Dave Wolcott is the founder of Pantheon Investments, a firm dedicated to helping entrepreneurs achieve financial freedom and legacy wealth through alternative investments. With over 20 years of experience in wealth-building, Dave has learned from and partnered with top experts in private markets, tax strategy, and multi-generational wealth. His proprietary Pantheon Holistic Wealth Strategy is designed to share insider knowledge and strategies once reserved for the ultra-wealthy. Under Dave’s leadership, Pantheon Investments has become a trusted resource for those looking to transcend traditional stock market approaches and build lasting wealth with purpose and fulfillment.
Here’s some of the topics we covered:
- Integral Lessons Learned In The Marine Corps
- Borrowing Against Life Insurance To Make a Purchase
- The Wholistic Wealth Strategy
- Belief, Health, and Habits For Success
- Tax Strategy and Estate Planning
- The Importance of Asset Protection
- Asset Repositioning For More Diverse Investments
- Focusing More On Being a Specialist Rather Than A Generalist
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
For more about Rod and his real estate investing journey go to www.rodkhleif.com
Full Transcript Below
00:00:58:08 – 00:01:16:29
Rod
Welcome back to life time cash flow through real estate investing. I’m Rod Cleve, and I’m thrilled you’re here. I’ve got a super cool guy I’m interviewing today. I’ve been on his podcast, I. His name is Dave Walcott. Dave’s pretty much every asset class and real estate. He’s raised almost $100 million for real estate. he’s the CEO of pantheon Investments.
00:01:16:29 – 00:01:25:21
Rod
It’s Pantheon invest.com. And I was on his podcast, which is well, strategies secrets of the ultra wealthy. Didn’t have here. Brother. Good to see you. Yeah.
00:01:25:21 – 00:01:29:10
Dave
Look. Grateful to be here. Always great to connect. And,
00:01:29:12 – 00:01:33:07
Rod
And you’re going to be moving in right down the street on the same street that I’m on, no less.
00:01:33:07 – 00:01:35:10
Dave
100%. We’re officially neighbors. Yeah.
00:01:35:11 – 00:01:56:00
Rod
That’s crazy. Crazy. Well, I appreciate you coming out, brother. And I’m a little jealous because of some of the things I’ve heard before we started recording here, of the way you’ve approached this. Because talk about the the the right way to approach this. But, listen, I’m not gonna steal your thunder. I want I want you to tell your story, and then, and then let’s dig in on stuff.
00:01:56:03 – 00:02:15:25
Dave
You better. Yeah. I think it’d be helpful to provide some context, really, about my story. And, you know, I was raised in a middle class family in Connecticut, and I was told that the recipe for success was go to school, get great grades, you’re going to get a good job. And life would just work out right. So kind of followed down that path.
00:02:15:27 – 00:02:39:13
Dave
I had the opportunity to do the ROTC program in the Marine Corps, serve my country and really learn some things there, rod, that they don’t teach you anywhere else in life. Things such as leadership, teamwork, and integrity. After the Marine Corps, I transitioned into, corporate America, got into the tech industry. and at the same time, my wife and I started raising a family.
00:02:39:13 – 00:02:47:13
Dave
We had an 18 month old running around. And then on October 24th, 2000, we literally had triplets.
00:02:47:15 – 00:02:48:24
Rod
Oh holy cow.
00:02:48:24 – 00:03:08:23
Dave
Yeah. Holy cow is right. And so, we quadrupled the size of our family overnight. And here I was just trying to figure out my career, but the first thing I did, rod, was I went to see my financial planner and said, you know, it’s $1 million these days to raise a kid. Now that’s four plus. I’ve got retirement.
00:03:08:25 – 00:03:33:17
Dave
And I wanted to live a big life. Right. And the financial planner just told me that, you know, look, Max, out your 401 K, defer your taxes, write for the kids. There’s things like 529 plans. And it was right then, rod, that I just realized, you know, I wasn’t going to get wealth wealthy, right. As a retail investor in the stock market.
00:03:33:24 – 00:03:52:14
Dave
And this was average advice for average people. Right. So this put me on this obsessive quest to really figure out how are the top 1% really building their wealth. And I tried to decode that. So I started investing in private deals. And keep in mind this is back in 2000. You know, Rich dad, poor dad just came out.
00:03:52:21 – 00:04:18:02
Dave
There weren’t great podcasts like this or resources. but I had the opportunity to invest in, all kinds of asset classes, retail, raw land, single family, office, multifamily oil and gas had really great success over the next 20 years. And all these asset classes, and built a tech business on the side, which I had a full exit.
00:04:18:04 – 00:04:41:06
Dave
And then I created pantheon, really to help other people figure out what is the blueprint of the ultra wealthy. How can we, you know, achieve our goals in life? You know, much quicker using the real estate asset class, other asset classes. How do we need to be thinking about our wealth? And, you know, how can we just live the best life that we want to live?
