LUR 66 | Passive Investing

 

How do you figure out which passive investing asset works best for you? Today’s guest is Billy Keels, the founder of KeePonCashflow. In this episode, Billy shares his story of how he once lost 33% of his portfolio, and while he was looking for something else to do, he stumbled upon real estate. But he didn’t stop there because he eventually discovered how it branches out to syndications and ATMs, which make for excellent long-distance passive income streams. Billy and Lisa Hylton also talk about how you should understand the mechanics behind each asset and why you should experiment to find out which one works best for you.

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Conversations With Passive Investors – Long Distance Passive Investing With Billy Keels

I am super excited to have on my show my first repeat guest, Billy Keels. Billy, where do I even start? Billy is a guy from the Midwest United States who saw opportunities hidden in plain sight, seized them and grew them to their full potential. Billy, welcome to the show.

Lisa, I’m super excited to be back again. Congratulations to you for continuing to add so much value, seeing what you’re doing and how you’re impacting so many lives positively. It’s nice to be back and share another conversation with you.

It’s a pleasure to have you back. This show is another episode of conversations with passive investors. I love these episodes. When I think about Billy’s background of having known him and his personal passive investing experience, I think you’re going to get a lot of value from reading this and learning a lot about Billy and passively investing. To get started, Billy, tell us where you live and what do you do for work?

LUR 66 | Passive Investing

Passive Investing: The beautiful thing about entrepreneurship is that as you get started and take action on your goals, your feedback helps you get clearer about what works for you.

 

I live in a very small town called Barcelona, Spain. I’ve been living here for many years. I’ve been in Europe for years. I was in Italy and France before that. I am living in between two worlds, but the one that’s the most relevant in this conversation is the fact that I worked for a very large enterprise software company, where I’ve worked in sales and sales leadership for the better part of 25 years and several years with this specific company.

You are an entrepreneur because I remembered I ran across one of your videos on YouTube for playing the CASHFLOW game. I was like, “This is interesting,” but I didn’t know you. I just knew the CASHFLOW game and I was intrigued. A year or two later, I was in the syndication business and realized, “He’s a syndicator.” Can you talk to us a little bit about your business as well?

Sure. As you mentioned, I am a real asset syndicator of tangible goods. I was in real estate in the beginning. That got me started and then I realized, “You can do things beyond real estate as well.” Also, being a syndicator is bringing people together for common goals, aggregating capital, working with world-class partners and making sure that we’re delivering on the goals and dreams that people have entrusted to my company.

That’s why I’m super excited to get into this conversation with you because that’s a beautiful thing about entrepreneurship. As you get started in taking action on your goals, the feedback you get helps you to get clearer about what works for you and the fact that you now are real assets. It’s not just real estate, but other types of assets and being able to invest in them passively and actively. As you noted, by doing that, you’re helping people to achieve their dreams and goals. What are your favorite things to do with your family?

In non-COVID times, I love being able to just get in the car. My wife and I have two children, two young boys. We love being able to get out of Barcelona, go to the mountains and the beach towns that are outside of the city, hang out and be outside in nature. This is one of the things that’s cool. Our boys are enjoying playing CASHFLOW for Kids. What we’re doing on Sundays is playing CASHFLOW for Kids and it’s amazing because our nine-year-old understands concepts like passive income and expenses and understanding that that is the road map to freedom. It took me another many years to get that right. That part of being able to spend time and play CASHFLOW for Kids is also something that we’re enjoying a lot.

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You’re raising the next investors. They’re either accredited or regular investors doing their thing. From there, I want to pivot into the experience part of the show. How did you discover real estate syndications? A lot of my readers are thinking about investing passively. They’re always curious about how people even run across this.

It’s interesting. It took me a while. I was probably a couple of years into actively investing. Initially, I was trying to solve my own problem. That problem was, I’ve been working at a big multinational for most of my life. In 2000 in the dot-com bubble, I lost value. In 2008, I lost about 33% of my portfolio. I was looking to do something else and get out of paper assets. I read Rich Dad Poor Dad like so many different people and I got into the area of real estate. I bought my first small multifamily and that was going well. I was buying and buying. Eventually, I ended up working with a coach.

