LUR Stuart | Turnkey Real Estate

 

Turnkey properties have been gaining popularity among many new investors. However, not many have the right information and safety nets in place to make the whole investing experience a breeze. Fortunately, in this episode, Lisa Hylton has Stuart Grazier, an active-duty Navy pilot and real estate investor, to help us navigate through the whole turnkey process. What do you need to prepare for a turnkey? What questions should you ask your turnkey providers? What systems should they have in place? Stuart answers these questions while sharing with us how he came upon real estate investing, how he eventually started his turnkey company, Storehouse 3:10 Ventures, and how he balances it with his job in the Navy. Having been in almost all sides of real estate from house-hacking, mortgages, and private lending, to commercial property syndications and cash flowing rental properties, Stuart gives out great insights and advice on how you can break into some of these areas. He goes further by tapping into investing in RV parks, multifamily apartment complexes, and more. Tune into this jam-packed conversation that sheds light on the different ways to go about in this industry.

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How An Active Navy Pilot Went Into Real Estate And Built A Turnkey Business With Stuart Grazier

I am sitting down with another amazing guest. He is Stuart Grazier. He is a real estate investor, an active duty Navy pilot who has served eighteen years in the military. During a fourteen-month deployment in Iraq in 2008 and 2009, Stuart had the opportunity to do a deep dive study into real estate investing and learnt about the power of passive income. Through endless learning, lots of determination and continuous action, he and his family have become financially free over the years. From house hacking, before the term was even coined, to monthly budget meetings and frugal living to investing in real estate, mortgage notes, private lending, commercial property syndication, and also buying cashflowing rental properties. They are on the path to early retirement and financial independence. Stuart and his family now own a portfolio of approximately $600,000 in performing mortgage notes, four single-family rental properties and an RV park. He’s a part owner of an apartment complex and mobile home parks syndication. Thank you so much, Stuart, for coming on the show.

Thanks for having me.

Affordable housing is an asset that's going to be needed for quite a while. Click To Tweet

I touched a little bit about your story in your bio. You started out house hacking. More specifically, there was something that happened in that time when you were in Iraq that opened your eyes or piqued your interest about real estate. Can you talk about that experience?

I’ll take it back a step further before that deployment. It was six years before that and I had gotten out of college. I was in flight school learning how to fly airplanes for the Navy. A friend of mine that was going through with me, he told me that he was buying raw land in Alabama. We were stationed in Pensacola, Florida, which is right on the border of Alabama and Florida. He told me he was buying this raw land up. I had no clue what I was doing but it sounded cool. I had a little bit of extra money in my pocket. I decided to go across the border there to Orange Beach, Alabama. I talked to some random realtor. I was like, “I want to buy some land.” He showed me this little plot of land in a new development. It was for sale for $45,000. I put $5,000 down.

About four months later, a huge hurricane came through. It wiped out everything in the area. I was like, “There goes my investment.” A couple of months later, I got an email from the same realtor who I bought it through. He’s like, “I’ve got a buyer for you. They are interested in buying this lot. It is one of the last ones in this development. They want to pay you $90,000.” I was like, “What? This is amazing.” I didn’t do anything and made this huge chunk of money within less than a year. I was like, “I like real estate investing. This is awesome.” That was my first taste of real estate.

I then got super busy with being a Navy pilot, learn how to fly, deploying, go into Iraq and all that stuff. I dove deep back into it. I got interested in it again. Although I was deployed and super busy, I didn’t have a family nearby. I didn’t have anything else to distract me. On nights when I wasn’t working, I was studying, reading and listening to podcasts. It gave me an opportunity to dig in. There’s an Army chaplain who got this Army battalion to pay for a course. It was Dave Ramsey’s course Financial Peace University. Although it didn’t dive deep into real estate, it got me thinking about finance in general. How to live debt free and how to make the most bang for your buck on your money. That started me, then from there I got into real estate. After I came back, I went to a three-day paid for guru course that costs a lot of money. I learned a ton and it forced me to take action. As you read my bio, I’ve been all over the place.

