GI20: Over $110 Million Invested in U.S Real Estate in 3.5 Years with David Thompson

GI20: Over $110 Million Invested in U.S Real Estate in 3.5 Years with David Thompson

David has strong experiences in real estate investing in both domestic and international projects covering single-family, multi-family and land development. He earned his MBA in finance from Thunderbird School of Global Management, and graduated summa cum laude with a B.A. degree from Arizona State University. David spent over 20 years in high-tech management positions at Dell, AT&T, and Lucent Technologies. At Lucent he managed a $2.5B investment portfolio and raised over $1B in funds for acquisitions.

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Announcer: Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles: Welcome to another episode of the Global Investors Podcast. I’m your host, Charles Carillo. Today we have David Thompson. David spent over 20 years in high tech management positions at Dell, A&T and managed a two and a half billion dollar investment portfolio at Lucent Technologies, also raising $1 billion for acquisitions. Just over three years ago, David left the corporate world and started Thompson Investing, which offers the investors the opportunity to invest in apartment communities, mobile home parks and self-storage complexes. David recently has surpassed $110 million in investor capital, invested in 30 plus syndication deals and once raised $4 million in 48 hours, which is a story all to his zone, I imagine. But, thanks so much for being on the show today, David.

David: Charles, thanks for having me. I appreciate it. Yeah, good to be here.

Charles: Yeah, it’s great to have someone with your expertise in investing in so many different asset classes. Cause normally you’ll get someone that specializes in just one of them. And I briefly touched on your professional background, but can you explain a little bit more prior to your corporate career? before you launch Thompson Investing,

David: Sure. Right. I mean, I graduated school, I went into the the corporate world and worked in a variety of management roles in high tech and landed you know, across the country from Los Angeles, New Jersey, North Carolina, came back down here in 97 in Austin. And it felt real comfortable, like an old shoe. I liked the environment, the weather and things. I was from Phoenix, so I enjoyed being back South and raise a family here. We got here in 97, so about, up to about 2015 and worked for Dell down here as my last job. And then as like as a kid got a little older one went to just recently graduate from UT and one’s a senior in high school. They were a lot more independent. I didn’t need me as much. And I was getting a little bit restless. I had invested in some single family homes here in Austin that ended up being a really good market here and was starting to do some research on you know, how I can leave the corporate job, how do I do that with passive income and syndication? Just, it just was a way to accelerate that that path and you know, the problem was single family and they’d be some small multifamily under four units is that you have to have a W2. And that was something that was trying to move away from after having a, you know, a fun career, but you know, ready to try something different entrepreneurial role. And like a lot of people a bit got bit by the bug of the passive investment mantra and managing your own destiny. And so I just kinda got into that and got what the right people amped it up and we can talk a little bit more about that, right as we, as we go on.

Charles: Nice. Now it’s your firm focuses on a few different asset classes as I touched on them, mobile homes, apartments. And self storage complexes. What is unique between one to the other in the sense of, we’re talking with reward returns versus risk?

David: Yeah that’s a great question. I like all three from a standpoint of history would show that all three of those niches and the reason why we’re in him is because later in a cycle especially do well, they do well on downturns. They tend to hold up very well. And specifically I would say value add approaches, which is where we’re actually going and buying older properties that aren’t as expensive typically than a brand new with a property. So you’re getting a little bit of a buffer there and then you have an opportunity to renovate and streamline operations to increase values. So I liked the, I liked the niches because there’s an opportunity to do something with that property. They tend to hold up well in downturns, apartments and mobile home parks, people have to live somewhere self storage. We buy a lot of stuff and up markets we tend not to get rid of stuff. We’re kind of a nation of hoarders and we forget about stuff in the store. It’s like a gym locker. You know, you may have it for three years and you forget, maybe this a hundred dollars payment start to bother me, or why do I have this stuff? But after three years, we’ve made our money. Right. So that’s good. But we’ve, if you look at the history of performance, Charles over the last 25 years this is coming from the national association of real estate which publish this data every year. The apartment, self storage and mobile home communities have 2x S&P 500 in returns. And I would say a large reason why that is if you look at the years between 2007 – 2009, the stock market was down 22%. Manufactured home parks actually did not lose money. They were up like a half percent. A self-storage only last three and a half percent, apartments 6%. So if you look at the data, it’s like, wow, over 25 years, they’ve outperformed the stock market and they have less, they’re less volatile. So that caught my attention a few years back and hence some I make this as kind of my core focus of our firm, my investments and also my investors.

