One Lawsuit Could End Your Real Estate Career

The Real Estate Investing Club

Join an active community of RE investors here: https://linktr.ee/gabepetersen  0:00 Introduction and Guest Background 3:29 The Most Common Lawsuit in Real Estate Syndications 7:42 What Keeps GPs Up at Night (And Why You Must Disclose It) 10:07 Step-by-Step Guide to Setting Up Your First Syndication 13:03 506B vs 506C: Which Path Is Right For Your Raise? 18:18 The Accredited Investor Debate: Should You Even Accept Non-Accredited Money? 22:10 Quick Question Round: Education, Advice, and Market Picks 27:49 The Most Effective Way to Raise Capital (According to a Securities Attorney)  PROTECT YOUR REAL ESTATE EMPIRE WITH PROPER LEGAL STRUCTURE 🏢⚖️ Getting sued in real estate isn't a matter of if, it's when! In this critical episode, I sit down with Nick McGrew from Polymath Legal, a securities attorney who specializes in real estate syndications and also invests in multifamily himself. Nick reveals the insider secrets that could save you from devastating lawsuits and regulatory nightmares as you scale your portfolio through syndications.  UNDERSTANDING THE BIGGEST LEGAL THREAT TO YOUR SYNDICATION 💼  Nick drops a bombshell early in our conversation about the number one reason real estate syndicators get sued by their investors. It's not property damage or tenant issues, it's disclosure failures! When deals go sideways and investors lose money, they immediately start looking for someone to blame. Nick explains how operators who fail to properly disclose risks in their Private Placement Memorandum become easy targets for litigation. The solution? His PPM documents are designed to scare away investors who can't handle the risk, which might sound counterintuitive but actually protects both parties in the long run.  The episode wraps with Nick's recommendation for Regulation D 506C as the most flexible and efficient capital raising structure for most situations. The ability to raise unlimited capital from unlimited accredited investors with internal compliance requirements (no SEC pre-approval needed) makes it incredibly powerful for scaling your real estate business quickly! #RealEstateInvesting #Syndication #RealEstateLegal #CapitalRaising #RealEstateInvestor  Want to learn more about our guest? Connect here: https://www.polymathlegals.com or follow @NicTheLawyer on social media Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen

Transcript

00:00All right. What's up, guys? We are back with another episode of the Real Estate Investing

00:11Club. As always, Friday energy coming at you. This is going to be a little bit different of

00:16an episode. We are going to be going into the legal side of things. We usually are focused

00:20entirely on GPs, on operations, that kind of stuff, getting deals done. But the legal side

00:27is equally as important, getting that purchase agreement signed, setting up that PPM, all

00:31those different things that you need to do, getting your syndication up and up. What's

00:36the word I'm trying to say? Up and running? Is that the phrase I'm looking for? I don't

00:40know. Getting your syndication done. How about that? That's what we're here to talk about

00:45on this episode. We got Nick McGrew with us from Polymath Legal. He invests in multifamily,

00:50so he is an investor. And he also is the legal side of the real estate equation. So it should

00:56be a good one. Nick, thanks for hopping on the show.

00:58Yeah, thanks for having me. Happy to be here.

01:00All right. I told you before we get on here, we always like starting with stories. We like

01:05to hear how people got to where they are. So why don't you, I mean, I know you went to

01:09UW, so that's part of your story, which is awesome. So tell me a little bit more. How'd

01:14you get started? And how'd you get to where you are today?

01:16Yeah. So I went to UW for undergrad and going there, I took a couple of pre-law classes and

01:22loved it. And so I knew I wanted to go to law school. And with law school, you just get a law

01:27degree. You can use it for criminal law or bankruptcy or family law or whatever. So you

01:33get a basic law degree. Your first year, all your classes are the same for every first year

01:38law student for the most part. But then your second and third years, you get to kind of

01:42choose your electives a bit more. And so while you get a general law degree, you can kind of focus

01:47on the errors that you like. And so I've just always been fascinated with buildings and structures

01:52and whatnot. And so I always knew I wanted to do something in real estate. And so when

01:56I got to law school, they teach you, law school kind of gears you towards litigation, fighting

02:01in court. That's what most people think about with lawyers. And so I liked the skill sets I

02:06was learning in law school, but I was like, I don't see myself fighting in court too much.

