Category: Investments
Air Date: 07.14.2020

The Investor Mindset With Adam Ulery & Kevin Galang

Finding your investment niche and developing the right mindset are critical and foundational steps in establishing a thriving business. Today’s guests are Adam Ulery and Kevin Galang, the voices behind the Tech Guys Who Invest podcast, who provide insights into their investment niches. We open the conversation by exploring why Adam and Kevin got into investing, even though both of their backgrounds told them that you make money by working for someone else. Kevin and Adam discuss how investing leads to financial security, especially if you establish multiple streams of passive income. They then explain how different mindsets influence how you invest, and why you should be guided by math and not emotion. We focus on the importance of aligning an abundance, investor, and growth mindset to go further and faster in your career, along with helping you to grow as a person. Diving into their specialties, they talk about their different approaches and the benefits of either commercial multifamily investment, in Adam’s case, or in note investing, Kevin’s forte. While sharing what they look for in investments, Adam and Kevin emphasize the value of networking, developing a trustworthy team of people with different skill sets, and playing to your strengths. Near the end of the episode, they share their top books and the keys to their success. Tune in to learn how you can develop the kind of mindset that leads to success.

Key Points From This Episode:

  • Introducing Adam and Kevin — the minds behind the Tech Guys Who Invest.
  • Adam and Kevin’s journey into real estate and which investment niches they specialize in.
  • How real estate investing and having passive income has given Adam a sense of security.
  • Why having unexpected costs means that you can’t “save your way to financial success.”
  • The importance of having an investor mindset and being guided by math, not emotions.
  • Why also having an abundance and growth-focused mindset will lead to greater success.
  • Hear about each of the guests’ approaches to investing.
  • Kevin’s perspective on why note investing allows for so many exit strategies.
  • How networking was key in Adam closing his first deal and building an investment team.
  • Why closing a deal doesn’t always work out as one might expect.
  • Specifics about Kevin’s early note investments and how creative you can get with them.
  • The level of control that note investing can give you over a deal.
  • What Kevin learned from playing the stock market and why it’s not for him.
  • Why education and understanding each deal is important for passive investors.
  • Learn the components that Adam looks for in a multifamily investment.
  • Understanding the worst-case scenario before closing a deal.
  • Why you should seek counsel from local real estate attorneys and brokers.
  • How having a competent and trustworthy team is as important as the specifics of a deal.
  • Working out your own investor perspective in finding your niche.
  • Adam and Kevin’s top books, including How to Win Friends and Influence People and Think Rich and Grow Rich.
  • Learn why never giving up and journaling are some of Kevin and Adam’s keys to success.


“What I’ve learned is that multiple streams of passive income give you security. Even if you lose that job, you’ve got those streams coming in to support you each month.” — @AdamUlery


“You cannot save your way to financial freedom, nor financial security. There are going to be things that are going to happen that are just going to be unexpected.” — @2ndhandsuccess


“Don’t just do a deal because everybody else is doing a deal. Do a deal because it makes sense for you. That’s where defining what a good deal means for you is hugely important.” — @2ndhandsuccess [0:22:00]

“When I started note investing I learned that I’m literally the bank. I set the terms with the borrower and loan the money out and sit back and let the money come in.” — @2ndhandsuccess [0:27:14]

“The most important thing for passive investors is education. Just because you’re passively investing, doesn’t mean you shouldn’t fully understand everything you’re getting into.” — @AdamUlery [0:30:24]

Links Mentioned in Today’s Episode:

Tech Guys Who Invest

Tech Guys Who Invest LinkedIn

Tech Guys Who Invest eBook

Tech Guys Who Invest Email

Adam Ulery Email

Adam Ulery LinkedIn

Adam Ulery Twitter

Kevin Galang Email

Kevin Galang LinkedIn

Kevin Galang Twitter

Kevin Galang Instagram

Secondhand Success

Rich Dad Poor Dad

Michael Blank

Dreamstone Investments

Vehano Joseph

Nick Contessa


Tesla Model 3



How to Win Friends and Influence People

Jim Rohn

Zig Ziglar

Think Rich and Grow Rich

Ritter on Real Estate

Kent Ritter

Kent Ritter on Twitter

Kent Ritter Email

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Interested in Investing Alongside me in our next multifamily deal?

Contact me at

My operating partner, Birge and Held Asset Management has a twelve-year track record creating sustainable wealth for over 2000 investors through high-quality multifamily investments.

Thanks for listening!

—Full Transcript Below—

[00:00:02] KR: Welcome to Ritter on Real Estate, the show about how to passively invest like a pro. On each episode, I interview real estate experts who give their investing advice, strategies and tools, then I break down the insights into practical steps to avoid the pitfalls and make better investments. I want to help you passively invest like a pro. This is Ritter on Real Estate and I’m your host, Kent Ritter.


[00:00:25] KR: Hello, fellow investors. Welcome to Ritter on Real Estate, a refocus on how to passively invest like a pro. I’m your host, Kent Ritter. Today, my guests are Adam Ulery and Kevin Galang. Together, they are The Tech Guys Who Invest. They are both real estate investors and they’re hosts of the podcast by the same name, The Tech Guys Who Invest. Thanks for being here today, guys. I think we’ve got some great topics to talk about. I want to dig into your story and your chosen investment niches, but I’d love to just start with given the listeners an idea of who you are. Tell us a little bit about yourselves.