As we were working to continue to acquire assets for my own portfolio, I came and started meeting people who were part of other groups and different things like that. They mentioned this thing called passive investing, which meant that I could still work in my day job and make my money work faster and harder than it was working with me. To put it in a different way, it wasn’t maybe working in the exact same way, but I didn’t have to do as much of the effort during the owning and holding of the asset. There’s still work that needs to be done, but it was just a different type of work.

When I found out about that through meeting other people and in the relationships that I had, I was like, “Oh my gosh.” I want to try this passive investing thing because I also saw it as a gateway to beginning to get involved in much larger deals. It was twofold, meeting with people, being able to recognize that that was something that existed, having my money work for me and then being able to look and see how I can go out and scale. Those are three things.

From that answer, two things stood out to me. One, you started off buying smaller properties for your portfolio. It sounds like the real estate syndications opportunity provided you the option to invest in even larger projects. Is that accurate?

That is accurate.

LUR 66 | Passive Investing

Passive Investing: Understanding concepts like passive income and expenses is the road map to freedom.

 

Would you have been able to potentially have done that on your own, but with a longer time span? Do you find that syndication sped up the process for that happening?

That’s exactly what it did. When I saw the opportunity, it was about me learning two things. Number one, everything that I’ve been doing in my corporate role seemed like a lot of the same skills made the syndicators and then I understood later the operator is successful. First of all, it was about testing my thesis if this was something that I would like to do. Secondly, it was going to collapse time frames. Once I was working with a certain team, one of the things was I wanted to be able to understand, ask questions and learn along the way. That’s part of who I am and the way that I like to do things. I was asking, “If I put this capital here, I also like to be able to ask you some questions,” things like that. Without a doubt, it was about being able to test my thesis as to whether or not I wanted to move into that space of owning larger assets and then secondly, being able to collapse time frames.

Continuing from there, were you only investing in real estate? How has your real estate investing passively evolved over the time period?

It has evolved a couple of different ways. Number one, to your point, when I was going around, the books that I read and the content that I was consuming online was all about real estate. I am someone who is a non-real estate professional. I’m not a real estate professional by the IRS standpoint. I realized, “Let me figure out how I’m going to do this.” As I was investing passively with other people, I realized, “I was passively invested in a development project,” which is a hotel. Having an 82-room hotel was part of that and learning about the development was something different. I hadn’t thought that through because it wasn’t like the properties that I’d already owned before, which were more like value-add.

I got involved in much larger multifamily well over 225, 250 doors or something like that. When I was there, then I started meeting with other people. They started talking to me about other things like ATM machines. I thought, “This is not real estate. Why are we talking about ATM machines?” When I started realizing, it’s a tangible asset. I understood the process because I was someone who used ATM machines. Anytime that I’m back in the States, especially if I’m driving, at the gas station, at a road stop or one of these kinds of things, when I’m driving between my parents’ house, I was like, “I will take out cash.” It’s not a lot. I’m not a heavy user, but I also recognized that there were a lot of other people there.

At the end of the day, that’s also a real estate play because you have a piece of equipment that is on a particular place. You’re paying a lease or a rent to someone and then it’s a transaction. Just like you need to be able to live and sleep in a place, the money rests inside of this machine. In order to take it out, you have to pay for it. It then started making sense. I realized, “It’s not just about real estate. It’s about being able to understand whether or not what I want my own capital or currency to do. Some will call it money. I know what I wanted it to do so I had to find the different types of opportunities.” Now that I was in this new world that wasn’t just paper assets, I was like, “Now that I’ve broken out of that box, I’m not going to stay with real estate.”

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It has even evolved into other things where nowadays, I’m working with large pieces of equipment for carbon capture. That’s something that is completely different. However, it is a piece of tangible equipment with similar types of benefits that I would find in my real estate investments. There’s one important difference with this particular piece of energy equipment. We can talk about that later. Hopefully, that gives you an idea as to start it with real estate and then spread it into different areas because it’s about understanding the model and the benefits.

As a passive investor who is intrigued by the idea of being able to passively invest in real estate and then other real tangible assets that you mentioned here, how do you get the knowledge you need to feel confident about the different types of investments that you choose to invest in?

