GI272: Self Storage Investing with Clint Harris

GI272: Self Storage Investing with Clint Harris

Clint Harris is a former medical sales professional who became a successful real estate investor. He built a diverse and profitable real estate portfolio, beginning with single-family homes and progressing to multifamily properties, Airbnb rentals, and, ultimately, self-storage investments.

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Transcript:

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host, Charles Carillo. Today, we have Clint Harris. He is a former medical sales professional who became a successful real estate investor. He built a diverse and profitable real estate portfolio, beginning with single-family homes and progressing to multifamily properties, Airbnb rentals, and, ultimately, self-storage investments. So thank you so much for being on the show today, Clint.

Clint:
Thanks, Charles. Happy to be here. Excited for this time. Thank you for the invite.

Charles:
Yeah, no, it’s great to have you on and to kind of work through your whole background. And let’s start there. Like, tell us a little bit about yourself, both personally and professionally prior to getting bit by the real estate investing bug. Sure.

Clint:
Well, so my name’s Clint Harris. I’m 41. I’m happily married with a 4-year-old and a one and a half year old. Two little boys. We live at the beach in Wilmington, North Carolina. I started my career coming outta college. I was pre-med and ended up switching, got a business degree and I had a 16 year career implanting pacemakers and defibrillators. So it worked in heart surgery. For anybody that knows that world. It is not Monday through Friday, nine to five. It is a, it’s kind of a young man’s game in that it’s a lot of taking call a lot of nights and weekends and getting called two or three hours away at two or three in the morning dealing with defibrillators going off or fractured leads or, or whatever. So a very demanding job. I really loved it.

Clint:
I was lucky enough to be good at it and became a trainer and a sales rep and eventually moved to take over a territory. But before I did that, knowing it is a young man’s game I knew eventually there was a good likelihood that either I would wanna step away or they would make me step away. And so I wanted to prepare for that ahead of time to give myself some options. So I chose real estate as the vehicle by which I wanted to do that. My first house, I believe I was 25 or 26, was a duplex. I thought I invented the, what eventually came to be known as house hacking. I thought I was the only one in the world that had figured that out, and I was a genius that is far from the truth. Built up a small port family portfolio of nine single family homes in the post 2008 crash, 2010 to 2013 timeframe.

Clint:
Figured that is a very slow way to get ahead. In 2017, my wife and I took a promotion, moved to Wilmington to build the sales territory there. That opened me up to start buying small multifamily properties and converting them to Airbnbs, which is, that was starting to be some, some significant money in terms of moving the needle in terms of financial independence. Built out a portfolio of 14 Airbnb properties that turned into a property management company. And at the end of that day about that timeframe, I realized that I had done this real estate thing wrong two times in a row, and my focus had been focusing on financial independence, which I was never able to get there with single families because I was just focused on the next property and not the five or 10 after that. And I limited my ability to scale once I got into multifamily properties, specifically converting duplexes and triplexes and quadplexes into Airbnb properties.

Clint:
This is real money. Like our first duplex, we lived in one half. We rented the other half, two blocks off the ocean, and we did 57 grand our first summer. I was like, oh, this is meaningful. And so we learned some of the hard lessons from our single family portfolio and we navigated scaling that. And when I was done, I was like, okay, great. I’ve replaced my income. I was still working at the time. I had replaced my income, but I did it wrong because even when I had replaced that income and I wasn’t working or on call, I was still basically on call. I still had my phone on me. I couldn’t leave that location in for the summer. And I still didn’t have independence of time. I had to be available to navigate issues or weather or late check-ins or whatever it may be. And I realized that what we all want is not the buzzword that we all talk about of financial independence. It’s really time, location, and financial independence together. ’cause Financial time and location independence together create an independence of purpose. That’s where you can go where you want and do what you want with your life. And I realize I’d done it wrong again. So <laugh>,

Clint:
Instead of unpacking that portfolio I spent two years building a property management company, which we still own with some amazing partners. They operate it, I’m completely out of it. And it manages my properties in about another 75. And then we took what we learned there and we, we took the next step in our journey, which is a aggressive pursuit of passive investment strategy.