02:10I don't really like to do that. And then my second year, I took a class called Entrepreneurship

02:14in the Law and it focused on lawyers advising businesses. I said, yes, this is the kind of

02:19stuff I wanted to do. And then through that same program, I took more real estate related

02:24legal classes as well. And so I said, yeah, this is the type of stuff I want to do. And

02:28that's what we do today. We help real estate investors lawfully raise capital so they can

02:33create generational wealth and also passive income.

02:37Nice. Nice. I love it. And you mentioned you also invest in multifamily. How's that story

02:42been going? Uh, yeah, overall. Well, um, as you know, we're in a bit of a tougher cycle

02:48in the market. Uh, thankfully, uh, my investments, um, so far doing well. Um, but obviously I have

02:54worked with a lot of clients and unfortunately some of theirs are not doing a lot. So definitely

02:58seeing a whole lot more capital calls or trying to restructure loans as a pair compared to,

03:04you know, three, four or five years ago.

03:06Yeah, absolutely. Capital calls is not something I ever haven't had to do it yet, but it's not

03:11something I want to do. That would not be a pretty conversation. Yeah. Um, yeah. So, I mean,

03:16the legal side of things are always, uh, it's always interesting. And so there's a lot of ways

03:20we can take this. Um, you've mentioned you, I mean, you said lawfully raise capital. That's one

03:25topic I want to get into before we do that. I want to talk about getting sued. Um, if you're in real

03:30estate, you're going to get sued. You're going to get sued. It's going to happen at some point.

03:34Um, hopefully you're in the right. You're the one that, uh, that wins the case. We've been sued a

03:38couple of times, but it was never our fault. And so we ended up winning all the cases, um, but it's

03:42not fun. So what is the most common lawsuit you see, uh, with real estate investors with owners?

03:49Um, the big one, I would say, uh, investors claiming that they were not informed of something.

03:54So not disclose, you know, if a deal goes bad, we want to point fingers and, you know, if a deal

03:58goes bad and my money's in it and I'm not getting all of it, it's not my fault. So I've got to blame

04:02somebody and that's going to be you, the operator. And so, um, that's why one thing that I always

04:08focus on is disclosures. Um, cause that's one thing that the sec is going to look at a lot.

04:12That's one thing that they would look at in the lawsuit is that, um, I think my goal as the

04:17securities attorney is to make sure that we're just, obviously that you're raising the capital

04:21lawfully, but a big part is that scary PPM you kind of mentioned earlier on. And my big goal in that

04:28is to think of all the crazy bad things that could potentially happen and let the investor know,

04:33because while the, uh, you know, the operator is going to try to make a lot of money and a lot of

04:38them had made lots of money for their investors, all investments have risks. And so we want to make

04:43sure we're clearly disclosing those risks. And so I've had a few clients where there was the, um,

04:48the threat of lawsuits and they say, Oh, you didn't tell me this. So you didn't tell me that.

04:53And then, uh, the client comes in and they're saying, what should we do? What's going on? I said,

04:56Oh, just have them to look at this page on the PPM. And sure enough, they look at it and it goes

05:00away. So I, my goal is to try to help you avoid those lawsuits. Or if, uh, you do get sued to make

05:07sure that all your documents are buttoned up so that you'll be in a good place to where you can

05:10prevail. Interesting. I wasn't even thinking about that. We've been sued. Cause like a, you know,

05:15like a limb fell or next somebody's somebody's trailer and they sued us for the trailer damage.

05:21And we were like, you know, we maintain these trees. We have an arborist come out every year. And so it was

05:26just an act of nature. Um, but you're talking about being sued because you're not, uh, like

05:32your LP is suing you because you're not meeting goals essentially. And so you, that, I did not know

05:40that you had to disclose absolute, absolutely everything. I thought that for syndications,

05:45because you know, they're, they're entering into this contract knowing it's, it's a risky endeavor.

