Listen to Anna’s most recent podcast guesting, an interview with M.C. Laubscher of Cashflow Ninja.

Speakers: Anna Myers and MC Laubscher

How To Pick A Market For Your Real Estate Investments

 Announcer:  Welcome to The Cashflow Ninja, the podcast sharing how to create and grow income streams and manage, multiply, and protect your wealth in a new economy. Are you tired of trading your time for money? You desire freedom today instead of retirement in 10, 20 or 30 years? I’m MC Laubscher and this is the Cashflow Ninja.

 MC:  Hello, Cashflow Ninjas! MC Laubscher here and welcome to another episode of The Cashflow Ninja! I have a great show for you today. On today’s show, we’re going to look at how to pick a market for your real estate investments.

 My guest on this episode is Anna Myers. Anna is the Vice President of Grocapitus Investments, a firm dedicated to finding and presenting rock solid commercial real estate investments to its capital partners. The team at Grocapitus is on a mission to help investors become financially free by putting their money in apartment buildings, student and senior housing in choice markets across the country. Grocapitus also runs an educational platform known as MultifamilyU, that offers online and in-person training around multifamily investment and current trends in real estate.

 If you’re interested in joining our investor’s group, you could go to CashflowNinja.com/InvestorsGroup and fill out an application form or email me at [email protected] to start the discussion to see if you’re a good fit for our group.

 If you’re living in the Philadelphia, Bucks County, and Southern New Jersey area, we are hosting a live investors Meetup event every month in New Town, Pennsylvania. For more information on the monthly event and information on how to join us at our next live event, you could go to CashflowNinja.com/Events.

 I’m also speaking at the Multifamily Investor Nation Summit coming up on June 27 through June 29th. It’s a three-day information-packed event for multifamily investors with over 1,000 attendees and over 50 speakers. You’ll hear from experts about finding deals, raising capital, underwriting strategy, selecting markets, and much, much more. To access the event, you could go to ApartmentEvent.com to grab your ticket and use promo code “ninja” to get $100 off.

 [Music begins.]

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 MC Laubscher here, the host of The Cashflow Ninja Podcast and also the President and Chief Wealth and Investment Strategist of Producer’s Wealth, where we help our clients integrate cashflow banking, also known as infinite banking, with their business and investments.

 If you’re interested in learning more about how we create strategies that integrate cashflow banking and investments, turbocharge them, you can access a video series at YourOwnBankingSystem.com.

 [Music ends.]

 Anna, welcome to the show.

 Anna:  Well, thank you. Great to be here with you.

 MC:  Yeah, appreciate connecting and having you on. Can you share a little bit about your background and journey with my listeners?

 Anna:  Sure. My real estate journey actually began before I was born, because my grandfather is what I consider to be a real estate maverick in Southern California. He originally was in Tampa, Florida, doing some real estate over there, and he saw on the West Coast, things were really happening. So, he sold everything he had in Tampa, went to Southern California, LA, and started flipping houses. People think, like, wow, flipping houses, but yeah, they used to flip houses way back then.

 Then he became a self-made millionaire at a time when that really meant something and built up this kind of real estate empire and then was buying orange groves and walnut groves and converting them into shopping malls. He was one of the guys in the history books that actually realized at the time that when you build something near a freeway exit, that was a key thing. Back then it was. It may not be quite as key now, but again, he was very entrepreneurial, a forward thinker, and that was kind of the fabric that I grew up with, was a strong example of commercial real estate being the wealth in my family, as well as somebody who just was not afraid to strike out and be different and build things.

 My dad is an architect. Me, as well as all my brothers and sisters, were always encouraged to be entrepreneurial. What did I do? I actually, instead of real estate, I got involved as a programmer. I went into the information technology world. Why did I do that? I am a problem solver, I love to solve problems. I’ve also got an artistic side to me, which I was always like, art/science, art/science, which do I want to do? But I ended up having a baby very young and so that changed my world. I was a single parent, I was a teenager, and I needed to provide income, as well as proceed in my education. I became a programmer so I could do that.