Charles:
Very interesting. Before we get into those, can you give us a little, I don’t, we don’t, we don’t talk too much about short term rentals on here, but obviously I can see the slowdown with progressing from, you know, small single family or small residential properties and growing that portfolio very slowly. And what, what were some of the challenges that maybe you faced as a short term rental investor looking to scale their business, where in that business it is more profitable? You said it’s more time, it’s more of like, it seems like it’s more of a hospitality business. What were some of the other challenges maybe you faced as a short-term rental investor compared to a long-term rental investor and maybe those same properties?

Clint:
Yeah, if you think about a long-term property, maybe it’s one or two headaches a year. And then you think about a short-term rental. You don’t have one tenant, you have eight to 10 month tenants per month. And so there’s a lot of moving parts. Check-Ins, checkouts, cleanings, turnovers. It forces you to either become a good operator or be honest with yourself that you’re not a good operator. The properties only are as good as the person operating them. And and I can operate. And it also, it for me, it forced us to systematize and automate systems automation, automatic messaging, check in, checkout communication with cleaners. It, when I had one Airbnb, it was fine when I added a triplex. So when I had four, it was more challenging at that point. We put in automation, streamlining property management systems into place, and then managing 10 was as easy as it was with one.

Clint:
But the problem was that I assumed it would continue like that in a linear pathway as I added more properties. And it doesn’t, it creates more positions that you have to create, and it’s not a linear scale. So the sweet spot is, you know, even as a property management company, it’s like 60 to 80 properties is kind of the sweet spot. Below that, you don’t have the economies of scale to really control the book of business for all the, the different pillars that you need in there, the handyman, the cleaners, the plumbers, electricians, everything else. And above that, the juice really isn’t worth the squeeze. So it, it does not have an unlimited potential for scale and it’s kinda limiting, but it will force you to get really honest with yourself about what you’re good and not good at. For me, what changed is I read the book Who Not How by Dan Sullivan and it, I was asking myself, you know, in the process of building out this company, how do I do this?

Clint:
How do I do that? How do I do all these things? And I read that book and I realized that’s not, that’s not the question. The question is, who do I have that would be better at these things than I am? And that’s when I stepped back out of the company, I let my partner and one of our managers take over, and that’s really when the company flourished and it, which is humbling, right? I was like, oh, I was the problem. <Laugh>, that stinks. But, but it’s at the same time, it’s like, know thyself. Yeah, I can operate. I’m not a great operator. My ability isn’t finding deals and doing the conversions and navigating the construction and things like that. And that, and that’s the fun part for me. So I let them navigate the operation and I move on to other things and ultimately on further in our, in our journey into more passive strategies.

Charles:
So talk us about that. How, I mean, how did your investing strategy evolve after as you said, doing it wrong twice? Where did it go when you kind of re restarted again for the third time? How did that change? What was your mindset? Obviously you’ve realized that to really know your role and stay in that role. And kind of tell us a little bit more about what happened and kind of leading up to where you are now. So

Clint:
As I rounded the corner on building out that property management company, I was pretty burned out with tenants. And with everything involved with Shortterm rentals and how it’s a wildly active investment strategy, and I, I realized, I was like, okay, I can’t leave here for three months out of the year. And that’s kinda what I’ve been like, that should be the goal. Whether you do that or not, you should be able to step away and your business continue to operate. Now, the short-term rental side could, but I didn’t feel like I had the capacity to continue scaling and, and the market was telling me it’s time to find another strategy. So I reverse engineered at this time something I should have done originally. I looked around and I found the group of wildly successful older investors that had the lifestyle that I wanted. They could travel and do all the things right and spend time, the time, location, and financial independence.

Clint:
And among that group of people, it ultimately always came down to three things. It was mobile home parks, and I was already burned out on tenants and I was not interested in that. It was hard money lending and I didn’t have the seven figures it took to get started there, or it was self storage. And I was like, Hmm, self storage. Let me get this straight. No one’s living in the property, hopefully <laugh>. And there’s no bedrooms, no bathrooms, no kitchens. And I’m renting someone a box of air, but it still has the power of multifamily, which I already understand. Sign me up. So I started the pursuit of education on self storage. I have a very serious belief about the power of relationships and networking. And so I was going to the real estate meetups in town. I hosted a meetup and I, I went to to several others, and I met my partners, a father and son team of Eric and Levi Hemingway who they were doing hospitality at the beach as well.