05:50Um, so that does not cover the GP is what you're saying. Like you have to state that the economy

05:56could turn the whatever, like the, we, we still, you know, anything that can go wrong,

06:01can go wrong.

06:02One is about COVID a couple, like maybe a year ago when they were talking about bird flu,

06:06we threw that one in, um, we have warnings about, uh, global warming. Um, and it's not so much that

06:12you legally, absolutely. If you don't have every disclosure, then you're, um, criminally, uh,

06:17have a criminal violation. Uh, there are certain disclosures that the SEC is just going to require,

06:22especially risk that, you know, that if you were an investor, you'd want to know about,

06:26you got to disclose that. But we try to disclose just all of the potential bad things because

06:31no deal is perfect. And one of the things that we do when we're working with a client, uh, that's an

06:36operator. One of the questions that we ask them is I say, what are the things that are keeping you up

06:40at night? What are the things that you're scared about? Um, and there's always going to be some,

06:45and that's okay. That's the nature of this, this industry. Um, but I asked that question so I can

06:50understand, okay, what are the risks that they're like, Oh my goodness, if this happens, what's going

06:54to go wrong, what's going to happen. Yeah. We want to let the investor know that so that they can

06:58evaluate whether they want to take that risk on themselves or not as well. And if they don't,

07:03you're like, Oh man, that's money I'm missing out on, which yeah, that stinks. But I tell my clients,

07:08I say, we want these invests. We want these documents to scare the investors away. Now we don't want to

07:14kind of, uh, put something under the rug or be a little quiet about it, get them to invest.

07:19And then if that worst case scenario, unfortunately happens, now you have their money and you're losing

07:24their money and they were not informed about it. If anything, I say, listen, we want to tell them

07:29those scary things. And if that scares them away and they don't invest, that stinks, but that's good

07:35because that the document did what it's supposed to do. It's there to inform the investors to let them

07:40evaluate. Do I want to take this risk on or not? And so you want to give them the information to

07:45where they can give that full evaluation. Yeah. So generally, like when I'm, if I'm raising money,

07:50the thing that I'm always the most afraid of are the things that are completely out of my control.

07:55Like if for some reason, this local economy, maybe a big employer up and decides to leave the area,

08:00hundreds of people, you know, lose their jobs, the economy tanks, that kind of thing.

08:04That's the thing that kind of keeps me up at night, but I know I have no control over it.

08:07All right. Is the GP, if you don't disclose that, are you still liable for not having disclosed it

08:14and say, let's say you're in a city, it's, you know, a hundred thousand people, the biggest employer

08:19in that town leaves, and now your vacancies are through the roof. What are you liable for not

08:25having disclosed the possibility of, you know, the economy tanking or whatnot? I'm going to give you

08:31the lawyer's favorite answer, which is it depends. So we'd have to know the, the, all the ins and

08:36outs of what's going on there, but there's definitely potential. You know, I do have some

08:40clients, well, they'll invest in a market that has maybe three big employers. And so we absolutely

08:45disclose that. And, you know, it's not so much that it's your fault that they laid people off

08:49or moved or what have you. But as an operator, you should be kind of knowing, or at least have

08:55an idea about these things. What are some, what are my weaknesses in this deal? And so things like

09:01that are weaknesses that, yeah, they're out of your control, but it is something that can affect

09:04your bottom line. And so, especially if you're aware of that and know that type of stuff,

09:08then we want to make sure we're disclosing that. So the, again, the investors can say,

09:12ah, that's a little too risky for me. Let me know about the next deal in the next market versus

09:16you not disclosing it. And now there's a risk that they would have, that would have scared

09:20them away that they weren't informed about. Interesting. Okay. That makes sense.

