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Ep #381 – Jeremy Roll – Passive Investing for Cash Flow

Here is some of what you will learn:

  • Hedging against Market Volatility
  • Evaluating a deal
  • Trading control for diversification
  • Understanding investors criteria
  • Red flags for investors
  • Understand the expense ratio
  • Questions to ask syndicators
  • The importance of communication with investors

Full Transcript Below:

Ep #381 – Jeremy Roll – Passive Investing for Cash Flow

Hi! I’m Rod Khleif. Each and every week I record an interview with a thought leader that I know you’re gonna get a ton of value from. Now here on YouTube are the video versions of my podcast, Lifetime Cash Flow through Real Estate Investing. Now to make sure you get the latest information please subscribe and hit the notification bell. Let’s get started.

Rod: Welcome to another edition of How to Build a Lifetime Cash Flow through Real Estate Investing. I’m Rod Khleif and I’m thrilled you’re here and I know you’re gonna get tremendous value from the very seasoned gentleman we’re interviewing today. Now, his name’s Jeremy Roll, and Jeremy’s in, right now, currently is about 70 opportunities that are worth more than a billion dollars but all passively which is very unusual for this podcast because typically we’ll interview active operators and syndicators. Jeremy has really taken this and done it in a passive role but he’s done in multiple asset classes. In fact, he’s so well respected in season that he’s an adviser to Real T-Mobile which is, you know, really one of the largest crowdfunding sites out there. So we’re gonna have a lot of fun today. Jeremy, welcome to the show my friend.

Jeremy: Yeah, thank you. Thanks so much for having me on. Really appreciate it.

Rod: No and I appreciate you because you really have no agenda either. I mean, there’s no gain here and so that I just think that’s so cool you’re here just to add value. So can you maybe speak to, you know, how you went from the corporate world into investing passively in deals and how and why that happened.

Jeremy: Sure, yeah. Thanks again for having me on. So, back after the dot-com crash, for you can remember that because it is a while ago now. I always sick and tired a stock market for two reasons, one is a little more obvious than the other. Essentially, I was sick of the volatility, like I do. Yeah, I’m a really slow and steady guy to watch it go up and down 30% in a year which just was not for me. But the thing that bothered me even more was the lack of predictability for my retirement account. Not knowing where America would be in 10, 20, 30 years, really bother me as a retirement strategy. So, I basically looked at different ways to invest and I came across passive cash flow. And when I concluded for myself was it kind of to be low risk, diversify tenant based, opportunities, like multifamily, would probably be the best fit for me. Looking kind of lower risk. More highly occupied building just from my own strategy and I rotated my money from stocks and bonds all of it into cash flow between 02 and 07. And that’s kind of how I got started. And I did not actually intend to get out of the corporate world at that point. I actually wanted the cash flow for predictability and the paycheck but I had a last hour moment with my manager, I was actually working at Toyota headquarters at the time here in LA, and I decided to take the risk and leave for a year or two because I had the cash flow built up to live off and it’s as it turns out, I was like the best thing that ever happened to me with that challenge because I’ve been out now since 2007 and I just love being a full-time passive cash flow investor.

Rod: Wow.

Jeremy: That’s my quick snapshot.

Rod: Wow, wow. Now listen, I know you were in just about every asset class; office retail. I think you said in industrial. I think the only thing you said you’re not in is hotels.

Jeremy: Right.

Rod: And, you know, we’re gonna focus more on multifamily but really, passive investing as a strategy, you know, the asset class isn’t as important as, you know, really fully evaluating the deal and they’re all in as far as from an equity raising standpoint, they’re, I think for the most part they’re fairly similar, so, you know, let’s listen talk about what you look for in a deal. I mean, I know that right now in the market cycle, you’re not really, you know, you’re not going hole, You’re really kind of, you kind of pulled back a little bit because we’re definitely. you know, in the irrational exuberance phase, but let’s say, it wasn’t, we weren’t in that place. What would you, how do you, how do you evaluate a deal? I’m sure you’re very-very good at it at this point, but can you speak to that a little bit?