[00:00:57] KG: Well, thanks for having us on the show, Kent. Well, Adam and I both work in tech and we both invest primarily because we don’t want to work in tech for the rest of our lives. How I came across real estate is because I lost an argument to my girlfriend. I used to be of the school of thought where you climb the corporate ladder, you invest in a 401k, you buy a house and then you retire. That’s how you live life and achieve financial success. That is what I genuinely thought. She’s much smarter than I am and she was the one that educated me that we need multiple streams of income.

All right. Fine. I conceded, because she wasn’t giving up and I’m happy she didn’t quit. I started diving into real estate and then I learned as much as I could, found a number of different ways that you can make money, actively or passively. Eventually, I settled on note investing, because I heard a podcast from a note investor who was talking about how you can be the bank. You don’t have to be the landlord to invest in real estate. You can own the paper, own the debt, and when you own the debt, you have, effectively, more power. You can control opportunity. You can set the terms of the loan. You can set the collateral, so whatever you want to take back. People think you can just use one piece of property. No, you can cross-collateralize. Where, if an investor has multiple pieces of property and they need this money, to secure yourself, you can do things as, “Hey, I’m going to take this property. I know you own this. Let’s put this together too,” or you can use a jet ski. You can do a number of different things, to get creative as the bank and that’s how I’ve been focusing my time, effort and energy as a note investor.

[00:02:28] KR: Very interesting. Very cool. Excited to learn more about note investing.

[00:02:31] AU: All right. Kent, thanks for having us on. My name is Adam Ulery. I got started in investing somewhere around 2016. I was raised in a fairly typical middle-class mindset, an environment and didn’t think that investing in real estate was something I would do. Or could do, or I didn’t even know to do it. Around that 2016 mark, a friend of mine turned me on to the book Rich Dad Poor Dad. I read that book and it just blew my mind. It completely changed my life and how I thought about them.

What it did most for me, is really made me super curious and put the seed in my mind that I could do this and should start to educate myself on this. I went on this education journey and began just consuming as much as I could around the topic of investing in real estate and figuring out if I could indeed do this. I pretty quickly discovered I could. I learn by doing, so I started experimenting right away and started working on my first rental property.

I got a single-family rental in the town I live in and started experiencing that it is a true thing and this really does work. The more research I did, the more I started to realize the wealthiest people invest in commercial multifamily, or apartment communities. I started to look at that. Again, my mindset was that Adam couldn’t do that. Normal guy working a W-2 job. That was what rich people did. But the more I educated myself, the more I realized that’s absolutely false. It is very attainable. The thing about large multifamily is you need a team. I love working with a team, so I started putting a team together and that really began my journey into real estate investing.

Then Kevin and I met in a mastermind. We actually met at a cash flow game, which is pretty cool, because we host a cash flow game in Tampa now. That’s where we met at another cash flow game. We realized we had some commonalities and we both want to share this with other people. That’s one of the reasons we’re excited about being here is we want to share with people, who may not realize how important it is to invest in real estate as part of your plan and how attainable it is.

[00:05:01] KR: Yeah, very cool. I share a very similar story, so I can definitely relate. You have a moment that’s eye-opening for you and you realize that the things that you thought were the path forward really aren’t the best way to go about it and then there is a totally different world out there. I can absolutely relate. You guys got together and you guys hosted a show, you’re educating people. What are the benefits that you guys have received and realized through your real estate investing? I mean, what are some of the things, so people really do understand?

[00:05:29] AU: I could take that one to kick it off there. Security is one word that comes to mind, especially with what’s going on right now as we’re recording this. We’re in the midst of the coronavirus situation and people I know are being furloughed. Tenants we have, have been laid off. There are lots of jobs being lost. A major airline just announced a mass layoff coming. If you have one source of income, then what do you do in that situation? That’s scary. That’s the way I was raised and educated is you go get a job and you work for someone else. The better job you have, the more money you have, the more toys you can have, the more security you have. But it’s not true in terms of the security piece. What I’ve learned is the passive income, multiple streams of passive income give you security. Even if you lose that job, you’ve got those streams coming in to support you each month.

[00:06:31] KR: I love that you mentioned the idea about security. I think it has been eye-opening. A lot of discussions I’m having with people that maybe hadn’t considered real estate in the past now are really starting to understand, like you said, the importance of not being completely beholden to one stream of income and one employer. Because you never know. I mean, I’ve had friends who’ve gotten laid off and it totally blindsided them. Now they’re out looking and they have nothing to fall back on and support. I think that’s so important, even if you love your job and you like what you do. It’s important to have that diversification, so I appreciate you mentioning that.

[00:07:07] KG: A couple things that I’ve learned is that you cannot save your way to financial freedom, nor financial security. Even if you amass a lump sum, there are going to be things that are going to happen, like healthcare costs that are just going to be unexpected. Things that you won’t be able to account for. Things that are unpredictable and saving isn’t going to necessarily be that blank — yes, you should have some reserves, but just the idea of saving your way to financial success, I don’t think exists.

On top of that, investing is the single greatest action anybody can take when it comes to attaining financial success, as well as financial security. A lot of for the reasons that Adam was mentioning, the multiple streams of income. We’ll talk about this, but the power of leverage is a fantastic thing when it comes to real estate also.

[00:07:55] KR: Yeah. I think that’s great to get into, because you guys have mentioned this concept of traditional saving versus investing. Something that we talked about before was this idea of the investor mindset. Tell me a little bit more about that and what do you mean by the investor mindset.