Charles: Yeah. So even with self storage, it’s that recession resistant home, I mean only went down just a few percent. I mean, I imagine if it’s being billed to your credit card every month and it’s 50 bucks, it’s probably not or whatever, 50 a hundred bucks. It’s not a huge issue for someone compared to other, other parts of the economy that rely on, you know, like cars where it’s not a $50 car payments.

David: That’s right. I think that’s a key point you make. I think the fact that you know, if you thought that we raised the rent and it started to be like, say it’s 95 and it goes to a hundred and you keep doing that for two or three years and it’s kinda out of sight, out of mind, that’s that gym membership payment you kind of forget about, but then you maybe wake up one day and say, yeah, for a year or two you’re like, it’s kind of going up a little bit more than I’d like, or maybe it started bothering me, but do you really want to go rent a truck on your weekend and go try to move it and try to save five bucks a month somewhere else? Most people just say, heck with it. I don’t do that. So even though you can competitive shop, you know, it’s kind of a sticky, sticky asset.

Charles: Yeah. The other thing I’ve heard from other operators before is just then they go in and they figure out if they’re going to build or not. And it’s like they take the population, I think it’s like eight square feet of storage per person.

New Speaker: Yeah. Yeah. That’s why I like about that space. It’s got a very objective way of determining supply and demand, they go one, three and five miles is called a feasibility study. The biggest downside to self storage is over supply. So if you get in a situation when you’re in a, an investment and then a competitor puts a store across the street, it’s not like this, it’s gonna kill the deal. But you may be the first couple of years, maybe a little lean for you. Right. And then as the demand eventually catches up, but that’s what I like about it. There’s some injectable data out there.

Charles: Yeah. That’s awesome. Now as you focus by, or you, you specialize by niche and then also by geography, and then you partner with a number of different, several different operators as well. So when an investor works with you, you can spread them over all three different ways of kind of spreading money.

David: Right. That’s a, that’s a benefit of, you know, I have a dream in financial planning, so I always had this hat on a diversification and when I first got into business, one of my goals with investors or with myself was, I’m going to work with an experienced partner, right? And this is not going to be Dave Thompson raising capital and talking to investors and going to find his own deals and you know, hoping something’s working. I’m like you know, my advice to people today is, you know, go find someone that’s doing what you want to be doing and you know, work for free, whatever you got to do, learn. So I just started doing that and I worked and I got to a point where all the deals were up, Dallas, they’re all apartments and I liked him, but I was like, my investors would keep coming back and say, what’s you got it. I was like, well then that started my research, Charles. I’m like, well, you know, I like self storage, like mobile home parks. And so I started finding other partners that also had a lot of experience in those niches. And you know, I co-sponsor with them on the GP side. I get involved very detailed in some of their, you know, the vetting process and their underwriting and everything and make suggestions. And then at the end of the day, I’m, you know, I’m bringing my investors and their capital to the deal. And then I monitor that. But what I think are investors love is that we were kind of a one stop shop. You don’t have to go directly. So all of these different operators and have all these different experiences, we can kind of work directly with you and we’re part of the operating team and we had these different opportunities to share with you and help you diversify along different operators and different geographies and different niches was really what our mantra is.

Charles: Now you must get so many opportunities. They come over your desk that how do you utilize and choose opportunities to bring your investor base? So is it you do your own stress testing? I imagine you do your own final underwriting within 13.