Let’s start about in some of the places that you decided to dabble into and why essentially.

Because I was an active duty Navy and had a full-time job, I wanted to find a way to passively invest. At the time, I didn’t have a whole lot of extra time to dig in and start flipping houses and be that active investor. I had a bunch of money saved up from that long deployment, from being overseas in Iraq. I found some other investors. I started learning from them and talking to them. They were flipping houses, but they needed private lending. I was like, “This is perfect. I can start lending money to these flippers and passively invest to them and make a greater return on my money while I was still in active duty and flying all the time.” That’s how I started. That went down the path of learning the mortgage note industry. As a lender, the best place to be when you’re lending is owning that mortgage note, being in that first lien position, and having collateral. I got into that and started learning it. I started building up this portfolio of mortgage notes. I learned how to buy them at a discount. I learned how to buy by the first and second position note, and then sell off the first and keep the second. There are all kinds of creative strategies to it.

LUR Stuart | Turnkey Real Estate

Turnkey Real Estate: When starting in real estate, try to find those investors who are successful and try to learn as much as you possibly can from them.

 

I was doing all of this outside of any type of a Roth IRA or a 401(k). I was doing it in an LLC. What I soon learned was there isn’t a whole lot of tax benefits to just owning the mortgage note. I started to continue to build this portfolio, my tax bill got pretty high. That’s a good problem to have. At the same time, if you can find ways to not pay that much in taxes, the better. After a while I figured out that I need to start doing this inside of an IRA. I self-directed my IRA and then started buying mortgage notes through my self-directed IRA instead of outside of my IRA.

The IRA is a tax shelter in and of itself.

If you’re owning these mortgage notes, all you’re gaining is a 1099-INT form and that goes directly towards your own personal filing. If it’s not inside of any type of tax shelter IRA, it just going to go towards your bottom line. You’re going to pay taxes on all that income. That was the first round of investing for me. After that, a mentor of mine said, “To offset some of these taxes, you need to go start buying physical property because that’s what you’re going to have to have in your portfolio to offset some of these taxes. You can have more a lot more stuff that you can write off on your taxes.” That’s what I did. I went and found a turnkey provider. I heard some podcasts about Birmingham, Alabama. I knew nothing about Birmingham, Alabama. I did very little due diligence of my own and decided to go with a turnkey company out there. I had some cash laying aside, so I bought four turnkey single-family rental properties in Birmingham. That alone was another round of great lessons learned of doing due diligence and knowing what the market is like.

Do you still hold those properties?

I do. They’ve been okay. They cashflow when they’re rented, but there have been some vacancies. There have been some maintenance issues and some communication issues with the property management company. I had to change property management companies. A lot of good lessons learned there. For me, I dive in and take action probably more before getting the full picture. It’s great to take action, but sometimes, it might have been better to learn a little bit more before you jump in.

You have a couple of things underneath your belt. I want to ask you a couple of questions on the mortgage notes and then the turnkey. On the mortgage notes, people who are reading this and thinking, investing in mortgage notes sounds something that they might be interested in doing. What would be the path? Given your experiences and lessons learned, if you had to do it again, how would you approach? What would you recommend for someone approaching mortgage notes now?

That alone is such a niche type of investing. There are a lot of different strategies within that simple niche. There’s performing notes, nonperforming notes, first position notes, second position notes, discounted notes. That alone is such a niche market. There are a lot of different ways and there are a lot of different vocabulary involved. First and foremost, you got to get educated. There are tons of books out there. There are tons of people that work within the industry and they’re doing it. Try to find those investors that are doing it and are successful at it. Try to learn as much as you possibly can from them. If there’s a way that you can add value to them and learn through them, or somehow find your way into them becoming your mentor, then absolutely go that route. Once you feel you have a pretty good base knowledge, then that’s when you start investing. There are tons of different ways that you can invest through that.