00:04:41:08 – 00:04:43:19
Rod
Okay. When did you start pantheon.
00:04:43:22 – 00:04:45:08
Dave
Started about five years ago.
00:04:45:08 – 00:04:55:27
Rod
Let’s talk about some of the things you do inside of it. I know you have a virtual family office. Explain, I mean, versus a brick and mortar situation or. Yeah.
00:04:55:27 – 00:05:20:08
Dave
So you know, so it’s interesting, right? Right. Like I’m really focused just like you are. Right? I’m focused on our investor. Right. And as an entrepreneur I see it as solutions. Right. So where are people struggling with not meeting their goals, their financial goals whatever that is. Right. So we have a podcast, right? That creates education for people to learn, right?
00:05:20:15 – 00:05:40:26
Dave
Education is a huge part of that. As you go through that journey, then and you start to learn how the ultra wealthy are investing, what is the asset allocation model they have? Well, they’ve got a certain amount in real estate. They’ve got other asset classes. they might need help in terms of okay, you know, I’m too busy, right?
00:05:40:26 – 00:06:00:05
Dave
I just sold my business. I made eight figures, and I’m too busy to chase down all these deals. Right? We don’t have enough time. So that’s where our virtual family office can come in and help give you guidance and really act like a CFO, you know, to kind of plug you in. other things, for instance. Right, such as strategic tax planning.
00:06:00:08 – 00:06:17:09
Dave
You know, it took me firing five different CPA firms over the course of you know, building businesses over the years that I got completely frustrated that all the had 95% of the advice out there is just, you know, it’s for average people, right?
00:06:17:15 – 00:06:19:29
Rod
It’s driving looking in the rearview mirror. Yeah.
00:06:20:02 – 00:06:37:17
Dave
Right. Yeah. Exactly. They’re they’re they’re filing your taxes. Right. They’re not doing strategic tax planning. Right. And so that’s huge. So you want to be able to plug into a network of these strategic advisors that can really help you accelerate your wealth. As well as preserve your wealth.
00:06:37:19 – 00:06:59:03
Rod
And that’s part of your family office program. Correct. So you got you got tax planning there. you’re you’re you’re identifying, opportunities, for you to invest in. I know, you know, you’ve co-invest in lots of deals with some big names that we talked about before we started recording and people I know quite well. and, I think you mentioned life insurance as well as a whole life.
00:06:59:03 – 00:07:22:22
Dave
Yeah. No. Again. So let’s just think about that from a solution perspective. Right. And I know there’s a ton of real estate, you know, investors in your audience. Right. So that’s how I actually discovered using cash value whole life insurance policy is we start getting income from our different properties, right. And what do you do with that income, especially when you’re starting out?
00:07:22:24 – 00:07:52:29
Dave
Might not be that much, right? Might be a couple hundred bucks from each property, a couple thousand here or there, but you don’t have enough to to have the down payment for that next deal. Right? So what you want to do is actually add value to your money, right? So by putting it inside of a whole life cash value policy, what you can do is that money starts compound in tax free at just about a 6% rate.
00:07:53:02 – 00:08:15:03
Dave
it also you can use it as collateral against loans. So you could actually purchase real estate using it as a collateral base. And you can borrow against the policy to go make your next purchase and basically use the same dollar twice. And there’s probably a dozen other things that it does. And this is one of the things that the wealthy do really well.
00:08:15:06 – 00:08:18:22
Rod
Helped me understand some though. You said use the same dollar twice, I you lost me on that.
00:08:18:22 – 00:08:26:27
Dave
Okay. So this is what’s really sophisticated about this, right? So let’s say I put 100 K into a policy this year.
00:08:26:27 – 00:08:31:05
Rod
And you’re not limited by how much you put in. Correct. You can you can pretty much stack it up if you want.
00:08:31:05 – 00:08:52:09
Dave
Yeah. You can stack it up on the front end. Exactly like if you had an asset or liquidity of that. Right. Okay. But let’s just say you put you put in 100 K right upfront and then typically, you know, within 30 days you can actually borrow, you know, up to maybe 75, 85% of the value that you’ve actually put into it.
00:08:52:12 – 00:09:10:20
Dave
Right? So that 100 K is going to continue to compound at just about a 6% rate, completely tax free, while I’ve then just borrowed 80 K out of it and now I’m using that for you. My next multifamily deal is part of the down payment.
00:09:10:23 – 00:09:11:09
Rod
How does that.
00:09:11:09 – 00:09:13:06
Dave
Look. So you have a loan.
00:09:13:06 – 00:09:15:28
Rod
So what is there I mean I assume there’s an interest rate.