 Fast forward, I had a great career in IT, and my background is data analyst, as well as a systems architect. Then I did a big pivot and pivoted into photography. The IT industry crashed in the year 2000 and I had always wanted to be a photographer, again, that art/science thing, right? I said, I’m going to go into photography and have a career here.

 What I learned is, first of all, when you’re really good at something and you make good money at it, the government wants to take most of that money, especially when you’re an entrepreneur and you’re working for yourself.

 That was a big problem for me because I just felt like I was working to pay taxes, all my money was going to taxes. In solving that problem, I was like, “Well, how am I going to do this? I can’t stop working.” So, I went back to real estate and I started investing as a real estate investor to protect my income as a business. And it worked, of course it worked, we know it works, right? It’s a great way to shelter and because of all the advantages that real estate investors have, you can really leverage a lot of that to protect the cash flow that you have from businesses.

 But when I continued down that path, I realized that the career that I had created for myself, even though I love photography, was completely non-scalable and real estate is extremely scalable, and so I pivoted again. I pivoted and I made a five-year plan that I was going to go from my photography career, I had a 1,500-square-foot studio, very successful photographer in the Bay Area, to full-time real estate.

 That is what I was able to successfully do. I now am a full-time commercial real estate. I went big time into multifamily. Again, I’m all about scalability. I re-traded back to my IT days, because I never lost that as a programmer. I love applying data science methodology to real estate, and so I bring all of my various skill sets into what I do now and that is, along with my partner, Neal Bawa, we source deals from all over the nation, from the best markets and the best neighborhoods, and find great product for our investors, applying data science to determine what is going to deliver the best results.

 MC:  Now, markets is constantly changing and there’s massive changes going on right now all over the U.S., mass migration from one area to another area.

 Anna:  Absolutely.

 MC:  There’s demographic trends playing into this. What are some of the things that you can share with our listeners just around that, if you want to comment on that, and also, how do you identify some of these markets? How do you pick a market to go into, especially for a lot of newbies? A lot of newbies might be listening as an active or as a passive investor.

 Anna:  Yeah. That’s really good that you pointed out because we are active investors and by the way, we do teach a bootcamp for other people that want to learn how to be active investors. Our mindset is really all about teaching people to be active and also teaching passive investors how to vet deals. Because whether you’re active or passive, you should understand markets. When you’re looking at a deal, you can decide, is this a market that’s going somewhere? Is this a good place to place my money?

 Some of the key things that we look at are, two of the things you mentioned, is population trends and then coupled with job trends. Those are definitely huge movers for markets. We’re looking at workforce housing and above, so we do class B, as well as class C. We also do new construction, which could be considered class A, but for population trends, we’re looking to make sure that there is a significant amount of population that has moved into that market.

 We look back to the year 2000 through as current as you can get, depending on the data source that you have, and we’re looking for a significant amount of population movement into that market between that time. The smaller the market, the ratios are going to depend on whether it’s 500,000 people or over a million, so we look at those in different ways, but we’re looking for the bigger the market, that gets an 18% increase, 25% increase, those are big numbers, but those are going to be on the smaller markets.

 When you look at a very large market, you might see 4% increase and when you really do the numbers, you go, that’s a big increase for a market that’s several million people to have a 4% increase is substantial.

 So, population coming into a market, we do not invest in markets where population is leaving. A lot of people, if you look at the markets that you’re interested in, if you Google the name of the city plus population, it’s going to bring up a little table and it’s got a slider on it. And you can slide back to the year 2000 and see what the population was.

 Google “Population Phoenix, Arizona” and you’ll see this little table and you can see what it was in 2000 and what it is closer to now. Often it’s 2016, 2019, it depends on their source of data that they have. You can really see who’s growing and who’s shrinking. Very important to see where is the population moving to.

