Brett: 

Yeah, I know, thanks for sharing. Thanks for sharing that it's on fire. So now let's talk about places you are investing in, which I think is mostly the southeast. And it's a walkthrough, how are you guys structured? Are you a fund? Are you finding and operating the deals? Are you finding operators to invest with, like a walk through exactly what you guys do at Sugarhouse Investments?

Brad:

Yeah, so sugarhouse investments, specifically, we are coast indicators. You know, when I wanted to get into commercial real estate, I started talking to commercial brokers looking at sourcing my own deals, realized how much of a team sport it is, and the systems and structure that are required to do well here. And so in doing so, I learned about other operators who were already doing well but had specific needs that I knew I could help with. And so was able to find alignment opportunities with operators who are already doing well. And my primary role, this point is Investor Relations, I always help with due diligence, I'm always flying out to the properties, doing the market checks, walking through the units, so that I can be part of that vetting process. But then from there, the main operator team is going to focus on executing the business plan, managing the manager, I'm going to focus on the investors. And so as investor relations slash capital raise function, which is fantastic, I love that element. So to be clear, we do have a couple of properties, meaning apartment complexes here in Austin, we have many up in Dallas and some good handful in San Antonio, those are great markets. in Austin, the cap rates are tighter. So we have to be you know, it's not we just don't find a whole lot of great deals here. The two that we do have to happen to be good relationships with the broker and giving him an off-market scenario. But it's so outside of Texas, we really like those southeast southeastern states, like so many others do. Georgia, the Carolinas, Florida are where we focus on right now. And those markets have done really well for us.

Brett:

Excellent. Yeah, we're talking about financial freedom through passive commercial real estate investments. And so you have a quote with Brad Shepherd here and so you have a co syndication model where you're, you're with the investor's face, you know, and building that relationship helping educate also, some you're vetting the deals as well. You're hands-on, you're flying to the properties you're walking through, you're going through the numbers, so you but the heavy lifting as far as the operations, that's for someone else is strength and your strength is on investors relationships is great. Is that a fair summary?

Brad:

That is that is. And I just looked at that and thought rather than me having to build up all those systems and those relationships, I knew I could see opportunities for me to come in and partner with folks who have already built those heavy lifting elements. And I could provide a valuable component to that.

Brett:

Beautiful love it. And so what's the biggest secret to making sure that you're working with quality operators, and you're being a co syndicator? with them? What have you found that's worked? And maybe things that, you know, have not worked out? What are you looking for when you're looking to be a co syndicator? Or somebody?

Brad:

Yeah certainly, I'm working with teams who are already experienced, I don't want to bring deals to my investors, where I want them to be the guinea pigs, I don't want to be the guinea pig. And so I'm looking at their track record, what is their portfolio? What do their exits look like? What does their management team look like both the operator team is was the property management that they're using my very first experience in as a passive investor, I participated in a single asset property about an hour and a half south of Houston, right near the Gulf, got slammed with Hurricane, whatever hurricane that was, I think it was Harvey, deep value, add new construction on the property. It's been rough. It was a rough deal. And so it turned me off to the idea that the deep value c minus type properties, I really liked the B, B class properties and operators that focus there where it's still a value add component, we're not talking about new construction, we're not talking about a class, there's still a value add component, but it's not the value added. These are properties that are already doing well, they could just do better. And so I'm looking for operators focused on that kind of framework, so that I can take that back to my investors confidently telling them, Hey, this is the kind of stuff I know works that I participated in. And then well, it's Yeah, you might get some bigger returns on a deep value play. But there are certainly some bigger risks. And I've seen that firsthand. And so I like the ones where I can come back to my investors and say, the safe bets, these are going to go well. And we've got a team that can execute that plan.

Brett:

Perfect. That makes sense. Yeah, make sure you're vetting the experience level and the track record and figuring out if they've had a proven exit plan, right, proven track record, and then making sure you're communicating what, what is most valuable for the future deals? Very good. Um, Where are you seeing as far as opportunities if you had to pick one state? What's your favorite place to find deals right now?

Brad:

Oh, boy, it'd be hard to pick one. The next deal that we're doing we're working on right now we're actually raising money for to this point is in Atlanta, the Atlanta is like in Austin, but bigger, you have so much net positive immigration or migration going there. People love it. There are a lot of things going for it: a good economy, good tax structure, good, good regulation levels. So, you know, we were picking it, we're gonna pick up another property right behind this Atlanta, one in Jacksonville. And so I do like Florida. But I think, you know, just if you're making me choose one, I think I would go to Atlanta and you get a little further off the coast a little more steady cut type of a population. As opposed to, for example, we have one property in Orlando within COVID hit a lot of the tenants, there were employees at the theme parks and university students, and they all got sent home. And so we took a hit on occupancy there where you're not gonna experience that same type of thing in most likely

Brett:

Atlanta, Georgia is the spot. Excellent. So we do focus here, capital gains tax solutions, and also Expert CRE secrets for ways to defer capital gains taxes, not using a 1031 exchange, we got a thing called a deferred sales trust. It's pretty cool. And we help people understand that. But I'm curious, what's the biggest frustration that you've found with? It could be real estate investors, business owners that you've worked with high net worth individuals when it comes to capital gains tax deferral options?

Brad:

It's complicated. You know, when we get into these commercial syndications, we're doing cost segregation studies. So we can accelerate depreciation so we get a really good net negative number on our K ones. But then once there is an exit, there's your recapturing depreciation, and now you've got a game to deal with. And the 1031 scenarios in syndications are tough. It's not impossible, but they're, they're tough. And so you know, what your, your expertise is in I'm sure would be very appealing to the type of people that I'm working with, because it is you know, you've got these three or four or five years with great negative cash flow on these k ones, even though you've got money coming in. But then there is this depreciation recapture. And what do you do from there? We do have a lot of investors that will go into these opportunities with solo 401 K's or self-directed IRAs, you have the concern of UBTI tax the UBTI tax. And the paperwork is just complicated with custodians, not again, it's not a huge hassle, but it is a hassle when you're doing with those plans on how to get the custodian involved. And so between recapture difficulty of the 1030 ones in these scenarios and hassles with custodians, and doing it through tax-deferred accounts can be a bit of a challenge.