Make sure that your core values align with your business partner. Click To Tweet

Do you still invest in mortgage notes these days?

I do when I have enough capital built up to buy some more. I only do it through my self-directed IRA. I will buy performing notes that are already in a position where the buyer is paying every month. That’s super easy cashflow and completely passive. I don’t do a thing. It comes into my bank account every month. Also, with any extra little cash I have that are sitting in my self-directed RA, I invest into a crowd fund. The crowd fund goes and buys portfolios of non-performing mortgage notes. There are quite a few companies out there. I use a company called AHP Fund, American Homeowner Preservation Fund. You can invest a pretty small amount of money and they offer a flat return on your money. I do that as well.

That’s very diversified, which is great. Part of my show, especially the series that we’re in, is showing people that there are many different ways to play. Anyone reading this is going to see a lot of different ways to play because you’ve played in many different ways. Investing via the self-directed IRA, because you’ve chosen to do notes to essentially play being the financier of the project, and these projects don’t have loans on them, then you avoid any additional taxes that can come with using self-directed IRA money to invest. Moving onto the turnkey provider, what advice you would give for people as they’re thinking about the turnkey path? Because this is a very popular path. You also have a business now where you provide turnkey for other people. Can you also share lessons learned and then your strategy in terms of bringing turnkey properties to investors?

Turnkey is popular but it also can get a bad name because there’s quite a few bad turnkey providers out there. I hate to say this but it’s easy to be bad at it. There’s a lot to it and there are many different levels that you have to be good at. If you don’t have good systems, processes, communication, and honesty in place, it can go south very fast. My first experience when I bought turnkey, I wouldn’t say it was absolutely terrible, but it wasn’t by any means great. The company that I used, I had to do a lot of questioning of the monthly statements. I’m hitting them up multiple times before they would respond to me and have lots of questions. It’s a service-oriented business. If you don’t have a team that has those systems and processes in place, and is ensuring that they’re communicating, honest and have that core value of making sure that integrity is at the forefront of their business, then it can go south.

My roommate in college who’s also a Naval officer, we’ve always talked about what we’re doing. He was investing in real estate and I was investing in real estate. He had bought his turnkey and I bought turnkey. He had a bad experience with it way worse than I did. The company that he used lied about a lot of stuff. Their system was that you would buy the house from them prior to them rehabbing it. You would pay up front for the purchase and the rehab. You would own it but then they would go in and rehab it afterwards. What ended up happening with that is you paid for all this stuff like you pay for a new water heater on your statement of work, but they didn’t put a new water heater in. They pocketed that money. He caught them in this huge lie and it was $10,000 per house of different stuff, and bad rehab work.

LUR Stuart | Turnkey Real Estate

Turnkey Real Estate: Turnkey is a very service-oriented business. If you don’t have a team that has the systems and processes in place, ensuring that they’re communicating, honest, and working with integrity at the forefront of their business, it can go South.

 

Through all of that, we’d compared notes along the way. We both had been doing real estate for a long time. We’re like, “Let’s make this turnkey idea good and try to help people and serve others who try to get into being real estate investors.” I feel that buying turnkey is one of the ways that you can ease into it. It’s the first step into learning how to become a real estate investor. It’s getting you comfortable with buying houses, managing property, managing your finances, and learning the nitty-gritty of owning rental property. For us, it was about putting a great team in place that had the same core values that we did. Putting those systems and processes in place where we could serve our investors. We look at them as partners throughout this entire investing evolution. That was super important to us.

Could you talk about maybe 1 or 2 of the systems that you think are super important that turnkey providers should have in place?

