Episode No. 20

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Episode No. 20

Lisa Hylton

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            Your Favourite Platform

SHOW NOTES

What is a fund and how can we benefit from it?

 

In this episode of the Share the Wealth Show, Lisa Hylton answers our questions about funds and what makes it different from investing in a syndication. She also talks about her real estate journey and gives a realistic perspective on building a business, which a lot of us will surely relate to!

 

Lisa Hylton is the host of The Level Up REI Podcast, VP of Finance for a Real Estate Tech Start-Up and founder of Lisahylton.com, a commercial real estate fund management firm that was created to help accredited investors gain diversification across private commercial real estate investments. When she’s not investing in real estate, she is hiking, dancing Argentine tango, paddleboarding, practicing yoga, taking evening walks, swimming, traveling, embarking on wine country getaways, and trying new adventures.

 

[00:01 – 07:56] Who is Lisa Hylton?

  • Growing up in a real estate family
  • Buying a property in Grand Cayman and being an out-of-the-country landlord
  • Why she almost gave up on real estate and how she found her way back

 

[07:57 – 17:13] Investing in a Syndication vs. Investing in a Fund

  • What is syndication?
  • How Lisa got into syndication
  • Networking is key
  • Her first foray into doing funds
  • Creating a fund that enables people to choose deals they want to invest in

 

[17:14 – 32:12] Playing the Long Game 

  • How Lisa is taking action in her life right now
  • Finding longevity in real estate
  • Why she decided to go back to a W2 job
  • What it takes to build and sustain a business

 

[32:13 – 40:37] Closing Segment 

  • The final 2 questions
  • Lisa on diversification: Doing intelligent diversification 
  • Connect with Lisa!

 

 

Key Quotes 

 

“Who you hang around matters. This opportunity came because I was around people who were thinking bigger than me and saw opportunities that I did not see.” – Lisa Hylton

 

“Anything that you’re thinking about doing, finding a way to do it will provide you with a lot of clarity.” – Lisa Hylton

 

“I think that funds are a long-term play because they require money for you to start. It’s going to require a couple of thousand to get started, to get it off the ground. Eventually, the funds really start paying as you continue to make really good investments.” – Lisa Hylton

 

 

Resource Mentioned:

 

 

Connect with Lisa Hylton! Follow her on LinkedIn, Instagram, Facebook, and Twitter. Subscribe to her YouTube channel and join their Facebook community. Visit  lisahylton.com for her podcast, blog articles, and investment opportunities. Check out The Fund Accelerator to learn more about fund creation!

 

 

Let’s get connected! 

You can find Nicole on LinkedIn, Instagram, or Facebook. Visit her website https://noirvestholdings.com 

Transcript

[00:00:00] Lisa Hylton: You have your acquisition fee in the beginning, which is great. But along the way that acquisition fee is helping you to keep lights on along the way. And your asset management fee is helping you to continue to sustain yourself along the way as well. So you are not getting rich off of these, you know, fees here.

[00:00:22] Lisa Hylton: It’s really when the asset sells and you realize for your investors, you also then realize for yourself.

[00:00:57] Nicole Pendergrass: Hey, today we actually get to speak with Lisa Hilton, not H I L T O N. H Y L T O N. But you need to know her name anyway, right?

[00:01:08] Nicole Pendergrass: She gave us so much insight. She shared her journey, what she’s doing with funds and how she started with accounting and then basically went into fund management. As soon as she learned about syndication, she actually started a fund with her second passive syndication. I’ve never heard of anybody do that.

[00:01:26] Nicole Pendergrass: If you don’t know what syndication is, you don’t understand what funds are, how they were. You gotta finish listeners for the rest of this episode because she breaks it all down. She also goes into her journey about like, leaving her job and making that decision. And because she was trying to do the entrepreneurship thing and, and start a fund management company and how she actually ended up getting another job so that she could learn more skills to really help optimize her business.

[00:01:52] Nicole Pendergrass: But in any case, her bio is this. Listen. Lisa is a syndicator and a CPA with about 15 years of experience in the financial services industry. And she started with big four accounting firm who are auditing billions dollar funds across private equity venture capital. Mutual and hedge funds.

[00:02:11] Nicole Pendergrass: She is also the host of the Level Up REI podcast, which I have been blessed to be a guest on. You need to check that out if you’re interested in real estate at all, she goes, she has fantastic guess and goes into so much detail about what to do, what not to do, all the ins and outs and intricacies of investing in commercial real estate, really.