David: Yeah. on my website that’s actually came out of a meetup group. One person asked me one time, well, you know, this is great, but how do you vet sponsors? I’m like, that’s like, that’s a great blog. I’ll go write a blog on that. That’d be a special report. We were like 10 tips on what I do when I vet a sponsor. It’s everything from reviewing track records to you know, researching everything that they’ve done on Google on these, you know, these people. Cause it’s mostly an integrity, high integrity trust business. Someone I know who I’m dealing with, I will tell you don’t do any transactional deals. So the partners I work with today were carefully selected. There, there were peer reviewed and I walk every deal with them and I don’t have to do the deals with them. So I still have that vetting process that my investors appreciate. But at the end of the day, I’m selecting longterm partners. They tend to not change their criteria. They tend to focus on the same markets. I like their singularity of focus. I’ll give you a one story that would turn me off. So I was interested in this multifamily operator out of, they were in Dallas based, but they were focused on Charlotte and Southeast and there was a geographic area, didn’t have a lot of coverage on. They’d done a few exits. They were kind of in this trajectory period would, I could get a lot of their attention. I drove up there three hours drive from Austin. We spent a nice lunch together. I said, this could really work on the way back. They send me a note the next day and say, Hey Dave, what do you think about hotels? And and then two weeks later I got a hotel deal, the San Antonio. I’m like, you know, different geography, different as a niche it just totally turned me off. So you know, to my ambassadors and stuff, I’m like, I’m very careful about what niche I go into. I mean, these were niches were carefully researched. I went into multifamily first and self stories and I added a mobile home parks. But I was blogging and I was communicating with my investors foreign advanced before we ever chose a partner. And before we ever actually did our first deal. So the last thing my investors want to know is, you know, Dave woke up one day with this idea, saw a deal, saw a guy or a person and just got it, you know, fell in love with it. Now, for my personal investments, I made take a few of them. I don’t want to call them fliers. I may take a great calculated investment in a small amount with an operator on a deal in a niche just to learn about it because I don’t learn anything unless I’m involved with it but in a small scale and that would be a good way, I think for investors too, to test something out, be prudent if you’re really, you know, you’ve got to feel pretty comfortable. But don’t go in big with somebody until you get a chance to learn how they operate, how they communicate with you. Because I would say trials as much as we’ve talked about the success of a project. Yeah. And how it’s supposed to roll out. It’s how people communicate with you.

Charles: Very true. I was at a real estate conference a couple months back and people were like, how many emails? Well, how many people here are on an email of a syndicator. Everyone raised their hand. How many people are in a deal where are they as an LP where they wish they had better a conversation. They had better communication. And well, you know, so many people raise your hand. You know what I mean? And it’s just amazing that just the update of how it is. And the other thing too, which is great about what you said about going in as like a limited partner or so, and investing with them first, I guess is how you’re explaining it. That’s great because then you have the reports. You know what a quarterly report looks like. You know what the monthly report looks like and then you can whatever. If you want to block out the information, you can show it to your investors and say this is how it is. And the other thing too is we cosponsored a deal a couple months ago and walking the deal while, because if you’re bringing investors, right, we were bringing in investors and you’d say, Hey, we walked every one of these units, we might walked all the units. We know exactly what this is like, how they’re explaining it is true. You know, in ROM and this is kind of what we see and you know, you actually, it’s not just, “Hey I got some pictures and I saw it on Google map.”

David: No, it’s key. It really is key. And I make it a point to get to the property with the operator. And typically the property managers there, that may stay or may not, but you get the full story, review the competition. What are the key competitors you want, you know, the rock, the sub market. That’s key. The other thing that I get asked a lot, do I invest in every deal? Absolutely. I mean, I can’t imagine this sharing a deal with somebody and not investing. You get, imagine that. But you know, it doesn’t have to be huge because we do so many deals. But just knowing that you’re aligned with your investor is really critical.

Charles: Yeah. Well, right now there’s a lot of that going on where they’re not investing alongside and the alignment of interest and we’re just, you have people just making money just on fees and stuff’s being refinanced and stuff’s being sold. That’s maybe not the best point. Just so that it can generate fees for the general partners.

David: Sure, sure.

Charles: So what are the, what would be the main thing when you’re, if you were investing as an LP with them? Obviously the focus on a niche or if you were talking to someone to invest as an LP, having to have a sponsor that focuses on a niche, have a sponsor that have a very, you have an idea of kind of the communication and the reports. Are there any other big points that’s of stuff that you would suggest them looking out for?

