WS1006: The Pros and Cons of Investing In A Fund With Kevin Brenner

EPISODE 1006

[INTRODUCTION]

0:00:00.0 ANNOUNCER Welcome to the Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication. 

And now your host, Whitney Sewell.

00:00:24.000

Whitney Sewell: This is your daily real estate syndication show, I’m your host Whitney Sewell. Today our guest is Kevin Brenner. Kevin is a founder and CEO of Nimbus Capital, a private equity firm dedicated to helping qualified investors and real estate professionals convert active commissions into passive income through diversified fund investing in emerging markets nationwide. Kevin is also the host of the active duty passive come podcasts and coaches hundreds of students on how to get started in a single family real estate investing. Kevin has started a fund, and I want you to listen to the conversation as he goes through why he decided to start a fundings, he started the for fourplexes, Airbnb, those things like many of us did, but he has gone the fund route and is operating this fund in a way that he vet sponsors, vet deals, and all, those things. He’s built a team around that, so investors obviously can invest in this fund and gain that level of vetting sponsors and deals that they wouldn’t normally maybe have time or the expertise to do on their own. But he goes through many questions that he’s gonna ask sponsors and his team, the pros and cons for that passive investor. We’re just gonna talk about how you get paid as an investor, how they get paid to operate the fund, and amongst numerous are the things that’s so valuable for the passive investor and operator that’s listening.

So have a blessed day, I hope you enjoy the show.

0:01:42.7 

WS: Kevin, welcome to the real estate syndication show. Happy to have you as a guest. I know you have done some pretty big things in the real estate business recently. And I know the listeners and myself are gonna learn a lot from you today. I know you have a military background. I wanna hear a little about that, maybe how that’s affected your entrepreneurial journey, but then also let’s jump into your real estate business and where you’re at now. 

0:02:07.7 

Kevin Brenner: Yeah, awesome. Thanks for having me again with me, so I’m still active duty, probably by the time this episode comes out to the listeners, as the listeners are listening to it right now, I might have two, three weeks left in my active duty career. 

0:21:19.0

WS: Thank you for your service, by the way. 

0:02:20.7 

KB: Thank you, Whitney. I appreciate that, man. It’s been a heck of a journey, eight plus years, active duty in the Air Force. Came out of college, right into the service, and I’ve learned so much. And I’ve actually learned what not to do and how to avoid the massive bureaucracy after working at the Pentagon for so long. But point being is there’s good things about the service and you learn leadership and team building skills, and how to put an all-star team together, and how to run things efficiently when you don’t have all the things that you necessarily need right away, so… great business, and yeah, I kinda got my start packing up a few quads and some other investment opportunities from Airbnb and getting that started.

And what I realized pretty quickly was I went down the road… The progression that a lot of people go through and you’re like, “Hey, I like small multifamily, I like large multifamily. How does one get into that?” Well, let’s learn about syndication, did the whole course thing, study them, started going after mobile home parks and the thing. But what I realized is that I don’t necessarily like the operations thing, the operations side of the house, and I didn’t necessarily… We wanna be an operator. What I love doing is talking to people, helping solve their problems and raising capital for deals. So I got approached by a lot of different operators, “Hey, will you raise capital for us? Blah, blah, blah.” 

And I was like, “Yeah, I don’t know, maybe,” because I’ve always had this idea in the back of my mind of helping the millennial generation achieve and create wealth. And I knew I could do that. So, what I ended up doing was kind of taking a U-turn and stopping my progression and saying, “Okay, what is it that I want to do?” And I built a team around that, and ultimately that spawned in Nimbus Capital. And Nimbus is cloud in Latin. And I’m a meteorologist in the Air Force, that’s what I’ve been for eight years. That’s kind of my throwback to my Air Force, got a career. But in Nimbus, what I wanted to focus on was, I want to help qualified investors diversify and not necessarily operate the properties, but I wanted them to get access to these properties. So, what we do is we’ve set up what’s called a fund of funds structure, and it’s a little bit popular now as people are making that progression from, “Hey, I’m syndicating deals to, Hey, I wanna take even a further step back and grow,” and what we’ve found is our niche and micro-private equity, where we’re able to offer investors direct access. And then also offer the operators to customize capital stack solutions that fit their needs, because that’s a big problem, like Whitney, I’m sure you’ve seen it, like traditional private equity or institutional money, they’re like… What do they say? They’re like, “Okay, well, here’s a deal, you bring a deal to them” and they’re like, “Okay, great, I love the deal. Our minimum investments, $5 million.” Okay, well, it probably blows up your capital stack unless you’re willing to bring them on as a GP, which you probably don’t wanna do… Because you don’t even know these people.