00:09:15:28 – 00:09:28:09
Dave
Yeah, there is an interest rate. But there’s always a spread. You have like a half point to a point spread typically. So that way you know you’re always able to basically you know be ahead.
00:09:28:10 – 00:09:38:16
Rod
So so is the interest rate on the borrow similar to what you’re getting is the return on the initial 100,000. Just to excuse my ignorance on this, I’m just curious.
00:09:38:16 – 00:10:11:03
Dave
Yeah. No the interest rate like I said, is usually about a point or a half point below what the interest rate is. And that’s and that’s much more or you know, what you’re making on it. So again, say at 6% you’re maybe at 5%. So you have a little bit of a margin, right. Arbitrage that you have. But if you think about, you know, you take out that 80,000, it’s now on a real estate asset which, you know, you can multiply at multiples, but at the same time, you still have that existing principal of the 100 K plus.
00:10:11:03 – 00:10:30:26
Dave
Don’t forget all the other benefits like people are raising families. You’ve got a death benefit attached to that. You have also, you know, estate planning, right, where it can go to your heirs completely tax free and avoid probate. It’s got asset protection. So if people creditors come after you, they can’t see it.
00:10:30:28 – 00:10:41:16
Rod
So that return that they get. I’m sorry to belabor this topic as much as I am. It’s just my own curiosity that return. They get to say that 6% on their 100,000. How is that generated?
00:10:41:23 – 00:10:58:00
Dave
Keep in mind that insurance companies have been a mutual insurance company, has been around since the Civil War. Okay, so they’ve seen all kinds of ups and downs in the market. So therefore how they allocate capital is so conservative. Right?
00:10:58:00 – 00:11:00:27
Rod
So it’s from their investments exact. Yeah. Insurance companies loan.
00:11:00:27 – 00:11:04:11
Dave
Bonds you know bonds very low risk. investments.
00:11:04:11 – 00:11:11:13
Rod
So that’s how the Buffett term started out I think was he bought an insurance company. And that provided the cash flow to get things rolling if. Yeah.
00:11:11:15 – 00:11:32:25
Dave
Yeah. So you can use this very synergistically. Right. With real estate in terms of like I said, adding more velocity to your portfolio, adding dry powder, like where do you keep your dry powder. Right. We’re coming into this, you know, market right where there’s going to be some really great buying opportunities. But you got to be able to be liquid to do that.
00:11:33:02 – 00:11:36:21
Dave
And I don’t know about you, I don’t want to keep my money in banks anymore.
00:11:36:27 – 00:11:37:07
Rod
Right?
00:11:37:08 – 00:11:37:20
Dave
Right.
00:11:37:27 – 00:12:03:15
Rod
So not not with a third of the commercial debt held by small and regional banks and office occupancy at, what, 60%? Yeah. Nationwide. I mean, we’re going to see some bank unrest. We’re going to take a break from this great episode for word from our sponsor, which is the multifamily bootcamp. Now, financial success is what you’re after. You’re rapidly approaching one of the greatest opportunities I think we’re going to see in our lifetimes to capitalize financially.
00:12:03:15 – 00:12:22:07
Rod
So if you know real estate is the vehicle for you, you’re crazy not to spend a couple days with me and one of my bootcamps. I’ve always got one right around the corner. Thousands and thousands of people have taken action on their journeys to creating generational cash flow for themselves and their families. From attending my events, I don’t sell anything at this event, so it’s basically 16 to 18 hours of training with nothing being sold.
00:12:22:07 – 00:12:46:07
Rod
Kind of a no brainer if you’re serious about this. To check it out, text the word links to 72345 or go to Rod’s links.com again. Text links to 72345 or go to Rod’s links.com. I promise you’ll be glad you came. Let’s get back to it. yeah. I put my money in a bank that spreads it out over 80 banks and doesn’t put more than 250,000 on in each bank, so it’s covered by FDIC.
00:12:46:09 – 00:12:56:08
Rod
So I know you wrote a book, the holistic wealth strategy. I’ve got a page tagged here that’s got some great points for me to ask you about in the book. talk about it for a minute.
00:12:56:11 – 00:13:29:20
Dave
Yeah. So again, rod, you know, this is really about kind of helping, you know, investors and whether you’re an active investor or a passive investor, it’s really, you know, the focus is to distill all these myths that we have about wealth. Right? And how can we really get to our goals, you know, much faster. Right? So dispelling some of the, you know, myths about traditional financial planning type things, you know, how do you incorporate you know, real estate into your, you know, overall plan.
00:13:29:22 – 00:13:52:01
Dave
And it really has just five simple phases to it. And it’s all underpinned rod, which I know you’re a huge gold guy, right? So it’s all underpinned by creating your own strategy, right? Because if you don’t have a target you’re going to miss every time. So getting crystal clear clarity on what is your vision.