David: Well, I mean, I typically would like to see if focusing on geography a Metro or two. I do have one successful operator, there could be in five or six markets, but they’re an exception, their institutional base and they’ve got the resources to do that. But a typical value syndicator that I work with, it’s a small shop. They’re niche oriented. They’re really good at a certain market that broker relationships are, you know, those are built over time by closing big deals in the market, those brokers for hand and they’re going to get some more attention. So I’d like to see kind of a singular focus on niche. We talked a little bit about, you know, pick a market or two or, or three that they get to be an expert in and get those broker relationships set up so they get to see deals. Some of them are off market that’s important. If they can do that. A couple of looks at that. I think I’d like to see a copy of their communication, so I would actually absolutely know. How do you, if you’re communicating with new investors, she may pass deals. I’m gonna see a track records or good, he doesn’t, a lot of people ask me, you know, it’s important if they’ve exited deals. Yeah, it is important. But I haven’t shied away from doing deals with people who haven’t exited yet. If I do, if they checked the box in lots of different areas I certainly want to be doing as much research as I can on their integrity. What are they doing outside of this business? A lot of them I involved with or doing their own podcasts. They’re really passionate about the space. They had some background in construction. They have background, in relationships and building relationships. And so, you know, you really kind of got to spend some time with those partners if you can. I know it’s sometimes for a passive investor, it’s hard, you know, I may be paying 50,000 a deal, how do I get all this time with people? But they should. They should allow you, you should be able to talk to the partner. Yeah. Just to be able to talk directly to them. Now I’m kind of that voice for my investors and you know, if someone really wants to talk to the lead principal that’s fine. What you could probably make that happen. But you know, I just tell people to be realistic and you know, but do your own research and you should get fast communications. You should get accurate communications. Did you get nothing? That should be wishy washy. If you want to see the underwriting for a deal, you should be able to do the underwriting for the deal. Yeah, I see a sensitivity analysis for a deal. You should be able to see it. There should be nothing that really, they don’t want to share with you. They may not share with you their financial model on the GP side, how they made their money, that might be the only thing. But they should be able to talk to you, Hey, we’re kind of compensated this way. It’s in the PPM fees. And that kind of thing. And I would, I’d like to know her deal structure. You know, what’s the deal structure? 8% pref, 70 30 is typical. If you start seeing, you know, things are outside of the norm, then why is that, you know, Oh, you’re super experienced or you just trying to, you know, get as much as you can. Right. But investing alongside, we talked about that. I want to make sure they’re investing in a deal.

Charles: Yeah. It’s funny because I was speaking to someone that was a limited partner a couple weeks ago and they were saying that about four deals they’d looked at and they invest in only two of them and the other two operators would not provide them with the underwriting, which I thought was crazy because it’s, I mean, like you said, you can leave off that tab with the general partner if the partner subjects and stuff like that. But you already know if it’s 80/20 or 70/30, you can have an idea of like the nature thing that really affects you. But really the 12 tab, I mean the whole Excel, they don’t even send it over. And it’s kind of like, I mean, you know, cause you go through and if I’m looking at it as a passive investor, I’m going to take away some of the rent increases. Maybe just bring them very bring them down low and you know, kind of do just very do my own worst case scenario, stress test. And I can’t do that with an OEM that just has some beautiful picture on it.

David: Yeah, yeah, yeah. And I think, you know, if you’re a sponsor that doesn’t mean Hey, green light, I show you everything. It’s kinda like if you, if you ask, right, I’m sensitive sizing that most investors are passive investors and they’re not, you know, like you and I who are really into everything about this niche or you needed to see all the details. They expect me to do that. So they’re coming to me, they’re busy, they’re entrepreneurs or doctors or attorney, whatever is going on in their life. They have families like they have the reason I’m going syndication and passive fasting. I want to, you know, I kind of want the investment summary, want to be able to understand the market, the deal and some basics around it, what the expectations are. But I don’t need to see all that. So you gotta be careful. You don’t want to overwhelm people and that seem the whole kitchen sink. But you should be prepared to understand if you have a person who’s a little bit more analytical or who expects that to be able to provide that. Because I look at it as you’re partnering with us, right? You’re a partner now, you’re a limited partner. You’re not sitting on the board of directors and making decisions, but you’re a limited partner and you’re a valuable partner. And I would tell you, Charles, 85% of my investors in every deal or return investors or you know, I get referrals from return investors. So yeah, we want you to be a feel like you’re part of this. And that’s why I think, you know, monthly communications and you know, certainly I think anything that you can do to make people feel like they’re part of it. We want to keep you involved and understanding what’s going on. You don’t have to worry about the residents or just you know, something breaking on the property. But you know, if you want something more detailed we should be there to provide that for you.