[00:08:09] KG: Yeah, when we’re talking about the investor mindset, to succinctly put it, when you’re reading the book Rich Dad Poor Dad, it talks about buying assets versus liabilities. The investor mindset, you look at the numbers. For example, a primary residence, and you do the numbers and show and prove that buying a primary residence is in fact not an asset. It is a liability. You start to see things in the light of, “Okay. How am I going to look at this, assess the risk?” And using math is the perfect way to remove the emotion. That’s where we get into the investor mindset, where you have to define a couple of things. Figuring out what asset class you want to invest in, define whether or not you want to be passive or active. If you’re passive, thinking about the numbers. What numbers make sense for you? What type of return do you want? How risky is this?

You start to almost problem-solve through the investment by just asking yourself questions. That’s an important thing. The investor mindset for me is removing that emotion of it, because money can be emotional, but math is not.

[00:09:11] AU: Yeah, I think that’s great. There are other associated mindset stances that I package up with it as well. Maybe they’re not purely the investor mindset, but in my mind, it does go so well with it. It’s so tightly coupled that I almost group it together mentally. That’s the idea of an abundance mindset and a growth mindset.

For people who may not know what that is, just super, super quick, the abundance mindset is the idea that there’s enough for all of us. I think it’s important to think about it that way when you’re investing. Because when you have this employer mindset, it’s not that way. Your gain is often at the expense of someone else. It’s a zero-sum game there. You get used to that, but that severely limits you when it comes to investing.

If you’ve got this mindset that we can all win here, let’s just figure out how. You can go so much further and faster as well. Making that how you think about things, looking for ways to make sure everyone wins is huge. Then the growth mindset is just this idea of continuing to improve and move forward and mature and round yourself out as a person. I think they go really well together, because as you approach your investments, you want them to align with your goals, you want them to support your life’s vision. Thinking about them in that way will make you more effective as an investor.

[00:10:51] KR: Yeah. I think those are great perspectives. I think this idea of abundance and growth and continuing to learn and educate yourself — and real estate is something you can always be learning about. There’s so many different ways to do it. So many different ways of approaching it and I think having that mindset, I mean, you guys in and of yourselves, you have two totally different approaches to investing that you’ve decided to take. Both involved in real estate though and for different reasons, but the idea that you have to keep growing, you have to keep expanding, I think is so important.

I think you can get very complacent in a W-2 job. That idea of that zero-sum game, I think, that takes me back to my own experiences, right? And find that the real estate community is so much more open to that idea of abundance and that there is so much out there, and I’ve had so much help individually, I’ve experienced that. Yeah, I really appreciate that aspect of it.

As we continue the conversation, I’d love to hear more about the individual approaches to investing that you each have taken and why you’ve chosen those niches, and specifically in those niches, what are you focusing on and how do people start to invest in the same way?

[00:11:56] AU: I took a large multifamily, commercial multifamily. Anything about five units is considered commercial. Sometimes I’ll refer to it as commercial. It’s apartment building investing. As I mentioned earlier, the reason I became interested in this is because when I was doing my research about what my investor identity is, I was looking at everything. Anything I could find out about.

I think it’s important to establish your investor identity and understand what you want to focus on; make sure that aligns well to your goals. Then once you do, you can really focus on that. For me, I wanted to grow massive wealth. I’d like to be able to leave a legacy for my family. I don’t want to just pass money down. I want to share the knowledge and transfer the knowledge and the mindset as well, so future generations will flourish.

Maybe I’m the least wealthy of any Ulery to come. That would be fantastic. My research indicated that the wealthiest of the wealthy in the United States, which means in the world, I guess, invest in apartment buildings. Even many celebrities and popular people that you don’t realize do, they’ve got to put their money somewhere. A lot of them put it there. Certainly the people that I was starting to follow, some of the bigger names in multifamily, syndication, Robert Kiyosaki himself, Trump, these people that we know of invest there.

I thought, do what the wealthy do if you want to be wealthy. That led me to multifamily. From that point on, it was just a simple matter of educating myself about what it would take to get there. We can dive into that as well, how I actually got into my first deal.

[00:13:51] KR: Sure. Yeah. Kevin, how about you?

[00:13:52] KG: Yeah. From a mortgage note perspective, I am the bank. You think about the tallest buildings in the world, generally speaking, the skyscrapers in every major metropolitan, there’s a bank associated with those names. Not to say that I’m trying to be one of those massive banks — it would be great to have the amount of money that they have. But, when you think about it from that perspective, the bank basically controls everything when it comes to financing stuff. That was an attraction for me. I think, this is somebody famous, I can’t remember who exactly said, “You control everything, own nothing.”

Basically, that’s what mortgage note investing entails. You don’t own the property, even for a multifamily, I don’t own the property. But I can control it in the regards that if this borrower stops paying, I can take that back. That sense of security is huge for me. I know that there are so many exits. Whereas, let’s take flipping houses for example. If you’re flipping a house, what are your exits? You either sell it or, I guess, you can hold on to it as a rental. Those are really the only two that I can think of.

With mortgage note investing, you can take the property back, you can create a new note, you can sell or finance it. There’s so many different things that you can do to protect yourself as an investor and that really drew me towards that. On top of that, as an active investor, I’ve found that performing notes where the borrower is consistently paying the mortgage on time, it’s the most passive form of investing for active investors that I can think of. There’s no tenants. There’s no toilets. There’s no turnovers. Those things that landlords have to deal with, the bank doesn’t care. It’s not the bank’s responsibility. All the bank cares is — “Will you continue to pay your mortgage?” If not, then I have recourse. There’s consequences that I can use to my advantage to protect myself.

[00:15:39] KR: Yeah, very interesting. Very interesting. It’s different approaches, but similar concept of this idea of being able to build wealth, while maintaining control. I think that’s fascinating. The note investing is something fairly new to me too. I think it’s a great niche to learn more about.