0:05:09.8 

WS: And many of them are not gonna do it any other way. 

0:05:12.7 

KB: Exactly, because they’re like, “Hey, we got mandates, we gotta dump this money, we gotta do what we gotta do.” 

0:05:16.7 

WS: And they’re gonna demand some operational control usually… 

0:05:17.7 

KB: Right, sure. So it’s like, “Okay, well, that sucks from the operator standpoint,” so what I came in is I wanted to build a customized solution, I saw this problem and we’re attacking it with Nimbus Capital through the fund of fund structure, and I like to describe Nimbus as kind of like the missing puzzle piece in the capital stack.

So if there’s an operator listening to the show right now who’s like, “Man, I could really use three to four million,” I just gotta bring this together… Sure, I can raise $50,000 at a time, but what if I had a partner in Nimbus Capital who wanted to put down 24% of that? What if I had that partner that said, “Hey, I’ll bring one and a quarter of this deal”? Sure, you’re still gonna raise some money, but it’s a heck of a lot less and work with you on how it looks. 

So right now, what Nimbus does is we take a primary LP position, the fund takes a primary LP position in our operators deals, and we’ve vetted tons and tons and tons of operators and narrowed it down to about six operators that we love and know and trust, we’re just crushing it.

So they have Creative Capital stacks where that missing puzzle piece. We work with them and we help them scale. They help us scale, and ultimately, because we, the fund, are LPs and the deal, we’re able to focus and direct all of our focus and attention boom right back on our investors, which is where it should be in private equity, and where a lot of the time it’s just not.

0:06:41.0 

WS: No, I think it’s an awesome structure and it’s becoming more popular, but I know there’s all listeners that probably aren’t very familiar. Kevin, why, they’re probably asking like, why would you do this? And there are lot of expense to creating your own fund, or why would you… Is this because of some legal issues, why would you go to the trouble to create your own fund?

0:07:00.0

KB: Yeah, you can create your own fund for anything, and that’s something that people listening to shows on, but you know, it’s mostly real estate folks, right. So obviously, you create a fund to raise money for one deal at a time, technically that’s a… fund but the reason that I wanted to do it was because for me, it’s the ultimate way to scale my business. Because I could be invested in and we intend to actually… Because right now, we’ve launched Stratus Fund One, which is a $5 million opportunity. We’ll talk about that later, but point is Stratus fund one, within the next year, we’ll own over a thousand units. If I went to a syndicate and said, Hey, do you wanna go from zero to 1,000 units, they’ll probably say, “Yeah, that might take like five, six years.” I can do it in a year because of the scalability offered in the fund of funds model.

Is there some legal structure? You definitely have to… I went through a massive process of self-education, networking, I went through probably 10 different lawyers trying to find the person that would understand, and I’ll drop this gem on your audience right now if you are interested in this, save yourself the time, effort and energy. Don’t go seeking an SEC attorney, go and find a fund attorney. They are special attorneys. I didn’t know this. I spent a month in my life talking to an SEC attorney, it would tell me that this isn’t possible, and then I would look at people like Thomson or Whitney or some other big names in the space doing exactly what I wanted to do.

0:08:27.2 

WS: There has to be a way.