[00:02:31] Nicole Pendergrass: She’s also the VP of finance for a real estate tech startup. And she’s the founder of lisahylton.com, which is a commercial real estate fund management firm that was created to help accredited investors gain diversification across private commercial real estate investments. When she’s not investing, you can find Lisa hiking, dancing Argentine tango, paddle boarding, practicing yoga, taking evening walks, swimming, traveling, and embarking on wine country getaways, and trying new adventures. I knew there was more about her that I liked besides just her business acumen , but in any case, stay tuned for the rest of the episode. You’re not going to wanna miss all the gems that Lisa drops.

[00:03:15] Nicole Pendergrass: Hi, everyone. Welcome to the Share The Wealth Show. I’m so excited that you joined us back here again today. This is a show where we talk about strategies to build, grow, and protect minority wealth. And today we have with us Lisa Hylton, a good friend.

[00:03:32] Nicole Pendergrass: I’m so honored to say that I met a little while ago, cause I heard her on another podcast. And I reached out to her and we started conversations and then like, it just blossomed into this friendship. And I’m so lucky and thankful to have you as a ear and a, basically like a mentor, unofficially, mentor and friend, right?

[00:03:51] Nicole Pendergrass: So in any case, Lisa, I gave everyone like a high level overview of what you’ve been doing, but dig in, tell us, give us a little bit about your journey and how you progress from what you, you know, started often, I don’t know how far back you wanna go to yeah. To where you are today.

[00:04:09] Lisa Hylton: Wow. It’s definitely been a journey. Thank you for having me on the show. I really appreciate it. I think it’s a, it’s also a testament to your journey as well. You know, the journey of being guests on other people’s podcasts to then eventually launching your own, you know, and like going through all of it and the ups and downs, and experiencing, you know, building all these different businesses and, you know, streams of income and et cetera.

[00:04:35] Lisa Hylton: But yeah, so my story starts off, like, I grew up in a real estate family. My father was a contractor. He built 14 apartment units when I was a child. So I grew up cleaning apartment units, property management, selling quarters, collecting rent, you know, writing receipts, the whole nine yards. And, but I never saw real estate as something that was like wealth and building and like, it, like, it just never came across that way.

[00:05:00] Lisa Hylton: And my parents never really had that kind of conversation with us. It was more the conversations that they did have were about going to school, getting a good degree, and like going to college and all that stuff. So that’s what I did, you know, went to school for accounting, came out, bought my first place.

[00:05:15] Lisa Hylton: When I was in my early twenties, I bought a two bedroom, two and a half bath in Grand Cayman. And after I bought it there, you know, I bought it because I loved it. I didn’t really understand fully the numbers, but I quickly got an education in the numbers of real estate ’cause I held that property for a total of six years.

[00:05:33] Lisa Hylton: It broke even the first year, lost money every single year after that, primarily because I paid too much for it. Number one, number two, I bought it in an HOA which increased the HOA fees with time, further eating into the cash flow coming off of the property. And then secondly, after I got, I couldn’t afford property management because I never thought that I would be leaving Cayman and lo and behold a year after I bought it, I ended up leaving and I’ve been outside of Cayman for, I don’t know, almost 10, almost 12 years at this point, probably more than that, but close to 12 years, I’ve no longer lived in Cayman. So, you know, during that time, after I left, after my first year, I was an out of country landlord taking care of this property. And then I’d now moved to LA, got a bill in the email for over a thousand dollars. The AC had broken down, they came out to fix it. In Cayman, you need AC because it’s very hot and humid. And I said, you know what, it’s time. It’s time. It’s been six years. I’ve held this property. It’s time for it to go. So the property came out and was like, I am done with real estate and I always say that life has a sense of humor because I ended up taking a job, working as a controller on private equity real estate funds about a year after I said that.

[00:06:52] Lisa Hylton: And after I took that job six months in, I said, wow, people are making money investing in real estate. You just need to know what you’re doing. And that’s when I embarked on my journey of investing and finding ways to invest. And at first living in California, I wanted to buy like a duplex quickly realized that duplexes here were like 700 to over a million dollars with deferred maintenance over 20 years of deferred maintenance.