First of all, it starts with me and understanding what my situation is, getting clear as to why I’m interested in not being in the mutual funds stock market. Maybe you have a portion of your portfolio that’s there and you like it and then you have another portion of your portfolio that’s going to be in other types of real or tangible assets. Once you’re clear on what you want that particular part of your portfolio to do, then you look for the types of opportunities that are going to provide you with the result. That’s the way that I like to approach it now. I am looking for a specific result. I now gravitate towards those types of opportunities that are going to provide me what I’m looking for. Whether that is a piece of carbon capture equipment, an ATM machine or a multifamily apartment building with a team that I know, like and trust or I’m getting to know, like, and trust, that is how I look at where I’m going to place my currency or capital in these specific types of assets.

The way that I do it is it starts with me and knowing what I want that particular part of my portfolio to do. Once I’m engaging with the syndicator, it’s about being able to make sure that that syndicator can enter the questions that I have in the way that I understand it. You can work with multiple different people. It’s like teachers in school. You had some teachers that you loved going to their class because when they were explaining something, you were like, “Ms. Lisa is telling us all the things that we love to be able to do.” You asked the questions. You were able to translate it in a way that made sense. You liked being able to work with that teacher. For me, it’s an important thing to make sure that your syndicator and their team, not just the syndicator, can help you to get the results or understand how you’re going to get the results that you’re looking for by placing your hopes, dreams and trust, which is capital, in that particular syndicator. Hopefully, that makes sense.

One other thing that comes up for me that captures some of the deals that you’ve invested in like hotels, value-add play, multifamily and ATM machines, is there anything that differentiates each investment strategy from each other? In terms of when you’re looking at hotels versus multifamily versus ATMs? Someone who thinks, “I would like to invest in all these different tangible assets,” what is something that they need to consider?

I’ll take you through the evolution because this has been part of an evolution. Each one of those different assets has a story behind it. If I think about the investment in the hotel, the hotel was about, “I wanted to get involved with other people who were very experienced syndicators.” Through the relationship that I knew, I was able to create the opportunity to invest with this very seasoned team that had been doing hotel development for over many years. Once again, I wanted to understand the mechanics of syndication. I had heard about it in the classes 506(b) and 506(c).

This was a 506(c). I was able to get involved in that. All of that paperwork that they told us about, the subscription agreement and private placement memorandum, all came to life. What I was looking for with that was the experience to understand the process. When I invested in the ATM machines passively, I wanted a certain portion of my portfolio to give me consistent returns in a shorter time frame as possible. Meaning how quickly the payments could come is what I was looking for. I found this was something that paid out on a monthly basis. I wanted to find out what this was like. Also, it fits into what my thesis was for this portion of my portfolio. When I sat down with the syndicator, I got clear responses. I felt comfortable and then I placed my capital.

As someone who is a non-real estate professional, when I looked at the carbon capture, it was because I had a problem and I was trying to solve a problem. That problem was when you place your capital into a project like another passive investment with large multifamily, the passive losses keep building up. Every year, I was like, “My passive losses keep building up.” I was thinking, “When is this going to stop?” I was thinking to myself like, “How can I come up with a solution that would allow me to get returns and help me on my active income because I’m a W-2 wage earner?” If I quit my job, I could, but I didn’t plan on doing that. If I’m going to continue to work in my role in my high-wage job because I like it, it was like, “This is a way to get the double-digit returns and help on my adjusted gross income.”

LUR 66 | Passive Investing

Passive Investing: When you start looking for a specific result, you gravitate towards those types of opportunities that are going to provide you what you’re looking for.

 

Each one of them had a little bit of a different opportunity, but the thing was I’ve always been looking to solve the problem initially for myself. A lot of the times, when I have these similar types of problems, the people that I’m around have similar types of problems. It makes it a much easier conversation to say, “How is this affecting you?” or, “I’ve gone through this.” Each one of those stories is a bit different, but at the end of the day, we’re all trying to solve our own “problems.” If each different opportunity can help you to solve that and then working with that specific syndicator and their team can help to explain how the benefits of that particular syndication can help you to solve your problem, I found that it becomes a much better way to help specifically passive investors. That’s also the way as a passive investor that I like to approach the situation.

To date, how many deals have you invested in? Has any of them gone full cycle? Have any of them sold?

As a passive investor, there have been four. To date, none of them have gone full cycle. COVID has made it a little bit of a unique situation, but 50% of them have performed to expectations than the others. We’re in a very unique time so it hasn’t all been a bed of roses, so to speak.

Do you have some that you’ve done as a GP separately from these four?

Yes, as a GP and the one specifically is around the carbon capture equipment exactly.