 We’re also, of course, looking at jobs. Where are the jobs going to? It’s not surprising that jobs often move with population, because jobs want to go where the population is going, but sometimes jobs are the leader because they’re leaving places that are less affordable and they need to move to places where they can have workers that can afford to buy a house or afford to have a decent lifestyle. Jobs are another major, major marker for us. Your tenants need to be able to pay their rent and they can only pay their rent if there’s a diversity of jobs represented in the market, so if a recession does hit or if certain sectors get hit with a recession, you want to have a very diversified marketplace so that you have a variety of jobs that your tenants can be employed at and you get less hit as an apartment owner by your tenants not being able to pay their rent.

 MC:  So, the diversification of the job markets, too, that’s a fantastic point because there might be something springing up but it’s one or two industries.

 Anna:  Exactly.

 MC:  Those two one or two industries leaving out of an area can completely decimate it, as we saw with the Rust Belt.

 Anna:  Yes, absolutely, with areas that are very focused on autos—there are some areas that as a market demographer, as I’m looking at the market, I see certain cities really taking off and then I always have to look and say, well, what is it? Is it the price of oil that’s driving it? Is it a military town that suddenly the budgets have really increased? You always want to understand why is there a sudden change and is that a good thing? What happens if that trend reverses and you’re in for a five or a six or a ten-year hold? How will that impact you?

 We love to see different markets coming, like Amazon coming in, you can follow certain people that say, “Well, there’s a lot going on there.” But I’ll give you Jacksonville as an example. We recently invested in Jacksonville and my impression of Jacksonville, not knowing, I hadn’t invested there yet, I was thinking, lots of military in Jacksonville. I was doing my due diligence and I looked at the employment, I was so impressed. I mean, it is like a pie with every shade of the rainbow and lots of pieces, lots of good size chunky pieces of pie. That’s a good market. That’s a market where you’re like, yeah, there’s true diversification in a market like Jacksonville.

 MC:  That kind of plays into the demographic trend, too, right? From a lot of people moving into Florida, just so it hits the jobs, the diversification of the market and the jobs there, the industry, obviously there’s growing industries. One that I just noted here is healthcare is obviously a very big—

 Anna:  Healthcare is huge, yeah. Not only, I mean, it’s everywhere, right? But that’s like something people are always going to need in every market. I really like seeing healthcare as a chunky section in any market that we’re in.

 We also recently acquired a property in Tucson, Arizona. I love that market. Tucson is an amazing market. It’s really on the up and coming. In fact, it was just rated the top market for rent growth for small markets. When we first invested maybe a quarter ago and when we were doing our due diligence, it was like number two or number three on the list, and now it’s number one.

 That type of studying of data and analyzing and the market studies that we did, they don’t lie, when you’re looking at that stuff and you’re like, yeah, Tucson is a solid market to invest in and the trends are going there.

 MC:  Right.

 Anna:  It starts to show that it was a great place. But healthcare is a big player in the Tucson market, for sure.

 MC:  One of the things that we’ve mentioned before, there’s a website, How Money Walks, great website. You figure out, and you’d mentioned, that from a personal point, the problems that you had was taxes.

 Anna:  Yes.

 MC:  They follow, let’s just throw it out there, California, Illinois, New York, New Jersey, I mean, it’s the states that keep coming back up and up when you have the tax discussion, right?

 Anna:  Absolutely. Well, I’m born and raised in California and live there still, so yes, I’ve been a person that’s been very heavily taxed but a person that takes advantage of real estate to leverage real estate to prevent over-taxation as much as possible.

 MC:  Yeah. Then to your point about looking at markets, too, where are these folks going? That’s, I think, the data that people have been looking for. Arizona, that you just touched on—

 Anna:  Arizona. I’ll tell you another market that we really like that I believe a lot of companies, as well as Californians, are going to, is Utah. It’s obviously a state, not a market. But there’s multiple markets in Utah that we love. We love Salt Lake City, we love Provo. We’re big fans of St. George, but that’s just a secret between me and you. Don’t tell anybody about St. George, okay?

 MC:  [Laughs] I’ll make sure not to.

 Anna:  You’ve got to take this out, don’t include that in the interview, please.