[00:07:19] Lisa Hylton: And I said, wow, like that’s just out of reach. So I went from that to then turnkey rentals out of state and then just couldn’t pull the trigger. I think primarily due to my earlier experiences. So by time I haphazardly met a syndicator at a personal development program and we just ended up being in the same circles continuously.

[00:07:44] Lisa Hylton: And I got introduced to syndications. I was like, wow, I’m ready. Let’s go. And it reminded me so much of what I did for work that I was like, wow. You know what? This is so cool. So I’ll pause there.

[00:07:56] Nicole Pendergrass: Oh, I was just gonna ask you to tell people what syndication is.

[00:08:00] Lisa Hylton: Ah, syndications are group investments, where you have the lead, which is generally the general partner team. They will put together the deal, raise the capital as well as managed the property throughout the whole entire period. And then you’ll typically have passive investors who will contribute capital in exchange for getting a portion of the returns. During the whole period, in terms of the rental income and then when the property sells, they also get a portion of the proceeds of the sale.

[00:08:31] Nicole Pendergrass: Okay, perfect. So regular people to invest in larger deals by coming together.

[00:08:37] Lisa Hylton: That’s right.

[00:08:38] Nicole Pendergrass: All about that. Okay. Wow. Cayman so, why it took you six years before you got that thousand dollars bill and then decided that you were done with real estate, right?

[00:08:48] Lisa Hylton: Right. I was, I was getting done along the way, you know?

[00:08:53] Nicole Pendergrass: Yeah. So I was like, thinking, why didn’t you, if it was losing money every year, why didn’t you sell way before that?

[00:08:59] Lisa Hylton: I had to wait because in Cayman, I actually had purchased the property with a first time home buyer discount kind of thing. And if I had sold it earlier, I would’ve had to repay that. And I think the second part of it is that, you know, some people feel that like, if they just hold it long enough, they can outrun maybe the bad decision. And I think that, yeah, I just got to the point where I was like, okay, you know what, once I got that bill, that was like the breaking point.

[00:09:31] Nicole Pendergrass: Yeah. Okay. So then you met the syndicator. You learned about what syndication was. It was similar to kind of what you saw at your job and people making money. So then what was the, the next step? Did you start syndicating or did you invest in syndication as a passive investor?

[00:09:52] Lisa Hylton: So my next step was I made two passive investments. The first one was in June of 2019. It was a 600 unit apartment building in Atlanta. And then the second one was another 250 also in Atlanta. And that second one, I had the opportunity to create my first special purpose vehicle entity slash fund that was created to invest specifically in that second property.

[00:10:22] Lisa Hylton: So I had invested, I had liked the deal I decided to invest. And then there was also an opportunity to create an entity to bring capital through to that deal.

[00:10:32] Nicole Pendergrass: So you are a passive investor and fund almost at the same syndication.

[00:10:36] Lisa Hylton: Correct, at the same time. That’s right. Yes. And I invested also alongside my investors through that fund entity that I created as well.

[00:10:46] Lisa Hylton: Okay. So that was the first foray into doing funds on my own. And then also like sort of general partner kind of experience.

[00:10:58] Nicole Pendergrass: So like who goes from just learning about syndication to all of a sudden investing in one and creating a fund at the same time? Like, that thing, that’s a huge leap. How did you feel comfortable doing that? Like, what was that process like?

[00:11:13] Lisa Hylton: So I tell people that who you hang around matters. This opportunity came because I was around people who were thinking bigger than me and saw opportunities that I did not see because I remembered distinctively when they came to me and said, Hey, you know what? This is an opportunity.

[00:11:39] Lisa Hylton: Like, this is what I’m thinking about presenting to your group. At first, I was like, oh, I don’t know if I wanna do that. You know, who’s gonna wanna invest in that. Like who, you know, on, like, that was my thought. I can remember to this very day. I remember what I was saying and where I was, and then, you know, and then it sat with me and I thought about it more. And I said, huh, I could see how this could be an opportunity. And yeah. And it went, we did.

[00:12:08] Nicole Pendergrass: Okay. Wow. Okay. That is still kind of crazy to me. I’m like, I can’t even imagine creating a fund. So people, Lisa says special purpose vehicle, but it’s just like an entity. It’s a fancy name for an entity that allows you to create like people to invest in the fund.

[00:12:25] Nicole Pendergrass: So, okay, now, what’s the difference? If they’re investing in this syndication or they could invest in the fund along with inside of the syndication, so why would somebody need to do that? Why don’t they just invest in syndication? What’s the difference between investing in a fund and a syndication for the passive investor?