First is how the turnkey providers are buying it and how that’s transacting to the end buyer. There’s quite a few of what they call turnkey providers, but all they are is marketers. They never owned the house themselves. They’re almost wholesalers where they’re wholesaling a house to you for a fee. They never take on that risk themselves. Personally, I think it is super important that turnkey providers should be buying a house and owning it themselves, doing the rehab themselves, and making sure that it’s all great rehab. They own it and they take that risk on themselves before they sell it to another investor. There’s the model that my business partner, David, did. He paid all money up front for purchasing and rehabbing it, then the turnkey provider rehab it.

There’s no risk involved for that turnkey provider, it’s all on the buyer. I don’t think that’s a good process. That would be a good question upfront, “Are you buying the house yourself? Do you own it? Where are you finding these properties? What money are you using to buy these properties?” instead of just, “Are you marketing it? Are you taking zero risk yourself?” I think that’s important. Some other stuff from a communication standpoint, ask about the property management company and how they communicate. What do their systems and processes look like? Do you have individual cell phones and emails? Are they going to respond to you in a timely basis? That’s important as well.

Moving on to a couple of the other strategies that you’ve played in as well. You’ve also invested in an RV park. Can you talk about that investment and deciding to do it, why you decided to do it, and whether you still hold it now?

This is a fairly new investment for me because of the single-family homes. Although, there is a property management place, it’s somewhat management intensive. I have to manage the manager. I wanted to go bigger. I liked the idea of multifamily. At this time in the market, affordable housing is important. It’s an asset that’s going to be needed for quite a while because of where we sit with the market. From having to be a landlord and some of the woes that come with that. I liked the idea and the concept of owning the land that homes are on, but not owning the homes themselves, and letting those individuals take care of their own houses.

The RV park and the mobile home park fall in line with that type of investments. This is my first one. It’s going pretty good so far. There are some different types of challenges with that and always some lessons learned along the way. It’s a different type of clientele. There are some different challenges there, but so far so good. It’s cashflowing so that’s good. I can get it performing a lot better. I’m going to try to put some storage on it and fill up some space on the land that’s not being used, and build up some extra income that way. We’ll see. It’s been fun.

Where did you buy this RV park?

This is in a tertiary market, small town outside of Fort Worth, Texas. I’m originally from Dallas, Fort Worth area. I have a lot of family and connections there. Dallas Fort Worth is blowing up and it’s growing and growing. This in Bowie, Texas which is about 45 minutes outside of Fort Worth. It’s a small town now but I’m hoping in quite a few years, as DFW expands, it’ll slowly grow.

Did you invest with other investors like with your partner on this one or did you do this on your own?

I did this on my own. I and my wife have a separate entity and we bought it through there.

What are the key lessons you’ve learned so far on the RV parks? How are they different from the mobile home parks? Are they the same or not?

They can be. The one that I bought, I call it an RV park because there are RVs on it. They act more mobile homes because they’re stationary. Most of them don’t even have wheels on them. They have wood decks around them and they’re not moving anytime soon. Most of them are very long-lasting tenants. Although physically, it’s an RV that acts more like a mobile home park. In a traditional RV park, you’re going to have way more change in occupancy that could depend on the season, time of year, what’s going on with industry and economics. There’s a little bit more of a challenge or unknown with straight RV parks because it’s so in and out. People could take their RV, park it for two nights and then leave versus a mobile home park. A mobile home itself is very hard to move. Once it’s there, it’s probably not going to leave anytime soon. That alone can be very different. The way you manage it is very different too.

You can educate yourself as much as you humanly can, but there will come a time where you just have to take action. Click To Tweet

How did you find this opportunity?

I was searching on MobileHomeParkStore.com. It had been listed for a short period of time and it was a good time. I saw it close to that area and I was like, “This looks like pretty good deal.” I reached out to the broker. I bought a plane ticket and flew pretty quickly there afterwards and made an offer on it.

As people think about investing in this asset class, given what you’ve learned, what are maybe 1 or 2 key things that they should think about as they proceed into it?

