that that look that's the when you're when you're of the mindset of you want to hold real estate for a long time imagine pitching an investor and going we're going to hold this forever they're like so I'm not getting any money I'm just watching the value of my share price go up without realizing anything it's it's a harder sell um and so what we found is that allows us to kind of capture The Best of Both Worlds right and and oh go ahead I say and then are you guys helping them facilitate you know a 1031 exchange or anything like that no because what we what we typically do in the uh a lot of our offerings are set up as funds so in that they're basically especially the reads they're purchasing to keep it simple they're not able to exchange because they're not on title yeah okay not not a tenant in common orst yeah correct on some of our private offerings that the we haven't done a tender offering for our like individual sbbs no not yet yeah um Christina how do I uh responsibly search interview and find a financial adviser what's the process of finding the right person I think first and foremost finding someone that's independent um that is not you know with inherent conflicts of interest someone that has a certified financial planner designation I think is important um to make sure that they have a well-rounded understanding of how to analyze an entire Financial picture not just sell Investments or pick Investments can you expand on that actually because a lot of people say Okay so the cfp designation I mean it comes with the state planning insurance if you want it goes over um insurance coverage um it goes over income tax planning business owner planning retirement plans you know all different types of retirement plans understand understanding stock options understanding your income distribution rate that you're going to need what your um taxes are going to be on all your different income sources and so it takes a look at all those aspects as well as what's your estate value going to be because real estate's a big component of your estate what's the growth rate assigned to that and are you going to eventually have an estate tax problem so you have to understand all of those aspects to understand what investments go in the right spot of your financial plan making sure that you have the right asset and the right bucket and so you want to have a certified financial planner that understands all that um and that has experience in working with what your needs are so if you're a business owner does that advisor deal with business owners do they do income tax planning do I think what I also like to go back to is it you want an advisor that is going to work with your estate planning attorney and your CPA it's the three-legged stool if you don't have all three legs communicating there's going to be a gap in your plan So eventually you're going to have an income tax implication because your financial adviser wasn't talking to your CPA or you're gonna have an estate tax implication because your you know financial adviser wasn't coordinating with your your estate plan or something's not properly inside your trust that should be so that's really where I think picking the right advisor is making sure that they understand and are equipped to handle what your needs are yeah I often give uh the analogy that your cfp is like your primary uh physician right corre they have an understanding of all the aspects they know enough about your estate plan they know enough about insurance they know enough about business continuity they know enough to have the conversation and then when it gets time to you know put like a tangible plan in place they are if they're good going out to the attorney to get it done and then talking to the accountant and making sure that what the accountant is doing and what the attorney is doing is both in the best interest at the client that they're speak because the attorneys and CPAs don't speak the same language right but the CFB it just like a primary medical physician can you know understand what a neurologist is looking at or a cardiologist is looking at to a certain extent and that's really the value and at the end of the day investment strategy and deploying your dollars is only one aspect of a financial plan right but if you're looking at an adviser who all they're doing is managing your money that's all that they're doing and so that's a that's a decision that you really want to be mindful of that's exactly right you need you need a quarterback that's going to be your primary physician you don't need 10 primary physicians you need one that understands all the medications involved and you need to make sure that they're then you know bringing in the experts as needed um and I don't want to say that you know there aren't good advantages to you know a wirehouse adviser if you're just getting started and investing by all means just start investing there's you know the it's the eighth wonder of the world is compound interest so don't wait if if it's um some advisers have you know minimums to hit and maybe you can't quite get to that you know independent cfp level that you're trying to get to today just start and the a lot of the the big wirehouses do have good foundational entry points to get started so I don't want to um exclude them from just get started investing so I think both of those were phenomenal answers C can you fairly say that with how good rwood ADV visors are you could actually skip the warehouses and go Robo advisor or CFB if you're just starting yeah Robo is fine just get start putting money away um but once you I guess the question I'm asking asking now I'm I'm gonna run this thing uh if you're getting started why not go Robo advisory until you get to the point of just getting a a you know going to somebody like you guys or ra with like actual CFB why why do the wirehouse at that point do you still need to do that it