[00:12:41] Lisa Hylton: Yes. So couple of things. So in this particular scenario with that syndication, it was a 506B offering. So the operator needed to have relationship with, like, all of their investors that are coming in. And then similarly, so they had relationship with us and then through them having relationship with us, we are then able to create our own 506B entity, which then we were able to raise capital from investors to then go into the deal.

[00:13:11] Lisa Hylton: So that’s the first thing is like you’re able to provide opportunities to investors to go into a deal that they essentially would not have had opportunity to go into, especially in a 506B realm. And then coming, skipping a little bit to today when like I have a accredited investor fund now. And my play is two things.

[00:13:34] Lisa Hylton: One is diversification and lower minimums. So where this came from was I was on my own journey of investing passively into all these different deals. I’ve invested into six deals to date. Now, two of which have gone full cycle. And, as I invest more and more and as I have a podcast myself, and I’m active in the space and go to conferences and all that stuff, like you’re constantly getting deals like deal flow is super strong.

[00:14:01] Lisa Hylton: There’s like, no, like no doubt about it. Like if you need to invest in a deal, there’s. You check the inbox and there’s tons of deals up in there to invest in, right? That you could potentially invest in. However, most deals are looking anywhere from between 50 to sometimes 100. And if not, sometimes when you’re dealing with even more and more experienced operators, they want 100 to 150 to $200,000 minimums, which, okay. That’s great. But I don’t wanna spend, I don’t wanna put all 100k into one deal. I’m sorry. Like, I just don’t want to, like, that’s just not my situation right now. So I said, you know what? How, like, would it be possible if I could get exposure to really good operators, really good assets, strong markets, but not have to be coming in at a 100K.

[00:14:51] Lisa Hylton: Maybe you come in at 20, 25. And I thought, okay, well maybe that’s, that’s a pain point for me. Back to the pain points. That could be a pain point for other people. And maybe the solution is creating a fund that enables people to choose what deals they want to invest in in the fund. And they only send money when they see a deal that they like and they want to invest in, and that’s one of the benefits of, like, that’s one of the differences between just doing straight syndication is most of them, yeah, you could find some that have lower minimums. Sure. With the fine is like being able to provide people with diversification and access to really good operators and really good markets and assets.

[00:15:39] Nicole Pendergrass: Yeah. Because that’s one of the things, too. It’s just like, you’re in a syndication, you’re investing in that one building that being raised for, to, to purchase. And sometimes that’s good because then you, like you say, you get clarity, you get more transparency, you know, exactly. You know, what is being purchased, all the numbers for that deal, where there are a lot of funds out there where you invest in the fund and, you know, the type of general asset that they will look to buy, that the operators will look to buy. But you can’t say yes or no to any one asset. Like, you put your money in the fund and they put that money to work in buying multiple different kinds of buildings. Right. And you don’t get to choose it’s. So that’s called a blind fund. And I like, I like transparency of the fund that you’re talking about where people can actually put their money in a fund, like put, send their money in, but they can delegate it to which buildings are the best for, to fit their like, investing criteria or whatever.

[00:16:38] Lisa Hylton: Exactly. Exactly. A hundred percent.

[00:16:40] Nicole Pendergrass: Okay. Perfect. Now, so you went from starting as a passive investor and a fund manager at the same time. But that’s because you were working as a fund manager. What was your W2 again?

[00:16:54] Lisa Hylton: I was in a mastermind where the mastermind had provided an opportunity for this to happen because the person who was running that mastermind had relationships with operators and through their relationships with operators, this opportunity came about.

[00:17:12] Nicole Pendergrass: Okay. Yeah. All right. So it’s all, like you said, all about network. Yes. Who you’re surrounding yourself. And I love how you said you were surrounding yourself with people who were thinking bigger than you were. And that forced you to, to level up.

[00:17:27] Lisa Hylton: Yeah. Oh yeah.

[00:17:29] Lisa Hylton: And funny, even in your podcast is Level Up REI.

[00:17:32] Nicole Pendergrass: I did do that on purpose

[00:17:37] Lisa Hylton: I know. Oh yeah. Oh yeah.