09:25So yeah, syndications, that is the, the leap that every investor gets to once they realize that

09:31they can't use their own capital anymore. Like you're all going to get there. You're going to

09:35get to big deals that are too big for your, for your, for your bank account. Like you're going

09:39to have already spent your money and now you need to raise capital. So it has to happen. Syndications

09:43is the solution to that. But there are a lot of ways to go about doing it. What are, when, if,

09:50take the perspective of a new syndicator, somebody who is just coming to the scene, maybe they've bought,

09:56you know, a couple, you know, a couple of quads, some, some single family, maybe a self-storage,

10:00they bought it with their own money, but they want to do bigger deals. They want to do a thousand

10:04to 500 unit multifamily complex. What are the steps that you would take them through to set

10:11up their syndication? Yeah. So the first thing, if you're new versing, I would explain why you're

10:16going to hire somebody like me and have to pay a lot of money. And that's basically because you're

10:21selling a security. And so the law says, basically, if you have an investment of money

10:25in a common enterprise with an expectation of profit, primarily from the work of someone else.

10:31So a way to summarize that, if you're taking passive capital, so somebody is writing you a

10:36check and they're just expecting bigger checks back, then it's likely that you're selling a

10:40security. And so the law says you either have to register that security. So go public essentially,

10:44or have an exemption from registration. And so we help clients with the exemptions because

10:49one going public is very expensive. And if we're talking about your standard real estate deal,

10:53the timeline is just not going to work. It takes quite a bit of time. And so you're selling an

10:58exempt security. And so we make sure you understand what that is. And then probably the next thing I'd

11:04ask is I'd say, what do you think your investors look like financially? And mainly what I'm trying

11:10to get at is, are they accredited or sophisticated? For those who don't know, two of the main ways you

11:16become accredited as an individual is either through income or net worth. And so if you're an

11:21individual, if you have an income of $200,000 or more, and you've had that for the past two years,

11:26and you expect to have that or more this year, then we say you're accredited. So you make $200,000

11:31as an individual, you're accredited. Or if we're talking about spouses, then we up that number to

11:36$300,000. So if you're talking about it by income wise, individuals is $200,000, spouses is $300,000.

11:43If you meet those numbers, you're accredited. Another way is by your net worth. And so there,

11:49whether you have a spouse or you're an individual, if you have a net worth of $1 million or more,

11:55excluding your primary residence, then you're accredited as well. And so we try to figure out,

12:00okay, do you think most of your investors are accredited or are they something else? Because

12:04that helps us understand which exemptions apply. The most common exemption that I use for real estate

12:09is Regulation D. And so within that, there's one exemption that allows you to advertise,

12:15but 100% of your investors must be accredited. So that high net worth or high income.

12:20There's another exemption that doesn't allow advertisement, but you can get up to 35 people

12:27who are not accredited. And they can invest as long as you have a pre-existing substantial

12:32relationship with them. In addition to that, you can get an unlimited number of accredited investors,

12:37but again, you have to have that pre-existing substantial relationship with them.

12:40And so sometimes people say, oh, well, you know, I want my friends and family and my cousins,

12:45and some of them are accredited, but not all of them are. Then we might say, hey, 506B might work for

12:51you. Whereas some people say the majority of them are accredited, but I have a big raise and I want

12:56to be able to advertise. Then we say, okay, 506C is probably going to be a better one for you. But yeah,

13:01we talk through that and see which exemptions apply. And then ultimately, which exemption is going to

13:06help you meet your goals the best. Yep. And so let's say they decide on 506C, they need to make

13:13sure that these people are accredited. Does it land on the shoulder of the GP to verify their net worth

13:21or their annual income? Or where does the liability fall there? So yeah, the responsibility is ultimately

13:30on the operator or the GP, but I tell my clients that they should not be the ones verifying.

13:36So if we are doing 506C, which is accredited investors only, the SEC says that self-certification

13:43alone is not enough. So the person can't just say, I'm accredited. And you say, good, we're good to go.