That brings me to my next question, which is finding deals. For instance, if you could talk a little bit about the carbon copy deal there that you mentioned, how did you find it? You’ve mentioned before that what attracted you to it is that you were trying to solve a problem that you had, which was being able to invest passively into investments that would offset your active income. I’m curious onto how you find deals in general. Maybe you can give an example of how you were able to find that particular one.

We’ll make it a bit more generic and then we’ll finish with the carbon capture. It’s being based on another continent because I invest exclusively in the United States. All of the things that I do passively or actively are all in the United States. It’s a bit more challenging to get on the plane and fly to Dallas for the weekend. I can’t do that.

Before you go further on that, can you share a little bit onto why you’ve chosen to continue to invest in the US as opposed to investing in Europe?

I got super excited when I read Rich Dad Poor Dad. I was like, “This is the coolest book,” because I had no idea. I didn’t know anything about real estate at all. Now, it’s like, “This is amazing. I can earn $200 a month,” because I came off that roller coaster with the stock market. I took all of the things that I’d learned from the book and then I read a whole bunch of other books. Many of them were the Rich Dad series. Eventually, I started walking down on the street and was like, “I want to look at this place. I want to look at that place.” I was like, “These numbers are not the same as the ones in the book. Why is this not happening?”

Every single thing that I was finding, I was going to end up paying or there wasn’t going to be those $200 a month. It was like I was going to pay €50 or €35 a month and that was with a tenant. I thought, “Something is not right. This doesn’t work,” at least where I was here. Also, I was in the mindset at that point that I wanted to be a landlord who was able to go and see the property and would have been over there overly controlling things. It would have been a disaster. This was one of the best things that ever happened to me is that I couldn’t see the property. After talking to a couple of friends, my friends who were here were like, “You’re a US citizen. Why don’t you buy in the United States?” One of the things I always say is like, “Did you not see the Atlantic Ocean between where I live and where the properties would be at a minimum?”

Once I got started and took action, I did it long distance. The very first property was 7,000 kilometers away or 9,000 miles, something like that. Since then, I’ve had to focus on the process instead of focusing on the property. I don’t look as actively anymore, specifically in the location where I live because my business is growing, where it is based in the US. I don’t spend as much time anymore. Initially, because the numbers didn’t work out and I’ve become much more sophisticated as an investor as well, part of the reason that the numbers didn’t work was because I was comparing a cashflow, which was what was in the book type of market, to an appreciation type of market.

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Had I had that knowledge at the time, it would have made sense. I would have gone probably two hours outside of Barcelona to look for towns where I’m sure that it could be a little bit closer, but because the infrastructure and the team were already in place, which to me is the most important aspect, I continued to focus on where I’ve already placed my bets because it’s a better thing for my investors and me as well. I sleep better at night. That is why I have continued to invest in the US.

Connected to that, infrastructure and team, what are the key things that you needed to put in place to successfully invest long distance?

Part of what I now help and teach is being clear on what it is that you want to be able to do personally. You find the locations that can provide you, “Are they tax benefits? Are they equity buildup, appreciation or cashflow?” Once you figured that out and found those locations, then you build the team and the infrastructure. When you’re looking to build the team, in the beginning, I didn’t know anybody. I was a guy from the Midwest trying to figure this whole thing out. I was on the MLS and I didn’t know that. It was about building relationships and being on the phone, like making a lot of phone calls. After people would respond to phone calls or email, it was about, “Can we get on a Zoom?” I’ve been doing Zoom forever. This is not a big new thing for me.

Once we could get somebody to have a Zoom and have a conversation, then they realize, “He already told me because when he would call, he was calling from a long, crazy number,” or “Somebody was doing telemarketing.” Once they realized that I was a real person, it helped to understand that, “I was looking to build relationships as well as make purchases.” You’d have a couple of Zooms. They start seeing that you’re active and moving forward, then you’re starting to build trust and you’re building the relationship.

From there, it’s about understanding the approach that I took once I would make a relationship, and I primarily start with the brokers or the property managers, was to understand what infrastructure they already have in place. It makes sense to leverage someone else’s infrastructure provided there’s already a good fit and then you feel like that particular team understands the resident that you want your capital to serve. At the end of the day, there has to be an alignment between the team, location and what you want your capital to do.