As you guys do get started, or as you did get started, tell me about that. Adam, tell me about how you started as a multifamily investor and what was your first investment and how have you grown?

[00:16:06] AU: Yeah. The first apartment building and commercial multifamily portfolio that I closed on was a 59-unit in Tampa. It was a portfolio, so we bought more than one property from more than one owner and put them together. We packaged them together. It added up to 59 units. It was funny, because I bet it’s a pretty typical experience if you talk to a lot of people who get started. It was pretty messy. Me and my team, we’re just basically doing anything we could to get the deal done, so we could get our first deal under our belt. Because it’s the law of the first deal that Michael Blank talks about. When you get that first one done and then things start to flow. We’ve experienced that as well.

The first one, it was interesting. I’m trying to remember. I think it was in ’88 when it started out. Then one of the owners was based in China. There were troubles with some of their paperwork and things and it was stretching the closed date out. As it got stretched out, they started to realize that the property had gone up substantially in value since we put it under contract. They started looking for ways out. They wanted to hang on to it, or sell it to someone else for more money, because they realized how good of a deal we were getting. Eventually, they did get out of it. It became a 59-unit portfolio. We let that one go and we got it done. I met the team that took it down through heavy networking. That’s a big piece of advice I would have for someone who is an active investor, is network like crazy.

I met some of these guys through meetups and through networking events and conferences and you never know what’s going to stick. You just try to meet and build relationships with as many as you can. Did end up building relationships with a couple of guys who ended up being the ones who got these properties under contract. Then they realized they were competing against each other on some deals and decided to put the two together to become what it did.

Very interesting deal. Now I’m friends and partners with all those people in the deal and we have stuck together to take down more properties and that’s how we’re moving forward as Dreamstone Investments — is the group that’s continuing to grow by investing in Tampa and Atlanta. On that first deal, it was me networking with people. We each brought different things to the table. They found the deal. Vehano, one of the founding partners of Dreamstone, is a former professional accountant; really, really good at analysis, loves spreadsheets. He plays to his strength. He does most of that for us. We support, but he takes the lead on it.

I’m the people guy and the relationship builder and I’m out here doing podcasts and meeting folks and bringing people who want to passively invest in our deals into the deals. I’m playing to my strengths there, because I’m the public relations guy, I’m the investor relations guy, the marketing guy.

Nick, another founding partner, is really good at construction management and operation, so he manages the back office. The reason I’m mentioning all this is because it’s important to realize that you need a whole team and you want to complement each other and fill each other’s gaps. That’s how I got my first one done is by surrounding myself with the team.

[00:19:41] KR: Yeah. How long did it take you to put that team together? You mentioned conferences, networking, doing this. I mean, how long did it take you to find the right group to do your first deal?

[00:19:49] AU: It’s hard to answer the question, because during the whole process, I was still learning. If you’re actively investing, whether you’re investing in single-family homes, or storage units, or commercial apartments, you have to have a team. You have to have people to work with. I was always throwing that out there. As I honed my investor identity and as it became apartment investing, I started to really look for people who are doing that. From that point forward, I’d say, a year easily, it just takes time.

[00:20:22] KR: A lot of work, right?

[00:20:24] AU: You don’t always know who it’s going to be. Yeah, it’s interesting how that works out. This does not feel like how I thought it would feel.

[00:20:31] KR: Yeah. What do you mean by that?

[00:20:33] AU: The books I was reading and a lot of the articles and things, I just had this picture in my mind of how it would go and it was pretty clean and straightforward, more like a transaction, like buying your house in a way. It wasn’t like that. One of the guys I met, he and I tried to partner up and take down a smaller deal. I think it was a 10-unit in St. Petersburg, Florida. That didn’t work out.

Then in the meantime, he ended up partnering with somebody else. I was bummed out like, “Oh, man. Shoot. You know what? I felt like I could work with that guy, but he found someone else and they got something done.” Fast-forward, I think six or eight months and those are the guys I partnered with. That’s Dreamstone now. I’m with them now. That did work out in the end. Things just didn’t quite happen the way I thought they would. It’s interesting.

[00:21:23] KR: Yeah. Well, very cool. Very cool. Congratulations. Kevin, how about you? I mean, you mentioned you lost the bet to your girlfriend, but as you went out and started actually trying to figure out what those other streams of income would be, how did you go about that process and what led you there?

[00:21:38] KG: Yeah. Just to also piggyback on what Adam was talking about and how he was networking and it takes time, that is probably part of the investor mindset is recognizing that other people have progress happening and that you need to be okay with how your progress is happening. What I mean by that is if you are doing all the right things, but it doesn’t seem like the opportunities are coming your way, don’t rush it. Don’t just do a deal because everybody else is doing a deal. Do a deal because it makes sense for you and that’s where defining what that means to you what a good deal is is hugely important. Because there are deals that if you can’t see the right opportunity, will come by your desk and be like, “Oh, I don’t know if this is good or bad.” You’ve wasted that opportunity. It could be a bad deal and you just jumped in because you’re like, “Oh, I want to get out of this rat race faster.”

The investor mindset would be to be able to recognize and have the discipline to say no. That is going to save you money. By saving money, not losing money is huge for your financial success also. He just talking and that triggered it, so I just wanted to share that.