00:13:52:04 – 00:14:06:26
Rod
Yeah. No, it starts with that for sure. I mean, that’s the first thing we do with my bootcamp. So just did that. The virtual bootcamp. I mean, how do you get anything if you don’t know what it is? And we’ve got, my, Orlando event is coming now. We should have over a thousand people there.
00:14:06:28 – 00:14:29:27
Rod
and that’s the first thing we’ll do is goal setting. I mean, you know, you got to create that that burning desire. I see in your book, you’ve got your at you’ve got to know the why otherwise that it’s the why that drives you. So, you know, I see some other things in here around growth mindset and, you know, I don’t want to steal your thunder, but let’s talk about some of these things, you know, beliefs, health habits.
00:14:30:00 – 00:14:31:03
Rod
do you want to elaborate.
00:14:31:03 – 00:14:31:24
Dave
A phase.
00:14:31:26 – 00:14:32:17
Rod
A little bit? Sure.
00:14:32:17 – 00:14:53:11
Dave
Phase one really starts with mindset. because I can tell you, you’re never going to get out of the gate if you don’t have a growth mindset. If you have a fixed mindset and you’re talking to your financial planner and you say, hey, I want to go, you know, buy a next multifamily deal, what’s he going to tell you that’s too risky.
00:14:53:15 – 00:15:13:22
Dave
You shouldn’t do that, right? What is all your family and your friends going to say shouldn’t do that. Right. And so we need to be in this position where we’re always asking why. You know, we’re asking a lot of questions. Were being very curious. And then we’re trying to figure out, you know, based upon our vision, right. How can we get there.
00:15:13:22 – 00:15:34:29
Dave
So setting goals and habits to really support that. But it all starts with having the right mindset, because I’ve talked to so many people and I’m sure it look is successful. As you are right, I can guarantee you’ve had conversations with people at, you know, some events or whatever outside of real estate that say, you know, seem strange.
00:15:34:29 – 00:15:42:22
Dave
You know, you’re not invested in the stock market because really, Wall Street wants us to think the only way to invest in this country is stocks, bonds.
00:15:42:22 – 00:16:04:13
Rod
And nobody’s stupid enough to come to me with that. If they know me at all. No, because I can obliterate that conversation. Yeah, but, you know, that sounded very egotistical. But the bottom line is, is no people don’t come to me and say, why aren’t you in the stock market? Because I’m I’m going to tell you what I think’s going to happen here sometime in the next, I don’t know, a year or two, maybe three years.
00:16:04:18 – 00:16:22:11
Rod
We have a reckoning. The first thing to crash is the stock market, you know, and we’ll see. We’ll see bank failures if that happens. And and so yeah. No, no I don’t I, I anybody I talk to I tell them get your money out of the stock market right now. Get into fixed assets because inflation is not going away.
00:16:22:15 – 00:16:42:17
Rod
I mean I don’t know if you knew this. I told you before we started recording. I’ve heard that now our national debt is going up $1 trillion every 100 days. In the last four years, they printed 80% of our money supply. So up to 2020, 20% of the money was in circulation. And now they’ve increased it by 80%, you know.
00:16:42:17 – 00:16:57:29
Rod
Hello. And we wonder why we have inflation and and I don’t think the fed can do a thing about it. So I you know, I think there’s going to be a reckoning at some point. But yeah not definitely not in the stock market. So the next piece of this is learning and team building. You want to elaborate in your book rather.
00:16:57:29 – 00:17:14:08
Dave
Yeah, absolutely. So you know, in my journey, like I said, you know, back in 2000, like, you know, I took the purple pill right from Kiyosaki. And, you know, the cash flow quadrant was was brilliant. But it didn’t really give you a roadmap on like where to go. What do I.
00:17:14:08 – 00:17:15:11
Rod
Do with this great strategy?
00:17:15:11 – 00:17:40:09
Dave
You know, this this is fantastic. But, you know, I mean, I constantly pause going through books and meeting people, right? And trying to grow and trying to learn all of the time, trying to find, you know, those resources. So you really have to look at yourself as the number one asset and be investing in yourself. And I have a little equation to kind of make this real for the audience.
00:17:40:09 – 00:17:52:25
Dave
Rod, which is your net worth is equal to your financial IQ plus your mindset, IQ plus your physical capital plus your relationship capital.
00:17:53:01 – 00:18:10:25
Rod
I love it. Yeah I see here health IQ. Yeah. No I got it I mean I couldn’t agree more. and see the problem is they don’t teach you this stuff in school. No. They’re even in college. you know, and so, you know, don’t get me started on that. But, you know, people just don’t know. They don’t know how to handle their finances.