Charles: It’s funny when you say that about because with busier people and I found when dealing with higher net worth individuals, higher income people, they’re vetting you and they’re vetting your team, the GP team more than they are. Instead of vetting more the deal itself. So then making sure that the people handling the deal are on the up and up and you know, all that kind of stuff is checked. Other than looking at, Hey, this is 17% IRR versus 19 from something else, I got in my email box.

David: Yeah. A bunch of different personality types and you can kind of sum up pretty quick. I usually kind of talk to people about kind of what their background is and if they’re telling me an engineer, I’m pretty expected to maybe share some more detailed information. You know, and, and some people come in for the marketing perspective, not to a stereotype and some people are just more about the view and, and you know, get a good feel for you. But I think in the general spectrum it’s, you know, you just kinda kind of feel out the ambassador and be prepared to share at the level that they want to be communicated with.

Charles: Right. Yeah. The so you’ve read the over $110 million from investors and for your 30 plus deals that you’ve been a part of. And your company works a lot with foreign investors and I know you’ve regularly, except you know, have investors that come in. How does do the deed, the goals for a foreign investor for that come through with Thompson Investing differ greatly from maybe a U S investor or is it very similar? Where’s asset preservation in return or?

David: Well, I mean at a high level, I think they’re looking for, you know, global diversification, right. At a high level and they’re looking for you know, tier one countries that, you know, have good transparency of laws and when protections for property rights and they it’s interesting, my wife’s Chinese and we just naturally had a significant Asian base I think because of she’s helped me in the business when we started. And she’s from mainland China and they’ve had a great real estate round over there. Right. If you have even one property that might be, you might be a millionaire if just had one rental property with that. If I live in a big city like Beijing or Shanghai, so, you know, we typically a lot of interests and people have seen success and what real estate can do to them. And a lot of these countries are in stock markets that are very like emerging markets. They’re very volatile. And so you get people coming over here, I think, I don’t know if it’s reduced expectations, but they certainly understand that we’re not going to, you know, be having those types of appreciation increases in our properties. But you know, still very attractive. But they’re coming out here for stability and transparency and I think also to put capital outside of their particular countries, just from a safety standpoint, access. A lot of them have children who are going to college here, Charles. So it provides them a way to, you know, the properties that we have, you know, our income producing and so they want to, they may have the money. Sometimes it’s hard to get money here if it’s here, they want to invest it. And then at once they want that property to generate income for family members that might be here, that can utilize or further themselves and retirement. Somebody want to retire here over and when they’re done with their careers and some of their country. But yeah, we do allow foreign investment into syndication. There’s nothing that says you can’t do that. There are some specific rules, right? You have to have a US bank account. We don’t want to be distributing overseas. The US tax authorities want to make sure that, you know, doing your taxes here locally. So you know, we advise the syndication groups actually have to withhold, There’s a withholding tax. And so we want to make sure our foreign investors are aware of that. We do encourage them to kind of look in and seek tax advice and maybe sending them a US LLC. If they’re going to do a lot of investments with us and then set up a US LLC, have the taxes all taken care of by a tax company here and get that all taken care of for you. But there’s just an active, a lot of interest in in the US. And that everything, every data point, I say that continues for the foreseeable future. Thank you.

Charles: Yeah. Normally when, if we have investors that come in that are abroad, it’s usually having the U S LLC is something that we required. We never had anybody do it in their own personal name. Yes, yes. And then also, obviously, you know, they’re having the EIN number, all this kind of stuff and like having them with the CPA and having them with a lawyer, we come together with them and that are well versed with international investors and well versed with real estate.

David: It’s very specialized. Right. Very unique. It’s very niche. You wouldn’t be going into your typical CPA or accountant to ask for advice on that. They might want to ask for a referral. Someone who does that.

Charles: It’s not going to be going to H and R block to do it.

David: They might need to get an ITIN number. Right. All kind of stuff.

Charles: And with the CPA’s, I guess they can fast track that. And it’s all having that. And then also they can speak to there possibly to their CPA in their home country, which I.

David: That’s important to note, right, because they might have some laws and issues on foreign investing outside of their country that they have to, we have that right. When did you enter and what’d you generate outside the country? They want to get a peanut.