[00:22:38] KR: Yeah. No, I think that’s great. I mean, I think as an investor you probably need to say no to 90% of the deals that you see. That should be your hit rate. I think that’s important just from a passive investor standpoint too, even if you’re not the one out doing it, two things you guys hit on about networking. How else do you find the good sponsors and the folks to invest with and build those relationships and you know that you can trust them? You have to do the legwork, you have to be out networking and you have to be educating yourself. I mean, I’m on a ton of deal lists. At this point, I get all these things coming in. How do you differentiate one versus another? And get through the marketing to get to truly what the deal is? And should return and what the likelihood is, if you’re not out there educating yourself?

I think it’s — even as a passive investor, you have to be somewhat active. You have to know how to choose those right deals. Yeah, appreciate those things you guys brought out. But Kevin, going back though, to you. As you started to look at note investing, I mean, what are you evaluating and how did you make your first investment?

[00:23:38] KG: Yeah. I made my first investment with my 401k really. The way it worked out is I had money in a 401k and I had learned the hard way that my 401k money wasn’t really my money, because when I left the job that had that 401k custodian and I went to a new job that didn’t have a 401k and at the time was like, “Oh, higher pay. No 401k. Whatever. Who cares? I’ll take that higher W-2 pay.” I took that job.

What I found out is because I didn’t work for the original company, I couldn’t do anything with my 401k. I couldn’t take a loan out as a down payment, which is what I intended to do because I wasn’t on payroll. The only options that I had were to withdraw it and then take that penalty, or roll it over into something else. That’s when I learned about self-directed IRAs, which is where Adam and I met through a cash flow game also.

I don’t know if your listeners have heard of what a self-directed IRA is, but I can just quickly explain it. It’s an investment vehicle where you can invest in anything, except insurance policies and collectibles. There are more things that you can invest in than you can’t. One of the ways that you can do so is by becoming the bank. When you’re note investing, you can originate notes, or you can buy existing notes.

What I did is I took my 401k money and I originated three notes to second-position mortgages, so I’m behind the first mortgage. Then I secured my other note with two work trucks. You can get creative in that aspect where it doesn’t have to be real estate. Some people do jet skis. Other people do RVs. They secure it in that way. If you’re going to secure a note, make sure it’s something that you’re familiar with, or something that you’re okay with also, because you’re assuming that risk as the lender. You’re assuming that the borrower is going to continue to pay. If they aren’t paying, I always look at the asset. How secure is that asset? What’s the quality of that?

For the second position mortgage, I lended out $55,000 in total at 8% interest only. What that means is the borrower is going to pay me 8% of $55,000 each year, over the next 10 years. Then after that 10th payment, they’re going to pay me my initial investment back. I structured the $15,000 note for the two trucks in the same fashion, 8% interest only. For me, that 8% is fantastic, because it’s not guaranteed, but there’s a high predictability that it’s going to come in each year at 8%. I’m happy with 8%. It’s fantastic. I think the average of the stock market, for example, is around maybe 7%, maybe 10%, but there’s a fluctuation there, and you have no control and no security in the stock market, for example.

Whereas mine, if the borrower just stopped paying, I could take that property back, I could foreclose on it and it had over $300,000 in equity. In a way, I’m not hoping for the borrower to fail, because it becomes a headache for me. But if they did, I am protected and because my self-directed IRA was a Roth, that money is all tax-free. It’s a great way to set the terms, which I met these investors through networking, like Adam was saying. You network, you network, you network.

One thing you’ll find with investors is that they always have something to sell or buy and they can always use capital. Use that to your advantage. If you have money sitting in a self-directed IRA, you can originate in, or you can invest in a multifamily apartment. That networking is key. We talk about passive investing, but there’s active work on your end, which you should be willing to do, because it’s your hard-earned money. There is an active component to it.

I took the knowledge that I had from note investing and learned that oh, I can be the bank. I’m literally the bank. Set the terms with the borrower and loan the money out and sit back and let the money come in.

[00:27:24] KR: Yeah. No, that’s very cool. It’s a unique approach and I appreciate that idea of being the bank. Like you said, having that level of control is definitely a nice position to be in. Having that, you mentioned the stock market and the overall returns, and I think what people often miss out on is the drag that volatility has on your overall returns and those ups and downs. If you happen to miss a few days of those ups, I mean, your return over time goes from like you said, 7% or 10%, whatever time you’re looking at down to almost nothing.

There’s a few days in each 10-year period that really drives the majority of those returns. The stable cash flow, I think from real estate is a huge advantage and a big reason that I started as well and just having the stability and the surety of that income.

[00:28:04] KG: I think also, one thing I experienced, because I dabbled in the stock market at one point, was that I’m too impulsive. I saw there was some article about the company Nvidia at the time, they were going to do the chips and the Tesla Model 3s or something. “Oh, let me buy some shares of that.” I did really well, but it was complete luck. I went from a few different strategies when I was reading through about stocks. All right, let me find an ETF that resembles this Vanguard, S&P index one, or whatever. It was like, “Oh, let me just switch it. It’s too impulsive.” Humans are naturally emotional.

If you see — and we’re talking about the average, right? — Is around 7% to 10%. Let’s go with that. That means that there’s going to be extreme lows, but there’s also extreme highs. If you catch the market on one of those extreme lows, you might pull your money out, because you’re now afraid. In the event with real estate, you can’t. You’re almost in a way, forced to write it out, because it becomes a big pain in the butt to try and say, “Oh, I want to sell this right now.” Even then, you really can’t. It’s hard to sell it right away, and allows you to see how things are going to ride out. That’s just one thing that I noticed from my experience with the stock market.