13:48We've got to have a third party verify, or you, the operator need to take their tax returns or look at

13:52all their balance sheet and whatnot. And so I always recommend for my clients to have a third party do it

13:58because one, that puts a little bit, takes a little bit of the liability away from our client,

14:03because if they're saying, oh yeah, I looked at the tax return and I looked at this. And if they

14:07missed something, now that's their fault. Whereas if you have a third party verify, the SEC says you

14:13have to take reasonable steps to verify their status. And so if you have a CPA or there's companies

14:19that do it and they're giving you a letter that says, yeah, they're verified. I looked at their stuff.

14:23Now I'd say you've taken reasonable steps.

14:26Yeah. That, by the way, that space, I feel like there's a lot of opportunity for now that AI is

14:32really big and you can build an app in like two seconds. I've built, I don't know how many websites

14:37I've built in the past like month, just using AI. But the tools out there for investors to basically,

14:45it's like a CRM for the syndication process and you get all the documents and everything.

14:50They are thousands of dollars on market right now. This is a total aside, but many of you guys out

14:56there are interested in AI, you should figure out a way to make that app and then just do it for

15:00a quarter of the price and you'll be making money. Anyways, on that topic actually, and this is

15:07another aside, I am curious. Legal review is something, in real estate, I look at a shit ton of

15:14docs, legal docs, and we've been using AI more and more, specifically perplexity.

15:20We use a lot. Have you been seeing that take an effect in the legal field or how do you see

15:27kind of AI having an effect on syndication specifically?

15:31I will say the legal industry as a whole is very slow to move. We're a very slow industry. It's

15:36trying. There are a good amount of AI-based apps and whatnot out there. They're not as, right now

15:44anyway, not as helpful as I would have thought that they would be. Even one of the main legal

15:49information databases is Westlaw. They have a new AI component to their stuff. We have the

15:56subscription. It's helpful. It's not as groundbreaking as I would have thought it would be. I definitely

16:01see that there's a lot of opportunity there, particularly in the legal space. When AI started

16:08getting really big a couple of years ago, I said, once Westlaw uses this, because Westlaw has good

16:14legal information, then their data is going to be very good. I said, once they get it, it's going to

16:19be amazing. It still leaves a bit wanting. There are things that are helpful, but it's not quite as

16:26groundbreaking as I would have hoped for. Again, I will say again, law is also slow to adopt

16:32most things. We're probably a little bit behind as well.

16:36Yeah. I've been impressed with how you can tell it to make any document. They make fairly decent

16:45legal docs now. I've always been kind of... I like AI, and I've been impressed with what it's been

16:51able to do. Anyways, back to the topic. 506C, is that the one that you generally recommend people

16:59start with? I know there's two different camps, but it sounds like 506C, especially if you're

17:05wanting to look outside of friends and family, that's the one that you generally push people

17:09towards. Yeah. I kind of tell people, number one, look at your network and look at how much you need

17:15to raise. Some people will say, yeah, I can raise... If I'm raising like a million bucks or two million

17:19bucks, I might have that in my network, in which case I might say we can do a 506B, so that way the

17:24people in your network that are not accredited can invest, and also the people that are accredited can

17:28also invest. One thing I will send that I do tell clients, a lot of times for your first deal or so,

17:37it's going to be less likely for you to get a random person that you don't know already.

17:43So oftentimes, people's first deals might be 506B, where you're having your friends and family and

17:47people, you have a relationship, invest. But even then, I mean, do you even want someone who's not

17:52in the credit, who doesn't have at least a minimum, a million dollars in net worth?

17:58Do you even want them to invest in your deal? Because if they don't have that much money

18:02to their name, then every investment is a risk. And so you're asking somebody who doesn't have a

18:11lot of money to put their money into something that does have risk. It doesn't matter how good

18:15you are at real estate, it does have risk. And so I don't know, I've always been kind of wary of just

18:20why would you want 506B? It just doesn't make sense to me.

18:23So I will definitely say, yeah, you and I've told this to clients, you don't want to take

18:26somebody's last dollar. So you do not want them to invest that because it is risky.

18:30And hopefully, again, if they are your and not that 506B is limited to friends and family,

18:35but a lot of times that's what it's going to be. Hopefully, if they are your friends and family,

18:38you are looking out for them and you have an idea of their financial status and have enough to say,

18:43hey, are you sure about this? This is a lot. Maybe we should lower something like that.