Clint:
They were building out a hotel. We had some overlap. I had a property management company. They had some struggles. I helped them, we get to know each other over the period of about a year. They had a background in storage, specifically in self storage conversion projects. That’s where they take an old building and convert it into climate controlled storage. Now this leapt off the page from me because this is what I was already doing. I was buying it as one asset class with bad long-term tenants in place and converting a property, a quadplex, to a top performing Airbnb, which three to four x is the gross potential rental income. So when they told me about what they had done in the past it was a no-brainer to me. So over the next year, we got to know each other. I helped them with some of their properties.

Clint:
They tried to hire me as a consultant, and I said, no I said, but here’s what I’ll do. You, you have some management questions with this particular property. I’ll bring my operating partner in. We’ll sit down, we’ll talk about everything. I’ll show you the software. And the only thing I ask in return is I know that you’re gonna get back into storage in a meaningful way. When you do, I’d like to try to raise the capital for it. They told me they wanted to try to do some big boy projects. So long story short, they did. And about eight or nine months later, they called me and they said, Hey, we’ve bought an old, we we’re under contract with an old Kmart building. We’d like to try to raise the money for it. We need X amount of dollars. It was just under a million bucks.

Clint:
Like, let’s try to raise the money for it. You see what you can raise? We’ll see what we can raise and let’s go for it. And I was like, okay. I was working in cardiology and planning pacemakers. Most of my friends are surgeons and cardiologists and electrophysiologists and er doctors. So three weeks later we got together and they’d raised 40 grand. And I had raised the rest and it was like, wow, I can do this. I didn’t know that. So we bought a Kmart building, we bought the building for 1.5 million. We put 2.5 into it and appraised for 9 million. And I was like, oh, this is, this is real money. I get it now. And so we raised capital and we did another conversion and another Kmart and then another grocery store. And then I left medical sales. This is in 2021. I left medical sales for good in November of 2022.

Clint:
Over the last few years we’ve done two Kmarts, three warehouses, two textile mills, a grocery store, an old soda bottling facility. We got two under construction right now, two more under contract. We’re sitting in $150 million worth of self storage facilities under our belt. Right now. We’re basically doing the Burr concept, but on commercial projects. So we’ve never sold anything. We know that we will, but yeah, we continue to scale forward. We’ve got a, a plan over the next couple years to get to 300 million, five year goal to get to 500 million and a 10 year goal to get to a billion. So and I, I talk to investors all day and I raise capital. I’ve never had more fun doing anything else in my life. And my partners are the GCs. I raise the capital, we build the projects out. We have in-house property management. And I would say this, it’s the same thing I was doing before. Like I I bird one or two single family properties without much success. I converted a few small Airbnbs with marginal success, but didn’t accomplish the goal that I had set for my life. Now I’m doing it with some partners. It’s basically the same thing, just with a few more zeros. And we’re on a pathway to a billion dollars worth of self storage because of a strategic team, strategic partnerships and understanding those fundamentals from those early projects. Thanks.

Charles:
Very interesting.

Charles:
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Charles:
So how does your team you know, when they’re going to find deals, how do they recognize properties that could be potential self-storage conversions?

Clint:
Yeah, so the, the number one way is you need to understand the demographics and the feasibility study is what it’s called. If you think about an old Kmart building, for example you know, typically around 90 to a hundred thousand square feet, you think they were big when they had all the, the racks inside, you should go stand in one when they’re empty. It’s a huge space. And even though that building is out of business at one point in time, it was a great location for that town to drive to that location to buy their home goods. And Amazon or Walmart put ’em out of business. But if you think about it from the residential density standpoint, the number of people that used to live there in a 1, 3, 5, and seven mile radius, the visibility, the traffic count you know, typically we’re looking for 10,000 people in a one mile radius, 25,000 people in a three mile radius.