00:18:10:25 – 00:18:35:06
Rod
And they. Yeah, they get they get sucked into the matrix like my dad did, you know, go work for a company, worked for Continental Airlines for 36 years, said, yeah, I’m going to get a great pension. Was was dogging me when I was doing real estate. I love him, don’t get me wrong. And I miss him terribly, but but you know, my my mom got $597 a month from his pension and he worked for Continental Airlines for 36 years and got laid off.
00:18:35:09 – 00:18:51:27
Rod
So, you know, thought he had job security. And I think a lot of people walk with those blinders on. They don’t recognize that you have to create your own security. You have to create you have to build your financial IQ. You have to build, you know, that mindset like you said, IQ. And then of course, it all ties into health.
00:18:51:27 – 00:19:16:17
Rod
I mean, if you don’t have the energy to do this, I mean, you know, I I’ve got students that have retired from extremely high paying jobs with, you know, with kids with, with, with consuming jobs. And they do this stuff on the side, but it takes, you know, if, if you’re, you know, if you don’t have the energy to do it, that takes incredible energy to grind for a few years, like most people want to live the rest of your life like most people can’t.
00:19:16:19 – 00:19:18:00
Rod
you do internet banking?
00:19:18:06 – 00:19:19:24
Dave
Yeah, that’s the whole life insurance.
00:19:19:26 – 00:19:33:08
Rod
That’s the whole life insurance. Okay, okay. So I think we touched on the next piece, but let’s just see if we missed anything. It talks about tax strategy, infinite banking and then estate planning. Is there anything we didn’t cover in our previous conversation as it relates to that.
00:19:33:10 – 00:19:54:27
Dave
Yeah. No I think that’s a good foundation. And then we really move. So you know we started with mindset just as a refresher. Right. Then we talked about education. Right. And all these different areas self-education. Yeah. Self self-education. Exactly. And then we move into phase three which is you know we’re not only trying to grow our wealth, but we want to protect our wealth as well.
00:19:55:04 – 00:20:17:29
Dave
So we need to create infrastructure around that. I like to call it infrastructure because there’s some plumbing. There’s some stuff that’s not all that fun, like asset protection. But I guarantee you, you know, no matter what your net worth is, you know, if you’re raising a family, you know, you’ve got to have some asset protection in place. And not all of these things are the same, right?
00:20:17:29 – 00:20:39:07
Dave
If you’re a real estate investor, you’re an LP investor. You know, you’re going after some big assets. You know, you better make sure that you are covered right. You’ve got an increased risk profile, you’ve got higher net worth, things like that. So asset protection is key. Estate planning is key. I know all of your audience are family people, right?
00:20:39:07 – 00:20:58:18
Dave
We’re thinking about future generations and really, you know, just like you, we want to make the world a better place, right? So how do you do that with proper estate planning? Because it’s not just about passing on money, but it’s passing on values. You know, setting up a family constitution and things that really matter, you know, within families.
00:20:58:20 – 00:21:06:27
Dave
and then, of course, the biggest one, rod, right, is having a proact is tax strategy that we talked about a little bit earlier. And if you think of.
00:21:06:27 – 00:21:08:21
Rod
Forward thinking, forward thinking tax.
00:21:08:26 – 00:21:31:19
Dave
Yes, think about it this way. Right. Everyone is always thinking about yield. So I can get a 15% IRR on that deal. My money’s working you know right there okay. Maybe the next one is 16%. And we’re always trying to increase our yield. But what if I told you you could reduce your costs by 10 to 20% by reducing your taxes.
00:21:31:22 – 00:21:59:12
Dave
Right. And then that’s perpetual. So now you add that 10% on top of your 15% you’re making. So now you’re at 25, 30%. And then that just keeps compounding. Every year it becomes really significant. So as I said I’ve fired, you know, many different, you know, CPA firms over the years. We’re all in real estate. But you still have to understand how to use that.
00:21:59:12 – 00:22:08:05
Dave
You have to be educated. You have to have the right partner, to be able to do that. But I think that it’s a significant opportunity for most people out there.
00:22:08:06 – 00:22:29:15
Rod
Oh, no question. I mean, what there’s a reason, you know, 90% of the world’s millionaires either made their money in real estate or invest in it after they make it, because the big reason is the tax benefits. Yeah, we talked about asset protection. I elaborate on that for one second. You know, when you’ve got a decent net worth and you’re a limited partner LP and deals and things like that.
00:22:29:15 – 00:22:47:03
Rod
I mean, I see LPs invest in deals in their personal name rather than like a holding company, LLC and things like that. Yeah, that’s the kind of stuff we’re talking about here. You’re not they’re not protected if it’s in their own name personally. And, you know, I remember I mean, I took it to a whole nother level back in the day at an offshore trust and all sorts of crazy things.