One of the things that you have to look at is the utilities and the infrastructure that sits on that. I bought the park and it had a septic system. I was a little bit worried about it. I have had a few issues with the septic system. It’s overflowed twice on me during the winter months. In Texas, when it gets cold, the water lines will freeze up. We have to tell the tenants to have their water dripping all the time. That then causes the septic to fill up a lot faster. I didn’t calculate that into my expenses when I was running numbers on it. I’ve had to pump the septic tank three times since I’ve owned it. Which I was only planning on doing it three times a year. I haven’t owned it that long. Looking at utilities, is it on city electric, city water, city sewer? That is important and if it’s a septic system that’s on a well, you want to make sure that those systems are good. You want to get inspections on them, which I didn’t do. I did not get an inspection on the septic system before I bought it and I should have.

Anything else you would recommend for someone as they’re thinking about buying an RV park?

We met at the Best Ever Conference. I remember one of the slides said, “The proforma is always wrong.” Do you remember that slide? That is true. One of the things that I learned the hard way was the proforma is always wrong. They were showing that it was 90% occupied. Everyone was paying on time. That was very wrong when I bought it. Four RVs completely left all of a sudden right before I bought it. It went from a 90% occupancy to a 60% occupancy. Of those that were staying, half of them were months behind in rent. Ask that question, “Are the tenants current on their rents?” In this case for me, they were months behind and they weren’t paying. I had to evict three separate tenants because they were four months behind on rent. That wasn’t shown on the proforma.

Do you think that’s also when you’re buying from mom and pops? Sometimes mom and pops don’t necessarily have the records, etc.

Unfortunately, in the RV park and mobile home park, a lot of those sellers are going to be those mom and pop type of sellers. It’s a calculated risk that you’re going to take. You have to understand that you might have to put in some work right up front to do some value add, get some new tenants in, and do some stuff that you can increase the income. That alone is an opportunity as well.

That moves me on to your last two that you’ve decided to also invest in, which is multifamily apartment complexes, and then mobile home parks syndication. Both of these guys were syndication opportunities.

I was a passive investor on both of these opportunities. I did that prior to me buying the RV park. I did it because I do want to grow and get into that space of becoming a syndicator and becoming that general partner. I personally feel that it’s important to do it and see it first before you try to raise millions of dollars yourself. For me, it was more of an education opportunity to be a passive investor. Read the full PPM, understand all the documents that go into it, and ask all those hard questions to the GP. Be that passive investor and see how they operate. Get those monthly newsletters and see how they do that stuff. I could learn and grow through that. When I become a GP myself, I’ve understood it and learn what’s good about what they did and what’s bad about what they did. That was important to me. The next step for me was doing it myself. Buying this RV park, learning how to operate it, and get into the nitty-gritty of running it myself. Owning the property myself before I go and try to start taking millions of dollars from investors, and having people put their trust in me to do well with their money.

LUR Stuart | Turnkey Real Estate

Turnkey Real Estate: If your business partner isn’t on the same plane as you and doesn’t have the same core values, then your partnership will go wrong immediately.

 

You’re still in active duty. How do you manage working and continuing to invest?

It’s a challenge. I’m not going to lie. Before we started this interview, I told you I was up at 3:30 AM. I’m a morning person. From 4:00 AM to 6:00 AM is my prime-time real estate activity. I can knock out a lot of stuff between 4:00 AM and 6:00 AM because my kids are still sleeping and my wife is still sleeping. I have my checklist of to-do items that I set the night before. I get up and go after it. I do my morning routine and then knock it out. I’m in a job now where I do have an office and my own computer. I can check emails when I have a break. When I’m not doing my Navy job, I can catch up on stuff. It does allow me to do some stuff during the day. That morning period, nights and weekends, is where I catch up if I do fall behind.

What advice would you give to people as they’re thinking about partnering with someone else? You have a partner that you’re building your turnkey business with. Any advice from that aspect of finding a good partner?