 MC:  [Laughs]

 Anna:  Also, no surprise for anyone that’s listened to Neal Bawa and his amazing annual webinar that he does about real estate markets and he does a shoot-down between different markets, and he always pegs a market that is what he thinks is going to be the best market—Boise, Idaho, two years in a row.

 MC:  Oh, wow.

 Anna:  That is another amazing market. Now, these are hard markets to get into because the cap rates are lower in Utah. They’re lower in Boise. You really have to go after it. I’ll tell you one of the strategies we’re using. I mean, we’re value-add multifamily people, but when the cap rates get so low that it doesn’t make sense to buy value-add, what do you do? What do we do? We build. We’re actually looking at building. We’re looking at new construction in some of those markets. Our current portfolio is about 150 million and about 60 million of that is new construction. It isn’t something that’s completely unfamiliar to us. It’s a tool in our toolkit that we can pull out.

 For key markets where the cap rates don’t make sense for value-add, we are engaging in new construction as an option.

 MC:  Right. Then obviously, Florida is definitely on the radar where a lot of folks are going to in Texas, right?

 Anna:  Yes.

 MC:  I believe I didn’t say Texas. Texas is also a big one. Once you nail down a couple of states that you’re interested in and make sense for you and is within your comfort, the market that you’re picking, obviously **** [0:18:46.3] and sub, what type of neighborhoods, once you’re in a city in a particular market? What are some of the things that you look for in a neighborhood to try and figure out what would be the best neighborhood to invest in?

 Anna:  Sure. Well, one key factor we’re looking for is median household income and also, the price of the houses and the rents. We don’t want to invest in the most expensive neighborhood in the market because you’re not going to make any money there. We’re looking for cash flow. You’re going to end up with a nice house, but you’re not going to be able to make any cash flow off of it.

 We’re looking for that sweet spot where the rents are maybe between 800 to 1,100. Once you get above that, your returns are going to be much less. I’m talking about an average rent across an apartment building, because you might have studios, one-bedrooms, two-bedrooms, etc. We might make an exception to go lower than 800 in some markets.

 But we do have that lower threshold in general because if you are in a place where your average rent is 600, we have found that with tenants who the average rent is 600, that you may not get paid your rent 12 months out of the year. You want a high enough level of rent expectation that your tenant base will be paying you consistently. Once you go too low, we’ve just found that you’re going to have an increase in bad debt and delinquency and a lot more churn and that’s going to affect your profits because you’re going to just have so much more eviction and have to deal with that.

 We’re looking at the rents. The median household income that we like is very similar reason, is 40,000 and above. So, 39, if it’s like that. Now, if it’s too high, then you get into that other range where it’s like, I don’t know if we’re going to make money in this market, it’s too expensive of a market. We’re not going to make a good gross rental yield here.

 Then we also look at crime. Renters don’t want to live where there’s extreme high crime. Crime is more expensive than schools for apartment renters, interestingly enough. Not that they don’t care about schools, but one or the other, then crime is more weighing on someone’s mind than a school, because they’re not moving into an apartment—like when you buy someplace, you’re buying it and you’re like, oh, my kid’s going to be here for 10 years. You’re living in an apartment for 18 months or something, right? School is not as important.

 But for crime, what we want to see, is we want to see the crime rates going down. Again, we look at the historic trend. We don’t like to invest places that if you look on City-Data and you scroll down maybe two-thirds of the page, there’s a crime table. I’m going to refer to the numbers they have in there. City-Data is a free source, so we always encourage people to look at free versus—we use a lot of paid sources, but not to add money onto people’s monthly budget—in the crime area, we’re looking for that last box on the right to be lower than 500. We don’t like investing in places that are higher than 500. Then you want to look all the way to the left, which is like your 2000 and then you’re going forward. You want to see the crime rate going down. Say the crime rate was 400, you don’t want the crime rate all the way to the left to be 200 because now you’re showing an increase in crime in the area.

