Episode01

Jeremy:

[00:00:00] All right, looks like we're good to go here. So good morning. Good afternoon. Hi, Stephen. Thanks for joining me. , so today I've got Stephen Gilmore here. Stephen's out of, out of Texas. Uh, we're going to interview him and kind of talk through his real estate journey, who he is, some of the stuff that he does for work.

He's got a really cool job, and some, some history on a bunch of different, real estate ventures. And so, with that, Stephen, how about you go ahead and give yourself a little bit of an introduction? Tell us a little bit about you personally, and let's start with, with what you're doing, currently for your career and maybe some unique history that you've had leading up to your career that you're in right now. Let's, let's, let's start there.

Stevan:

Okay. Well, it's good to talk to you. First of all, um, let's see. And I have to say that, I'm not a native Texan. We always [00:01:00] have to clarify whether you're. Born here or just found your way here.

So, um, I made it here and, basically early 2000 or middle 2001. So I've been here about 20 years. From the Midwest originally up in the Dakotas. So, um, yeah, as far as my professional background, I'm in healthcare. I'm trained as an emergency medicine physician. And, I did some training in basically in North Carolina and Ohio and then a little bit here in Texas as well.

So I've been practicing that at that for, um, let's see, I guess we're going on 23 ish years. A little bit more than that, I guess, if you include some of the residency training, but, the other part of that That I do professionally as I work for the nation's space agency and, they hire a few positions and, we, look out for the crew and their health and, make sure they're doing well when they're [00:02:00] on missions.

Basically, the way I describe it to most people is, they're similar to a commercial pilot in the, from the point of view that they have to have, a specialized medical exam that qualify that's part of their qualification for their job. So, , there's some, uh, there's a little bit of uniqueness in terms of health considerations there.

So that's the area that I've specialized in as well, so that's kind of what my day job is.

Jeremy:

Sounds like a pretty awesome day job, to be honest with you, to be working with, you know, astronauts, I mean, at the end of the day, right. That's what you're working with if you're working with astronauts and crew members that's going into space.

Right. So, yeah, I mean, you, you're critical in that and their health and making sure that, that they are. Cleared for their missions and that they're maintaining their health. , are they, are you meeting with these, individuals [00:03:00] often, or is it, you know, a certain timeline up before they are due for a mission or what does that, how does that relationship work?

How does that work?

Stevan:

That's a great question. Um, I would imagine if you asked one of them, they would say, as Little and infrequently as possible, but, , the to not be funny about it. Um, there we meet with them and every year and then, , as they get on a mission. , it's a lot more frequent than that.

You meet with them a lot more regularly. There's some medical training. Some medical skills training and stuff like that, that we help prepare them with and then, um, we'll support the launch, event that happens. And then we work in the control room in Houston. And, at the point when they're in the mission, we're usually talking to them at least, um, it's more often than weekly, but formally, it's along the books.

Anyway, it's we talk, we talk with them weekly and [00:04:00] then. When they get back, we, help, , there's some what we call reconditioning, but it's basically some, uh, physical exercises and other stuff that we help monitor and make sure that they get back to the way they were when they left. Gotcha. So that's kind of a thumbnail sketch of how that works.

But yeah, if you ask one of them, it's as infrequently as they could possibly make.

I gotcha. So that, that's actually really neat, right? So not, so you're meeting with them, not very frequently, , once a year, but then is there. Leading up to a mission during the mission and directly after the mission, that's when you're spending a lot of your time focusing with them, you know, making sure that they're staying healthy, making sure that they're probably doing the things that they need to, to stay healthy.

Jeremy:

So kind of coaching them through some of those daily activities, exercise. Proper nutrition probably. So you're, you're making sure that they stay healthy on the [00:05:00] mission, getting the things that they need and then helping them recover when they come back, because as you're out in zero gravity, your body does some weird things, right?

So your muscles start to get weak. And so , you're part of that rehabilitation once they're back on earth as well. So, so that kind of put it together as a snapshot, right?

Stevan:

Yeah, that's, that's, that's perfect. I guess that the specialty, the job we're talking about right now was not something that.