Jeremy: Yeah, absolutely. I’ll try to keep a high level because there that could be like a whole topic about that….

Rod: Sure, sure, sure, sure.

Jeremy: But first thing I’ll say is, if you made a very interesting point about the asset classes, to an extent there is a lot of overlap when you’re analyzing them on this side of the table and what’s really interesting is that, I would almost put that aside and like step one to me is “Who am I making a bet on?” That to me, is the most important thing. Whether you’re investing in real estate. Whatever, even a start-up, I would argue. “Who you’re making the bet on?”, is the number one thing and then, you know, the property which is very important, to me is number two. It’s like just behind number one. And so, what I’m trying to do is essentially, when I get a deal, assuming it meets my initial criteria, I’m trying to like trust but verify. I would call it. Meaning that, as you being a syndicator, you’re the expert like I actually couldn’t do what you do and then, I can’t go buy an apartment building, from a credit perspective and for many different perspectives in terms of analyzing, getting out of contract. I’ve never been through any of that. My job is to analyze what you’ve done and make sure that I’m kind of trust what you’ve done as the expert because you know much better than me but also, verifying. And really in the end of the day, I’m trying to find people who are conservative, just to match my own personality. Who are looking to like under-promise and over-deliver based on how they put their projections together. And that’s like someone is trying to build long-term relations with investors like me versus someone who is being aggressive using very aggressive numbers and is essentially over promising to make the numbers look good to get investors but may not perform in the end of the day and may not care whether I invest with them again. And so …

Rod: There’s a lot of that going on right now. I’m just telling you. Yeah, just, yeah. I mean, a lot of that going on and, you know, operators not stress testing deals. We were on, you know, we’re on a call a while back and Robert and I, and Robert is my partner, and asked the operator. So, how’d your stress test this? And it was crickets. It’s like. Okay. Well, so, you’re expecting everything. Do you just go fantastic for the next five years?

Jeremy: Yeah, exactly. So, you know, it’s, it kind, I kind of try to read between the lines a little about how opportunity like a summaries put together, is it telling me the person’s aggressive or not, what assumption did they use rate to really understand if they’re being aggressive or not and then, of course, so, once you assess a person, right? Then, you have the second question, is it the right property for you? And you can look at some high level stuff very quickly to filter out deals in terms of, you know, projected cash flow or returns, whatever your criteria is, is the pass on investor and all different ways to invest. In the end of the day, either you wanna evaluate who you’re making a bet on, anyone evaluate, is a property in the business plan, associated with a property something you actually believe in. But I do wanna stress “who you’re making a bet on” is so important because I like tough people, that I trade control, for diversification, in the way that I invest. Okay, as a passive investor but I’m giving up control. The reality is, I put a small piece across a lot of things and each time I put in a small piece amongst many other investors, I really don’t have control of a very small boat That’s “who I’m making a bet on” is critical.

Rod: Now, I’ve got a list of questions that is someone I should ask a passive investor and number one is, who are the actual sponsor of a KPs on the deal? It is the number one question. You know, and what’s their experience? How long they do in real estate? And there are lots of dig deeper questions on that but the bottom line is, who are they? And certainly, the property would be next. And so, let me ask you this, without getting too micro, can you give some high-level parameters that let’s say, you get a pro forma, and, you know, what are some red flags that jump out at you right out of the gate? Can you, maybe we could start with that.

Jeremy: Absolutely. So, now keep in mind, I invest a certain way for my personality and have certain cash flow targets etc. Everybody ….

Rod: Speak to that for a second because we spoke about that before we started recording and I want you to share your model so that people understand as relates to this conversation. Thank you.

Jeremy: Sure. Yes, sure. So, I typically invest in Class B assets into what I call a B market so I tend to avoid hot markets or like a Los Angeles where the cap rates are really low and the cash flow look as I look for cash flow. So, I’m investing mostly outside of California across the US. I tend to target stuff that’s 80 to 100 percent occupied and stabilized, and may or may not have any value at upside whatsoever. That’s completely optional to me. The best way to frame, is I wanna go to sleep tonight, wake up tomorrow and not much has changed but I live off the cash flows. So, I’m looking for predictability and I also love tenant diversification. So, in an apartment building for example, my rule is that I wanna be in a building it’s over 100 units, just because if one person leaves tomorrow then not much has changed which is going back to that predictability. So, that’s my own, that’s my own criteria, typically.