By being able to understand the infrastructure, the infrastructure came from understanding the team and then being able to explain it. As I start to think more and more about, “Where are my investors? What do they need? Is this particular opportunity going to help them?” There are some other infrastructures, but more from things to think about now. That’s more about, “How do you provide your investors with access to the documentation that they need at the click of a finger?” or whatever the case may be. Maybe it’s a little bit of a long-winded answer, but I believe that like any good relationship, it takes a bit of time. You understand. You’re building up credibility. You’re saying you’re going to do something, you do it. You get on a Zoom call, you see that people are real.

Also, one of the things that is important, especially like someone who is a long-distance investor like me. At a certain point when the relationship makes sense, I put my money where my mouth is. I get on planes. I’ve flown back to meet with property managers around a particular property that I wanted to look at. That also demonstrates that you’re serious about what it is that you are doing. I know that that’s something that you firmly believe in and that’s one of the things that you also teach. You have to be able to demonstrate to the team who’s on the other side who doesn’t know you that you’re willing to get on a plane and you’re flying from California to Alabama or Mississippi or whatever the case may be. When you’re there, you’re understanding what their infrastructure is so that you can make an assessment as to whether or not it’s the right fit.

With that said, I want to touch a little bit on passive investors who are similar to you, who might be living outside of the United States. When someone hears the answer to that question, they might be thinking, “When I invest passively on a passive opportunity, I might not necessarily be meeting property managers.” As someone who’s living outside of the United States, maybe they’re investing in that ATM machine, hotel or multifamily passively, how do they even find the operators to even get introduced to these kinds of opportunities when they live in Barcelona or the Cayman Islands?

There are a couple of things I did back in the day. The internet and social media are a complete game-changer. If this would have been back in 2000 when you were trying to do this, it would have been almost impossible. Nowadays, it is as simple as going very tactical. You just go to Google or Facebook and you say “real estate investing groups.” You find whatever city you think will provide you with the result that you’re looking for. If you’re looking for cashflow, you may look into a place like Memphis, Orlando or Columbus, Ohio where I’m from. You’re typing that in and you find out, “There’s this group.”

Afterwards, you click to join that group or you pick up the phone, call that group and say, “What kind of things are you all doing? I’m someone who is interested in learning more about what it is that your group does, whether it’s an operator or syndicators.” If they’re looking for syndicators, that may be one and the same. You get in touch with them. Now, we have WhatsApp so you don’t even have to pay for the phone call. Things are so much easier nowadays because of technology. It’s about understanding that you want to invest in real estate, real estate investing clubs, name your city in the United States and then you go from there.

People who are already a part of your group, Lisa, are wonderful because they’re already taking so many steps. They can reach out to you easily and say, “I’m in this particular place, Lisa. What are the things that you would recommend? I feel passionate about being involved in residential assisted living. Can you point me in the right direction?” Using the internet, which is one of the biggest ways to leverage technology and reaching out to someone if you happen to know someone. I’m going to assume everyone who’s reading this has some interest or has found this in a particular way. They can reach out to you and get your help. Those are probably tactical responses, but that’s the way that I did it. I didn’t know anybody in real estate and then you build relationships.

As you mentioned before, relationships do take time. It’s so important to get out there and meet people. You are very active on LinkedIn. Also, one of the things that I enjoy doing is getting connected to these operators, sponsors, people like myself and Billy on LinkedIn and these kinds of places because what ends up happening is you run across his podcast. You then listen to him interviewing maybe an operator or someone else who then gives you another breadcrumb to the next person. That’s how you continue to build out this gigantic network. Before you know it, you know all these different people and then you have lots of deal flow. For passive investors, that’s one of the ways in which you can meet a lot of people and then run across a lot of deals.

Coming back to what you said, which is getting clear on what you want to do and essentially what you want real estate to do for you. Everything from cashflow to appreciation, to solving the problem that you mentioned, which was decreasing your tax bills and stuff like that. The whole nine yards in terms of not just real estate, but real assets because you do that as well. At this point, I want to move into the reflection section of the show. It has a little bit of a feel of taking a step back and looking back at everything that you’ve experienced. The first one is, what do you love and not love about passively investing?