[00:29:07] KR: Yeah. That goes back to the investor mindset. Investor mindset has to be a long-term mindset. It’s the difference what’s being an investor and a trader. You’ve got to have this idea that — “Is this an investment that you’re going to want to be in for the next five years?” I mean, with real estate, that’s often the case. You need to understand that for the long-term is somewhere you’re comfortable being in the long-term.

[00:29:28] AU: Building wealth is a long game. It’s a long, slow game. I didn’t quite understand that and have learned that. It’s important to understand that as you look at your investments and decide what to invest in. That’s okay. It’s good. It’s part of how it works. It’s the long game. You want your investments to align to your long-term plans.

[00:29:51] KR: Absolutely. I’ve heard this quote a few different ways, but essentially, real estate is not get-rich-quick. It’s get rich for sure.

[00:29:58] AU: I like it.

[00:29:59] KG: Yeah, me too. That’s a great quote.

[00:30:00] AU: Yeah. I like it.

[00:30:02] KR: I can’t take credit for it. I’ve heard it from a few different folks, but I don’t know who started it. I think it’s a great quote to live by. As you’re looking at your individual niches, what are the things that you’re actually looking at as you’re evaluating an investment? Adam, for example, you’re looking at multifamily properties. What are the most important things that investors need to understand, to know if it’s a good investment or not?

[00:30:24] AU: You mentioned something earlier, Kent, that I think is probably the most important thing for passive investors and that is education. Kevin and I both believe strongly in education and for people to be very informed. Just because you’re passively investing, doesn’t mean you shouldn’t fully understand everything you’re getting into. You should. You should understand it as well as the operators. When passive investors are looking at our deals, we want them to see our deal package and understand that and make a determination if that’s a good fit for them and aligns to their goals. If it does, they can invest in the deal. Things that are important to us and should be important to our passive investors are location of the property. Physical location is important. We look for things that are in the path of progress.

We like to see that there’s going to be growth in the area, we’re already seeing signs of the area. We don’t like to be too far out in front of it, so that we have to wait for more than a couple of years for it to catch us, but we like to be that distance from the progress, if you will. It’s really important, because it’ll increase the value of the asset and therefore, the investors’ returns.

We want to be in an area — I guess, it’s implied, but that’s improving. Then in terms of the location, it should be a desirable place for renters. When we buy a property, it’s all about making it a desirable place for people, our residents that fit our profile to live. It needs to be convenient for the types of places they would want to go to for entertainment, or that fits their lifestyle, basically. Then, it also needs to have for us, some value add component that can be physically — whereas a lot of times we find we’re buying these from a landlord, or an operator who hasn’t maintained them very well. There’s a lot of physical improvements to make.

We like to provide clean, safe, affordable housing, for the most part, workforce housing. Which means a blue-collar type worker. We want them to have a very nice place to live. It’s going to be clean. It’s going to be safe. It’s going to feel updated. There’s a value add component to that, when you get a place that’s dilapidated, or it hasn’t been maintained. We’re looking for that.

It could also be in the business operations. A lot of times, we’ll buy this from someone who’s either getting older, or they just don’t care about it anymore. It’s become a hassle to them. Unlike us, they don’t have a team in place whose job it is to professionally run that operation. We’re partnered with professional property management who love their job and they professionally run the property. We can add a lot of value there, by cleaning up the business operations.

Then it’s a numbers game. Look at the financial statements. We’ll show an income statement, sometimes called a profit and loss that shows the expenses and the income for the property and what the projected profit will be. They really need to make sure that the cash flow and the expected returns line up to what they would expect to see there. We do our job to make sure those numbers are as accurate as they can possibly be. Then we want our investors to have confidence in us that they are, but also understand enough about it to see that they are, because when we get the financial package from a broker, or from whoever we get it from, the numbers are not typically accurate. There are things missing, there are little hidden things, they’re off a little. Those are the things that we’re looking for.

[00:34:19] KR: Kevin, how about you? How are you evaluating what’s a good note investment?

[00:34:22] KG:  Yeah. What I do is I always assume the worst case scenario. Worst-case scenario being that I have to foreclose and take the property back. I have to understand the foreclosure laws in that state. When I say understand, you may have an idea, but the ultimate go-to source is a local real estate attorney. It’s not your job to try and be a lawyer as an investor, so don’t try to. Even if an investor gives you some advice like, “Oh, this is how it is,” confirm that with a real estate attorney, because to Adam’s point, you’re talking about brokers and not to say that investors are lying, but a mentor told me this. The investor won’t be the one to defend you in court. Having that real estate attorney is huge.

Additionally, that’s another relationship that you can have in that local area. That being said, I also look at the value of the property relative to the loan. They call that loan to value, which is a term that I’m sure people are familiar with. Ultimately, that gives me an idea of how much skin the borrower has in the game. Do they have a $1,000 in on a $100,000 property? What’s their incentive then to stay if they go belly-up, if they default on the loan? I’m also looking at the likelihood that the borrower is going to want to work with me as the bank, because I don’t want to be a landlord. That’s not why I became a note investor. I became an investor to be the bank.

I look at the overall picture of how likely the borrower is going to continue to pay, because that’s what I want. I want them to continue to pay monthly as much as possible. I also look at the value of the property — covers my back-end. Meaning, if I am looking at — let’s use $100,000. The traditional way the borrower for residential mortgage, they’ll put 20% down, so they put 20,000 down. There’s 80,000 that’s left on the balance of the loan. I’m looking at, all right, if I loan out $80,000, if I buy this note, then the value of the property is 100,000, that’s only 20,000 in equity. Am I okay with that much money?