Rod: Interesting, interesting. And I know retail. You do retail and things like that as well. Of course you want tenant diversity there as well.

Jeremy: Yes.

Rod: But in multifamily, a 100 unit plus, you know, you can sustain a few vacancies, right.

Jeremy: Yes. What I’ve done, it’s interesting. The way I’ve handled this cycle as it’s going on is that I’ve had specific cash flow at target criteria and if the deal doesn’t meet that then, I typically will pass and so just and its very unrealistic right now with the way cap rates are, okay? Because of where we are with the exuberance you had mentioned so, I have been targeting a minimum of 9% cash flow projected net to investors year one and 11% average annualized cash flow projected net to invest. That’s why …

Rod: Wow.

Jeremy: Mortgage paid out or assumed depreciation. You know, what it takes. You know, that takes a pretty high cap rate, and what that’s done is, that it’s kept me what I caught in trouble in terms of not paying too much of a multiple for a property and it’s also kept me on the sidelines a lot, especially, in the past …

Rod: Sure, sure. Yeah, I mean, that’s higher than ours. We look for, our minimum is 10% annualized cash-on-cash for five years. Now, that now sometime because we do value add sometimes that first year is not is five, you know,

Jeremy: Right.

Rod: And then, we make it up on subsequent years.

Jeremy: My market is clear though. My targets right our completely unrealistic and I know that.

Rod: You said that. You said that. And, yeah, okay. Now, how important, I mean, talked about the IRR. What sorts in, how does that come into play?

Jeremy: Yeah. It’s a great question. So, I focus very heavily on the cash flow because that’s what I live off so I’m looking for it. And when I put a dollar to work, I wanted to in a certain cash flow criteria because I’m living off that and every dollar I don’t put to work within my cash flow criteria, everyone’s got a limited amount of capital and I’ve got to be really careful with it. So, the IRR is a lot less meaningful to me, to be honest with you.

Rod: Yeah.

Jeremy: Now, what’s interesting though is that, when you have a deal that cash flow is in a certain amount, to a certain occupancy rate, you’re fitting in this specific box that I’ve created, you’re typically gonna see a typical ROI in the 15 to 18 percent rate just kind of like everything aligns up to that.

Rod: Sure.

Jeremy: And IRR might be, you know, 14 to 16 or 17 but again I am not an IRR investor, you know, most people are.

Rod: Right.

Jeremy: And, especially in value add. You’re going to be, right? But that definitely makes me a little bit different. I’m very heavy on the cash flow focus.

Rod: Interesting, interesting. So, okay. So, you look at that. Any other red flags that jump out?

Jeremy: Yes, for sure. So, one thing you wanna look at immediately is the terminal cap rate or the cap rate that was assumed that you’re exiting at after a certain amount of time.

Rod: Exit cap.

Jeremy: Yeah. That can really change the economics of a deal and especially, the ROI, and to an extent the IRR depending how far out are those. That’s one for sure right away you wanna check.

Rod: You wanna see an increase. And you see some of these deals that have no change in the entry and the exit cap. You’re like, “come on”.

Jeremy: Especially right now, right?

Rod: Right.

Jeremy: Exactly right now. You wanna take a look an apartment, specifically you wanna take a look at the expense ratio and you wanna make sure that it’s actually in the right range, I just a quick first look, right? Is there flag? And you’ve gotta take into account which climate you’re in. There could be more heating expenses etc. You wanna look at who pays for utilities etc. Because that can affect things. You wanna look in the type of asset class. Is it a class C property? May have a higher expense ratio? In a class A property. So you wanna adjust for everything but definitely look at the expense ratio because what the expense ratio is telling you is how conservative has the deal have been projected out.