For me, there’s more about what I enjoy about passively investing. There are always going to be drawbacks. I’ll start with what is not a nice thing. You have a pro forma and you’ve talked to the team and you expect that they’re going to perform in a certain way and then COVID-19 happened. No one would have ever expected that. What does that mean? It affects the returns on the trust that I placed in this particular opportunity, not the team. This is a particular opportunity because the team is managing things in the best way that they can. They’ve done very well in terms of communicating and how things are. Although it’s been negative because the returns aren’t up to where the expectations were, it was something that was so far out of left field that no one saw this coming or maybe a few people saw it coming. That part is negative when you don’t meet the pro forma.

The things that I personally like about it is it’s a very different feeling. When I was investing in paper assets on Wall Street, buying, betting or speculating on stocks because that’s what it was. I thought it was cool because I got a hot tip and I’m going to buy this and buy that. I was buying things that didn’t make a lot of sense, but now I get to know and meet people. The people are helping. They understand more about what it is that I would like for my capital to do and what my particular problem is. There’s a person that I can call on a real phone who’s going to take my phone call. I would prefer a much more high-touch type of relationship, which is also why I was a passive investor.

I’m very fortunate as a high-wage earner that I can get access to some interesting opportunities. Maybe this goes back to one of the things we were saying before. Even if you’re overseas and working with a syndicator and you want to get to meet the operator, I’ve done that before. I’ve said to the syndicator, “I know you’ve told me about this and I’ve understood it, but I want to speak to the operator. I want to speak to the founder of the company and understand more about it.” The syndicator organized the call and the three of us got on a call. It was great. It was one of those things and I said, “I want to be able to learn. This is part of the learning process. I would love to be able to record this call and all these other kinds of things.” Sometimes it’s just a matter of being able to ask the question. If not and if they can’t, hopefully, they’ve explained it in a way where you understand why they can’t.

Have you ever invested in real assets through any of the crowdfunding websites online? If so, why have you chosen not to?

Have I done that? I have not done that. This is coming from a place of never having done it. Keep that in mind. If I’m going to place $100,000, $200,000 with somebody, I want to meet them. I want to be able to speak to them. I don’t want to put my digits on a screen and push the button. I’m not personally interested in investing $500 or $1,000, then it’s just models that are different. I prefer if I’m going to have a relationship with someone that I can have a relationship, be able to speak to them and have them give me the opportunity to understand. As I said, I’ve never done crowdfunding. My response is based on my limited knowledge of it. That’s why I have not done that yet.

Moving from there, what lessons have you learned from your personal passive investing experience that you would share with upcoming passive investors?

When you have a question that you want to ask, ask the question. Don’t think that you can’t ask the question because you’ve not done it before or you don’t know what to ask. Even when we talked about the carbon capture thing, people are not familiar with carbon capture so they may not ask the question. You think, “Why would I even be involved in carbon capture?” You would ask, “Do these large companies have issues that they want to solve with being able to be carbon neutral by 2050?” When you understand the organizations with who you’re trying to help them solve their problems, then that helps to give you more insight as a potential investor because it’s not just about the CO2. It’s about, “What is this particular opportunity? How is it helping the end customer to solve their problem?” That makes you a much more informed passive investor.

At the end of the day, why would someone want to pay for this type of solution? I’ve dealt with people who have never done a private placement before. It’s normal that you have a lot of questions. Ask the questions. A couple of times when it’s very clear that the person hasn’t understood or they don’t feel comfortable asking the question, I’ll say, “You may be having a couple of questions and you’re probably thinking boom, boom, boom.” After that, the floodgates open and they ask all the other questions. Give yourself the opportunity. If you don’t understand, let the person know. It can be as simple as, “I’ve not done this before so I’ve got a couple of questions that I want to ask. Are you okay with that?” The syndicators are going to tell you, “Yes.” If they don’t tell you yes, then you probably need to pick up and run.

Can you reflect on your last investment opportunity? What made you excited about investing in it? That’s where I want to start.

What made it exciting is I was trying to solve my own problem. I am not a real estate professional. I was tired of seeing that bucket of passive losses roll over and build. I was able to find a solution. This is a solution for accredited investors where I could not only be able to generate double-digit returns and being part of something socially responsible, but it also helps me and is now helping my investors with something that they normally wouldn’t be able to do, which is to help them with their active income. It’s at the top of my mind so it’s something that I’m excited about.

A lot of passive losses can only be offset against passive gains. Can you talk about how you found this kind of opportunity that offsets against active income?