David: So for a foreign investor or for any kind of passive investor coming in, US or foreign will come and mistakes you see passive investors if you’ve, if you’ve spoken to them before and they, something happened with them, what are common mistakes you see that they’ve done maybe with their first dealer, first dealer? A couple of deals?

David: The common mistakes that when people come to me, well, I mean, I definitely see people over concentrated. Like, I was talking to the guy just before this call and he’s in three new development apartment deals in Austin now. Austin is a fantastic market and he feels like he’s going to do well. I’m not saying he’s not doing well and maybe he researches it and really knows us, but he’s with one operator. He’s doing three development deals on Austin. That’s pretty constantly he has done anything else, anything you all stay outside? So we were talking to him this morning about, you know and I gave a presentation yesterday but that he listened to down in Austin too, a multifamily media group on a book that I have called riches in niches, which talks about why I liked the three niches and you know, some of this, the data that we were sharing earlier. So it was like a perfect lead and he was like, I gave you, I gave my book away for free, which is always a good thing to do. I give everything away for free, you know, maybe something sticks with somebody, but you know, it really resonated well with him. And he said, you know, I really feel like I love apartments, but I like stories now and I, I’ve always been thinking about these things. So I think most people would get involved with the real estate. Typically it’s local and it might be accidental landlord. It might be, you know, getting a rental property or two. One thing is they’re just not, they’re just not aware of the different things they could be doing and they try to do it themselves. And I encourage people that you can still have an active gene and you, you can still do some flipping. You can still do some if single family of buy and holds in your local market. But when you start talking about different geographies, which you should be thinking about because if you’re local economy sours and you’ve got some assets somewhere else where it’s booming and some different niches and, but also having experts doing some of this right, because that’s where I think syndication and either you go all in to syndication or you’re, you know, you still have some active gene, that’s fine. But I think people feel like they have to do everything themselves and that I think can get you in trouble unless you’re an expert and you know, then you can get over concentrated. Cause I’m only doing this because I know it. That’s great. But no, is that a job? Like flipping houses is a job. Yeah. Okay. So you got to keep flipping to keep making money. What are you doing? You know, you need to be thinking about spreading those assets and making money. And the best thing is just having someone else who’s an expert that spins, you know, 24, seven thinking about that market, that niche, those relationships, how to make money and just, you know, do some more thought around diversification I think is the biggest mistake I see.

Charles: Yeah. Diversification on the business model, which is great because on the development and then they might go into, even if it’s apartments again, even if it’s still an Austin or somewhere else in Texas or in the Southeast or say, yeah, but it’s also, you’re going from construction and development. Now you have something that’s already cash flowing. So day one, yeah, cash flowing before we even implement the business plan before the value add even goes into effect. You have something, you’re making money, you’ll get paid in three months or month, however you do it. What books do you recommend for inspiring active passive investors and just learning more about cashflow in real estate?