Rod: Yes, yes, yes. Okay, guys, I want you to hear what he just said. He’s very fast talker. I want you to miss what he just said. If you see a lower expense ratio, it’s someone on a pro-forma, it’s someone being aggressive. It could very well be way too aggressive. So, talk about a range that you like to see in the different scenarios? Just, I know this is way high level but …

Jeremy: Yeah, yeah. So, you’re talking about an expense ratio?

Rod: Yes. Expense ratio. Yes.

Jeremy: So, on a Class B asset, I would say that, my, I’m most comfortable between 45 and 50 percent. I think goes below 40, like even below 45, I’m gonna start to ask questions. If it goes above 55, look it’s in some cold areas where it’s a hard tenant base and stuff, I could see you go for 55 which is kind of rare but if it goes above 55 I’m gonna be asking questions and it goes below 40, for sure, I’ll be asking questions. If it gets towards 40 I’ll be asking questions.

Rod” Yeah.

Jeremy: But, you know, what’s really critical is that when you look at that and the terminal cap rate, you’re starting to see people who could potentially engineer numbers that they’re looking better than they should be, right?

Rod: Yes. Yes.

Jeremy: So those are some of the flags at a quick glance. Those are the really easy ones.

Rod: Yeah.

Jeremy: You’re gonna look at the expense inflation assumption on average and then, the income inflation assumption on average. It might different by year.

Rod: What’s sort of averages? I’m sorry. You’re moving really fast and this is probably making a couple the people on the podcasts head swim a little bit.

Jeremy: Sorry, sorry.

Rod: So, let’s start with, let’s start with the income inflation which, guys, what he means by that is, what percentage are you throwing in on a pro-forma per year that you anticipate the rents to increase. So, what do you like to see there, Jeremy?

Jeremy: Yeah. So, keep in mind. I’m investing in a stabilized deals. So I wouldn’t expect to see 10% year one, right? Because that doesn’t really, you know, it doesn’t equate. So, I would say that 3% is a fine number for me.

Rod: The average.

Jeremy: Anything under with flag is being very conservative and it’s tow or something, I may even ask why it’s so low. Anything above three, I’m gonna start to question. Is this person being aggressive? Are they trying to make the numbers look good?

Rod: Okay.

Jeremy: For an expense inflation, I would say, as an average, I like to see two and a half to three but I really dig into the line by line because you know this very well. You know, you may have like often I’ll see like someone’s paying medical expenses for employees, for example. And then those medical expenses, it might be best to assume that they’re gonna have a higher inflation rate, for example. But if they don’t assume that then it could be understated so, yep, we’re getting the averages as a high level but I would say that two and a half to three is a really nice area.

Rod: Okay, okay. Anything else pop up? Pop into your head? Just as a …

Jeremy: At the quick glance, I’m just going through it. I mean, you know, …

Rod: You’ve done so many of these. You can just think about it. Well,

Jeremy: Yeah. One very important thing I forgot to mention. One of the first questions I asked right away, because of the way that I invest, is the cap rate and if the cap rate is under a certain number for me, I automatically pass and, partially, because I know that it was in my profile, it won’t hit the cap, I don’t even have to look at the cash flow.

Rod: Right.

Jeremy: It won’t hit it, you know. If you’re taking a normal loan. So, that’s another one I would very strongly recommend looking at.

Rod: Okay, okay. So, what are some other questions that you might ask an operator when you’re considering getting involved in one of their deals? What are, let’s go down that. It’s, you know, the big one. So once I really, you really give attention to.

Jeremy: Sure. Well, one thing I wanna mention right off the bat is that I always do background checks.

Rod: Right.

Jeremy: And I do all the managing members of the manager entity and I say this right off the bat because I find most past investors I network with do not do those.

Rod: Why?

Jeremy: They give me a number of times and I think it’s one of the most overlooked things when someone evaluates this indication. So, I always do background checks, that’s number one. Now, that I actually don’t normally do that until one of the last steps because …

Rod: Because it cost money.

Jeremy: Exactly. And I wanna make sure everything else lines up first and make sure it’s the right deal to really do that on.