0:08:28.7 

KB: I was like, How are these people doing it? This’s gonna be a way so I was like, “Okay, well, there’s an obvious solution right there.” So finally I found the person and the group that I’m working with now, and they customize it, but from a cost perspective, honestly, it’s about the same as setting up a regular syndication. It’s just structured differently. It’s just all SPV. So special purpose vehicles, remember that acronym, and ask the right questions, and you’ll find yourself in this… 

Now, there’s some pros and cons, obviously.

0:08:57.7 

WS: That was gonna be my next question. Like speak to that towards the passive investor, right? Is there learning about this, and I know I get questions from our past investors and many others often about why would I invest in a fund, why should I ?or maybe it’s the only way for some pros and cons for the passive investor. 

0:09.11.0 

KB: Yeah, so for the passive investor… Let’s talk about the pros first, so you were a passive investor a lot of the times, because you got something else going on. You’re busy, you might be an entrepreneur, you might be, I don’t know, a real estate agent, you’re doing some sort of hustle, your main hustle.  And you’ve made a lot of money. And you want to diversify. I advise investors and clients that they should have about 20% of their portfolio should be in some form of real estate, so you don’t have time and you wanna get real estate exposure… Sure, you could go after any operators deal that you might know, and God forbid that deal goes south, you’re kind of on the hook, right. But in a fund of funds concept, you invest in a fund that is then broadly diversified across a niche portfolio of assets, so for example, Stratus Fund One and Nimbus Capital, we are in 150 plus unit assets all around the country and great markets that meet minimum criteria thresholds, but they’re all like 1980s, newer, build their class B class A assets and we’re in it for value-add multifamily, but it’s usually like value-add, it’s really heavy on optimization as far as property management and things like that.

But point is… You get a large swath of diversification, so that’s a big pro, the other pro is direct access, you get access to operators who wouldn’t even take your money if you had it. Because these operators at this point in the game are usually only going after private equity and institutional funds or institutional money, so they’ll have, for example, one of our partners just close on a 552 unit deal in Texas, and 91% of the capital stack was put up by institutional private equity, so they had to come to the table with 9%. Well, of that 9%, they looked at micro private equity like us, unfortunately, we weren’t ready yet, but they were like, “Oh man, this would be a great deal for you guys,” there’s more deals like that in the pipeline, but that’s… The people that we work with, as opposed to the folks who are using agency debt, which is your Freddie and Fanny, traditional, “Hey, you gotta come up with 20%. We’ll give you 80%, whatever.” 

So, direct access, so you got your diversification, got your direct access, and finally the due diligence. If you want to be in multi-family or you want to be in mobile home parks or self-storage development or whatever the fund is in, and you don’t feel like spending the time to super go into the weeds and educate yourself on how to do the due diligence, then go with the fund that is aligned properly. That will help you do the due diligence for you. 

0:11:42.7 

WS:Essentially hiring you to do that. 

0:11:43.0

KB: Exactly, if you’re aligned properly, and you should understand this piece as a passive investor, you want to be aligned properly so that when you make money or the fund makes money only when you make money. So line it up like that as a pass Investor, Watch out for the fees because you’re gonna get fed. 

And one of the things that I set up with Stratus fund, when I saw the fee structures of traditional private equity with… And it was ridiculous. 

0:12:09.7 

WS: Why don’t you talk on that a little bit, the fee structure as far as for the past investor, what should they expect, what’s excessive, what’s not? And maybe you can highlight some of the other known cons or unknown cons for the passive investor, but the fees… Talk about that a little bit while we’re there. 