 We do dig in and see—when you’re in a C class neighborhood, you will have crime. You’re not going to find C areas to invest where there’s no crime, that’s just not the way cities work. The more densely urban it is, the more crime you’re going to have, so you’re going to have to dig into that a little bit.

 We, of course, are looking at unemployment. When we’re looking at unemployment, that’s a very important feature for a micro-neighborhood. How many people are working in this neighborhood, right?

 MC:  Yeah.

 Anna:  What we like to say in terms of a metric, is if you look at the unemployment rate for the city. You Google it, what’s the unemployment rate for Phoenix? Then with that micro-neighborhood, you don’t want the micro-neighborhood to exceed 2% over the city’s unemployment.

 Now, if it does, if you’re finding high unemployment, again, you have to dig into it because look at what that neighborhood is made up of. If the neighborhood has a lot of students, that could throw off your trends. If the neighborhood has a lot of retirees, that could throw off your trend. You do need to consider that, that when you’re looking at unemployment, understanding what is driving them.

 [Commercial break.]

 MC:  You’re listening to The Cashflow Ninja, the show helping people all over the world create monthly cash flow and achieve freedom today, not in 20, 30, and or 40 years. This is the show where cash is not king, but cash flow is king! We will be right back after a word from our sponsors.

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 MC:  You’re listening to The Cashflow Ninja, the show helping people all over the world create monthly cash flow and achieve freedom today, not in 20, 30, and or 40 years. This is the show where cash is not king, but cash flow is king! Now, let’s return to our interview.

 [End of commercial break.]

 MC:  Could you share a little bit more about your process, because you guys are ninjas applying the data science to find best deals in markets and neighborhoods and drilling down in micro-neighborhoods. Can you elaborate a little bit on your process?

 Anna:  Sure. Well, we have our resources, but what do I use personally? I use, when I’m first looking at a property, I use a paid service called Neighborhood Scout.

 Let me step back. The first thing I use is Local Market Monitor. Okay, I’m going to look at the big market. And so, I’m going to pull up the market in Local Market Monitor. That is going to give me a report that is going to be looking at the job trends, the population trends. It’s also looking at the valuation of real estate.

 It’s focused on single family and many of these paid sources are focused on single family. You just have to take that with a little bit of a grain of salt. It gives us the ability to do some forecasting on rents in there. It’s one of my key pieces, is looking at Local Market Monitor to understand a snapshot of the market. Markets change and these reports on Local Market Monitor get updated, I’d say probably every two months. It could be every month, depending on the market, and so that’s a really great resource for us.

 Then, once I understand the overall market, I zero in with Neighborhood Scout, which is NeighborhoodScout.com, and pull the report to understand what’s going on in the micro-neighborhood. The Neighborhood Scout report is just this abundance of information and I love it because it’s very graphical. Remember, I’m like the art/science person, right? I really love the way they’ve laid out their stuff.

 The first thing I look at when I pull the Neighborhood Scout report is I look at the trend forecast for Neighborhood Scout. They have—it’s a 1 to 5 and there are two things they’re looking at. They’re looking at, one is the blue chip, like what’s the appreciation value going forward and what is the likelihood that it’s going to exceed right now. It’s kind of like path to progress, like are you on the path to progress and are you a blue chip? Like historically how has this area done?

 So, 1 to 5, we’re looking at how well it’s doing there. It’s not common that you’re going to get 4/5s or 5/5s. More often you’re going to see 3/2s, 2/3s, that type of thing.

 I dig into the demographics quite a bit in that report. I’m going to look at the median household income again. It’s going to tell you all about who lives there, so it breaks down all the different people that are there, what are the ages, what are the employments, what are the makeups of the households. It gives me a great view. If my unemployment is high, in that report I can see like why it’s high. It’s because there’s a lot of students here. It’s very obvious within that. That is definitely one of my favorite tools to combine with. Then it also does some market demographics there as well.

 MC:  Great. I want to touch on opportunity zones a little bit because I know that this is something you’re very well-versed and as well. For listeners not familiar with it, can you just briefly explain what it is?