It’s so important. Don’t randomly go out and find a partner just because they’re doing a lot of stuff. There are two points that you need to work through. One, do you mesh? Do you counter each other? My business partner was an English major in college. He loves to talk on the phone and is super social. If I call him with a simple question, he’ll talk to you for an hour. I’m like, “I just have one question.” I was the engineer. I’m the guy who gets into all the spreadsheets, gets all nerdy, loves the graphs and analyzes the deals. We mesh and counter each other when it comes to creating that business. If you get two people that are super social and high on that DISC profile, you’re never going to get anything done. That’s important.

The second thing I would say is make sure that your core values are aligned. David, my business partner in our company, Storehouse 3:10 Ventures, it’s a Christian based business. We wanted to set this business up to serve and give. For us, it wasn’t about the bottom line. We wanted to build this business on integrity, honesty, serving, and giving. We have to set those core values. One of our items in our business model was were going to give the first 10% of our profits to a nonprofit organization. Our company is called Storehouse 3:10, which comes from a Bible verse, Malachi 3:10, which says you’ve got to give the first 10% to the storehouse. You’ve got to tie it to the storehouse. That was important. If your business partner isn’t on the same plan as you and he doesn’t have those same core values, it’s going to go wrong right away.

We had to have that discussion early on, sit down, go through our core values, go through our mission, go through where we see this company going, 3, 5, 10 years from now, and set up that vision. That drives where you go as you’re building your business and building your partnership. I would recommend a book called Traction, if you haven’t heard of it. That helps you go through that process of writing down your mission, writing down your vision, your core values, your targets and all that stuff. It breaks it down and allows you to go through that. It’s super important when you’re trying to build a business and build a partnership.

Now are my level-up questions that I ask everyone. The first one is what are you grateful for in your life right now?

My family, they are amazing. I have an amazing wife. She kicks butt all day long. We have two little kids. I have a five-year-old little girl and a two-year-old little boy. They are crazy little monsters. I love them to death. They’re amazing and they are my ‘why’ for what I’m doing all this for. I’m doing all my real estate stuff and I got my full-time Navy job. My wife, bless her heart. She’s the most amazing kick butt mom that she could be and a kick butt wife. My family is awesome.

This isn’t one of my level-up questions but it’s an important question. While you’re building a business, these real estate entrepreneurs, the communication that you have with your wife or your partner, when you’re trying to build this. I don’t know in your case if your partner is actively involved in the business. Regardless of whether they’re actively involved or not, what advice you would give to other real estate entrepreneurs like yourself who have a life partner in navigating that process?

It’s tough. I can’t say that I’m good at it yet. I’m still working it out. My wife is not very involved in our business, although I do fill her in on what we’re doing. Any big type of decision where there’s a big purchase of some real estate or any type of investment that we’re putting some money down. It’s a conversation that we absolutely have. I’m not just going to go and spend our family’s money without having that conversation. She puts all of her trust and faith in what I’m doing. It’s still good to have that conversation and say, “Here’s what I’m thinking. This is what I’m doing.” She will ask questions. She’ll poke holes and stuff every now and then. There have been times where she sees something from a different viewpoint and I’m like, “You’re right. Maybe we shouldn’t do that or maybe we shouldn’t go this way.” She’s not totally ingrained in the business, but it is good to have that open communication with your life partner of where you sit with that stuff.

If you are scared to fail, then you're never going to grow. Click To Tweet

To what do you attribute your success and continuous growth?

It’s not being scared to fail. There comes a time where you can educate as much as humanly possibly can. There comes a time where you have to take action. If you aren’t scared to fail, then you’re never going to grow. For me, I’ve learned a lot of lessons and I feel like I’ve grown tremendously because of some of those failures. There have been times where I’ve lost quite a bit of money on some of my deals. The best thing about it though is you go back and go, “What did I do wrong here? What happened? How can I make it better next time so I don’t make that same mistake? I’ve learned and grown so much through making those mistakes. If you can’t go into a deal or make a decision and attack a problem without knowing that you’re going to make some mistakes, then you’re not going to grow.