depends on what your needs are you know do you have any tax planning at all all like you know Ira versus Roth IRA a little bit of analysis on what your tax situation is you're not going to get that from a robo fair but you you'd argue that when you're just getting started you're not really getting that any he's asking because a lot of the that we get is hey I have $10,000 what do I do how do I start of our CL our the people that follow us right I would say their goal they want to become financially free a lot of them are getting started and it's like a and that's the most common question I have 10 $1,000 what should I do that's who I'm thinking of yeah yeah um on that note speaking of like entry level versus seasoned investor uh this was seems like it was more of a comment but I'm going to turn it into a question for you Christina uh access to a financial advisor seems very hard to get or at least getting a good financial advisor if you don't have enough money to invest if you have a million dollar it's easy to find but if your entry is let's say 100 or $300,000 it's very hard to find somebody who's willing to work with a lower minimum balance and making basically uh finding somebody who's going to be your Advocate what would you recommend for somebody who's in that position I would say some advisors that do have you know million dollar minimums much like we do um we will help the next gen so if it's a if it's a family member of one of our existing clients so maybe look to a family member you know will their advisor give you access because you're part of that family um because then you get access to really good advisers and um and at a lower minimum and then there are some advisers that have gone to a subscription model so maybe you're you don't have the the dollar amount yet to invest but you've got high income and you're on a path to start building a pretty quick Nest to where you can do real estate you can do stocks you can build out a portfolio there are some advisers there that that will do that on a subscription base where you don't have to meet their minimum they might charge a fee to put a whole plan together for you um and those are worth seeking out too what about um going to a financial adviser who's just getting started it was only a couple years in the business where they have a senior advisor who's got the million doll minimum that's kind of overseeing and supervising them is that a bad route I would say generally not just you know again it just depends on what your needs are if you're a business owner um and you're you don't have that million dollar minimum but you've got a lot of business tax planning needs yeah you might need that senior advisor where you maybe need to pay a a flat fee to get proper advice we don't have the assets to manage but some advisers that are independent can do things on a flat fee basis and just put a plan together so it depends yeah so one of the questions would be also like how are you compensated right to a financial visor between you know trades versus uh actual financial planning Consulting so on and so forth uh Global factors how do Global factors affect real estate and stock market Investments differently should investors consider International diversification you want me to start yeah um man uh that's actually a really good question uh there's a couple factors like when you look does does the global economy affect real estate as much of this as the stock market i' probably argue not as much but it affects it it it definitely does like even looking at something right now like let's say let's use America for example we're on a like America First build everything here you're seeing like a big push back to like well you're not really supposed to call it nationalism but it's it it's a we're building here that's more expensive right that's inflationary and so when you start seeing stuff like that and how the global economy's impacted inflation inflation affects real estate now there's some parts of inflation that real estate likes which is whenever there's inflation rents go up right rents going up does well for for Real Estate also drives up cost to build and then I would say the secondary part is when there's inflation you're typically going to see interest rates ramp up like we just saw two years ago and if interest rates come up you're going to see cap rates come up as well which brings values down so it it impacts it for sure it's it's just different I would say when news breaks you're first going to see the market impacted it's quicker to impact real estate slow that doesn't always mean it's good right it means that it's usually delayed so prices are going to be more expensive for longer than they need to be um but I I would probably say not as much I don't know if how you feel about that it goes back to real estate being Regional because you look at you know the e CB and the European Central Bank was much slower to hike interest rates and so the interest rate environment there for Lending was I mean they were negative interest rates they were paying you to go get a mortgage over in Europe so it's just very different and then a lot of institutional real estate companies took advantage of the interest rate environment buying in Dublin because a lot of the um legislation that was also great for Americans to do business and American companies to do business in Dublin that became a real competitor in the global economy and so they were buying up office space in Dublin and so it just depends on what asset class what region what's what's happening what's happening with taxes what's happening with um you know tax incentives what's happening with interest rates and real estate very Regional um even have to look at um certain parts of Phoenix industrial for example the Phoenix Market the industrial Market they they did um foreign trade zones ftz where there was anything that was on the rail line