Rod: Sure.

Jeremy: Another thing I’ll do is I will absolutely try to verify the operators experience clearly and their track record and what’s really important is, you know, we’re seeing an interesting time right now because we’re recording since 2019 and if somebody started in 2012, and everything’s gone really well then, you know, …

Rod: They haven’t had their butt kicked yet. They didn’t go through what you did, personally, you said you started, you know, 02 to 07. So, you probably saw, you probably saw some pain.

Jeremy: Yes.

Rod: Maybe not personally but maybe your some of your investments pulled back. Yeah. That’s where you were going with that, right?

Jeremy: Right. So, my point is, don’t be confused but like, if I see an operator start in 13 and currently has a pristine track record up till 19, all that does is check the box that’s the way it should be. Not like, “oh that’s actually a bonus”, actually work. Any red, any yellow flags or red flags coming up during that time period almost it gets magnified in my head because they shouldn’t be having trouble at this point in the cycle what the way the economy’s been in the expansion and reduction in cap rates etc. So, it’s like twice as bad I suppose if you see that type of scenario. Sometimes they’ll actually ask questions where I don’t even care what the answer is but I actually asked it to see if they’re conservative or not in the way they answer.

Rod: Give me an example.

Jeremy: So, what’s a good answer? So, this is kind of an obvious one but it’ll give you some idea what I’m talking about. So, let’s say that the current building is 97% occupied and they assumed an 8% vacancy rate, okay? Across the board. I’ll say it, well, you know, why did you assume, how’d you get the 8% vacancy rate? Well, they may say look, we’re in a really strong market, we think we’re going to continue to be at 97, 98 percent occupied.We wanna be conservative and make sure we setup the right expectation for investors. That’s what I would expect to hear. On the contrary, if the property is 85% occupied and they’re modeling out in year one 98 and they’re going out like 97 all the way through, for example, then, I’ll ask them that question. If their answer is, well we’re in a really strong market. It’s gonna be strong for the next few years, the data shows above a, what that’s telling me is it could be right but they’re being very aggressive and that’s not the personality I’m looking for. So, again, in that case, it’s a little bit, that’s not really the best example.

Rod: But that’s what you mean by that. You’re looking for that, you know, that personality that matches yours which is very conserved. Guy, I mean, you know, ….

Jeremy: Right. So, reading between the lines on the way the sponsor answer some of the questions is sometimes more important the actual answer itself is my point. And that’s definitely some of what I do for sure. That’s a ton of questions.

Rod: Sure.

Jeremy: Yeah, one of my favorite things to do because I typically go on site depending if I’m invest with someone multiple times and it’s a deal it’s easy to analyze from afar I may not travel but I usually will travel. One of my favorite things to do is to get a tour from the sponsor of the general area and not just the property because what that tells you is how detailed is the sponsor. Are they like eager to show you this building, that building looked at this, you know, this depend on the asset class but and this wasn’t accomplished. This one has rents, they’re really-really know their stuff. They’ve done a ton of research. You can tell. And then, on the flip side they just take you to the property, walk you through the property and then, that’s it and they don’t know much about the area that tells you something about them too and again, this is reading between the lines, right?

Rod: Yeah, yeah.

Jeremy: So, I do a lot of the reading between the lines because in the end of the day it’s who are you making the bed on and have they done their research because they’re in the expert that you wanna make a bet on and trust.

Rod: Nice. Okay. What are some other things, you know, other questions that you might ask if you’ve never done business with the particular operator? Any other, even maybe drilling down a little bit more.

Jeremy: Yeah, I mean, basically, I understand their general strategy, what they’ve done in the past? Is that aligned with what they’re doing today? Or do they have to switch? And if they have to switch, why? Which sometimes can be for a very good reason. They’re switching strategies. I definitely would want understand how they handle the cycle and how they kind of manage a cycle because I could tell you, personally, I switch what I’m investing in depending where we are on the cycle. It’s very specific and very strategic and I try to stay away from what’s hot and I can switch asset classes which is one of the advantages I have on the passive side.