The last one is what do you wish that you had known at the beginning of your journey that you now know?

For the early stage of my investing career, I was trying to do it all myself. The earlier you can build that team, find a partner or outsource some stuff that you’re not good at, it will help you succeed a lot faster. I was trying to do everything myself. Every single little asset of investing in real estate, I was trying to do all on my own. It’s a slow path to growth that way. The other thing is you have to put yourself and surround yourself around people that are doing what you want to do. At the early stages of my career, I wasn’t doing that. That takes going to meet-ups, getting yourself into a mastermind, going to the conferences, although they’re expensive. That’s where you grow and that’s where you learn and network. I think that’s important.

Thank you so much for coming on, Stuart. I appreciate it. If our audience want to learn more about you and reach out to you, what is the best way that they can do so?

My business is Storehouse 3:10 Ventures. Our website is Storehouse310Turnkey.com. You can go there and then there are all the social media platforms. We have a Facebook page and Instagram page. I’m pretty active on LinkedIn. That’s probably the best way if you’re interested in that. We’ve got this Military and Veteran Real Estate conference started. It went live. It’s going to be at St. Louis, Missouri. It’s not only for Military and Veterans, others can come. However, all the speakers are going to be military or veterans that are doing real estate. If anyone in your show is military veteran that would be interested, they can go to VeteransLive.com and go join the conference.

Thank you so much, Stuart, for coming on. I appreciate it.

Thank you, Lisa. This was a lot of fun. I appreciate it.

What an amazing episode. Thank you so much, Stuart, for coming on. I appreciate it. It was such an awesome time talking to him and learning about his story. The theme of these episodes is primarily about exploring all the ways in which people have invested and continue to invest in real estate. I felt this episode was jam packed with many different ways that you can invest. To recap on some of the insights and highlights from this episode. Stuart has invested in mortgage notes. He talked about all the different types that are available. You have performing, non-performing, discounted, first position and so much.

LUR Stuart | Turnkey Real Estate

Turnkey Real Estate: If you can’t go into a deal or attack a problem without knowing that you’re going to make some mistakes, then you’re not going to grow.

 

When I asked him what advice he would give to someone who’s interested in investing in mortgage notes, what did he say? Number one, get educated. You don’t want to go in uneducated in this space. Get educated, read books, get out there to the meetups and find meetups that are on mortgage note investing. You can search for them on MeetUp.com and through that, you will find people who are active in that space, who are investing in that space, who can teach you and show you the way. That way, you can start to decide how you want to invest and whether this is truly a path for you. That ties into point number two, which is finding successful investors to learn from. It’s super important. I think that’s true for everything. These two points are true for everything. As we’re talking about mortgages, it’s definitely true for that.

He talks about using his self-directed IRA to start buying the mortgage notes because in that, he was getting the tax sheltering that the self-directed IRAs provide. Whereas because investing in mortgage notes doesn’t have the tax advantages of owning physical real estate, he wasn’t getting those tax advantages in investing in the mortgage notes. Moving on to turnkey providers. He is a turnkey provider himself, but he is also bought from turnkey providers, both he and his partner. I thought that was great to have people who have done it themselves, who have used turnkey providers to buy property, and then now they’re offering that as a service. To the extent that you’re interested, check them out. They seem like great guys.

Some of the things that they mentioned here is a key. It’s important that the turnkey provider owns the property and rehabs it before they sell it to you. There are great stories here about going through the process of having the turnkey providers vetting them and making sure that they are full of integrity, and have good systems in place, and are executing on the work before they send the property to you. Understanding where they’re buying the properties, what market they’re invested in, and determining whether that market is where you want to be is also super key. Understanding how they communicate is also important. Having those conversation, even talking to other investors who have invested alongside them. Find out who they would recommend talking to, to learn about how they also invest.

