Logan:

Yeah, absolutely. So, you know, an interesting conversation that I had recently on a podcast was with a gentleman who focuses only on Office products. And you know, I think everybody has said, Man, I bet the office is struggling. Yep, maybe, maybe in very specific areas. But there's an opportunity, I think, for a lot of people to look at different asset classes while everybody's flocking to one which seems to be multifamily and self-storage. So those two, what that being said, Midwesterners here in Kansas City act a little differently than some people do on the coasts. So you need to look at not only the demographics of your market and your asset class, but you have to look at the psychographic piece of them. So how are they behaving, our businesses back in the office? And if you come to Kansas City, they are. And a lot of folks I hear counter-intuitively is, man, I'm ready to get out of the house. Sure, it was cool. Like the flexibility working from home was nice. But I have three kids, I have four kids, I got two kids, I don't have an office, I miss people, I miss seeing collaboration. My wife is a prime example. She works at a marketing and advertising agency for a firm here. And they have done a great job during COVID. But I can tell that they're working a lot with their people on, you know, social anxiety and things like this, because they're just missing, we have to remember that we're social animals. So looking at who your end-user is in an asset class is so important. In Kansas City. It's unique because we are still continually seeing new multifamily properties being delivered and being struck for new development. And so I look at multifamily as a core-plus value add and opportunistic. And each one of those sub-asset classes in multifamily presents a unique opportunity. If you're developing core plus, or core or core-plus assets, really just on the core side of things. Fantastic. You're probably a developer, and you have a different outlook. And it's a shorter-term hold for you. But most of my investors and clients are looking for strong cash flow on day one. So we focus on value add and opportunistic deals. And in Kansas City, the affordability matrix is very, very still conducive for investment from outside firms. So when I talk to somebody, one thing I always start with red is our return on equity. And people don't understand what that calculation is. It's just simply let me break it down. If you had a single-family home that you lived in, at one time you moved out, let's just say the mortgage is 3500 bucks, okay, you might get 4000 for rent at that single-family home that you own. After management. If you have management after, you know, fixing something after any of the other expenses that you might have, you might cashflow 150 to $250 right. Well take that, multiply that by 12 divides that by your equity, and now you have your return on equity. Whenever I tell somebody that calculation, they're like, well, what else can I do? I said, Well, you use that money that you can either invest in a tenancy in common with a DST or you can use it as a downpayment on the cash-flowing asset at a cap rate from six to 9%. In Kansas City, we break that down even more and I show them that okay if you use This 75% leveraged product with your 25% down payment, you might be able to get into 20 doors. So you have 20 people now paying you monthly instead of one tenant. And that just blows people's minds because they don't understand that calculation of our UI and where they can move that money too. So that's where I tried to start the educational process app.

Brett:

Beautiful. I love the way you said. And you're absolutely right. That's one of the most underused and utilized and understood parts of the calculation. I always love cash on cash return, yeah, and then immediately return on a return on your equity. Right? Because you could be sitting on just a huge amount of appreciation, especially said a primary home sale in Palo Alto, an $8.3 million primary home seller wildly appreciates it. He's living in the house. additional income, they're like, well, you can sell it. But I have all this capital gains tax. Well, no, not with the deferred sales trust, we can defer it, move it in there. Now all of a sudden, you have a pile of money that you can go and diversify and go into commercial real estate syndications passively or actively, right. So you're taking an illiquid asset that was producing zero cash flow. And of course, if we go Rich Dad, Poor Dad, Robert Kiyosaki, your primary home is not an investment people. It's a liability, right, and investments are gonna produce cash flow, it's gonna pay you right, it's gonna pay you right, it's gonna be appreciated. So it's kind of another topic. But let's talk about capital gains tax deferral challenges, the 1031 exchange is very well known from our listeners, but maybe I know we, before the show, we touched on a story, and I think maybe it's good to maybe share our listeners with that story. The biggest frustration you've seen may be a client or partner when it comes, to completing 1031 exchanges?