David: Wow. So I mean everyone says Rich Dad Poor Dad is that would be good. I got one called The CASHFLOW Quadrant that I like to. That just, anything that you can expose you to you know, leverage and just, you know, not trying to do everything yourself and, and how things can cash flow is important. There was another, Gary Keller wrote a book The millionaire and the investor. I think resonated with me and started gotten me more thinking about syndication and I just more houses. It wasn’t more house. A lot of people start, you know, going on just buying more houses and more houses and you realize, wow, I could maybe buy an apartment and save the trouble, all the hassle there. So I think that was an exposure to scale. So that book really taught me about scale. And I started thinking about that. But then you can’t forget the little things. I just got done reading this book and I brought it over here cause I want to make sure I had the guy’s author’s name on it. Right. And that was called Atomic Habits by James Clear, says easy and proven ways to build good habits and break bad ones. And you know, there’s so many if you look at success and if you analyze it, it’s typically what do I do every day? What am I doing every day to get me to where I need to go? There’s certainly there’s goals, but you know, breaking it down. But I really thought this was good because so many habits, we don’t think about all summer doing something and then someone makes us aware of it. But it was a kind of a clear and concise book on how to maybe incrementally improve your life and gets you going in the right direction. I mean you know, three and a half years ago, if you would’ve told me we would have $110 million assets under management from what I’m doing, listen, I failed coming out of college in a sales and marketing role. I don’t, I feel like I’m in a sales marketing role. I may be marketing, but my marketing is subtle. It’s thought leadership. It’s what’s you’re doing Charles. You’re providing a really good free content to people. And that’s what I started. I had my mentor was telling me start blogging. Now I’m doing a podcast and maybe my biggest investor came from podcast interview as being interviewed. People want to see you as a real person. Are you genuine? You know, I get that. You know, you may not know this finance stuff, but yeah. Who are you as a person? I make it a point in my website. I’ve got a family. I got two daughters, I’ve got a wife. I mean, I’m involved in the community. I’ve got things going on at this. This is all about relationships and integrity. You should that as much about me as the investment offerings I have, right? Because I think that says a lot about you as a person and what you’re doing. So in your quest for in pursuit, I learned so many things in a short period of time I want to tell you, but essentially just because you’re not an expert now or just because you don’t know what you don’t know you know, keep an open book. Surround yourself around people who are experts in areas that you think you might like. I knew I liked syndication. I knew I liked investing in commercial real estate. That’s it. I have found a, I found a guy, name Joe Fairless, everybody knows Joe, right? I ran into Joe on Biggerpockets and I was looking at the right time in my life to find someone to help me understand apartments better. He had a small mentoring group. He was just starting it. You only had two apartments in our belt. I ended up taking that, asking him one day how I could help him. And he said, well you can meet me at the property. I want you to understand the business plan. Help me look at this underwriting and stuff, but we need $8 million. Would you be interested in talking to some of your investors? Because Hey, if you start doing your own deals was what’s this mentoring was all bout, you know, you’re going to need to have this investor network. He says, by the way, those investors you bring to our deal, are your investors. Perfect. They’re not our investors. You’re part of our team. They’re your investors. We won’t talk to them. You talk to them. You educate them. And so that was magic to my ears. It wasn’t like I was ever selling it. If I ever felt like I was selling something, I was doing it wrong. Listen, I have a good market. I have a good deal. I can explain it to you and I can show you how to get in these deals. We’ll monitor for you and we’re expected to do well. And there, there it is. And if you have questions, I’ll answer your questions. And if you come to a point where the questions are done, I’m like, great, are you interested moving forward? Yes or no, that’s fine. If you’re not, well, you know, we’ll put you on our mailing lists for future opportunities when the liquidity is there, you’re ready to do some. If you are great, let’s help you get in, we’ll monitor it. So it’s just, it became a very logical discussion. And what blew me away was when I got to college, I sold a whole life insurance and disability insurance, kind of my financial planning degree was only one. It was like going to the dentist for me is important stuff to have in your portfolio. But I just, I just wasn’t excited about it and I failed at sales and marketing. Okay. And the point I want to make with your listeners is for 20 years in the high tech world, I avoided those roles. Whether I had talent in that or not, I didn’t. I was so had such a bad experience on a mental block like that. But when I actually fell in love with what I was doing and I realized I was just educating, teaching people about a fascinating topic that they didn’t know nothing about. So many people I talked to, I couldn’t believe you could invest in a 300 unit apartment or a self storage, a mobile, how do you do that? So I became an educator. So I think the best advice I can give to people is like, I had no clue it would be good at this. People would say for what I do and how far I’ve come, it’s like, wow, that’s incredible. But it’s because I surrounded myself with good people. I took on kind of a this education mindset and sharing thought leadership, which is what you’re doing, we’re out there, we’re providing information. People come to my website, great. We take them from there and educate them and show them or some ideas. But the business of all evolves over time because of trust and relationships. And you know, like I said, 85% is [inaudible]. So it’s a wonderful business. It’s a wonderful way to get into the business. And I’ve been very blessed and very excited about the partners. I have very great partners and I guess I’ve, if I’ve done anything right, I’ve selected good partners.

New Speaker: Yeah, it’s definitely, yeah, it’s, it’s tapping into that, it tapping into someone else’s business system or system that’s already been, it’s, it’s already successful. They’ve got all the different pieces, especially the ones that you don’t bring put together and it’s already running and you’re just kind of adding more value to their group and it helps everybody. It’s a win win for obviously everybody that’s on the general partner side and all of the limited partner, all the passive investors as well as anybody involved with the deal.