If it cost me $10,000 to $15,000 to foreclose on a property, then I’m only potentially making $5,000 to $10,000 and that’s not good enough for me. I look at how much wiggle room there is, how much equity there is. That’s important to recognize the value of that property. The way I do that is I get an idea through Zillow’s truly as realtors. But a local broker price opinion is as good as it can get from the outside perspective, because if you’re evaluating a note, you can’t go inside the property, because somebody owns that. That’s one thing you have to remember.

Whereas, if you’re buying a multifamily property, you can. You can tour the property. You can get in-depth images of the inside. I can’t do that as a note investor. I can take a look at the outside and the general rule of thumb is the quality of the outside of a property reflects the inside. That pride of ownership. It extends inward and outward of the property.

I have an idea, does a property look like trash? Is there pride of ownership? If there’s part of ownership to me that says they like this place, they want to stay here, that’s an indicator that they’re going to continue to buy. Then I take it further and look at the entire neighborhood. Is this property in the middle of nowhere? Because again, if I have to take that property back, who am I going to sell it to if it’s in the middle of nowhere? Who’s going to want to rent this place in the middle of nowhere? I have to look at that too in the event I had to foreclose, what are the exits that I want to focus in on and then how can I cover that, is really how I approach it first. Then I run the numbers. If the numbers make sense, then you got to pull the trigger.

[00:37:45] KR: Yeah, absolutely. I appreciate that. It’s been great having you guys on today and hearing about your stories. I think it’s inspiring for folks to hear how you guys are investing in real estate while also maintaining W-2 jobs and doing it all at the same time and putting in the work and educating yourselves and networking. These are some big takeaways that I had.

Now we’ll move on to the keys to success. A few questions I want to ask you guys to understand a little bit more about what’s behind your success story and how our investors can be as successful as well. First question is, what’s the most important question that a passive investor looking at a deal can ask that deal sponsor to evaluate whether it’s a good fit?

[00:38:27] KG: I feel it’s tough to narrow it down to just one, but it would probably be around the cash flow and the return on investment. I mean, at the end of the day, I think from a passive investor standpoint, you want to know that your money is working as hard for you as possible. You have other options. You can invest in other opportunities. For me, it would be around the return on investment. What’s the return on investment here?

A more important question though, honestly, for me is not about the deal itself. It’s around the team and ensuring that you trust the team, understanding their character, what their principles and values are and that they have high, strong moral principles and values and that you can trust the team itself.

[00:39:18] KR: Yeah, that’s great. I think you hit the nail on the head. You’ve brought it up on this show many times. That’s how I think about it is, it starts with the sponsor and building that trust. That’s the networking and that’s the time going in upfront. A bad sponsor can kill a good deal and a good sponsor can save a bad deal. It really starts and ends there. If you build trust with someone. Then you have at least an understanding as you’re looking at that cash and the returns that you trust what they put on paper is what they’ll really deliver on. I think that’s so important.

[00:39:45] KG: Good point. Yeah. Totally agree.

[00:39:48] KG: I would say for the number one question to add to this point, it is really difficult to come up with just one. You have to think from your own perspective as an investor, what’s most important to you? Because what’s most important to me isn’t the same for you Kent, or for Adam. It varies greatly. Knowing yourself is huge and that’s what the investor mindset comes in.

For me personally, I’m thinking about the worst-case scenarios. What happens if the borrower stops paying if we’re talking about mortgage note investing? Or multifamily, what happens if we’re at 50% vacancy? What is the plan of action there? Because your hard-earned money, you’re investing it so that it grows. You should feel comfortable with that from an objective perspective. There is the relationship aspect. That is absolutely huge. Knowing how your downside is covered, because that is the advantage of investing in real estate. There is always an exit. Knowing what those exits are and how those exits are going to be handled, I think is how I would approach it from that perspective.

Another thing is how are you getting paid? Defining that clearly. Some people want to get paid monthly. Some people want to get paid quarterly. Some people don’t care and want to get paid yearly. It’s up to you. But asking that I think is also another imperative question to ask.

[00:41:00] KR: Yeah. I think those are fantastic questions. I mean, thinking about what’s the downside. It’s easy as an investor to get very excited about what’s on the paper and what the potential for the upside is and all the good things that can happen. Equally understanding what’s the downside? What is my risk and how likely is that to occur? One way of understanding that and you start to do some sensitivity analysis, and understand like you said, what happens if occupancy goes to 50%? What does that mean for the investment? Can we still pay the mortgage? Can we still pay Kevin back, if he’s the bank? Those are important things to understand. Great perspective, guys.

Next question is what book should everyone be reading?

[00:41:36] KG: I would say, How to Win Friends and Influence People by Dale Carnegie is a life book that everybody needs to read. As an investor, whether you’re active or passive, you are dealing with people at the end of the day. Yeah, there’s numbers involved, there’s money involved, there’s math involved, but you are dealing with people. If you need to negotiate, learn the skills that would make negotiating easier through that book.

If you’re networking to find opportunities, what makes people tick? What makes people want to be your friend? Not to say, have everybody like you, but there’s a component of these social skills that are important. Building true, genuine relationships will take you so much further in life than anything else that I can think of.

[00:42:17] AU: This one is so hard for me, because I’m an avid reader and I read a ton of books and I feel like I get so much out of the books I read and it’s highly dependent on where I am in my journey, if that makes sense. I think if you’re just starting out, I know everyone says it, but Rich Dad Poor Dad. It did hugely impact me and a lot of people I know.

If you’re just learning how to invest and considering making passive investing work for you, I think Rich Dad Poor Dad is a really great place to start. Then Jim Rohn and Zig Ziglar have amazing content that I just think is phenomenal. Napoleon Hill’s book, Think and Grow Rich was very influential. A lot of those really help open up your mind to different ways of thinking.