[00:17:38] Nicole Pendergrass: Okay. So, you know, what else have you been up to? Like, what are your plans with this, for the future? What else do you wanna share? Like, we chatted a little bit before, but I feel like I haven’t talked to you in a while. We were, everyone, we were having like monthly catch up accountability calls. Mostly with, with Lisa telling me what to do and not to do, not really telling me, but, you know, giving me some great advice, I’m always going through something, but yeah, like what’s up?

[00:18:05] Lisa Hylton: Well, I would say that I’ve definitely taken a lot of action, right, and made a lot of decisions that have brought come to Jesus moments, you know, for me and my life and have, you know, made me think, okay, yeah. Like, what is the next path? What’s the best next path for me to go. And I think one of the benefits, I always tell people action reveal. Because it really does. It’s like, if you are thinking about doing something, quitting your job for instance, which is something I’ve done, you know, like sometimes if you have the ability to just do it, like it will provide you with so much clarity about yourself.

[00:18:53] Lisa Hylton: Like, anything that you’re thinking about doing. I think, you know, finding a way to do it will provide you with a lot of clarity. And these days, you know, as Nicole, you know, like I’ve, since now taken another job, but I continue to build my business, both my podcasts and, and, you know, the way I play in real estate via funds and.

[00:19:15] Lisa Hylton: To come from a place of saying, okay, well, you know, these are some of the things that I still wanna do, and like taking those actions of being able to get out there and do them and, you know, understanding. I think one of the biggest lessons I think, gets lost on people is that real estate really is a long game, you know?

[00:19:34] Lisa Hylton: And it’s a long game. It’s not something that generates big cash flow tomorrow, like crypto. And like some of these other, you, fund stocks like, you know, high growth stocks. I should call them that today, they’re down and tomorrow you, you are like, you know, over a million dollars or whatever in them. Like, that’s just not the same with real estate and it’s educating yourself about that.

[00:20:03] Lisa Hylton: And then your investors, and then as people you meet, who are interested in playing in the real estate space is like sort of helping them to sort of see that and understand that as well. And that it doesn’t mean that you don’t, you give up on what it is that you wanna do. It doesn’t mean that you do that, but it means that you find a way to have staying power and longevity and like being able to play the long game consistently. And knowing that that is gonna pay off with time.

[00:20:34] Nicole Pendergrass: Yeah. Oh no, I completely agree because people see, I guess, where you are, where I am. And they might know a little bit about the journey, but for the most part, they don’t see that whole thing. They don’t see the ups and downs. They don’t see the times where we’re crying in, in the corner. Like, they don’t see, you know, us, you know, being angry and all the extra gray hairs that are hiding inside here, you know, like, but there, it is definitely been long journeys, longer than I honestly anticipated when I first started in real estate ’cause I thought, oh, you know, long time, I know it’s long journey, maybe two or three years, and then I could get some capital rolling.

[00:21:15] Nicole Pendergrass: And then I’ll just throw that over here and I’ll do that and I’ll be good and this, and like, ’cause I thought, in my younger years, two or three years was a long time. And so now it’s like, what, when did I start? It’s 12 years later since I took that first real estate three day bootcamp conference thing. I would’ve never imagined that I’d be here or what I’m doing, or I’m still like, you know, obsessed with real estate, ’cause I am, ’cause I still believe that it’s a great journey and I’ve seen like, you know, fruition of that throughout my life. But what I really actually wanna dig into some, cause I thought about it as soon as you mentioned it, your job. That’s something that a lot of people can probably either relate to or have questions about, or wanna know how you process through that.

[00:22:04] Nicole Pendergrass: So you quit your job to focus more on real estate, and then you went back to another job, but why? Like, being off of work, not like give you what you were looking for, or is it more strategic? The route, the way that you took a job now? So what was that journey? What the emotional highs and lows when you left and just all of that, like why you even left get, let us know, what were you thinking and what that process has been like?

[00:22:31] Lisa Hylton: Yeah. Great question. So when I chose to leave, so I think a couple. If someone is thinking about playing in the syndication space full time. I think that it’s important to understand that there’s different roles in the syndication team. You know, those being acquisitions, underwriting, asset management, and investor relations, raising capital, and each of those roles play within, you know, the syndication space differently and are compensated differently as well.

[00:23:05] Lisa Hylton: And depending on how you’re planning on pursuing it, like, there’s that as well. When I started my journey, like, my focus primarily was on, like, raising capital and seeking to provide other services to a GP team. Like, I am an accountant by profession. So being able to, like, analyze numbers on an ongoing basis, asset management, review property managers, financials, which is something I do personally now for work.