0:12:24.0 

KB: So the fees, kinda blew me off the water depending on the fund that you’re in, you could see up to 6% management fee, just crazy. And this is just for placing your money, and that’s before… These are fund-to-fund, so the fund might be invested in something else that has a management fee, another portfolio company, so you’re getting double promoted it, and that’s the big con that we talk abou. And I’ll get into that next, but between your acquisition fees, your disposition fees, your management fees, other accounting fees. You really gotta be careful. So what we did with Stratus Fund One is I said, No, no fees. We just do a straight 80-20, the 20% Carrie. So everything that comes back to the fund and form of cash flow, equity, everything, preferred equity, I’ll get split 80-20, keep it simple, the military way, keep it simple, and that has resonated a lot with our passive investors who are interested, but breaking into what we were talking about with the cons, that double promote, if you’re in a fund of funds, there’s going to be some sort of double, you’re gonna get it on whatever the fund is investing in most likely. And you’re gonna get hit on the fund itself because they need to keep the lights on and are in it to make money too.

So the ways you can ask the right questions to the fund operators out there, I say, number one, how are you aligned with me and they should be aligned in some sort of… whether it’s a complicated preferred equity and waterfall structure, which are common, or it’s a straight 80-20 or whatever, there’s gotta be some sort of alignment where it’s not super heavy upfront and ask that question. And then make sure that your fund is negotiating down the fees from the portfolio companies. So, the portfolio company, and this example is the operator, so what we do we, like I said, we were that puzzle piece, Nimbus capital, where that final puzzle piece in the capital stack… Well, because we’re coming to them with 24% of the primary LP, what we do is we set up different shares, a different class of shares in their PPM, and guess what? We’re not paying, they are 3% management fee. We’re not paying their acquisition fee, we’re not paying… We negotiate down, so usually it ends up with no acquisition fee, no disposal, we get a preferred return and maybe we pay let say 3% percent, we pay 1% management fee. 

0:14:44.0

WS: You’re able to do that because you’re bringing so much more capital, but it also allows the operator to do larger deals, right. So it allows them to do larger deals… It’s kind of a win-win all the way around. Then you mentioned no fees, so it’s not cheap to set up a fund and so no fees upfront for you either though?

0:15:01.0 

WS: Yeah, no fees for Stratus Fund One. And like I said, it’s our first phone, it’s a $5 million opportunity, and we blind pull the opportunity and we bring people in. What we do is we actually over-raise, so we raise 5.1 and we use that $100,000 to pay for some initial startup costs and accounting fees and things like that, but the way I wanted to do it was to make sure that number one aligned and number two, that people aren’t getting a raw deal and getting double management fee in this because the industry has gotten very, very greedy. And I think it’s time that someone went and press the reset button a little bit and allowed the newly accredited investor an opportunity to create wealth, diversified wealth and assets that they know will perform, that they don’t have to go and get a master’s degree to understand, that’ll help them create… Well, faster than just getting pickled and dimes. 

0:15:55.7 

WS: Sure, so walk through just a little bit of another’s passive investors is probably a wonder and you know… So just straight 80-20 split, but somebody’s listening that really doesn’t know what that means, you… How do you get paid? How do they get paid? I guess break it down very simply.

0:16:06.0 

WS: so very simply, if you’re picturing a pot of money, and if you’re watching this on YouTube or wherever this is… Now, I got my hands up, right, you have the pot of money that is the fund, all the passive investors come in and they contribute where if it’s Stratus fund, well I’ll keep using that as our reference point, $50,000, minimum, everyone puts their money into the fund that all goes into the pot, and then on a rolling basis, we are deploying that capital and do deals from our preferred partners that are coming in, we’re underwriting the deals. We’re saying, “Hey, is this a good deal for the fund?” It goes up to our investment committee, we decide on your behalf effectively. So to give you an idea, in this first fund, we plan to be in about five to six different deals, so between $750,000 and one and a quarter in each deal. And from that, all of the cash flow that comes back from these properties… Most of these are cash loan from day one, and most of these actually have a preferred return built in from the operator, so that 8%, say all coming back and quarterly distributions to the fund, everything that gets come back to the fund at the end of the quarter, it’s collated into a report from our accounting team, and within 10 days you get your distribution and it’s just split 80-20.

So, the investors get 80% based on the amount of ownership they have in the fund, so it’s just like if you had shares in something based on how much you invest, how many shares you get, you get your pro rata share.