Clint:
We’re running a full feasibility study both in-house and we pay for a third party study. It’s a 60 page report, and it’s looking at everything from the amount of people. Is the population rising or falling? What’s the percentage of renters versus owners? ’cause Renters use more storage. What’s the number of people per household? What’s the average age, the median income? We wanna make sure that how much storage is in the area, what’s the average price per square foot? What permits are filed for more storage coming to the area? What developments are going in? And make sure not everybody in one town works for one auto manufacturer that could close down and drive people out of business. So it’s a very complex formula. Ultimately it comes down to the price per square foot. And here’s why we love the conversions. If you and I went and built out a self storage facility right now, it’s gonna cost us $120 a square foot for the construction, plus the cost of the land across our portfolio of conversions on the day that we open up the door as a climate controlled self storage facility for the cost of the building, the land, the parking lot, the construction, all of it.

Clint:
Our average is just under $65 a square foot. Because you don’t make your money when you flip a house, when you sell it and you don’t make your money when you renovated it, you made your money when it smelled like dogs and cats and you bought it for dirt cheap from the wholesaler, right? It’s the same concept. We’re buying buildings that typically have been empty for eight to 10 years. The town is just ready for someone to do something with it. There is very little appetite for big box retail. It’s basically worth what we’re willing to pay for it. We do the construction in-house property management in-house. We can convert it for less than half of new development. And in about a third of the time, average is 12 months versus new development’s gonna take three to four years. That means we’re landing on average when we’re done and it’s stabilized, we’re typically landing around 35 to 40% loan to value. We can do a refinance to 60% loan to value pay off the bank, double our investors’ money, leave them in the deal. We are all recapitalized. We hold it and allow it to continue to cash flow forever, and it’s a very inflation resistant asset class. We can adjust those rates on a monthly basis. Yeah,

Charles:
The, the one question I had about is obviously it’s very lucrative. You’re getting it for almost half of what replacement value would be for a property like that. But you’re, you’re getting into really getting into almost development and yes, it’s much faster. And so there your money’s out there for a much shorter period of time before it actually starts making a return. Is there anything else that your firm really uses with this strategy to really control or minimize limit your downside? Yeah,

Clint:
The, one of the big things is we do the cost segregation study and we take the accelerated depreciation. So storage does very well from a depreciation standpoint. So we can, everything going into the building is basically a fixture. So we take that depreciation, we raise capital from investors, and the the investors benefit from that as well. The biggest thing is the, is the speed and obviously the cost. But I wanna unpack something here and not fall into the trap of either me making it sound easy or the listeners hearing it as an easy strategy because it’s not. The reality is I have partners that make it look easy. But the reality is this, the reason the strategy works for us is because we have full vertical integration. What I mean by that is I’ve got a team of three guys on an acquisition team looking at 50 to 70 properties a week to get down to two to four a week that they’re actually going to underwrite to get down to maybe one or two a month that we might send a letter of intent on.

Clint:
We’re looking at a lot of off market deals and a lot of deep diving into the information in the data. I’ve got a construction team in-house that’s building out at cost plus 12%. Our employees are also invested into our deal, and they are working hard to control costs on all the materials. Our property and asset management is in-house and we’re building, we’re we’re building the properties out and then managing at a combined 5% property and asset management. What that means is we’re not paying cost for the building, for the construction or for the management. If someone wants to go find a building, do the conversion. By the time you pay retail costs for the building, retail costs for the construction, retail costs for the management and the carrying cost of a couple years of interest payments while you’re filling the facility up, it’s not worth it.

Clint:
It’s millions of dollars of outlay. The reason that we are able to do it is we raise money from investors that know and believe in our system, and we are converting these buildings at rapid speed compared to most operators. This is all we do. These are the projects that we build on the, if you’re using a retail gc, it’s gonna take you two, two and a half years to build a project out. Our fastest project has been eight months, typically they’re around 12. A really long project might be 15 months, and that holding cost will eat you alive. So that’s it. It sounds easy, but it really comes down to just like those Airbnb multifamily properties, you’re only as good as the operator. And luckily my partners are amazing operator. Yeah,

Charles:
It’s a system, it’s team and it’s something that you wouldn’t be able to achieve your level of success with what I call like yellow page pricing and contacts. You know what I mean? I

Clint:
Like that yellow page pricing. <Laugh>. Yeah, I love that.