I ever really knew existed. When I was a kid, we had some books about the space program, but I always thought, Oh, I don't know anyone that would that ever did that. Um, and I just kind of stumbled across it when I was in my training. It's a fair bit different than I think the traditional medical career, but, There's a lot of it that I've really enjoyed.

Um, there's a lot of international travel to work with, , some of the other countries that we work with. , there's a big aviation element to it as well, which I really enjoy. So, , anyway, it's, [00:06:00] there's some uniqueness to it. And, it's really been, I, I can't believe I'm, I can say that I've worked at it as long as I have, but pretty much when I moved to Texas, that's what I was.

Working towards. And so it's, it's been quite a while. It's been quite a while now. So it's funny how time goes by.

Jeremy:

Yeah, that's, that's so cool. And to be able to be part of that, right. And to be able to build that career and have that history. And so that as a physician, that's probably.

Afforded you, a unique, buildup in, in your life and, and the opportunity in the real estate side of it to be able to do some investing on the real estate side. So I'm sure you have a lot of options, obviously, right. It was where you can be investing, but what was it that, that drew you to real estate specifically real estate?

Stevan:

Um, that's a good question. I would say, , well, at first, I would just say,, everyone has a lifetime experience with [00:07:00] investing. I wouldn't really classify myself, classify myself as all that., sophisticated. , as it relates to this, I knew how to work hard and study hard. And, , it's a short way of kind of saying, like, , I'm old enough that I've lived through a few of the big crashes in the in the stock market.

I sort of was concentrated in sort of trendier areas than maybe I should have been just kind of watching all that, um, go away relatively quickly. I just thought, you know, maybe I ought to get a little smarter here and do something, um, a little more diversified with the money that I do earn.

But to your question, I got interested in real estate around 2007 and 2008 and participated in one of the local real estate investing groups in Houston and Texas. It's a lot bigger now but but just kind of cut my teeth on investing in a single family, real estate and, , [00:08:00] complexes and just kind of continued that interest since that point.

Jeremy:

Okay. So getting into 2007, 2008. So at this point, you know, the market isn't doing very healthy. And so you, you chose a good time to get into real estate realistically, because as the market came down, you know, opportunity arose, right? So being able to, to get into that timing. Um, so, you mentioned a couple of pieces, right?

A lot of people that I talk have talked with, they focus on one asset class only. And so you've, you've been Both of these, you know, large sectors, there's a lot of single family. There's a lot of multifamily. And so maybe share some of your experience there between the two and what you like versus didn't like between those two assets.

Stevan:

That's a great question. Well, the main reason behind, , the multifamily part of it was, , I figured that, well, just sorry. Let me take a step backwards. I, I [00:09:00] kind of cut my teeth on duplexes and quads. Um, and also did some investing in bigger apartment complexes, things that are greater than 100 units and the reason I went that route is I figured. I don't know if it's my professional background or other reasons, but I'm a real, um, experiential person, meaning I kind of see things work to really believe it can happen. So when I was initially starting in my education in these areas, I was kind of like, Yeah, I know.

I know they they say you can make money, but or you can invest in. It can be profitable for you, but I really need to see that happen. And so I focused on, um, I didn't focus. I have one condo currently, but I was focusing on things that had a little bit more margin of error. I viewed as a way to, try to not have a [00:10:00] negative, investing experience.

And so that's why I looked at things like duplexes and quads and things like that initially.

Jeremy:

So with a duplex or a quad that gives you that that flexibility right where you're not relying on one individual person to pay the mortgage on that unit, you know, you've got you're splitting that between two four however many units and being able to have a little bit more safety there.

It's a little bit. More stable type of, of, you know, property and giving you again, it's, it's a little bit more of a conservative outlook. It sounds like, right. So thinking about your motivation for the multifamily units. So giving you that conservative potential growth, a lot more stable type of a situation.

Right.

Stevan:

Exactly. And yeah, if you didn't, for example. I'm probably worried about a little too much, but if your unit wasn't rented, obviously, you're not [00:11:00] making it and you just have a single family house. You're not making any money that month. But, you know, the other way to look at it is no matter how many units you have you're always going to always have to.

Factor in some kind of vacancy factor. So after after that if your investment is making money that that was a good, a good investment to make but again, I was attend to be a little bit more hands on on a lot of things in the way that I learned. And that's just one of the ways that I wanted to protect myself a little bit.