00:22:47:03 – 00:23:05:11
Rod
Limited land trusts, regular trusts. pre this is pre LLCs. I was limited partnerships back then. but you know, you’re walking around with a bull’s eye on your forehead and you’ve got to think about this stuff. Yeah. You know, in advance. So the next thing you’ve got here is asset repositioning. Do you want to speak to that a little bit?
00:23:05:18 – 00:23:32:22
Dave
Yeah. This is where it starts to get fun. Right. So most of the time I talk to, you know, new investors and you know and let’s face it, over 90% of America, they have their money tied up in two places. It’s in government sponsored qualified plans or it’s in trapped equity in their own primary residence. Because we were under this false notion that paying off your home mortgage is a really good thing to do.
00:23:33:00 – 00:23:58:23
Dave
But as savvy investors, we all know that the rate of return on equity in your primary residence is zero, right? So there’s typically some opportunity there. And, you know, just to give an example, right. Let’s say, you know, you pull out, take a home equity line of credit even at today’s rates say 8% or something. Pull out that capital.
00:23:58:23 – 00:24:25:01
Dave
You’re going to now increase your amount of, you know, income, taxable, you know, you deductions that you have in the house. Right. So that goes down, you actually reduce your exposure liability in the home as well, because now the bank owns more of the house than you do. So you’re protected against creditors. And now I can take that 8% and then arbitrage it and say, for instance, we have a credit fund, right.
00:24:25:01 – 00:24:48:07
Dave
That’s investing in merchant cash advances. You could make a 15 to 20% return and basically over double your money just by being smart about it. Right. So that’s a big opportunity for people is to take it, look at their existing portfolio and look at assets that are lower yielding and move them to a higher yield and lower risk.
00:24:48:09 – 00:24:51:24
Rod
That fund you just described. Could you elaborate on that a little bit more? What is it?
00:24:51:28 – 00:25:22:25
Dave
Yeah. So merchant cash advances. this is a really interesting, asset class. It’s got 20% combined annual growth for the past decade. New asset class and what’s happening is, is with the banks tightening regulations and everything, right. They’re not able to lend to small businesses. So basically these other providers. So we’re on a platform that can essentially do factoring and provide lending to let’s say there’s a restaurant here in town right in Sarasota.
00:25:22:27 – 00:25:47:21
Dave
They’ve got three different locations. And now they want to open one in Naples. Well, you go to a bank, they might not even get approval funding, anything. We could underwrite this inside of a week. They’ve got a $400,000 loan. Put up a new flag down in Naples. Now they’re producing revenue, and they pay back principal and interest payments on a daily and weekly basis.
00:25:47:23 – 00:26:14:10
Dave
So the money gets the velocity of money here is so fast it starts getting returned because the average loan is only seven months. and so you can do a nice double digit return, you know, with cash flow it’s non correlated to the markets. And it’s also very diversified because we’re investing in different industries and also only taking a small position in each one of the loans okay.
00:26:14:10 – 00:26:19:29
Rod
That last piece made me feel more comfortable. You talking about a restaurant’s huge failure rate in a restaurant. So that made me a little nervous.
00:26:20:00 – 00:26:20:28
Dave
Yeah, 100%.
00:26:20:28 – 00:26:21:27
Rod
Bad information out.
00:26:21:27 – 00:26:32:07
Dave
There. This so? So the default rate on the fund we’re working on. It’s been around for over six years. It’s less than 6% okay. And that includes Covid okay.
00:26:32:12 – 00:26:34:24
Rod
Right okay. All right. That’s that’s that’s not bad at all.
00:26:34:27 – 00:26:42:17
Dave
And we can collateral at least the other thing is we collateralize, equipment. Most of the deals are collateralized or personal guarantees.
00:26:42:18 – 00:27:02:25
Rod
Well, I had a restaurant and I had equipment, and. Yeah, I don’t want to. I don’t want to belittle what you’re saying here, but, you know, when you when you get this equipment, it’s not worth much afterwards. But but yeah, but but so, and so you also talked about targeting IRAs, which is kind of a no brainer.
00:27:02:25 – 00:27:28:14
Rod
If you’ve got an IRA, you can invest with that. And then some of the things that you’re investing in I know your multifamily, you mentioned your, your, getting into oil and gas. and are you any and besides this merchant cash advance or really merchant lending, really, any other asset classes or any other things that so with that, that’s.
00:27:28:14 – 00:27:59:27
Dave
A great question. Right. And I’m really glad that you asked that. Right. Because I think, you know, when you follow family offices, right, and send to millionaires and you really study portfolio allocation thesis and really understand this, there is what we call this concept, I think of diversification is used incorrectly in the stock market. Right. because it really becomes diversification because you’re investing in so many different assets across so many different things.