Charles:
I had to tell my a property manager that one time and I was like, are you calling your own plumber to do this? Or like, are you doing like yellow page pricing? He’s like, oh, no, no, no, we have something. All right. It’s a whole different pricing

Clint:
<Laugh>. Yeah, for sure. No doubt about that.

Charles:
You mentioned something in couple minutes back, and I kind of wanna unpack it a little bit because whenever you’re getting into anything with the municipalities, right, it’s it can get a little dicey. I mean obviously you’re working probably where you are is much more pro-business area, but tell us about dealing with municipalities and your experience and kind of like how they react as obviously they have, if a building’s been vacant for eight or 10 years, it’s a much easier conversation, but I imagine you get some pushback or they want you to do something different or special or change something that might fit better with how they’re revitalizing that plaza or that part of town.

Clint:
Sure, there’s challenges, right? We we’re, when we’re having accepted letter of intent and we’re under contract or headed towards PSA, we’re building those relationships and we wanna understand what their goals are for the property. And it is a partnership with the community that having been said things happen. Like we, my hometown is Lexington, South Carolina, and we were working on the Kmart there and they just decided they had enough storage, they changed it. So you can only do storage in areas that were zoned industrial and okay, so obviously we moved on from that project. With the exception of that, every other town and building that we’ve approached has typically been very receptive. But things happen, like we just had, we’ve got a project in Kernersville, North Carolina, giant old textile mill right in the middle of downtown, and the town is making us do I think it’s six figures worth of landscaping, like 150 trees and beautifying the whole area, which is gonna look nice, but it certainly wasn’t part of the original plan.

Clint:
So it’s a partnership with the community. We have to make sure that we’re giving them what they want and ultimately it’s gonna be benefit everybody involved. We also have things like, we had a property in Flowery Branch Georgia that we’re under contract with, that we just backed out on two weeks ago because the town decided they’re not gonna allow us to use the existing fire sprinkler system. The whole thing has to be replaced and added onto and it changed the, yeah, it changes the economics and it’s like, okay, well now we have this other deal that’s actually better, so it’s gonna go into the fund. That one’s getting bumped out. So usually if you approach it from a, you know, a pro community standpoint, understanding that this is a partnership and we want to go in and we wanna, we want to do the announcement with the Chamber of commerce, we want them there to cut the ribbon we want to, you know, hire within that community. It typically is very well received, but ultimately each town is gonna have their own goal. The sooner you can start that communication, the better. And ultimately it just comes down to exactly what you mentioned. Usually the longer the building is set empty in that community, the more willing they are to aggressively work with us to make sure that that project gets completed. Yeah.

Charles:
Then they’re also gonna start getting more tax revenue outta that property as well. So it’s there’s, there’s pros for everybody involved, which is how it’s supposed to be. One thing I was, when I was looking over your website and kind of other projects you’ve done one of the things you mentioned was repositioning mismanaged self storage complexes. And I, I guess as from this conversation, you know, the conversions and that’s kind of what you kind of focus on, which makes perfect sense. There’s much more value that’s added there much more wealth that’s created from doing that. But can you kind of touch upon if you guys have worked with you know, what the process is really what a typical business plan looks like if you found a mismanaged self storage complex and kind of kind of plug your whole vertically integrated team into it?

Clint:
Yeah, so sometimes mismanagement is, is exactly what it sounds like it’s operational. Sometimes it’s just missed opportunity and there may be room for an expansion and room to add on a, a fifth building or something like that. But one example is there’s a, a facility here, we operated under the brand city storage. We’re based outta Wilmington, North Carolina. One of the early conversions was here in town, a building that’s now called City Storage South. It was a giant brick warehouse that was already being used for storage inside, but it was not climate controlled. They hadn’t had rent increases in years. And you know, those giant high pressure sodium lights that you used to see in, in basketball courts when you were kids And you, you turn it on and there’s the loud click and it takes three or four minutes to warm up before it finally starts to putting off light.