Jeremy:

And I think that's smart. You know, a lot of people, when they first get into real estate, they're like, I want to buy as many single family homes as I can. Right. And you, you is a lot more focused on like, how do I diversify and make sure that, you know, what's what's the safest way, what's, what's an easy way, because of anything under four units is still considered a conventional loan, conventional financing.

Right. So talk to me about your experience as you went into, you said you, you own some [00:12:00] ownership in a hundred plus unit how does that work? What is your position in that? And, what's your experience been there?

Stevan:

Uh, there's a couple of ways you can do it. The one I'm most familiar with is being what's called a limited partner.

So And are being a part of a syndicated deal where there's a group of general partners that are responsible for. Well, they find the deal. They recruit people to invest in it. They are in charge of the operations and they make that investment opportunity open to people that are interested in whatever returns they're talking about, or their company and that kinds of thing.

Kind of thing. So I've done, I've. Invested in probably say around 10 or those by now 10 or 11 something like that. Um, it's a little. It's definitely more hands off than someone that's, you know, [00:13:00] owning a single family home or properties themselves, but you know, you still have the same at the end of the day, you have you have your investment at risk so you want to you want to make sure that you understand the kind of investment they're making and the business plan and how they're going to run their properties so that you're comfortable with what risks they may or may not be taking there.

Jeremy:

Yeah, so you're doing a lot of research on those individuals and kind of get a history of who they are, how they're operating before you invest in that but essentially you're letting them do a lot of the legwork, the upfront, you know, do some of that piece of it. But then you're going to be able to bring in some capital to be able to help fund the project, right?

Fund the purchase fund, some of that stuff. And then the intention is, is as the property becomes stabilized and you're getting, that income, then now you're getting a return on that. Now, is that typically a percentage or is it, how does that, are [00:14:00] you, are you guaranteed a percentage or is it based on how the assets performing?

Stevan:

It depends on what framework you, well, it depends on the individual deal. There's different ways that can be structured. Sometimes people do offer what's called a preferred return, which means let's just say they offer you a 7% pref. You're going to make 7%. As long as the property is making money you make your 7% before anything else gets paid out, but there's different types of structures. They don't all work that way some are, you know, straight. We'll give you X percentage of the, of the improved value of the property and the cashflow. So it, it just depends a little bit on the deal and the operators that are sponsoring it.

Jeremy:

I gotcha. So part of that, as you're structuring that dealer and as you're negotiating with them it sounds like it could be any range. I mean, you could just be getting a percentage [00:15:00] back. You could potentially be able to get equity in the property. You could, you know, so it sounds like there's, there's a lot of ways to be involved as an investor on the multifamily units, depending on what's your involvement that you want it to be right.

So the nice thing is with being in the medical field, I'm sure you're, you're extremely busy with what you're doing on a day to day basis as a W2, so it's probably much more convenient for you to be able to say, Hey, look, I've got some cash that I can put in this deal with, you know, getting the returns back and then I don't have to be so involved in the day to day minutia of, you know, hiring, finding tenants and hiring the gardener, that type of stuff.

So that's really a cool strategy for somebody that, that wants to be involved with it, but doesn't want to be operating it. Right. So I think that's really cool.

Stevan:

Right. Yeah, no, there's. Definitely those trades and yeah, as you mentioned for myself, um, that was a, [00:16:00] an advantage but again, you know, you'll run across different types of people.

I'm, I mean, my professional background is basically knowledge worker. And so, and it takes a lot of time to get there. I didn't really come from a entrepreneurial or business space background. So for other folks, you know, they may be able to jump in at a much different point than than I would have.

Like I said, I just wanted to see that the stuff they were that I was learning about actually came to pass. And for me, it has I mean, for probably anyone that's in a good investment, it's going to work out that way. But still when when it's not your background, you just probably exercise a bit of caution, which was what I've been doing.

So

Jeremy:

I gotcha. So as you've done, you said you've been in 10 different properties, you know, different at this time, is there. Is there one that you've worked with that didn't work out very [00:17:00] well? You know, what's like, one of the things that I always feel is as you're learning is sometimes the mistakes or the failures is really where you learn a lot, right?