[00:23:32] Lisa Hylton: So that’s all like, and I did that previously as well. So like that’s all in my wheelhouse in terms of making sure that I’m not just raising capital. But the reality is this, is that for syndications, you know, when the general partner team truly makes money is when the deal typically sells and does well. Sells, not just a break even sale, I mean, sell and provide investors with returns and them with great returns as well.

[00:24:05] Lisa Hylton: You know, you have your acquisition fee in the beginning, which is great. But along the way, that acquisition fee is helping you to keep lights on along the way. And your asset management fee is helping you to continue to sustain yourself along the way as well. So you are not getting rich off of these, you know, fees here.

[00:24:27] Lisa Hylton: It’s really when the asset sells and you realize for your investors, you also then realize for yourself. And I think that is really important because, like, that, just knowing that then think about. When I decided to leave, I did not have, like, a portfolio of properties myself personally. Yes. My family has properties, but like, they’re not mine.

[00:24:51] Lisa Hylton: Like, they’re not mine alone, like they’re with my family, right? So, like, essentially, you know, when you’re thinking about just focusing on syndication alone, it puts a lot of pressure on the business to perform. And on top of that, what I also noticed in this space is that many syndicators and people in real estate in general have multiple streams.

[00:25:13] Lisa Hylton: Not everyone, some people have. I would say they have multiple streams when it comes to syndication, unless they’ve been in the game for a very long time. And then, you know, they just have lots of properties. So now it’s like a snowball effect, right? But like otherwise people might have their own individual portfolios of fourplexes, single family homes. 10 plexes, 20 plexes, whatever that they either own personally, or they joint venture with other people, or whatever the case, right.? So they’ll have some of those. And then they’re also syndicating as well. Or they might have businesses, you know, everything from masterminds to coaching programs are completely separate businesses that are not even in the real estate space.

[00:25:57] Lisa Hylton: So it doesn’t mean that syndication is not a really good business. It is, it’s just a business that in my opinion, takes time to build. If you don’t automatically come in with a community of people around you who are able to write half a million dollar checks or a million dollar checks to, for your deals.

[00:26:17] Lisa Hylton: And that was just not my reality. My reality was not that I was around people who would be able to write half a million, a million dollar checks. That was just not my situation. So I, as an entrepreneur had to think about, okay, given my landscape, what can I do? And I thought about, okay, there was a guy and I won’t say his name, but he really inspired me because as I continued to be in more and more, well, I’m in two masterminds and he’s in one of my masterminds and he works full time as a tech professional.

[00:26:50] Lisa Hylton: And he primarily works for equity. And when I started working for the startup that I work for now, I noticed that a lot of the founders, they themselves work for equity as well. And when I spoke to a friend of mine who works with, for a lot of startups she’s been working for a lot of startups for the last 10 years or so.

[00:27:11] Lisa Hylton: She was like, yeah, it’s very normal for founders of these startups in the beginning to work primarily for equity. They don’t really pick up big paychecks in the beginning. As a matter of fact, they’re not making any money sometimes for many months, if not couple years. So they have other businesses or other income through either investing or other things that helps to bring in money while they’re building this business. So that way they don’t have to put the pressure on this business while, but yet they will hire people like myself and all these other people and pay them, you know, to continue to build their business. So that way eventually they know where they’re going and they’re gonna eventually get there.

[00:27:52] Lisa Hylton: So that has been a lesson for me. Because it has taught me a lot that, you know, sometimes when you’re building a business, especially in the beginning, you know, it’s, it might take some time depending on the kind of business that you’re choosing to build. And for funds, I told this, that a few other people who are thinking about funds just today, that I think that funds is a long term play.

[00:28:18] Lisa Hylton: Because they require money for you to start. You know, it doesn’t have to be groundbreaking money like 20 and 30 grand, but it’s gonna require a couple thousand to get started to get it off the ground. And that is just how it is. You know, and eventually the funds really start paying as you continue to make really good investments.

[00:28:39] Lisa Hylton: And those investments sell and they provide returns, not just for your investors, but for you. And the last point I’ll say on this is that you and I both know that we’re now in higher interest rate environment. So in the multifamily space, what that equates to is lower cash flow because some of the properties you buy them and you’re gonna have to pay a higher interest, which that means that some of that money that would’ve gone to investors now needs to go to the lender in order for you to buy a property that you’d want to have bought previously.