Clint:
And when it does, it’s really hot. So that building was full of high pressure sodium lights. And so we bought the building, or my partner Eric, bought the building as a storage facility, but it was not climate controlled. And because those lights took so long to come on, they left them on all the time. So in Wilmington it gets hot, it’s right by the ocean, but it might be 95 degrees outside. It was 110 inside the building. And so that’s one where purchased the building immediately got a grant to convert those lights to LED and then put in heating or put in air conditioning. So you, the whole thing converted to climate controlled. The previous electric bill was around $4,000 a month because they left those lights on all the time, even adding air conditioning and motion detected LED lights, the electricity bill dropped to a thousand dollars a month.

Clint:
And then you partner that with management with QR codes and touchscreen kiosks and allow people easy access and to be able to book a a through a website, which wasn’t happening previously. And then you partner that with, you’re gonna go in and significantly increase the rates now, right? It’s climate controlled, it wasn’t previously you’re increasing the rates. Well, you know what all those tenants did when the rates shot up 30, 40, 50% over a short period of time, they were all unbelievably grateful because they were so tired of walking into a building that was that hot that they were only going there at night or in the cold months. And so many of them were like, oh man, it’s right downtown. It would be really convenient to use this. It’s just so miserable in there. So there was a operational turnaround from the management side, but even then there’s a little bit of a conversion factor in there, right?

Clint:
You’re converting to climate controlled, you’re converting to to, to LED, motion detected lights and, and getting that price down. So that’s just one example of if you find a facility that’s a hundred percent occupied, it typically means they’re not priced high enough. And if you find a facility that doesn’t have a website, self storage is still a very fragmented market. 70 to 75% of the facilities are still mom and pop owned. It’s consolidating fairly quickly, but most of the facilities are mom and pop owned. They’ve been paid for for years. They’ve had the same tenants for years, they haven’t had a rent increase. They are not marketing, they’re not pushing the rates, they don’t know what the competition’s doing and they don’t have a website. Something like that is optimal for stepping in and doing an operational turnaround. Now, still storage is really popular right now, so you’re gonna be buying that as a storage facility. Maybe it’s a good price on it and you think you’re gonna push that up, but even then it’s still not as good as a price as buying a nasty old grocery store or a warehouse or Kmart. So that’s our bread and butter, that’s what we look for. Sometimes operational opportunities or expansions do fall on our lap.

Charles:
Yeah, that’s a, that’s a great example. It’s always, if I speak to new investors and they’re like, well, aren’t all these properties that we’re trying to buy to value add like already done? I’m like, there are so many mom and pop properties out there that, I mean, think about it. You have a paid off property. Are you gonna be there checking the numbers and you’ve owned it for 15 years and this is like, it’s just a cash register to you every month. You’re not gonna be as thorough as someone that just has now a 75% loan to value loan on it and all this type of stuff, you know what I mean? New taxes that came up on a new insurance. You know, making sure that you’re getting every dollar out of it. So it’s completely different investor and different strategy. I mean, there are different cycle of their life, you know what I mean, of owning this property. And that’s if you can pinpoint those like as you said, I mean, it’s extremely profitable.

Clint:
Absolutely couldn’t agree more.

Charles:
As we’re kind of wrapping up here, I have one question here about that you mentioned before about when you were evolving and restarting your real estate investing career for the third time, and you mentioned something called truly passive investing. And this is one thing I think when I’m speaking to new investors I always have to correct them. They go, oh, it’s gonna be passive income. And I’m like, no, it’s gonna be more like semi passive income kind of a thing, you know what I mean? There’s not really passive income if you’re anywhere near on the active side or even parts of the passive side for real estate investing. Can you explain what truly passive investing is for you and what that means?

Clint:
Yeah, and small shameless plug here. I host the Truly Passive Income podcast and that is something that I very quickly learned. The whole thing is a joke because there is no truly passive income. I think the right way to think about it is it, it’s on a scale, right? Less or more passive. Something is the least passive, right? You could put money into a savings account and it’s gonna earn a little bit of a return and basically be FDIC insured and completely passive for you and just you decide if you wanna check the statements or not. Now you’re gonna get a horrible return on that, but it’s truly passive or as passive as you can get, right? You still had to sign up for an account, you still had to, to put the money in. You could do things like the stock mar stock market and just invest in a mutual fund.