 Anna:  Sure. Opportunity zones were introduced in 2017 when the new tax law was passed and what they did is they defined over 8,700 areas in the United States—these are specific census tracts—each state has them. It’s the governors that were responsible for defining them.

 What they are, is if you are to invest in these areas in very specific ways, there are three benefits that you can get. First of all, you need to be bringing in a capital gain. Let’s imagine that you sold a bunch of stock and you have a million dollars gain, good for you! But you don’t want to pay taxes on all that gain, so what can you do with it? Now, you can move it into an opportunity zone project. If you move it in, you have three benefits. One is that you’re going to defer paying your capital gains on that sale, that transaction, for seven years. Not until 2027 do you need to pay your capital gains taxes.

 The other element is, if you were able to get it in by December 31, 2019, you will have a reduced basis in what you need to pay. You will have a step down to 85% of the gain that you’ll need to be taxed on, versus 100%. What happens if you get it in after December 31, 2019, then you are at a 10% versus 15% and that stays there for 2 years. Eventually you’ll lose the basis, but hey, at least you’ve got 7 years that you’re not having to pay. You’re deferred for 7 years, right? That’s a huge advantage.

 That money that you bring in, that million dollars that you brought in and you invested in an asset, the gain on that asset, the asset has to be held for 10 years, all right? Otherwise you don’t get this gain. The thing is, that the gain that you get on that asset, from a federal perspective, is tax free. No taxes do you have to pay on that, and that’s forever. It’s not like a 1031 where it’s like, well, it’s tax free but only if you now move it into something else. Nope! Tax free. You win.

 Now, the states have not yet—interestingly enough, the states are just trying to catch up on like how are they going to tax this. I think different states will have different answers, so that’s something—but honestly, the federal part is always the biggest part of taxation, right?

 MC:  Right.

 Anna:  We see it as a huge advantage. We have a lot of investors that are either selling houses, it’s an option. It’s an alternative option for a 1031, which many people find difficult to do. So, instead, you can move that money into an opportunity zone fund. You can use the sale of a car, sale of artwork, sale of stocks, many, many types of gains.

 What they’re trying to do, what the government was trying to do, was unlock all of this capital gains that was locked up that people didn’t want to sell because they didn’t want to pay taxes. And the intent is that they’re able to move it into these areas and these opportunity zones are supposedly distressed areas. These are areas that need capital coming in in order to catch them up with the surrounding neighborhoods. I should’ve probably said that right from the beginning, sorry, I missed that part. I get pretty excited talking about opportunity zones.

 So, how do we improve those areas? The way that you take on one of those projects, again, there are some very specific things you have to do. It’s not like you just buy an apartment building and you’re like, “Good, I’m in an opportunity zone, my investors are going to get all of those advantages.” That’s not true. There’s some things you need to do. The first thing is, you need to understand that you need to bring in the same amount of money to invest in, improving the asset as the value of the building.

 Let’s use the $1 million again, because it’s a nice round number, I like a million dollars. Say you buy a building for $1 million. The building and the land is $1 million. The land is worth 300,000 and the building is worth 700,000. Now, in order to meet opportunity zone regulations, you need to bring in an additional 700,000 to improve that building to make it eligible to qualify for these opportunity zone regulations.

 Now, what could you do? What if that land was zoned so you could build another building? That would be a good play, right? It’s pretty hard to improve a building. We talk a lot about value-add multifamily, what we call lipstick on a pig, right? You can’t buy enough lipstick for that pig to make it eligible for opportunity zones, so let’s just be clear about that.

 What we think is that most opportunity zone plays are really new construction to some degree, whether you’re building an additional new building in the back, or you’re starting ground-up construction from the very beginning.

 As I mentioned, we have experience in new construction, so this isn’t an area that we’re afraid of going into. We’re embracing it wholeheartedly. At the same time, we have identified specific perils that we believe that investors need to understand. It’s not just about, hey, there’s a tax-free thing, let me jump in.