Logan:

Yeah, you know, read, it's just being proactive instead of being reactive. And everybody's like, well, 45 days is a long time. Well, they've never done a commercial real estate transaction, because 45 days, it feels like a blink, right? I mean, you blink in 45 days is over. But what I mean by that is, you know, if you're thinking about, you know, selling a property, and you have capital gains tax, before you even list the property, start educating yourself and start building relationships with people like Brett and myself, that can help you place that capital into a cash-flowing asset, you're going to need to build a team, there's an educational curve that you have to get over. After you get over that which you can do in multiple ways, listening to this podcast would be a great way. The second way you can do this is to start reaching out to people in the markets that you have identified. So that's the biggest piece of it is making sure that you understand that this is a relationship business. And most of the projects and deals that get done, you are not going to find on costar. Well, it would be a loop net for the clients that we work with, you're not going to find on the internet. So you need to reach out proactively and build a team of people who can bring you deals, they can manage those deals, they can finance those deals, and they can rehab those deals. So, you know, I think that the story I was alluding to was we had a client, it was a decent sized 1031 exchange, we were trading into an apartment complex, or she wanted to trade into an apartment complex. I said, Okay, well, when did you sell the property, so they said well, close two weeks ago. So well, holy cow. Now I only have 24 days to get 28 days to get you into a new property. And so being able to communicate that upfront, so you have the best team in place. So you can start underwriting and making offers on properties before your deal closes is the number one tip that I have for folks that are thinking about doing a 231 exchange. And in that story, I had to drop just about everything I was doing from a brokerage and acquisition standpoint to make sure that this person was not going to be liable to pay for that tax because they did not qualify for that COVID extension that came out last year. So to me, it was an unfortunate event. We made it work. But there was stress on all parties that didn't necessarily need to happen. Because we all know that lenders were a little bit goofy during COVID, there were a lot fewer lenders that were willing to step up to the plate on a lot of the projects that we were looking at.

Brett:

Yeah, very well said and for our listeners who are wondering and learning about the deferred sales trust for the first time, you can save a failed 1031 now pasture 45 dedication period, and not identify not having it as one of the three properties that you're identifying. So there's a ton of flexibility. We just did a deal in a Georgia $7.6 million multifamily sale, gentlemen bought and sold properties for 30 years and he was faced with this COVID dilemma. He had sold his money sitting at the 1031 qualified intermediary COVID hits and like a lot of folks didn't want to buy and maybe still don't want to buy given the high prices and low inventory and so we'll save his field 1031 he moved the funds pay off all this debt into the deferred sales trust. And then it's been invested now on some multifamily passive deals in Florida and another one Want an Arizona now? And so he's diversifying, he's feeling good. He's a baby boomer, right, he's ready to kind of relax a little bit, at least until the market shifts. And then if it shifts, he can go back and actively again, which is pretty neat. All tax-deferred. That being said, we are running out of time. Logan, are you ready for the lightning round?

Logan:

I was born ready, Brett.

Brett:

All right, here we go. So knowing what you know, now, if you go back to your 25-year-old self, what's the one Golden Nugget that you would make sure you would do?

Logan:

You know, it would just be to know who you are, and stay true to it, you know, I got caught up with my physical being back in that period, right? It was like one asset, or a part of my life was fantastic. But everything else underneath that was kind of broken. And so you know, for me, if I go back to my 25-year-old-self, I would say look, you know, it's great to be healthy, but don't make that your life. You know, make your emotional, mental and spiritual health, a primary objective for you and the physical will continue to follow.

Brett:

Beautiful, absolutely love that. I heard a quote, learn to work harder on yourself and your self being yet your faith, your family, your fitness, your finances, right, your personal development, your leadership than you do on your job, your job being maybe just education or, you know, making it to the NFL or getting that promotion, right the intangible stuff, but it's the internal stuff that's going to make all the difference in the things that are spiritual as well. So love that, next question, if you could recommend one book, two listeners that you're loving today, what did that one book?