Today, my guest is Mark Shuler. Mark Shuler RA is a licensed architect in the states of Washington and Texas with more than 35 years of professional experience as an architect, engineer, business owner and real estate investor as president of SGRE investments, Mark pursues value add opportunities that leverage his professional background and capitalize on his skill sets as an architect and real estate investor, and in just a minute, we're going to speak with Mark Schuler about the reasons why multifamily value add investing make a great investment strategy.
https://www.linkedin.com/in/shulerarchitecture/
J Darrin Gross
So if you're willing, I'd like to ask you. Mark Shuler, what is the BIGGEST RISK?
Mark Shuler
I have a pat answer for that. The biggest risk to real estate is government.
That's what I was alluding to. And beginning of this conversation, the West Coast Seattle is as Uber blue as it gets. You have a lot of well meaning city councils and county councils trying to address significant housing crisis that exists throughout the entire country right now. And they, rather than letting the markets Mark operate efficiently. They get in there and they they throw roadblocks in it, and we can't produce enough housing as a consequence, then we have a supply problem, and they enact rent control and other pieces of legislation that make the operation of real estate even more difficult. I That's why I left Seattle. I can't do it here anymore, specifically because of that. So that's one thing you know. You've got to look at the the risk posed by your local government, and see if that you know, if you can develop hedges against that risk. I when I first got into the business, I could do that in western Washington, but they it just became apparent after a while, there was so much legislation being layered on that the hedges were disappearing left and right, and so I made the choice that I couldn't do it here anymore. I had to find marketplaces that were more fair. And also, I will say this is a political side. I mean most politicians, politicize housing as if it's a fight between corporate interests and you know, you know tenants who don't have any control over their lives. You know, that's the nature of renting. Most operators I know are very hard working people and are doing the best they can in a pretty oppressive regulatory environment. There's no cabal of operators out there colluding and setting rents. And Berkeley just learned a big ass lesson about this where they. They tried to sue. Who was it? You know, that online platform, real page, claiming that real page was setting rent prices in the marketplace, and they were like taking them down real page. Those are, those are some tough guys, and they did not back down from a fight. Sued the shit out of Berkeley. Berkeley tucked tail and back down because they knew they were going to lose and lose big. So this issue is very emotional. It gets very politicized. It plays well on an election cycle, and so I just get tired of it. I just want to do my job. I really want to do my job and not have this white noise distraction that I have to deal with. But unfortunately, that's what that's the biggest risk I see in real estate right now. Then you you layer on top of that, this the politics in general, what I what really concerns me. Now, in addition to that, the other big risk is, this is just our political environment. It's so but, you know, bifurcated, and it's so politicized and the conversations are so extreme, there's no more middle ground, and there are only two or three things that control our entire economy, oil and bonds. And you know, if it seems like every time Trump opens his mouth about tariffs, the bond market Spike 25 basis points, I was in the middle of a refi three weeks ago, and he, he kind of went on his tariff tantrum again, cost me $250,000 that's, that's the impact bond rates have on, you know, the cost of doing business. I was in the middle of refi. I had to do nothing but suck it up and, you know, sign that loan in one day, I lost $250,000 on a refund. So government is a, you know, housing is one of the most nuanced and market driven things I can think of. It responds to supply and demand. The players are in it, who are in it, who are really good their market, they're they're watching this all the time. And contrary to popular belief, the margins in real estate are thin. They're not that great. So if the market swings wildly like that, how do you how do you do business? You can't make you can't plan for 612, 18 months down the road, which is that's the long, the length of time we think about. We're thinking in terms of multiple years cycles. And when you have this volatility in marketplace, how do you make business plans? That is in large part why we have such a housing crisis in this country that and the cost of labor, the cost of materials, has spiked dramatically. It's just more expensive to put up housing. But then you layer on all this government nonsense, this is really hard to build housing, and that's and as a consequence, supply, demand being what it is, price of housing goes up, rents go up. I don't know a developer out there that would not love to build affordable housing, but they can't afford to do so. That's my soapbox.
https://www.linkedin.com/in/shulerarchitecture/
Today, my guest is Caleb. Christopher Caleb is the founder of Creative TC, DOS Guard and Creative Title Company. He's a cyber security expert specializing in creative finance, risk management and ethical business building, and in just a minute, we're going to speak with Caleb about Creative Finance Mechanics.
J Darrin Gross
I'd like to ask you, Caleb, Christopher, what is the BIGGEST RISK?
Caleb Christopher
I'm going to answer with a categorical answer. I think the biggest risk is any risk that you either refuse or fail to identify and seek to address, like you talked about, what bucket can I put it in? Can I transfer it or do I have to accept it? But the ones where you don't have the eyes wide open, the ones that catch you unawares, are the biggest risks. So I think the biggest risk comes from a reluctance to engage either JV partners or consultants or attorneys or any general education, leaving yourself open to be blindsided by something you didn't see coming.
That is very well said. Eyes wide open and make sure you understand the risk. That's good. Caleb, where can listeners go if they'd like to learn more or connect with you?