 What are some of those perils? Well, first of all, remember we said that this is a depressed area that we’re going into and we were talking about new construction. How do those two things work together? Are you building a class A building in a class C or class D area? That is not necessarily going to work.

 The other thing is, there’s a lot about developers. When you’re doing opportunity zones, we’re partnering with developers. That developer needs to have lots of experience, first of all, as a developer, but most developers, what do they do? Their MO is they build something, they develop it, and they sell it, and they move on, and they develop again, because that’s what they do, they’re developers. That won’t work for opportunity zones, right?

 Because remember, for an opportunity zone to be eligible, to successfully get your gain in the end tax free, it has to be held for 10 years. That means the developer has to stay on the project for 10 years.

 We look for developers that that’s their normal mode of business. They’re like, “Yeah, I’m a developer and I hold onto what I build. That’s my normal thing and I know how to asset manage. We’ve got experience in that. That’s what we do.” We’re very, very selective.

 We’re taking all of these ways that we apply data science to markets and we’re applying additional new ways that we’ve come up with and we’re applying them to opportunity zones.

 Developer is obviously very important. Another thing that we look at is the zone itself. There’s over 8,700 markets or census tracts that are eligible opportunity zones. 19% of those zones are in already-gentrifying areas. Clearly, that’s where we’re going to focus. If we’re placing investor money, we’re focused on placing it in a place that’s going to have a high degree of success of that asset actually increasing in value. If we’re able to place it in areas that are already gentrifying, that’s one step ahead of the game. We’re doing that by looking at median household income and all of these things that we talked about before.

 Another thing that we look at, which most people had—I mean, most people say, “This just blows my mind. I’ve never even considered this for opportunity zones,” this is again, a Neal Bawa-ism. Say you have an opportunity zone census tract and where do you want to invest in that tract? Say you’re looking at it and it’s a big one, say it’s a big tract.

 Well, we say we don’t want to invest in the middle because if you consider a big pancake, you don’t want to put your butter in the middle, we want to put it at the edge. Why do we want to put it at the edge? Why do we want to invest at the edge?

 We want to invest at the edge because all around the opportunity zone are areas of higher median household income, lower cap rates. By investing at the edge, there’s a much greater likelihood that that area is going to be absorbed into the areas around it. It has a much greater chance of success than investing in the middle of the opportunity zone and hoping, kind of that 80/20 rule. 20% of them are going to work, 80% of them are just not. We want to be on the 20. We’re always looking to be on the 20 side with everything we do.

 It comes with a lot of innovative thinking and out of the box, so as we approach everything, Neal and I are both technologists. We’re always bringing our previous experiences as entrepreneurs and business leaders into—we’re using other people’s money, let’s be smart about this. How do we really squeeze the juice out of this concept and make it as best possible for our investors’ money?

 MC:  Absolutely. One habit I’ve observed from wealthy and successful people is that they’re always studying new subjects and learning new skill sets. What are you currently studying and what skill sets are you currently learning?

 Anna:  Well, opportunity zones and we just covered a lot of that.

 MC:  Yeah.

 Anna:  It’s a new concept for everybody because the laws just came out. Last week I was at an opportunity zone conference for a long time and because I’m now underwriting, I’m the lead underwriter for the group, again, that math programming side of me, and I’ve gotten really good at value-add multifamily underwriting. In fact, I teach it in our bootcamp, and I teach it on webinars. I do webinars monthly that provide free access to those types of things.

 But now I’m doing new construction. So, that’s kind of a new challenge for me, is to be underwriting all this new construction stuff. I’m loving that because it’s bringing me back. I’m underwriting large commercial, like mixed-use areas and I’m like, this is really resonating with me because it goes back to what my grandfather used to do. Here I am, like back with the mixed use, big commercial, shopping malls I’m underwriting and all kinds of cool assets and I’m like, this is interesting to me.

 I’m also always pushing myself on reading. I know you had Matt Faircloth on a while ago. I’m very focused on concepts of raising capital and I’m a big fan of Matt, as well as Liz Faircloth, wonderful people. So, focusing on raising capital in ethical ways and smart ways is something I’m also spending my time learning.