18:46Because yeah, you definitely do not want to be taking their last dollar. But there are people

18:51that may not, maybe they're high income or just not quite accredited yet. Maybe you just got that

18:58tech job and you're making 300, but you've only worked there for a year and a half. So technically,

19:03you're not accredited yet, but it's not as risky for you because you see the growth pattern. So there

19:07are ways to where you're not taking advantage of people or it's not quite that risky.

19:12And then also too, depending on just how your finances are set up. I've had some clients where

19:18there's trust or other things involved that are not solely owned by the person. So it can't be

19:23computed for their sole net worth, but they still have backups if things really went bad.

19:30So yeah, I get your point and I agree with it. We definitely don't want to take advantage of

19:35people or put people in a bad situation because it's hard enough if you're the operator having that

19:40conversation with your wealthy investors saying, Hey, I lost your money. It's going to be

19:44dramatically harder for somebody who's not super wealthy at telling them that you lost their money.

19:50Yeah. Well, and I wasn't even thinking of taking advantage or putting people's money at risk. I was

19:55just thinking, you know, the minimum that I would ever want somebody to put into a deal is $50,000.

20:00I don't want somebody to put in 10,000. And if they're not accredited, chances are they don't

20:04have $50,000 to put in. So yeah. Anyways, that's, that's kind of, I guess it's a personal

20:10preference there. But with 506C, I mean, the advantage is you can start marketing. You can

20:15just put it out there and say, Hey, we got this deal. If you want to be in that, if you want to

20:18invest in this deal, you know, fill out this form, reach out to me in email, whatever it is. And you

20:23can start having those conversations. You don't have to have that preexisting relationship, which is

20:28nice. Correct. Awesome, man. Well, Hey, it looks like we have run down the clock. It's already 20

20:33minutes. So time to jump into the quick question round. Are you ready? Let's do it. Let's do it.

20:39Starts with education. It could be any form. It could be a movie. You've seen a book. You've read

20:44a conference. You've gone to mentorship program. You've been a part of anything like that. I just

20:48need two recommendations, one for general life wisdom, and then one for real estate or business

20:53for, for education wise, or sorry, for real estate wise, I actually, a couple of years ago,

21:00I took a real estate development course is a executive certificate at USC. It was amazing.

21:06It kind of takes you through the whole development timeline in about six weeks. So definitely it's a

21:11crash course, but I took it not so much that I'm looking to be a developer myself, but I have some

21:15developer clients. And so I want to understand more of what they're working with. And so it goes

21:20everywhere from, um, site location to financing to the actual construction, the permitting,

21:26all that sort of stuff. And so that was, uh, an amazing, uh, for, especially for real estate

21:31and particularly if you're looking to get into development, amazing program that, uh, yeah,

21:36I highly recommend that one for sure. Nice. That's, uh, you're the first person to say like an actual

21:42university or whatever. Uh, and, but that's, that's a good, that's a good.

21:47And what I'll say is it's cheaper than a lot of the, the courses and masterminds that you find

21:52out there as well. So, oh yeah, for sure. Those guys, yeah, those are getting up to like 25,000

21:57now. It's crazy. Uh, yeah. How much was that, that, um, certificate that you went through?

22:02I did about five years ago. I think it was like five or $6,000. Yeah. Okay.

22:05So they may have increased it a little bit, but probably not dramatically from there.

22:09Interesting. Huh? Um, cool. So how about that was real estate? How about general life wisdom?

22:14Um, at least at least a book that I really liked. It's probably now that I've read more

22:20self-development and self-help books, it's similar to all them, but, uh, limitless by Jim quick.