David: Yeah, absolutely. I think, I think one thing I took away too is almost everybody needs capital. It doesn’t matter how successful they are, they want to do bigger deals, more deals, you know, and so, so that, that’s a skill set that maybe you can explore. You certainly have to do other roles on the team and be prepared to do that because from a legal perspective, we’d have to be doing more than just that. But I look at this whole thing as it’s great because I have to know all that to answer investor questions anyway.

Charles: Right. But it’s all, it’s also funny about speaking to people that aren’t aware of the whole syndication model because it, you’ll speak to someone and they say, Oh, you know, I bought like a six unit somewhere and it’s like an a D class area or, and they’re not living there. And like, Oh yes, one of my know golf buddies told me about this or, Hey, I bought a duplex and well, you know, there’s, that’s, you know, that’s great for learning, but it’s, you’re not going to be able to scale that business, especially with having a 40, 50, 60 hour a week.

David: Yeah. I mean, anything four units or under. We started going that direction. My wife and I did. And I quickly realized that it sounds like you get a little more cash flow per door, but it’s still, I needed my W2. I still needed to deal with all the administrative stuff around that. And, at 2015, I stopped buying single family homes in Austin, Texas, realizing it was cash flowing better in passive investments. I’m like, I can do better and I’m not having to manage any of that stuff. And it had dawned on me like, if Dave Thompson’s not buying single family homes and Austin has been a great market and he stopped, well then that may be, and he’s doing a syndication. What’s he doing with his own money? I’m like, I’m not buying any more single family homes. I’m not doing any more active stuff. I’m holding them because I think the longterm, it’s a great market here. And it’s manageable. My wife’s managing them. She’s more patient. But you know, I think that, that says something. So what are the experts doing? Follow the experts or they, you know, they, are they investing in their own deals? Are they, are they doing what with their money that they’re telling you that it thinks a good why strategy for you?

Charles: No, that’s awesome. So, well great David, how can people learn more about yourself and Thompson Investing?

Charles: Yeah, so you can go to my website thompsoninvesting.com. It’s all one word, T H O M P S O N investing.com. I have a lot of articles there. We’ve got some podcast stuff going on there and we’ve got two books you can download for free, ones on Raising capital and one’s called Riches and Niches, which if you’re investor, I think it’s awesome. It’s a, it’s a book that kind of gives you a high level view or the three niches that you know, Charles and I talked about today, why we like them. And then my email is [email protected].

Charles: Okay, that sounds great. And I’ll put all those links in the bottom of the email and you can, you are in the bottom of the, the notes and you know, Ray on the, on the website, you can pull down and they can download all those books by it.

David: They can do that and they can set up a call with me. I’ve got a, a way to just collect some information from you and then we can set up a 30 minute call and learn a little bit about you and what you’re trying to do, see if we can share some ideas.

Charles: Okay. That sounds great. Well, thank you very much for being on the show.

David: Thanks for having me.

Charles: Yep. Have a great rest of your day.

David: I appreciate it. Thanks a lot.

Charles: Take care of you.

Charles: Hi guys, this is Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in investing in real estate and you don’t know where to begin, set up a free 15 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com.

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Announcer: Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of harborside partners incorporated exclusively.

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About David Thompson

David has strong experiences in real estate investing in both domestic and international projects covering single-family, multi-family and land development. He earned his MBA in finance from Thunderbird School of Global Management, and graduated summa cum laude with a B.A. degree from Arizona State University. David spent over 20 years in high-tech management positions at Dell, AT&T, and Lucent Technologies. At Lucent he managed a $2.5B investment portfolio and raised over $1B in funds for acquisitions.

After leaving the corporate world, David started Thompson Investing which provides investors opportunities to invest with experienced operators in MF apartments, self-storage and manufactured home parks. As general partner and sponsor in syndication deals, he has raised significant private equity capital. He helped provide investor funds to purchase over 4500 apartment units worth over $400M. Current strategic partners included Ashcroft Capital, Wildhorn Capital, Reliant Real Estate Management and Covemark Group.

​David prides himself on building long-term relationships with investors and partners while providing a great customer experience. Dave has lived in Austin, Texas for twenty years with his wife and has two daughters.

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