they didn't have all kinds of taxes they eliminated all kinds of state taxes trade taxes tariffs and so that drove up Industrial in that market so you can see that happening International and domestic and it all just comes back to regionality that's right of real estate and then when it comes to the stock market you know International I think that everyone's made the argument of they're cheaper they're less expensive we've heard that argument for two decades and there might be two years where International stocks outperform domestic it just doesn't happen very often um not to say that you shouldn't have international stocks in your portfolio because there's some big company names out there that International stocks tend to pay a better dividend than the us but I would say overwhelmingly we have a domestic bias with stocks because they're just hasn't been the risk return necessarily to go heavy International yeah yeah look I think to add on that we don't do real estate outside of America it's like it's fragmented and that's the kind of the good part but I understand the laws here like building real estate is not easy and so I don't know I think as you get bigger you start playing more of the global game for firms our size it not so much right all right I want to move into tax oh okay I hate taxes good I hate taxes yeah I don't like taxes I hate taxes that's not the best way I hate taxes and I never want to pay them again how can I invest in stocks and get the same tax benefits I get in real estate I think that um with stocks it's important to have an adviser that is doing tax loss harvesting so you know I've heard the argument from some people in the past if I don't want to have all my eggs in one basket I've got multiple advisers well that's not having all your eggs in one basket having all your eggs in one basket is having shares of apple with three advisers that the the right hand doesn't know what the left hand's doing and they're you know canceling each other out with wash sales to where you're incurring more taxes so you really need one advisor that is doing proper tax planning looking at your overall tax situation and your stock portfolio and going okay do you need dividends do you need taxfree bonds maybe you're in a high tax bracket so you might be able to benefit from municipal bonds that your tax equ equivalent yield is higher so liquid Investments whether it be stocks or bonds have different tax benefits there's also tax deferral strategies and there's also basis management when you're dealing with estate planning so you can get tax efficiency in stock portfolios if you have the right advisor uh I remember uh when I was advising and even now uh at commu when I talk to investors that are coming in that are so super focused on tax I'm finding myself always saying like do not let the tax Tail Wag the Dog corre right do not let tax be the sole decision-making Factor behind where you're going to put your dollars because that is a very uh uh single lens focus and when you do that you're missing other risk factors that part that you know could expose your dollars into the deal uh we have five minutes left uh I want to be mindful of everybody's time and obviously Christina's time so if you haven't yet asked your question uh make sure you do so right now uh I have two in the queue so we have room to probably take on a couple more after that uh I haven't read this yet so I don't know who it's going to but let me read it and we'll go from there I have 200,000 liquid cash right now we'll have 50 to 100,000 more each year after expenses what's the best way to get tax minimization and planning where should I start do not let the tax tail whack the but be tax efficient yeah definitely get an advisor you know a a financial adviser and a CPA that knows what they're doing because then you can figure out where should I invest what liquidity do you need and where do you want to be tax efficient today but also where are you going to be tax efficient five years from now if you're earning that much per year you know can you put some things aside that are going to be more tax efficient for you whether it be in real estate or other tax deferral strategies or qualified plans you know whether it be a 401k or maxing a Roth 401k okay you know those are all things that need to be analyzed it's not a do this yeah and if you have an and if you if you're looking for a CPA to help you with the tax efficiency I would say find out if that CPA is just you know running W2 tax returns or do they work with business owners right because the tax code is what 77,000 pages long there's no CPA that knows everything when it comes to taxes so just like with anything else you want to find the expert that's in that field and if you have that CPA and you don't have a fin financial advisor ask your CPA for a referral you know ask the family members that you know but you want to make sure that you're building a team around you between legal and tax and and uh investment advice that's going to take a look at all aspects and that and that's going to be really important because uh the part that I neglected to mention on this question was he said I'm a business owner so that made me think about that part of it yeah um okay let's see here um you touched on this earlier but I want to I want to kind of come back to it the resiliency of the stock market versus Real Estate difference or no difference timing and regionality because again if you had an investor that picked up real estate you know in 2009 through 2011 their timing was impeccable depending on what they're what asset class they're buying and where but then again you go someone that rode through the peak you know 08 07 and rode through that it took them twice as long if not longer depending on what real estate market they're in to recover and so it just goes back to what your needs are and do you have what your time Horizon is for