22:25I'm a great self-development or yeah, self-development, uh, look, he's, he had a brain injury when he's

22:32younger, so it's hard for him to learn. And so he just really learned a whole lot about your brain

22:36and how it tricks you and whatnot. And so he shares a lot of those tips. So yeah, that's, that's a great

22:41book that I often recommend. Nice. Yeah. That sounds like it'd be right up my alley. Um, all right,

22:46with that, I'm going to move us on to the next one. This is for your younger self. So let's go back

22:51to the Nick who is still, still a Husky, still out there at UW. Go back to him, look him in the eye,

22:55give him one piece of advice moving forward. Just keep on going. It's going to, the journey is going

23:01to look very different than what you plan, but just keep moving forward step-by-step every day

23:05and you will get there eventually. Yeah. It is not a straight line. That's for sure. It is up,

23:10it's down, it's left, it's right. Just keep going. All right. Next question is about the U S it's a big

23:17place. There is a ton of opportunity out there. Give me the single Metro you're most excited about

23:23investing in today. Single match. Ooh, that's a tough one. You know, I actually, it's not a cheap

23:29market, but I like Seattle. I like, I like special and particularly the Tacoma. Um, I have a couple of

23:33friends and people that I invest with there that are doing a lot of stuff. Um, a lot of opportunity.

23:38Granted, I'm a little biased because that's the hometown, even though I haven't lived there for

23:41about 20 years, but still love it. And, um, I think part of it's just cause I know the area. I know

23:46the people, I know the companies and I feel very comfortable, but also even though it's a bit of

23:51one of the pricier markets, there's still a lot of opportunity and a lot of stuff going on.

23:56That's funny. I actually live in Tacoma and I don't invest here.

23:59I, uh, Tacoma, I mean, it is a great market. I just, uh, for mobile home parks, RV parks,

24:08self-storage facilities, uh, it's not, not the best. There's not great deals out here. And so

24:12I've, I tend to look elsewhere, but, um, I should, you know, I used to flip houses. That's actually

24:17how I got into real estate was 2014 flipping houses and doing wholesales. I have, I've been doing

24:22commercial since 2020 and I've been a hundred percent commercial, but I should, uh, I should get back

24:27into the flipping houses scene that it was a lot of fun back in the day.

24:30Yeah. Tacoma was looking for, they're looking for houses. So I have a development company I invest

24:35with and they'll buy a single family lot and they're able to build 11 units on that. And it's

24:41a pretty amazing project. And then they had one where they basically were able to build 22 units

24:45on it. So pretty fun stuff. That's funny. There's actually a, the house, we just moved into a,

24:50um, a house, new, new house up here on Proctor. And, uh, it was, you know, it was anyways,

24:56it was a good deal. We got the house, but it's right next to a lot that is completely

25:00vacant. And I've been, uh, I just found the owner recently and I called him cause I was

25:05like, Hey man, I want to buy your lot. Um, and I had this price in mind and, uh, he gave

25:09me a price of $3.2 million. I was like, I was about to offer him, he had bought it for

25:14300,000 a little while ago. And I was going to offer him, I was going to double his money

25:17like 600,000. And he gave me that price. I was like, you are out of your mind. He said,

25:21uh, he said, Hey, that that's what a developer will look at it. They'll, uh, and that, you

25:27know, that price makes sense. So I said, all right, that doesn't make sense for me, but

25:30all right. All right. Anyways, uh, that leads us to the next question. This is about lessons

25:37learned. Not every deal we get into goes the way we expect it. In fact, many times things

25:43go wrong and that's when we get to learn a lesson. So what is one deal that went a little

25:47bit sideways for you? And then, uh, what was the lesson you pulled from it? Um, we were

25:51kind of talking before, uh, and I was telling you how I had a cup, some Airbnbs and invested

25:56in them and they did not do very well. It was a lot of work. So I think the big thing

26:01I learned from that is one stay in your lane. Um, you know, I, I was just kind of, I had

26:06some extra cash and had a partner friend that was like, Hey, let's do this. Um, and I just

26:10didn't know what it didn't vet it and learn that industry as well as I should have. And so

26:15there was just a lot of, yeah, I just didn't work. And I know that obviously that lots of

26:19people can make Airbnb work very well. Um, but yeah, it just was a lot more headache than

26:24it was worth for me. And so the big thing I learned from that is when do a little bit