 MC:  Fantastic! A core message in our show is to leave our families, communities, and the world better than we found it by passing down a mindset, values, and principles to future generations, not just money. If you cannot pass on any money to future generations and were only allowed to pass on three principles to them to build wealth and achieve happiness and success, what would they be?

 Anna:  Well, I think the first thing that I feel privileged that was passed onto me and I want to pass on my future generations, my children and grandchildren, is the entrepreneurial mindset. I was very privileged that my parents and grandparents were great examples of that, and I was able to not be bogged down early in life with the idea that I had to work a job and meet certain standards and that was all there was to life. I was encouraged to open my own business and have an S corp and do all that. They were like, “Yeah! This is a much better way to be.”

 I want to encourage my future generations to think big as well, too. I want to say think big in terms of life, not that they have to have big money. It’s about what they’re happy with, but it’s not about just working in a cubicle. It’s about having big dreams and the confidence to go after them. I really like that my family has confidence in all of us that we’re able to do it. That entrepreneurial mindset and also that it’s okay to fail. That’s part of being an entrepreneur, not everything you do is going to succeed, but that’s where you really learn the most lessons, I think, is by really studying why something didn’t work and internalizing it and paying attentions to it and then making the changes necessary and going after it again. That’s one of them.

 Another thing is I really want to pass onto my children to seek experiences and not objects in life. Life is a wonderful thing, but if you get caught up in seeking big houses and big cars, I’m just a person that would rather seek long and big adventures and I would want to encourage my children and grandchildren to pursue big adventures and seek experiences.

 I guess lastly, I don’t know, it might sound kind of frou-frou, but I always try and operate from a position of love. I think it’s such a deep space in humanity that if we’re always able to open ourselves to—it’s a way of opening yourself to the universe and what’s around you. If you operate from a place of love, love for your family, love for yourself, love for the community, love for the person that you’re facing. Just being like, hey, this is a human being. I love humans! That can put you in a better space instead of being always competitive.

 I believe it puts you in a space of being very openminded and then also very ethical, because if you’re operating from a place of love, you’re always trying to figure out what the best solution is for everybody in the situation and I think that’s a very important place to be in business.

 MC:  Absolutely. Thank you for sharing that. Anna, where can my listeners learn m ore about you, your company, and stay informed with all the projects that you’re involved in?

 Anna:  Sure. The syndications that we do for passive investors is Grocapitus.com, is where you can find us. That’s G-R-O-C-A-P-I-T-U-S, dot com.

 Then if you want to learn how to become an active investor, then you can go to MultifamilyU.com. That’s Multifamily and the letter U dot com. That’s where we teach people how to buy apartment buildings, how to underwrite, how to do these things. I would say that there’s lots of great content on there, lots of free great webinar content, that even passive investors should check out. Information about markets, how we approach them. We have lots of guests that come on there, syndication lawyers, CPAs. I cohost lots of webinars on a weekly basis with great people from all over this nation.

 MC:  Fantastic! Thank you so much for coming on the show and sharing your journey and your knowledge and providing so much value for my listeners.

 Anna:  Thank you for having me, it’s been a pleasure.

 [Music begins.]

 MC:  Life settlement investments have allowed financial and banking institutions to not only buy their equity contractually, but also diversify their capital from any economic market and geopolitical risk. It’s been part of the billion-dollar blueprint followed by institutional investors and if you’re an accredited investor, you can also now participate in this vehicle with enormous growth potential. You can watch an informational webinar presented by one of the premiere organizations providing life settlement investments with a number of solutions at CashflowNinja.com/LifeSettlements.

 [Music ends.]

 Thank you again for joining me on The Cashflow Ninja. If you like what you hear and appreciate what we’re trying to build here, please subscribe, write, and write a review for our show on iTunes and share our show with family, friends, and your network. If you’re not a subscriber to our newsletter, you can sign up for our newsletter at CashflowNinja.com.

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