0:17:30.7 

WS: No doubt. We use the terms often and just say often there’s people listening. They’re like 80-20, okay, when do I get paid? What does that really mean? And so thank you for breaking that down. And what about any other lessons learned as far as starting a fund, there’s probably listeners that are thinking about doing this or hope to… One thing you mentioned earlier was find a fund attorney, someone who has done this before, right. Just ’cause their security attorney doesn’t mean maybe they’ve done funds before.

And so tell us anything else or any other lessons learned that you said six months of due diligence in yourself, just learning and pushing through this or talking to attorneys, what else would you say, “Hey, you need to know these things or check these things out before you start down this road.” 

0:18:11.0 

KB: Beyond just working with the attorneys, I paid for a Mastermind $10,000 to do a master mind to learn how to do this and network with people who want to do this, and really I think building a team was very, very, very important. It’s very hard to do this by yourself. It’s really hard to syndicate by yourself too. So, it’s kind of the same principles, you want a team, but also having a very specific idea of who your ideal client, who is your passive investor going to be and what type of fun do you wanna set up? You know, I did a lot of research and he decided on the 5063 C1, but we could have done a regulation crowdfunding, we could have done a REG A, we could have done a REG A+.

All of these different structures have their own pros and cons, typically the traditional crowdfunding platforms are more expensive, set up about $80 to $100K upfront just to set it up, and it takes about three to six months just to get the SEC to approve of what you’re trying to do… Whereas, you know Whitney, and a lot of your listeners do, you follow your form, D and you’re pretty much good to go. To make that happen, as long as you’re telling the SEC that, Hey, I’m gonna be exempt enter 5060. So, having an idea of what you wanna do is super important, but you have to know what’s out there, all the different options, and I think before that it’s identifying your ideal client.

So, a lot of our investors are luxury real estate agents, so I target Real Estate Agents and top markets around the world, and I’ve become kind of their wealth advisor, and that enables me to help them get into real estate deals in the US as passive investors because they’re making commissions, and then if they’re already American and they qualify as real estate professionals within the eyes of the IRS, then, boom, guess what? You can take your depreciation you’re getting from the deals that we’re in, ’cause we do 100% as the depreciation to the investors, you get that and you can deduct that off of your active income, which is your commissions, and that blows people’s minds wide open.

0:20:16.4 

WS: So, it’s interesting, you talk about knowing who your client is, right, like you just said who they are, this is who your focus is on it, I’m sure that’s helped you to grow quickly because you know that this person is… Or common issues or common frustrations, all those things that you can learn to speak to, but then also you just talked about this income and appreciation and taking that off your active. Can you go into that, just briefly, explain that just a little bit of how you maybe explain it to our clients of the listener, ’cause listeners probably think in a way… I mean, I need to know how to do that or what you mean by that. 

0:20:46.7 

KB: For sure. So this is a little bit high level, and let me preface this with — I am not a tax advisor or an enrolled agent and CPA, so don’t sue me. But what you need to do is go talk to a tax advisor and they’ll break this down for you, but there’s a lot of assumptions here, but what you can do… And what I tell folks is that if they are, say, a real estate agent and they’re selling $10 to $20 million with a real estate per year, depending on their situation, they could be accredited just on the income threshold that’s based on their commissions and so and so forth.

So you take that top 10% real estate agent, and if they qualify, if they have some other investments under their belt and they talk to their tax advisor and they qualify as a real estate professional, what you’re able to do then what that means within the eyes of the IRS, and it’s kind of one of those check the box things, so anyone can check the box, but you open yourself up for an audit if you’re not… And they’re very serious about that. So my recommendation is, don’t play with that, if you plan on skirting the law there, I don’t do that, but if you can prove that you are, and you’re an investor, you’re past investor, you can prove that you are, what that means is that you’re able to take depreciation, ’cause typically you can only take depreciation and deduct that depreciation off of passive income because it’s passive depreciation against passive income.