Rod: Right.

Jeremy: So here, you know, what the sponsors been up to, have they been mostly on the sidelines? By the way, when did that start? Do I agree with their timing or not? What cap rates are they willing to pay? That’s a very common question so I get an idea of how aggressive they’re willing to be within the type of framework and risk profile that I’m looking for and how many deals at date. So, you know, I may ask somebody, how many deals have you done this year? And see if, how picky they be, right? Because we’ve talked about this little before that, you know, now is the time to be ultra-picky and if someone’s doing a ton of volume that just flags up that’s really not okay. Just not align them with where I currently believe. We are just like. So, those are some more sample questions. Just trying to get to know somebody and make sure they’re the same philosophy.

Rod: Okay, okay. I mean, do you speak to their communication? Plan for investors? You know, like us, you know, we take a lot of time educating our investors. So we’ll do webinars and kind of show the behind-the-scenes stuff and, of course, I do live events, things like that, but there’s so many things I can’t teach from stage that, you know, so we kinda do a include education and then we, you know, do, you know, regular reporting, a narrative and included with webinars. So, what do you look for?

Jeremy: Yeah, great. So, that’s a really great point in topic. So, first thing I’ll do, is I wanna confirm the distribution frequency is what I look forward to typically, quarterly. I don’t expect it to meet quarterly often because it is very burdensome, administrative or the operator but I need the quarterly cash flow because I live on. I also look for quarterly reporting, right? And to your point, one very important thing I think a lot of investors don’t do in advance is ask for a sample quarterly report from the past. They can redact that if they want if it’s confidential or whatnot but that will give you an idea of what level of communication to expect because let me tell you, there are, I have seen the entire spectrum of communication and, you know, as an individual, as a past investor, you may have certain, what’s the word I’m looking for, not requirements, but you may have a certain expectation. That’s what I’m looking for, right? What am I going to get about this property every quarter? Some operators, they’ll give you a ten pages, some gonna give you one and you’ll see everything in between. Now, one thing you’re gonna know is, looking at that quarterly report, do you agree with the level information you get? Are you comfortable with it? Because if you’re not comfortable with that alone, could be a reason not to invest with an operator even though you’ll have a property. You have to make that decision. So, asking for that quarterly report in advance is really-really important and I find that a lot of investors don’t do that. I always do.

Rod: Right. No. That’s one I hadn’t even heard myself. So, that’s very important. I like it. I like it a lot. Do you dig into how an operator has stress tested a deal? We talked about that, you know, like, you know, do you look at how much of an operating reserve? They may be raising or keeping in the deal, you know, what if they, what if they, do you ask what would “ifs” that they may have done, you know, as to decrease in occupancy or decrease in rents or, you know, a combination of the two. Do you dig in to that at all?

Jeremy: Yes, for sure. So first thing I do is, I’ll definitely look for a line item, that will be like a reserve. Usually when I look for it as a reserve or so to speak on the multifamily side. Now, it depends too because if there is a kind of a, if there’s a plan upon closing to make some improvements, take care of some deferred maintenance, some of that cost will be upfront but you wanna see a reserve ongoing. You just want to see that for to be conservative. So, that’s one thing I’ll definitely look for. There was another thought I had in my head that I’m blanking on.

Rod: Well, well. Do you ask them what they did to stress test?

Jeremey: Oh yeah.

Rod: For high vacancy and things of that nature.

Jeremey: I always do. What a very important question to ask is, at what occupancy rate are we at breakeven from cash flow?

Rod: Breakeven. Yeah, yeah. They better be able to answer it.

Jeremey: Yeah, very good point, right? And by the way, that’s another great thing of reading between the lines. I don’t remember. I don’t know. How much are they really, you know, how much research have been on the deal? Sometimes they’ll publish a sensitivity analysis. Sometimes they won’t. But they may actually have done it. And so, it’s very important that you get a sense of whether someone’s been that thorough or not by asking those types of questions. Another question I like to ask is, at what occupancy rate are we below the debt service coverage ratio that the bank will actually allow? Unfortunately, I’ve seen to a couple funds recently that a friend was in where their debt coverage rate in this economy right now, the debt coverage is going down, down, down and they’re reaching the covenants, I’m sure, and by the way, a lot of investors don’t realize that once you’re below that debt coverage ratio, the bank can actually withhold all distributions.