00:27:59:27 – 00:28:24:11
Dave
Right. But what you see, the ultra wealthy do really successfully is they concentrate on typically, you know, 1 to 3 different sectors and then they diversify inside those. So for instance, for multifamily for us, you know, we’ll we’ll look at multifamily. But we’re going to diversify between markets, return profiles like we just did a 380 unit condo building in South Florida.
00:28:24:17 – 00:28:48:10
Dave
Build to rent totally unique product right. Versus a value add right in Texas, things like that. So we focus on real estate, private credit and debt, and we focus on energy. And one of the reasons why we like energy as well. We have this oil and gas fund, up to 92% year one investment offsets active income.
00:28:48:10 – 00:28:50:04
Rod
Yeah. So the highest high.
00:28:50:04 – 00:29:10:15
Dave
Income earners, it’s beautiful. Pays out the passive income. really? Well. Right. And and again, back to your point of printing $1 trillion right in debt that the government keeps spending. This is a great hedge against inflation. Right. And to get some exposure to a commodity where demand is always.
00:29:10:17 – 00:29:12:09
Rod
A hedge against inflation.
00:29:12:11 – 00:29:17:06
Dave
Because would you rather have exposure to a commodity. Right. Because the.
00:29:17:06 – 00:29:18:24
Rod
Commodity shipping a commodity.
00:29:18:24 – 00:29:21:08
Dave
You’re actually it’s a working interest in. And yeah.
00:29:21:08 – 00:29:40:19
Rod
Oil in actual oil. Yeah, yeah I do you know, I have a friend that, that did something on gas and just got his butt and it’s always my friend who’s an associate, but he had his butt handed to him. But I, I don’t know the details of it at all, but, you know, I mean, like, anything, everything has risk.
00:29:40:22 – 00:29:55:01
Rod
you know, we’ve got a lot of multifamily operators in trouble right now. I told you before we started recording, I’m taking over 23 assets, and some of those are in trouble. And I’ve got unhappy investors, you know, that I. I’ve been asked to step in. I’m not I don’t have an ownership interest in the ones. The worst of them.
00:29:55:04 – 00:30:13:14
Rod
but, you know, it’s, it’s, it’s some crazy times right now. There’s some people struggling in these different things. but, so talk about your team for me. I mean, you’ve got, you know, you’ve got a, you’ve got a relationship with strategic tax planning, which I love. I may want to talk to you about that myself.
00:30:13:16 – 00:30:22:06
Rod
you know, and I and, what other components you have underwrite an underwriting component. Talk about that a little bit. That you’re underwriting these. Yeah. So yourself.
00:30:22:07 – 00:30:45:04
Dave
No, I have a full time portfolio manager that was actually a wealth advisor for well over a decade. then he spent another decade in, you know, private equity doing acquisitions and things. So he does all of our due diligence underwriting, you know, when we’re looking into deals, which, you know, some, some operators don’t have that, you know, when they’re even code.
00:30:45:07 – 00:31:00:15
Dave
So we have to spend a lot of time doing that. And this is a relationship based business, right? So I spent a lot of time myself with family offices and PR groups actually trying to get exposure to what I call invisible deals.
00:31:00:18 – 00:31:04:20
Rod
Private equity guys. That’s just, you know, private equity. I’m sorry, I interrupted.
00:31:04:20 – 00:31:15:19
Dave
Yeah. No problem. you know, it’s it’s all about trying to find really great deals for us that basically nobody can see. Right? Because once it’s on the market, everybody’s got to ask.
00:31:15:19 – 00:31:44:05
Rod
Sure, sure, sure. Well, you know, that’s great that that that that answers that question. And, you know, like on my team, I’ve got a freaking rock star underwriter as well. Wrote our software that my students use. and it’s a critical piece of this. I mean, our business, a lot of our business is empirical. It’s numbers, you know, and and then asking all the right questions and looking at, you know, trends and, and, jobs and all sorts of other things that factor into this.
00:31:44:07 – 00:32:02:10
Rod
you know, you mentioned something about, family offices and I know the exposure that I’ve, I’ve had I’ve had, oh. What’s his name? Louis. there’s a guy who runs that big family office. oh. Brian, cut this out. You got to know I’m talking about the family office club.
00:32:02:12 – 00:32:03:09
Dave
Oh, Richard. Wilson.
00:32:03:09 – 00:32:05:03
Rod
Wilson. Wilson. Worse and worse.
00:32:05:04 – 00:32:06:07
Dave
His son in the back of that.
00:32:06:09 – 00:32:34:16
Rod
Did he? Yeah. Yeah. Yeah, yeah. So, you know, you were talking about family offices and I’ve had some exposure that I’ve had, you know, Richard Wilson from the Family Office Club on the podcast. He spoke to my mastermind, and I’ve gone to some of their meetings and, and, and I want to flag something you said, draw attention to it because you’re dead on in that the really sophisticated family offices will they’ll they’ll focus on one asset class, maybe two at max, and then they then they’re inside of that.