So that means that, say, Whitney, you’re not a syndicated, you’re a passive investor, and you have a couple of investment properties, single family homes or whatever, and you get $10,000 in depreciation and from those properties in a year, and you have made $5,000 in income or math sakes, what that means is first you gotta take off. You take that $10,000 against the $5,000 an income that you made and you’re left with a residual of 5000 that if you are a real estate professional with the eyes of the IRS, you can take that additional 5000 that you have left and go and reduce your adjusted gross income from any active or passive income stream, if you’re not a real estate professional, then you can only go passive versus passive or active. Versus active, if that makes sense. 

0:22:55.0 

WS: It does, it makes sense to me, but what did you, to just talk about it a little bit ’cause it’s so important, like when that starts to sink in and you can figure out how… Even if you’re a passive investor, let’s say you’ve been investing a lot of deals, but if you can get to the real estate professional status… Yeah. Things can change a lot. 

0:23:12.0

WS: The cool part here is I didn’t even start talking about bonus depreciation, cost segregation, which a lot of our syndicators, all of our syndicators do, and most syndicators do, and I’m sure you’ve covered this a thousand times over, but with the Tax Jobs Act, you can take a 100% of bonus depreciation in year one of five, seven and 15-year depreciation.

So all of our syndicates and Stratus fund one, all of our operators are doing cost segregation analysis, they’re taking a fat chunk of depreciation, they’re each passing that off in year one, and then because we pass it through to all of our passive investors, we have investors that invest $50,000 and in year one are getting a $35,000 deduction.

Well, in year one, in these deals, they might only be making income of… I don’t know, six, seven, eight grand on their money. So if that’s the case, then they have almost $25-30,000 extra that if they are real estate professionals, they can deduct off of their active income, thus lowering their adjusted gross income, the lower potentially taking them to a lower tax bracket. 

So, if you think about our ideal client who are realistic agents, luxury, realistic agents, they have a very high… They’re probably paying 37% taxes. I make a lot of income, and these agents pay quarterly, so they’re paying like 23… I know agents that are paying $40,000 Whitney in taxes a quarter.

0:24:39.0

WS: I believe that. I would say that it’s a great problem to have. That you have that kind of income. That is a great problem to have. That you have to figure that out, but I would say to all this stuff that Kevin’s been talking about, it can’t seem kinda complicated, but one of the most important things out of all that though is ensure you have a great CPA, ensure you have a great tax advisor, and what I find though, is a lot of people, their business or even their wealth, their situation changes over many years. But guess what, they’re still using the CPA they were using 20 years ago, just because their buddies and have them buddies forever.

And there’s a great chance they’re leaving a lot of money on the table because they have not grown their team as their wealth of their business has grown, and so ensure you have a great tax advisor, Kevin, as you are partnering with other operators through this fund a fund model, how do you just ensure that they’re so prepared for a downturn, what questions you ask, How do you know what are you looking for there as you’re vetting those sponsors?

0:25:34.0 

KB: It’s a deep process, and I’m glad you asked this question with me ’cause I’ve talked to… When we set up this first fund, we probably talked to 40 or 50 different operators out there, and we chose six of them, so you can see we’re very picky. But a lot of it boils down to their track record and their experience. So all of our operators have gone full cycle at least once, most of them multiple times, average years experience in the business are operative 17 years, they have over a billion dollars collectively in assets under management, and the big thing also is where they are and where they want to be. So, the majority of our operators have over a thousand units and some of them have over 8,000 units, but they wanna get to the next level, they’re hungry, and they’re going after the assets that we know, they’re going after the assets and the markets that we love. And the assets that we know and love, so that’s the value-add multi-family in the BI space as opposed to the C kind of space, which we currently feel is a bit over-played at the moment.