Rod: Wow.

Jeremey: Yeah, they actually can require the sponsor to not to show you any cash and just preserve everything until they’re back above and so that would mean zero cash flow for someone like me which is a huge problem, right?

Rod: Right.

Jeremey: And so, those are very important questions to ask as well so you can understand some of the risks as an investor, obviously.

Rod: So, if you were speaking to people that have not invested passively yet, what advice might you give them to educate them as I try to push them to come to my events at least have a basic understanding of the business and how to analyze a deal and at the, you know, because so many people will just blindly give their money to someone and then, not fully understand what it is they’re investing in. I mean, a great example that of course is the stock market. With stock brokers that are great at selling but haven’t got a clue of what they’re selling but, you know, so it’s my belief that you should understand as much as possible anything you invest in. Now, you’re on the opposite of the spectrum. You understand it, probably better than many operators do, but what would you suggest to someone that’s listening, that’s got, you know, maybe sitting on some money that they’re thinking about investing?

Jeremey: Yeah. So, I would say number one is, real estate is typically cyclical. So, we, you like to talked about some exuberance phase …

Rod: Right.

Jeremey: And more than to understand that real estate is cyclical and you’ve got to take a step back and educate yourself on where you think we are in the cycle. Got one’s gonna have their own opinion and what does that mean, you should be aggressive or not right now? I am mostly on the sidelines. Not fully. There’s always deals out there. There’s always new opportunities, right? But that’s number one. Really get a sense how dangerous is it to invest right now. What do you need to do to protect yourself? Depending where we are in the cycle.

Rod: Yeah.

Jeremy: Number two is, if somebody’s starting from scratch, the best way they can learn at least besides getting education like you’re referring to is what I call opportunity exposure. That’s how I learned and it was much harder to do when I first started in 02 because you have to network to find all the deals. If you’re talking about an accredited investor, you can log on to the major crowdfunding sites right now in your pajamas and in an hour you can download 10 multifamily deals, put them all next to each other and start to compare them. Even if you know nothing around you I can analyze them.

Rod: Great idea. Great idea.

Jeremy: You can look at the spreadsheets across all of them and you can start to learn a little bit. That’s how I learn. All opportunity exposure.

Rod: Fantastic. Yeah.

Jeremy: And it’s actually really efficient these days. It’s much easier than when I did it. So, that to me, you know, is one of the best ways I think to learn and also recognize that it takes time and like you mentioned, it’s not something you wanna jump into. These are not, you can’t just press sell on your screen and sell in three days in stock market. These are illiquid and you’re making commitment. It’s very, it’s not so easy to get out of these and it’s not something you probably wanna do unless you’re an emergency or some type of reason. So, you wanna put a lot of time and thought into this before you actually start down the path.

Rod: I couldn’t agree more. Well listen, my friend. You’ve been a tremendous value today. I really appreciate you taking your valuable time with no agenda other than to add value, Jeremy. And, you know, absolute pleasure to meet you and really very-very impressed with your incredible knowledge of this exciting business that we’re in.

Jeremy: Yeah. Thanks for having me and then, you know, can I mention if someone wants to contact me just to, I’m happy to help people …

Rod: Okay. Sure, sure, sure.

Jeremy: Reach me is through email which is at Jroll at our, which is JROLL@rollinvestments which is R O L L investments with an S .com. So, I’m happy to help anyone in any way I can. To networking if you’re new and have more questions. I’m not an investment advisor so I’m just going to share my perspective as an investor but everyone’s a welcome to reach out.

Rod: Very kind of you but be careful what you wish for. I’m in a lot of ears. Okay. Thanks, thanks for being on this show, my friend. And I’m sure that our paths will cross again.

Jeremy: That was great. Thanks again for having me.

Rod: Thanks, thanks.

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