Clint:
But the reality is what we’re talking about is like what kind of return can make a meaningful change in your life that’s not gonna require daily activity on your part. So in my mind, that’s either investing with a friend or a family member into a business that you don’t have anything to do with and you’re just trusting that person to do what they’re supposed to do with the money and navigate the challenges of the market. The other thing is I gravitate towards real estate. That’s obviously been my journey. And a lot of what I explore are general partners and operators like I am and limited partners. The limited partners are the investors. We’ve got about 170 investors that just place money with us and then it’s up to them. We send out monthly updates, quarterly financial reports and quarterly cashflow distributions, and then larger events coming from the refinance event.

Clint:
So that money’s coming back out. And it’s literally, they can be as involved as they want to. If they wanna come to our meetups, they wanna come to our investor appreciation events, they wanna read the newsletters and read the financial reports. They can do that. Some of them don’t wanna do any of that. They’re like, look, I don’t care. Just tell me when the double the monies back in the account so I know when to deploy it again. And it really comes down to, even in that situation, it’s not passive because what you should have done, hopefully is front loaded the work by building a relationship and understanding that to have success in any type of real investing, real estate investing, it takes three things. It’s time, experience, and money. Now, you don’t have to have all three of those things, but the deal does.

Clint:
So if you have money, you can take that capital, invest it with someone else that has time and experience. And in that situation, that’s what syndication is. The whole is greater than the sum of its parts. Syndication is where a pool of people put money together with an operator, that operator’s gonna go execute a business plan and everybody’s gonna share together in the benefit. So that’s about as passive as it gets with meaningful returns. You know, 19 to 22% IRR, which comes out to around a 21 to 24% annualized rate of return. That’s a, that’s a meaningful investment that can change things if you make continued investments over a period of time. But you still have to do the, the work, you have to find the asset class. Too many people get hung up on finding the deal. What you really need to be doing is looking at the operator, right?

Clint:
Looking at the operator and the deal structure, which is important. But ultimately, as a quote unquote passive limited partner investor, your your goal should be diversification of different assets, different geography, different operators paying out at different time structures and with different debt structures so that you’re not all with variable rate debt that’s exposing your portfolio. There are a lot of people, more people now than there ever have been that are professional limited partner investors. They’re managing a ball of money that they’ve accumulated usually by being an active real estate investor. And then they’re taking that and investing it into different deals with different operators and getting a great return off of that. That’s about as, as passive as you can get these days. ’cause If you own single families, even if you’re using property management, most property managers do not stay good for more than three to five years.

Clint:
If they’re really good, they get busy, they start buying their own properties, yours take second fiddle, or they get burned out and they sell the average short-term rental property management is in the game for around three and a half years. And some, some come and go faster, some stay a lot longer. But that’s the average. Over time, you’re gonna have to be active about going and finding some somebody else unless you are aligned with someone where you’re both benefiting from this business plan being executed. And that typically tends to be when you have a general partner and a limited partner with the same goal in mind. You’re putting the money in, they’re using their time and experience, and you’re, you’re sharing that risk. No,

Charles:
A lot of great information there. Thank you so much for sharing. So Clint, how can our listeners learn more about you and your business?

Clint:
So I, I do host the Truly Passive Income podcast. I’m not great at it, but I got a co-host named Neil Henderson, who is great at it. And we have a lot of people on there and I’m able to learn a lot through that. We do have a website, nomad Capital us, we do have a fund open now. We’re taking investors. And I connect with investors all day, every day. And I love it. I’m a natural extrovert. I love to learn. I’m a student of the game. People can reach out to me, Clint at Nomad Capital us and connect with me there, or I’m on Facebook and LinkedIn. Clint Harris, nomad Capital.

Charles:
Well, thank you so much for coming on today. We’ll put all those links into the show notes and looking forward to connecting with you here in the near future.

Clint:
Sounds great. Thanks so much for your time. I appreciate it. Thank you.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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 Syndication Superstar, LLC, exclusively.

Links and Contact Information Mentioned In The Episode:

About Clint Harris

Clint Harris has a 15-year background in medical device sales and has always been involved in innovation and creative solutions. In addition to his work with Nomad, Clint owns a strong multifamily real estate portfolio and built a highly successful property management company from the ground up, emphasizing streamlining automation and vertical integration. Clint’s core belief is that financial independence, combined with location and time independence, creates independence of Purpose.

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