So, we like finding that solid, the asset in those great sub markets, and the other part is, I brought one of my team members on, Bobby, who’s a broker his own right, and the Vice President of Commercial Sales at White Guard in Louisville, and he’s also a consultant to some of these top indicators around the country. So Bobby knows his stuff, he’s like our numbers guy, so it got to a point where I was like, Okay, Bobby, I’m gonna have you start taking the coloni, like to focus on what I like to do. And the numbers, I sometimes go over my head, so bringing in that team member and then having that criteria that Bobby and I developed together, and then it’s just… Hey, do you meet it? Yes, no. Okay, and then finally, the last thing that we did to vet them was to make sure that they’re cool with this arrangement that we have, and that they’re willing to create special shares and their PMs, if we help them raise the capital that they need. And that was also a big thing because a lot of operators were like, we don’t really wanna do that, and we’re like, Okay, well, find someone else, and we had to really had to make that a solid point in how we do things now. 

0:27:41.0 

WS: That’s awesome. Definitely have to have some vetting there, and even you’re talking about team members who could not agree more, members have not always been my favorite part of the business, but thankfully we have some of the team that’s an expert in that part of it, but any predictions, Kevin, for like I say, the next six to months in the real estate market and just your all plans moving forward?

0:27:56.7 

KB: Right now, let’s see, by the time this episode comes out, hopefully Stratus Fund One is filled already, but if it’s not, we’ll be very close to it, we expect it to fully subscribe quite quickly. But our plans, we’re gonna create the next fund Stratus fund two and offer more diversification, but in general, to answer your question, in the real estate market, I see everyone see in karate compression across some of the major markets, and I see more of a shift, like I said, from C-class to more B-class and maybe even longer term assets so instead of people being able to turn things around in three to five years, it might go more towards a seven-plus year time frame. But that will allow people to get more cash flow from these deals, so it depends what the investor wants and to that end what we’re doing is, with Stratus fund two is gonna be a $15 million dollar fund. We’re doing some really cool things. I’m working with some consultants.

Now, we’re actually gonna tokenized a third of the fund, and we’re going to accept crypto, hold it in a wallet and get preferred lending on that crypto that we will use to invest into real estate. So it’s a super creative way and it’s kind of like in the work on the logistics of it all, but we’ll be able to accept things like in theory, a Bitcoin as a form of investment and hold that for the investor, and they won’t have to take the tax hit on converting it themselves. But they’ll still be able to get a cash flow from real estate in the diversification, and plus we’re gonna open Stratus fund two and to create some sub-tranche funds, which will pretty much help our investors ear-mark their money. So when you’re out there and you wanna passively invest and you say, Hey, I’m not so much into cash flow, but I love development play where I want 30% to 40% IRR. Okay, well, we’ve partnered with some self-storage development folks who are really crushing it right now, and we’ll diversify your money into that fund. Or if you’re the past investors like I really love the cash flow side of things, here’s our mobile home park sub-trance or if I want a mix of both, here’s our multi-family or value-add multifamily and give the investor kind of put them in the driver’s seat more and say, what do you like… Let me customize this to you because what I’ve learned talking to so many investors is everyone has their own path, their own…

Everyone’s in their own stage in life and what they want and what they deem as a quality investment.

0:30:21.0

WS: So many things we could talk about. Unfortunately, we are about out of time, but wow. Newer things about a fund that we need to be researching and asking folks like yourself, and even if we’re investing passively, talking to people like Kevin and ensuring an even hiring people like himself or investing through a fund like him, so we know that we’re investing properly. If we don’t have time to do the due diligence on an operator or deal, and we need to find somebody like Kevin that is making the time and it’s building the team to ensure that we’re doing that properly or getting it done. 

A couple of quick questions, Kevin, any daily habits that you have, that you are disciplined about that have helped you achieve success? 

0:30:54.9 

KB: Yeah, journaling. I wrote a journal, a 13-week action journal, and I use it. I’ve actually turned it into a computer version, I wrote the journal it, but I actually turned it into a computer version using my task management tool, which I love, click up, if you’ve never heard of it. Use it, it’s amazing. And I write in it every day, and that has really helped me.