00:32:34:17 – 00:32:53:17
Rod
So they focus and, you know, like, even Napoleon Hill in his book Thinking Grow Rich, says, don’t be a generalist via be a specialist. And I’m even talking to my team about it because we’re in multiple markets and we want to hone in on 1 or 2 markets and just own those markets and, and the truly successful operators, that’s how they play.
00:32:53:17 – 00:33:09:10
Rod
And and it’s the same thing with family offices, you know, like like I remember Richard Wilson talking about, you know, certain family offices focus on this or they focus on that. So if you bring them something that’s not in their wheelhouse, you’re just wasting your time and their time. You really need to ask questions to discover what they want.
00:33:09:11 – 00:33:10:11
Rod
And would you agree with all.
00:33:10:11 – 00:33:32:22
Dave
That 100% if I brought to our investors the greatest biotech deal, right? I mean, it’s just not going to make sense, you know? No, no one is really educated on that. And, you know, I think a lot of syndicators are doing it wrong out there, right, because they’re actually they’re very transactional in nature. And that’s like, you know, let’s let’s go do this asset.
00:33:32:22 – 00:33:36:06
Dave
Let’s go do that asset. And how are they getting any leverage.
00:33:36:08 – 00:33:37:29
Rod
Or, or true.
00:33:37:29 – 00:33:39:17
Dave
Expertise. Exactly.
00:33:39:19 – 00:34:01:18
Rod
You know, because, you know, they’re trying to be all things to all people. And that’s the mistake. you know, I’ve built 28 businesses in my career, you know, and I, you know, I call them seminars when they fail and several worth, you know, tens of millions of dollars. I got three right now that are but most are spectacular flaming seminars because, you know, I, I didn’t focus and focus is power.
00:34:01:18 – 00:34:21:09
Rod
And so that’s what we’re talking about here is focus. So you know if you’re listening you got to pick your vehicle. You’ve got to decide how you’re going to capitalize on, you know what I think is coming. Economic uncertainty. But also, you know, how are you going to invest and and then learn that vehicle. Don’t, don’t, don’t, you know, don’t be lazy.
00:34:21:11 – 00:34:31:17
Rod
if it’s going to be multifamily, get your butt to one of my boot camps. But, if not, then go learn whatever it is you’re going to invest in. I mean, would you agree with that? I mean, you educate your investors as well. Yes. You.
00:34:31:19 – 00:34:57:10
Dave
Yeah, 100%. And, you know, I think this is a really great way to sum it up is that, you know, we’re all looking for great assets to invest in, you know, but look internally, right. Because there’s no bigger investment than yourself, you know, whether that’s your health, your relationships, your education. Because I’ve always achieved a ten x 100 x multiple on that investment.
00:34:57:17 – 00:35:05:16
Dave
So, you know, if you’re in multifamily, really carve out that niche that you are going to be the best at, right, and figure out what that is.
00:35:05:16 – 00:35:28:17
Rod
And even if you’re investing passively, yeah, at least have a basic understanding. That’s what I’m trying to say here. You know, and, and, you know, you take the time to educate. You’ve got your book, it’s on Amazon, the holistic wealth strategy, you know. Yeah, I know you’ve got a mastermind as well. And and you, you know by the way it’s pantheon invest.com and you know and and you know we do the same thing and we add value.
00:35:28:17 – 00:35:47:00
Rod
We try to educate and give people comfortable. So they have an understanding of what they’re investing in. And if it’s multifamily I’d suggest you come to my bootcamp. Honestly. Yeah it’s three days. But don’t give your hard earned money to someone unless you have a basic understanding what what the hell you’re investing in here. But listen, brother, it’s good to see you.
00:35:47:00 – 00:35:55:25
Rod
I appreciate you coming in. You’ve added, a ton of value, and. And I can’t believe you’re going to be right down the street from me. That’s crazy. But, it’s good to see you again, man.
00:35:56:00 – 00:36:14:29
Dave
Yeah. Always great to connect, rod. Really appreciate you. And I. You know, I really appreciate your mission as well because you’re helping so many people, again, really decode this. And because this is self-education. We’re not taught this anywhere. So definitely invest in Ron’s Bootcamp. You can’t get this information anywhere else.
00:36:15:00 – 00:36:25:14
Rod
Yeah. No, I appreciate that. and, you know, again, if it’s not multifamily, decide what it is and learn it. That’s the key here. Bottom line. Well, it’s great to see you, Dave. Thanks for coming.
00:36:25:14 – 00:36:26:12
Dave
In. Thanks again. Right. Yeah.
00:36:26:16 – 00:36:27:01
Rod
Appreciate it.