It’s about being able to build relationships and investing time. It’s the exact same thing. One of the things that I mentioned before, “If the relationship makes sense, you go through the process.” There is a certain point where if you live in Europe, you’ve got to get on a plane and you’ve got to fly to meet with the teams and people that you would like to be able to collaborate with. It wasn’t any more than that. I had an opportunity. I was flying and met two great ladies who introduced me to an opportunity. When I was there, I continued to forge the relationship and forge the relationship even more. I had the opportunity to come together and say, “This is something that we want to do as two companies. Now, I’m taking this opportunity to the marketplace.”

The thing is, as much as we all want to feel very special, if I have this problem, I’m not the only person that has this problem. It’s a matter of being able to talk to other people and say, “Are you having this type of a challenge?” Some people may say that that’s not a challenge. If you have the opportunity to continue to get returns, you’re meeting the syndicators and doing the things that you do and it can also help you with your active income, then you do that. Also, the other thing, it’s important about having an amazing team. One of the ways that we’re able to do this is because the team that I’m working with is a lot smarter than me. When you are able to put together structures that make sense, then I can ask all the questions that I want to ask. They make it to a way that I can understand it so then I can go out, translate and talk to investors or potential investors about it. It’s taking action and making sure that you have a great team.

At the end of the show, I am going to allow you to share with my audience how they can get in touch with you. At this point, if someone is reading and is intrigued by the idea of being able to invest passively in an investment that also offsets their active income, can you quickly share what’s the best way to get in touch with you to learn more about that?

The best way to do that would be to send me an email directly. You can send that to Energy@BillyKeels.com. Let me know that you are reading the blog and you want to understand more about the carbon capture opportunity.

If there’s any remaining advice that you’d have for people, Americans living outside the United States, who have an amazing career, loved their job and the trajectory that they’re on, but know deep inside that they want to invest in real estate. They’ve already concluded that landlording from millions of miles away isn’t for them. What would you say to them are the two next key steps that they need to take to achieve that dream of investing passively in real estate?

The number one thing that I would recommend is that they continue to read your blogs because they’re going to learn from you and you’re going to learn from other people who have passively had successes, as well as failures through passive investing. That’s the first thing I would say. Keep reading and being a part of Lisa’s tribe. After that, it is about making sure that you’re clear on what you want the portion of your portfolio to do. If you don’t know and you’ve never had the opportunity to sit down with someone, I would say the same thing. Reach out to Lisa and let her know because you’re a part of her community already that you need help. This is something you’ve not done before.

It’s keeping it simple, but then being able to take action steps. I’ve given a couple of very tactical ways that you can get involved, learn more, start to meet people that you’ll jive with and things like that. One, keep staying here and learning. From there, being able to reach out directly to Lisa if you have questions. Afterwards, being able to take tactical steps to take action. That’s the important thing is to take action. At a certain point, if you want to be a passive investor, you need to find the right investment opportunity for you and get started.

If not, you’re going to be in a position where you have hundreds of thousands of dollars that are sitting there and you’re the most well-prepared person in the world and you’re not doing anything. Having all that money eroding in your bank account is not the way that you’re going to get ahead. You’re going to sleep well for a while, but eventually, it’s going to erode away. You have to take action. It’s not always going to work. There are going to be 1 or 2 that aren’t working like, “Fifty percent of mine are not working right now.” That’s okay. It’s just a moment in time.

Thank you. This then brings us to our level-up questions. The last three questions I ask all my guests, what are you grateful for in your life right now?

I’m grateful to be healthy and that I have a happy family. That to me is the most important thing.

What has attributed to your success and continuous growth?

The love of my family and taking action.

What do you now know that you wish you knew at the beginning of your journey?

If I would have not overthought things, I would be a lot further along than I am. I can’t complain where I am now. This is one of the things I harp on. Take action and get started.

Thank you so much, Billy, for coming on the show. I appreciate it. I know that there were so many great gems in here. If my readers want to learn more about you, what’s the best way they can get in touch with you?