[00:29:17] Lisa Hylton: So yes. Like, do I feel that property values will continue to increase? I hope so. I think so. You know, if gas is, I live here in LA, and if gas is now in, like in roughly two weeks, gas now is double what I was paying previously. And, you know, I would say about a month ago, it’s compared a month ago till now it’s double compared to what, like, it causes me a hundred bucks to fill up my tank, which used to be like 50 bucks.

[00:29:49] Lisa Hylton: And that was, like, in March and now we’re in may. And like, it’s double that amount. And I can remember when I was in college, filling out my tank and paying maybe $15 to fill up the same type of car, I’ve always had, like, a Honda. So like, you know, if someone tells me that like in these bigger cities like LA et cetera, that, you know, real estate prices to some extent will continue to increase.

[00:30:14] Lisa Hylton: I do think that they are like, but I do think at the same time, you know, people need to be conservative in terms of the way they’re approaching it and not just take it for granted. So that’s a long answer to your question of, you know, the decision to take another job was grounded in the fact that I needed to learn that syndication is a business that takes time to build and, you know, I needed to find other streams of income to continue to sustain myself while I continue to build a business, because I do believe in this business.

[00:30:49] Nicole Pendergrass: Wow. That’s great. And it’s actually, if people didn’t catch the gems in that, like you weren’t really listening.

[00:30:56] Nicole Pendergrass: So she’s basically saying, yes, you can have a plan. If you wanna start your own business, if you wanna be an entrepreneur, whether it is doing funds or whatever business, you wanna start to create more capital so that you can invest, or you can help other people invest like Lisa is doing, then make sure you have the plan and make sure you know that it’s a longer term play to really get it up and running and make it sustainable where that business can actually pay for your expenses and for your lifestyle. So if you need to hold onto that job a little bit longer, then do that so that you have the funds to still live and, you know, feed into your business, right, or also take a job that has more meaning into what you wanna learn and the skill set that you wanna learn and be strategic about that. So maybe switch a job that is gonna teach you the skills that you need to be able to do the business that you wanna do. And then what you do with that business income is either like taking it and investing it and growing it, feeding it back into the business. And then learning how to do the whole building wealth for your family by being strategic about how you use your W2 and how you start on the entrepreneurial journey.

[00:32:11] Lisa Hylton: A hundred percent.

[00:33:20] Nicole Pendergrass: Okay. So we are actually about to wrap up and I just have a couple of questions for you that I ask every guest. The first one is Warren Buffett says that diversification actually. And it’s funny, ’cause you did mention that.

[00:33:36] Lisa Hylton: Yeah.

[00:33:37] Nicole Pendergrass: Diversification is protection against ignorance. That’s very controversial, right? So it’s like, do you diversify or do you not diversify? So I think I have an idea, but what is your thoughts about that statement?

[00:33:50] Lisa Hylton: Yeah. You know, I respect Warren Buffett. I think he is an amazing investor. However, I don’t think that everyone is doing the level of work that Warren Buffett is doing when they are investing for a variety of reasons. And because of that, I still believe in diversification, I believe in intelligent diversification.

[00:34:09] Lisa Hylton: So not just spray and pray, but more just saying, okay, well, looking at the different opportunities that are available to you and sort of making sure that you do your due diligence before deploying capital, but I strongly believe in, I believe in diversification, so yeah.

[00:34:27] Nicole Pendergrass: Yeah. Perfect. I like that. That is definitely, makes you just feel safer that you’re not gonna drop all the eggs in the basket, right?

[00:34:35] Lisa Hylton: That’s right.

[00:34:36] Nicole Pendergrass: That you have a little bit of cushion there.

[00:34:38] Lisa Hylton: That’s right.

[00:34:38] Nicole Pendergrass: Okay. Next one. You’ve played Monopoly before?

[00:34:42] Lisa Hylton: Yes.

[00:34:42] Nicole Pendergrass: Okay. Boardwalk or Baltic avenue. That’s the most expensive property or the cheapest. What’s your strategy to win and why?

[00:34:54] Lisa Hylton: Oh goodness. As I said, yes, I thought to myself, hold on, have I played Monopoly? Or have I played the Cashflow game? And I think it’s the Cashflow game ’cause I don’t, those two don’t really remind me of themselves. But you know, if I’m just thinking about that question in real life, I think I’d wanna know a little bit more information about the cheaper property to, like, understand whether it cash flows or have the ability to appreciate and value, because I feel that like starting with a more economical property could actually help you as an investor because, like, you can build your portfolio with time and, like, they build on top of each other, giving you the ability to refi, even though with rising interest rates, that strategy isn’t as popular at the moment. But nonetheless, like something like that is what I would say.