0:31:11.0 

WS: And click up is like… Is that like Asana or is that like…

0:31:15.9 

KB:  Asana? I think it’s better than… I’ve used all of those. I think it’s significantly better, but I guess I’m biased, I was kind of like one of those early adopter, I’m one of those computer nerds and I see an ad for it, I’m like, Oh look.

0:31:28.0 

WS: What’s your best source for meeting new investors right now? 

0:31:29.9 

KB: Podcasts are awesome. Oh, here’s something really cool, so Clubhouse love level of love, love clubhouse. If your listeners are on Club house, make sure that they give me a follow, ’cause I’m constantly leading rooms and talking about high level Fund of fun stuff, so even if they just wanna learn, I’m doing that, but we’ve integrated this really cool system where people are on clubhouse and the club has links to your Instagram, and we have developed a bot that goes and essentially when someone DMs us in Instagram, it takes into the box but gets their information, gives them our fester Guide or e-book, sets them up with a call. Does the whole thing for us right away, and using that process in the clubhouse funnel, it’s working really well, but the podcast hopefully fingers crossed events when they come back online, but those are kind of the big three.

0:32:17.0

WS: Number one thing that’s contributed to your success?

0:32:19.9 

KB: I would say the folks that active, passive income have really pushed me and opened my eyes up to what is possible, and I think just learning about marketing pretty much through working with them for the past two plus years, I was in my own podcast doing all that stuff. I’ve pretty much got a Marketing and Business Master’s degree. 

0:32:43.0 

WS: Yeah, believe that. How do you like to give back?

0:32:44.9 

KB:  Oh, I love this question. So each one of the funds, including Stratus Fund One has an impact partner. So, Stratus fund one impact partner is the folks at veterans community project, which I’m passionate about helping. And what they do is they build tiny homes for homeless veterans, and not only they build the homes, they build the community centers and staff them and help the folks get into a home, get some security, get them the food that they need to get the basic health care, and then they connect them to the programs that they’re run through the VA and other non-profits that they’re eligible for, and help them get the job training and turn them around within a year and get them a job and a stabilized home somewhere. 

So, it’s really cool. I will say there are 34,000 homeless vets in the United States. That’s a very solvable problem. That is a very solvable problem, so what we do with Stratus Fund One is we allow our investors directly to donate, we have a matching program, we match up to 1000 for investors that come out of our pocket, and our goal is to reach $50,000 in the first fund. And hopefully by the time your listeners are to this… We’ve already done that. 

0:33:47.0

WS: Awesome. No, that’s incredible. Appreciate you sharing that and just giving back in that way… 34,000 homeless vets. Yeah, definitely a problem. We could help and minimize… Completely right. If enough action is taken. So, I appreciate you all taking action in helping our vets, again, thank you for your service, Kevin, I appreciate your time today and really diving into a fund fund to funds what that is, and even some of the real estate professionals to pulling things that the listener needs to be thinking about as they are investing, whether it’s a fund or not, you need to be thinking about some of those terms that Kevin was talking about. And talking to your CPA about it, right. So, Kevin, where can the listeners get in touch with you and learn more about you?

0:34:27.2 

KB: So I understand that what this went fast, and I’d probably blew a couple of mines out there, so if you want to discuss this further, just shoot me an email, it’s [email protected], you go to our website, risenimbus.com, you’ll learn all about our current upcoming opportunities and yeah, I listen to me on podcasts and find me on clubhouse and Instagram, that’s where a lot of our content is. And I love, love, love sharing that content on club house, I use a name there @investorkev and find me on there. Give me a follow. And I’ll do my best to educate.

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0:35:03.0 ANNOUNCER: Thank you for listening to the Real Estate Syndication Show, brought to you by Life Bridge Capital. Life Bridge Capital works with investors nationwide to invest in real estate while also donating 50% of its profits to assist parents who are committing to adoption. Life Bridge Capital, making a difference one investor and one child at a time. Connect online at www.LifeBridgeCapital.com for free material and videos to further your success.

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