26:28more homework and probably more importantly to stay in my own lane, uh, do the stuff that

26:32I know for, uh, you know, if it's stuff that I don't know, just give cash to the expert

26:36and let them ride with it. But yeah, for, for stuff that I'm doing, stay in my lane, stay

26:41with things that I know and, uh, vetted a little bit more, which is odd. I know

26:45coming from the lawyer, but yeah, no. And that's really good advice. Uh, you know, I

26:51have horrible shiny object syndrome. Um, and I, every time I hear about a new strategy,

26:56I'm just like, Oh, I want to do it. But every single asset type, every single strategy that

27:01you get into in real estate is a different model. You do have to learn it. Um, you know,

27:06short-term rentals are great. There's guys out there crushing it, but it, you have to learn

27:10how to do short-term model short-term rentals versus self-storage versus mobile home parks

27:15versus industrial, whatever. They all have their own nuances and it's, it's a new thing

27:19you got to learn. So if you're not, every time you make that switch, it's you're starting from

27:23scratch almost not really, but you're, you got to really learn it, um, in order to get the best

27:28return from it. So staying in your lane is very, very good advice. And it's very hard,

27:32at least for me to follow. All right. And that leads us to the last question. This is for

27:38the listeners. Actually there's, I'm going to do one more before this. Um, we've already talked

27:41about, uh, raising capital. This is something that you help investors with. And so I'm sure

27:46you've seen a lot of ways to do it. So what is your, either your favorite way or the most effective

27:51way that you found for people to raise capital? Yeah, I think my favorite way for just all things

27:57being even, I like regulation D 506 C the reasons why you can raise an unlimited amount of capital

28:03from an unlimited number of investors. Uh, you there's your compliance requirements are internal,

28:09meaning there's things that you're supposed to do in order to raise that, but you don't have to send

28:13it off to the sec and have them approve it or better or anything. Um, the only way that sec is

28:18going to sec is going to come into play is if there's a complaint or an issue. And then you just

28:22have to say, here's my documents. Here's my compliance. So it's quick. It's streamlined. You have

28:27basically no, uh, raise limits. And so this is not regular, but we've set a client up, I think in

28:33like, like eight days or something, they were in like a major rush and they were on top of it. And

28:38so, but from when they reached out to us, so when we had it ready to them to raise capital is like

28:42eight days. And so you can, and again, that's not the normal user. It's about a month. Um, but you can

28:47get that set up very, very quickly. And so there's lots of flexibility, lots of speed. So regulation D

28:525060, um, obviously you got to know what your situation is and whatnot, but if everything

28:57equaled, that's the one that I like. There you go. All right. And that leads us to the very last

29:03question. This is for the listeners. You've given us a lot to think about. I'm sure people want to

29:07reach out and get in contact with you. This is a two-parter. Where can they find you? And then what

29:11can they expect when they reach out? Yeah. So, uh, you can find me on social media. My, uh, name is

29:17at Nick, the lawyer, um, on Instagram, uh, tick tock, all those, uh, or you can also come to our,

29:22uh, firm website, polymath legal. So that's P O L Y M A T H L E G A L.com. Um, if you go there,

29:29you click contact us, you can message us directly. You can schedule a free 15 minute discovery call,

29:35uh, to where we can talk about what your legal needs are. It also has our phone number there as

29:39well. All right. I will put that link in the show notes. So if y'all want to reach out to Nick,

29:44all you got to do is click the little more in the description. It's going to pull down that full

29:48description and in there, you can find his links. All right, man, that,

29:52wraps it up. Thank you very much for hopping on the show. Thanks for having me. Absolutely.

29:58For everybody who's with us today. Thank you guys for showing up. You are the reason we do this. So

30:02if you guys have any questions, reach out to me, Gabe with real estate investing club.com.

30:06If you guys want to support the show, just leave us a review, a comment, or whatever you want to do.

30:10Other than that, I hope you guys have a great week. Keep rocking real estate. And I look forward

30:15to seeing you on the next episode.

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