that risk reward relationship right yeah well you touched on it's it's the asset class you invested it's a big reason why we invest in multif family and storage it's what you just brought up it's how it reacts to downturns uh and I think it's it's it's important to note too there are so many different ways to invest into real estate right you can invest in real estate through reats that's very different than what we're doing and then even with what we're doing there's different asset classes and different strategies um you know look storage is is very resilient it's known for being a resilient uh asset through downturns multif family's done pretty well if you're an office right now you are like dying it's just it's it's getting smoked and I don't think there's a way out for at least a decade so that's going to be an example of a very painful one um I would say probably more than anything just bring it back to the beginning be in it for the long term right if you're buying an asset that you know is going to have demand 10 years from now don't put any options on the table that are going to force to sell if you don't have to sell your asset great sit on the cash flow and and wait for cap rat to compress before you sell it's the people that are forced to sell in times that are not ideal or the ones that have a hard time if real estate get if uh if the real estate you invest in gives you cash flow is liquidity all that important yes and all I mean I have a perfect client that uh is an example they bought a multif family apartment building Class A in Denver great high growth Market solid cash flow and then you have a 4% property tax hike that they're now having to appeal and then you also have a 60% increase in insurance and so their cash flow got cut in half 50% cut and so if you don't have liquidity and income sources elsewhere to complement that that's a real hit to the client so and the last thing you want to do is sell just to create liquidity in that situation correct because it's still a Class A right building with 94% occupancy that's going to continue to appreciate we're not talking about the value going down we're talking about the cash flow going down and so it's just going to take time to bring that cash flow back up to where you can do the right rent increases to pass some of those costs on to the tenants and so you it's again it's a tradeoff of just make sure that you're not forced into a liquidity you know a fire sale because you need liquidity yep all right last question storage versus multif family now okay that's okay look storage has been so good to me I can't like storage has been great um and we have a storage portfolio like there's opportunity how convenient but I'm going to say a but here if you're asking me what I believe is the greatest opportunity as we speak I think there's a greater opportunity for multif family right now why because coming out of the financial crisis we sto building I to put it simply like if you look at like 2000 to 2006 200 we were on fire we were building so much housing right financial crisis hits and it took us almost 10 years to even get close to what we were building that lasted about a year and then it fell off a cliff again so you have so many markets where the demand is so much greater than the supply which has created one a housing crisis to probably an outcry from residents that they will never be able to afford housing the next generation is you know I think their Outlook is Bleak and because of that you know anytime you can solve problems you get to make money that's at least my perspective so when you're looking at markets where they're so off Kilted you you could make a pretty safe case that you're going to lease up you're going to get to a very high occupancy and if the supply doesn't meet demand you're going to continue to see rents and appreciation grow storage in a lot of markets is saturated still it it doesn't mean there's not opportunity there is but if you look at the amount of storage deals we do versus multif family which deals do we do more ofy family and then I would say the other part is cities are not very excited about storage they never really have been but if you go all the way down to like the city council members right they're hearing from residents we need housing so now you have a political win or an incentive put on the table to the council members to put more housing on board right so in a lot of cities they're basically you know uh rezoning or creating new land use uh designations that are all mixed use or multif family and they're out zoning storage so you can make the argument that 10 years from now when you see population growth and housing growth and storage is not keeping up you're going to see what you're seeing right now in storage a decade from now you can make that thesis but dude housing is that's the one in my perspective all right well there you go you guys got it uh it is put a Twist on that both are very I love both asset classes because they're very recession resistant especially if you're in the right growth markets right uh it is 502 so uh we're going to be closing this out thank you guys so much for joining us again uh a lot of investment Financial conversation all intended as Educational Tools for you to take back study on uh please consult with a professional before making any decision none of what we discussed today should be construed as investment advice and not for you guys to go ahead and act on it uh if you have questions uh for Lindsay how can uh for Lindsay and lindsy and Christina's group how can they find you we're gonna put a link in the when this video goes out great so link will be available if you want to reach out to her and have a conversation with her or just reach out to us and we'll facilitate an introduction thank you guys so much for joining thank you for joining us and have a great rest of your day e e e e e e e e e e