[00:43:13] KR: Yeah, those are fantastic books. Then what’s your number one key to success?

[00:43:17] AU: For me, it is not giving up. Take action would be a strong number two. It’s super, super important to get educated. If you just get educated and you never take action, you’re not going to make anything happen so you have to invest in that first deal and that’s important. You’re going to learn a ton of stuff along the way. Don’t let it stop you or slow you down, if it’s not the perfect deal, or you see that you made mistakes. Don’t give up. Keep going. Keep learning. Keep growing.

[00:43:50] KG: For me, I would say, one of the habits that I cling on to no matter what’s happening, journaling for me is huge and there’s a lot of research that talks about the mental benefits and physical benefits really of journaling. What I’m alluding to is knowing yourself. Being able to understand why I’m doing what I’m doing is huge, and being able to articulate that to yourself. You can see it on paper, “Oh, this is how I thought about it.” Then looking back on that, seeing how you are progressing, how you are growing, because it’s hard to measure how you’re progressing from a personal development perspective.

There’s not really any stats, if you will. With investing, you can have an escape number. Where am I along those lines? How much has Kevin grown over the last year? How do you define that? That’s hard, but journaling helps you understand who you are as an individual, which is hugely important when it comes to success with investing. That is probably a key to success that I highly recommend. It sounds ‘foo-foo’, but journaling can be anything you want it to be. You can talk about your vision of what you want your financial security to look, your financial freedom, what you want to do with that. That is going to help you visualize what you need to do next. I think that journaling is something that people should do.

[00:45:02] KR: Yeah. I actually don’t think it’s foo-foo at all. It’s something that I do. I think something that’s very practical. I think that what it usually turns into for me is prioritization and these things start popping up, they’ve become a list and I’m able to then prioritize and really approach my day in the most effective way, because I think it’s really easy to get busy. If you’re just doing busy work, you’re not doing what’s really important. It’s usually one, two, three things in a day that are really going to move you forward. I think journaling is a great exercise. It’s not foo-foo. Don’t worry about it.

Thank you, guys, so much. Appreciate all the good content and discussion today. Takeaways for me are just no matter where you are in your investing journey, active or passive, the importance of networking, the importance of just being out there and meeting people and creating opportunities for yourself. And the importance of education. I think you have to start there, right? And books and podcasts are a great way to do that. I mean, that was how I started. Then I moved onto mentorship and going to conferences and things of that nature.

To Adam’s point, at some point, you got to get started and you got to dip your toe in the water. You can’t look for that unicorn, or that homerun. What we talk about at my firm when we’re investing, we say, “Look, we’re hitting singles and doubles consistently, but we’re going around the bases and we keep moving.” I think that’s really important for people to understand.

Then the idea of this right mindset, this long-term investor mindset, I think is so important for people. To know that it does take time. You have to put in the effort, but it is like we said, it’s not get rich quick, but it’s get rich for sure if you stick with the process. Thank you, guys.

Last but not least, how can folks get a hold of you? How can they learn more about what you guys are doing?

[00:46:44] AU: I would like to let people know about a couple things and then Kevin, you can tell them about our site. We have an e-book that we think is great for people who are investing, or learning to invest and you can find that on our website Kev and I are just putting the finishing touches on an investor identity canvas. If you haven’t started yet and you want a simple tool to organize your thoughts and to help you understand what your investor identity could be, you can use that. By the time this airs, we’ll have that up on our site,

Then you can reach us by email, You can reach me by email, I’m on all social media. Tech Guys Who Invest is on LinkedIn. I’m on LinkedIn. If you reach out to me on LinkedIn, tell me where you heard about me, please. I get a ton of random requests on LinkedIn and I don’t LinkedIn with people who I’ve never heard of. Just let me know where you found me and I’d love to connect with your listeners.

[00:47:55] KR: Awesome.

[00:47:55] KG: Yeah, Tech Guys Who Invest is on all the major podcasting platforms. If it’s Stitcher, Spotify, Apple Podcast, whatever, we’re on that. Tgwipodcast is our main site. From there, you can navigate to the e-book, you can subscribe. We have the show notes for each episode on there. You can connect with us on LinkedIn, we’d love that. I’m active on LinkedIn and Instagram or what have you. I’m happy to connect also. You can email me directly if you want to learn more about notes at

Like Adam, we love to connect with people in any way, shape or form. We love helping people, especially if you’re trying to figure out what to do next, or where to go. We love that. We have such a passion for the investor mindset that if we can help you succeed in your financial journey, then our job is done.

[00:48:40] KR: Very cool, guys. I mean, you guys are living out the abundance mindset. I love that. The idea of that investor canvas, that’s really interesting. I think that could be really valuable for folks. I’m going to have to check that out too.

[00:48:50] KG: Awesome. Yeah, thanks Kent.

[00:48:52] KR: Thank you guys so much. Everything you guys just said we’ll include in the show notes, so that folks can get links to it. Thanks again, guys. It was really a pleasure today.

[00:49:01] AU: Yeah, Kent. Thanks a lot for the opportunity. We really appreciate you having us on.

[00:49:04] KR: Absolutely. See you guys soon.


[00:49:06] KR: Thanks for listening to another great episode of Ritter on Real Estate. Hit the subscribe button and make sure you don’t miss out on the content that will make you a better investor. Also, visit for articles, videos and tools curated just for passive investors. Until next time, this is Kent Ritter with Ritter on Real Estate. Now go out and invest like a pro.