[00:35:46] Nicole Pendergrass: Yeah. Actually I do like that because not every property is going to cash flow and appreciate, right? So, and a lot of times just putting a blanket statement out there, a lot cash flowing or cheaper properties, the ones that cash flow ’cause rent in those areas still, still tends to be high, right? And then, the more expensive properties, like a Boardwalk, are going to more likely be in the areas that appreciate over time more. So you won’t get that cash flow, but you’ll get the equity build up and it’s kind of like which game are you playing? You know, you just have to figure out what you’re, you’re, where you’re starting with, what resources you’re starting with and where you you’re actually trying to go and what that journey looks like.

[00:36:26] Nicole Pendergrass: So that’s what this is all about. Just helping people figure that out, right? So figuring out what you’re investing strategy is gonna be and start implementing it. But thank you so much, Lisa. Firstly, I wanna ask actually, how can people reach out to you if they’re interested in the fund work that you’re doing, like if they wanna be an investor passively in a fund, or if they wanna learn more about how to run a fund ’cause I know you have information on that as well, how can people reach out to you?

[00:36:54] Lisa Hylton: Yes. Great question. So the best place that people can go is a one stop shop. It’s lisahylton.com. So lisahylton.com, you can find my podcast. You can find my blog articles on real estate investing. And then at the bottom of that website, you know, down in like, quote unquote, the footnotes, you’ll also see The Fund Manager Accelerator. So for people who are thinking about starting their own fund, or are curious about how funds could work for them, not just for real estate, but like you could create funds for everything from crypto to investing in single family homes, to investing in whatever you want, venture, whatever.

[00:37:34] Lisa Hylton: So, being able to do that, there is you can go all the way down to the bottom to get access either to my boot camp, if you make, like, depending on the timing of when the show releases or to my crash course, which is the boot camp that then turns into a crash course and goes evergreen. So those are the two options.

[00:37:53] Lisa Hylton: And then on my website, of course, you can sign up to learn more about investing with me as well as investing in my fund that I currently have, which is for accredited investors to learn more about what some of the offerings are and how it works. Happy to talk to any investors who are interested in learning more.

[00:38:11] Nicole Pendergrass: Perfect. Perfect. Actually really super quick tell people what is an accredited investor, so they know if they’re accredited or not.

[00:38:18] Lisa Hylton: That’s right. Yeah. So the definition for an accredited investor is someone who, the income level, you either meet the income level or you meet the net worth level. So the net worth is $1 million excluding your home. So that could be like your 401k retirement accounts or, you know, your portfolio of stocks, that kind of stuff, or rental properties as well. Everything that you own real estate wise, except the home that you live in. and then the other way you can qualify is via income. So you either earn $200,000 a year for the past two years and you’re on track to do so in the current year, as a single person, and then as a married person, it’s 300,000 for the past two years, and then you’re on track to do so in the current year as well.

[00:39:06] Nicole Pendergrass: Perfect. So awesome. You either make 200,000. 300,000. If you’re married or you have a million dollars net worth not including your primary residence.

[00:39:15] Nicole Pendergrass: That’s correct.

[00:39:16] Nicole Pendergrass: If you meet those criteria and you’re interested investing, reach out to Lisa, if you do not meet that criteria and you’re interested in starting a fund that you can help people invest, they don’t have to be accredited into invest depending on what type of fund you wanna start. There’s, all that type of, for if you’re interested at all in how that works, what that looks like, go to her website as well.

[00:39:37] Nicole Pendergrass: The links will be in the show notes. And thank you all for listening with us today, listening to us banter and chat and thank you, Lisa, for coming on. I really appreciate it. You gave a lot of gems and information to the people today, and I, I hope people reach out to you, like get started. Let’s start implementing this information. Get in this fund. Start investing. Yeah, let’s build our wealth.

[00:40:00] Lisa Hylton: Awesome.

[00:40:01] Nicole Pendergrass: All right, I’ll see you next time.

[00:40:03] Lisa Hylton: Thank you, Nicole.

[00:40:04] Nicole Pendergrass: Thank you.

 

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