Today, my guest is George Thomas. George Thomas is the founder of Financial Freedom Builders, an organization helping families build confidence with money. And in just a minute, we're going to speak with George Thomas about Money and Wealth Building Concepts.
https://www.thefinancialconstructor.com/
J Darrin Gross
If you're willing, I'd like to ask you, George Thomas, What is the BIGGEST RISK?
George Thomas
By far, the best the biggest risk, is not investing. You know, to darrin's point about, can you avoid it? You could try to avoid it. You can put it into the savings account, and you could, you know, avoid the market because you're worried about what could happen with your money. You could, but you run the risk of having to work tirelessly and getting nowhere the rest of your life. So that that so that moves that, that moves that away. The second piece is, is, can you? Can you mitigate it in some regards? So you, you can do things to help you mitigate some by understanding what the strategies are when it comes to investing, right? Does carry risk? Yes, you could be in the wrong investment, and it could turn into a true disaster. So what you do there to mitigate is to get the education you need to be able to use what you know is necessary for you to get to your end destination, which is financial freedom. And then you talked about transferring risk. Transferring risk is, is you can transfer risk through investing. If you enter strong, long standing companies at discounted prices. If you can do that, all strong companies eventually, although they go on sale, they do rebound and then continue upward, because they are true companies that are profitable revenue generating with significant shareholder interest. So if you can get strong blue chip companies at a discount and then enter your investing, you're transferring the risk back to the company to help to for them to continue to perform and be those companies. So if you're into Microsoft, your videos and all these other ones, again, this is just examples, not financial advice, but if you can find these companies at a discount that can help you transfer some of the risk and concerns you may have about investing, transfer it back to the company that you're investing into for them to continue to perform. So the greatest risk is not investing, because if you don't invest, how exactly are you planning to get to your end destination with your financial goals for you and your family and most people that don't invest end up working tirelessly and long and missing out on important things that were important in their life, and if they would have just had just a little more of their most valuable asset time, they would have been able to do and enjoy life the way that they ultimately would have. So that, to me, is a great risk and not one I'm worth taking. So we got into investing.
https://www.thefinancialconstructor.com/
Today, my guest is Nick Deangelo. Nick Deangelo is known as the Fixed Income Goat in real estate circles, with a $206 million plus portfolio, and in just a minute, we're going to speak with Nick Deangelo about fixed income.
J Darrin Gross
I'd like to ask you, Nick Deangelo, what is the BIGGEST RISK?
Nic Deangelo
The biggest risk, I'll give you the biggest front side and the biggest backside. Biggest front side is always going to be due diligence on our side, we have beaten that to death. We have overlaid many economic factors. Our due diligence confidence is at an all time high. But what I see in the marketplace is many people not doing the due diligence to a real, true conservative estimate of outcomes that is the biggest risk. And we saw that the last few years. And we see the back end of what that looks like, the optimistic, the rosy projections, things like that, and that's consistently what we see. And then on the back end, let's talk portfolio strategy. We have over 600 mortgages. We got, you know what, 19 syndications that we've done, the number one risk that I've seen on that side is not thinking long term. I know I beat that to death, but in the same vein of the underwriting and being over rosy with your projections and not really looking at the real numbers and the real economic data on the back end of a portfolio, if you're not thinking long term, and you're not thinking. How these pieces come together, and you're not thinking about how the management performs consistently over a long period of time, then you see shortcuts evolve. You see bad systems evolve. You see all kinds of shorter term thinking that lead to much bigger, snowballed problems later on. So if people are heavy on their due diligence on the front end and know exactly what they're trying to target and whether or not something is specifically in their Buy Box or not, and how to get that information effectively. That's one piece. And then on the back end, it's building everything for stress testing over a long period of time, thinking about a portfolio in that same vein. So if you're doing those two things, I think you're going to be very, very, very well hedged against stress and risk in the future.
Today, my guest is Cary Prejean. Cary Prejean, is the founder of Strategic Business Advisors LLC. Cary vision is to work with business owners to dramatically improve cash flow and profits, business autonomy and long term strategic planning. And in just a minute, we're going to speak with Cary Prejean about maximizing profits and cash flow.
https://strategicbusinessadvisors.org/
J Darrin Gross
I would like to ask you, Cary Prejean, what is the BIGGEST RISK?.
Cary Prejean
You talk about big risk for business owners,
J Darrin Gross
yeah, however you want to, however you want to identify it.
Cary Prejean
Well, I mean, that that's why I deal with business owners, right? The biggest risk for them is, is not paying attention. You know, not paying to get lost in the weeds, not paying attention. What's out there, not. Not, not anticipating some threat, as you call it, and they don't know they have they haven't even thought about it. They haven't even seen it. So there's no mitigating it. There's no transferring it. There's no navigating around it. It just hits you like an iceberg. You know, you have to pay attention to that kind of stuff, and that's why it's good to have, as you said, you know, you come in and you you take a very risk, Central, centric approach to what risk are out there, and what can you mitigate? What can you alleviate? What do you what can you transfer? I think that's a I've never heard it discussed that way, but I like the approach. So if you're not, if you're not paying attention to everything that's out there, it's not just insurable risk, but other risks that are out there, you're going to get blindsided. You know, you fly blind. If you fly blind, you will hit something eventually.
https://strategicbusinessadvisors.org/