Let me say this, too, I love how you continue to evolve. This conversation feels so fluid and great. What you’re doing is phenomenal. You’re adding so much value. Kudos to you for your development as well. It’s awesome. I always like to put it in a couple of different flavors. Number one, if someone wants to reach out and have a conversation like we can’t get on a free strategy call and no strings attached, you can go to Bit.ly/SpeakWithBilly. We can organize a call that way. If you want to know more about what I’m doing, go to BillyKeels.com. Listen to The Going Long Podcast if you want to understand more about living in one place and investing in another. We have a very awesome guest that you’re going to see. Her name is Lisa. Check out the Going Long Podcast with Billy Keels over there. If you want, you can also pick up my book, which was an Amazon bestseller when it went out. You can pick up a free copy of that at GrowYourMoneyTheSmartWay.com. Don’t forget to connect on LinkedIn. Make sure you let me know that you knew Lisa and me here on The Level Up REI.

Thank you so much. Billy is super active on LinkedIn. For those of you who are on LinkedIn, you want to get connected to him. There are lots of good stuff, and YouTube because that’s how I found you.

By the way, that video has had over 100,000 views or close to 100,000 views. If you ever want to learn about how to play Cashflow 101, you can go over there.

Thank you for coming on. I know that you deliver so much value. I appreciate it.

Thank you.

Thank you, Billy, for coming on the show. I appreciate it so much. There are so many good gems. Here are my key takeaways from this episode. Number one, people generally are investing in real estate to solve problems. Connected to that, some of those problems might be cashflow. They want to generate a certain amount of cashflow each month, either to supplement their income or replace it altogether. Maybe they’re looking for their money to grow in wealth, so appreciation, long-term goals or being able to flip a property that kicks off more cash. Maybe they have tax planning so they’re looking to invest in real estate in order to decrease their tax bill. There are many different things, but the key point that I got from this episode was that people are investing to solve problems.

These were some of the tips that I gained from this episode regarding passive investors. You want to get clear on what it is that you want. Some of the same problems that we talked about, either you want cashflow, appreciation or maybe a certain type of market you want to invest in. Maybe it’s even a certain type of property you want to have exposure to. Maybe it’s even the kind of reporting that you want, how you want your operator to report information and updates to you. Maybe you want quarterly webinars to give you updates about how the property is doing. All that stuff is super important to get clear about what it is that you want.

Secondly, he noted to ensure that that syndication team can clearly explain the investment and help you to see how this investment aligns with your goals. Further from that is that there are investments that can offset active income. He noted when I asked him, “What’s a project that he’s excited about?” He mentioned his energy project that he’s working on that from investing in it, the passive losses that generate off of that investment have the ability to offset active income. Once again, the world of real assets, be it real estate specifically or real assets generally in the case for Billy, who also invested in real assets in general, is so vast. It shows you the extent of the opportunity to invest and get a return on your money.

This brings me to my final point, which is focusing on the process. I would say focus on the process, not just the property. It is super important. That ties back into some of the things I mentioned before, which is, “When are these operating distributions going to be made? What’s the reporting? What’s the communication style of the operators? Do you understand? Are they able to clearly articulate what’s going on in their business plan and how they plan to navigate things that don’t go well?” It’s a great episode. I hope you thoroughly enjoyed it. If you have not gone across to my website yet, that’s LisaHylton.com. Go across. I have more information on there about passively investing in all different types of real estate, but specifically, in apartments. Go by there and check it out. Until next time, keep leveling up.

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About Billy Keels

LUR 66 | Passive Investing Before becoming a real estate entrepreneur, KeePon Cashflow’s founder Billy Keels worked in the corporate world. In fact, he was one of the best “corporate soldiers” you’d ever want to meet.

During his corporate career, Billy put his leadership and relationship-building skills to good use to help clients get to the root of issues that were holding them back from full success. Billy earned his stripes as a true problem-solver, a skill he carried into his new entrepreneurial life.

What made him popular with employers who sent him across the globe to meet with Fortune 500-level clients is the same thing that makes him popular with investors, buyers and sellers in real estate today… his skills in coming up with real solutions that work in the real world for real people!

Billy says that he was happy enough in his J.O.B., but something was missing. An emptiness and longing for a different life chewed on him, pulling him to what he knew he wanted to do more than anything else. Billy wanted to be an entrepreneur who brought two worlds together. He wanted to give individuals where he lives the chance to invest in properties on U.S. soil.

So he took steps and kept on the path to his goals. KeePonCashflow is the result of his efforts. Today Billy is an international real estate entrepreneur, problem-solver, author, coach and mentor. He sees opportunities where others often don’t in real estate.

No “overnight success,” Billy continues to work toward his vision and goals. Topmost on his list? Building a bridge between investors and buyers in Europe with sellers in the U.S.

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