He then went into talking about RV parks. This is another asset class in which he invested in. He said he moved to this because the single-family homes were quite management intensive. He was looking for another type of investment. Also, this happened after he decided to invest passively in multifamily syndications as well as a mobile home parks syndication. First, he got his feet wet into being a passive investor on syndications. One being multifamily and the other being mobile home parks. From that, he got the experience and exposure. He was like, “I would like to be a syndicator myself.”

LUR Stuart | Turnkey Real Estate

Traction: Get a Grip on Your Business

He decided that he wanted to own and to have the experience of being an operator on smaller asset classes of the larger kind. Hence, he got into RV parks. With that, he has learned a lot. He mentioned that utilities infrastructure was something that he thought was important. If you’re interested in going into the RV park space, understanding if there’s a septic or a well, ensuring that the systems are good, getting inspections done on them, and having a park that is connected to electric city water would be most ideal. Stuart also talked about the proforma is always wrong. He and I met at the Best Ever Conference. Once again, it’s a true testament of being willing to get out there. I’ll never forget the Best Ever Conference in Denver. I met some amazing people, Stuart included.

Going back to proforma is always wrong. This is what one of the guest speakers mentioned at the conference, which was the CEO of RealtyMogul. She spoke about how the performance is always wrong because things you can’t perfectly estimate every single thing. You pretty much have to know going in, that you need their opportunities. You see these things as opportunities to make the asset better. He talks about evicting tenants that weren’t paying rent, realizing how many were not paying because RV parks can be more transitional. For his situation, upon closing on the park, a few of the people decided to drive off the lot. His occupancy went from 90% to 60%. It’s understanding that as you’re going into these particular investments.

Overall, he talked about the importance of getting educated, learning, continuing to learn, continuing to get educated about the different asset classes, most importantly taking action. Clearly, he’s taken tons and tons of action. He’s definitely not afraid to fail. Knowing that in the face of the failure you will learn a lot. The other item that I thought was super important was about good tips on finding partners. When he said, look for a partner that complements you. Understanding what skillsets you bring to the table and what you’re good at, and then looking for someone who is good in the areas that you’re weaker in. Make sure that your core values are aligned.

He spoke about how his business is a Christian-based business and how they went up to set up their business to serve and to give integrity and honesty. Making sure that both he and his partner shared the same mission, values, and vision for the future. He also recommended a book called Traction, which helps with writing down your mission and core values. For me, another big item from talking to Stuart is not being afraid to fail. Go out there and take action. Learn from the lessons that your experiences bring and don’t give up. Until next time, keep leveling up. Take care.

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About Stuart Grazier

LUR Stuart | Turnkey Real EstateStuart Grazier is an active duty Navy pilot who has served 18 years in the military. During a 14-month deployment to Iraq in 2008/2009, Stuart had the opportunity to do a deep-dive study into real estate investing and learned about the power of passive income. Through endless learning, lots of determination, and continuous action, he and his family have become financially free over the last 11 years. From house-hacking (before the term was coined), to monthly budget meetings and frugal living, to investing in real estate mortgage notes, private lending, commercial property syndications, and buying cash flowing rental properties, they are on the path to an early retirement and financial independence. Stuart and his family now own a portfolio of approximately $600,000 in performing mortgage notes, 4 single family rental properties, an RV park, is a part owner in an apartment complex and mobile home park syndication, and has recently started a turnkey real estate company with his best friend and college roommate where they are providing rehabbed, cash flowing rental properties to their network of military/veteran and patriot investors. Starting in June of 2018, his company Storehouse 3:10 Ventures has acquired and sold approximately 45 turnkey rental properties, averaging 2-3 properties per month. Stuart is also the President of the Military Investor Network, which aims to network, educate, and connect other military/veteran service members that are interested in real estate investing. Stuart has a beautiful wife, Kristel, and two amazing children, Kollins (5 year old girl) and Wells (2 year old boy), and are currently living in Denver, CO where Stuart is stationed at Buckley Air Force Base as the Executive Officer of the Navy Operational Support Center.