So have you, have you run into any of those that you would feel is, has been a mistake or maybe, maybe it's just as a learning, it didn't work out quite as well as you had hoped.

Stevan:

Well, I would say some of the properties that I own straight out myself they, you know, I had one where I basically broke even on I was able to keep it rented, but some of the tenants that we chose were pretty hard on it and required a lot of improvements after they lived there. , and so that was, that's an example of one, and, you know, it's, it's just, it's part of that, um, part of that process of, renting a property out.

You know, making sure that you have a property management system where you're. I don't I don't want to say checking on your [00:18:00] tenants, but it's good. You have to keep in mind that you this is an asset that you're renting out. And so it's probably a good idea to touch base periodically during the year, just to kind of make sure see if there's anything that needs improving and see how properties getting taken care of and address those issues.

Jeremy:

So with that specific property, was you managing it or did you have a property manager managing the property for you?

Stevan:

I had a property management company that I was working with. Like I said, it wasn't a terrible experience. I mean, I just realized, you know, if you break even who's who can complain about that.

It could be worse. But that's sort of an example, and in my multifamily investing experience. I've invested in one where the operator was a sole operator and there's a little bit of just say some acrimony in the amongst the limited [00:19:00] partners and eventually cause the solution of the investment.

But the investments were awesome. Um, so again, it's not the worst bad story you could have. But if you just looked at it from a returns perspective, Yeah. On the one hand, you would go well. We should really keep this going because it's it's made decent returns, but just wasn't the case.

So so that that's the other other part of just sort of, it's interesting. I know it's a different than an investment in the stock market. You don't really have any can, uh, you can read about how the companies are doing in the press. , I guess this is just a little bit closer inside view of a company.

And, in this case, It wasn't the worst outcome, but it I think, speaks to the question that you had. Some, how do you, what kind of things have you learned about? And so, so for there, for both of them, you just have to recognize that you're giving your [00:20:00] capital to somebody else. Do you need to do some work on them?

You need to verify Some background work on them. See what their experiences. , see if you think they're what they're telling you their assumptions are about their business plan makes sense to you. And then recognize that your capital will be tied up until some future point and you have to be. Okay.

With that.

Jeremy:

Yeah. So it sounds like, say there's, a lot of little pieces to it and you really got to do your due diligence on, , a lot of it. Right. So it sounds like , you've learned a lot of this as far as being able to work with operators and kind of see their business structure, figure out what does work, what doesn't work.

Um, and then even on the smaller properties, uh, smaller units is still kind of the same thing, right? , there's a lot of takeaway out of, this to where you can say, look, getting the right people in there doing, you know, some really good due diligence on your people up front and then checking [00:21:00] in on them frequently to make sure at least frequently enough to make sure that they're not trashing the property.

Whether it's quarterly or monthly or, you know, whatever that needs to be, , kind of get a feel for it as it's like, it's not completely hands off. Right. And like with a stock, you can buy a stock or an index fund. You can buy an index and you can just walk away from it for years and never have to care about it.

Right. But, you know, you, you're still actively working on making sure that your investments are, performing the way that you want them to, and that you're comfortable with what's going on. Right. So, so cool. Um, just as we wrap this up, I wanted to kind of look and say, okay, what are your current goals going forward?

And what are the things that you're looking for? You know, somebody watching this, can they reach out to you? How, they help you out? Right.

Stevan:

Very good. Um, yeah, um so my goals going forward is, I'm positioning myself to move back into owning [00:22:00] directly, more properties and, and my focus is, again, it's gonna be similar to what my experience has been.

I'm interested in multiple units and small apartment complexes So I'll be looking for folks with a similar interest there either as an investor or if folks have some some other skills or things they can add in that type of realm, whether it's operating experience or, or what have you that's kind of what my future goal is I guess I didn't really cover this at the beginning.

One of my motivations was when I first got started was the way that I do some of my practice and we talked about. Two different kinds of jobs that I have for my day job, but, , some of that means that I spend, , I've spent a lot of time on nights and weekends and I work hard like everyone else, but just was trying to look for ways to, , develop different ways that I earn money, , that don't include me necessarily being.

In the hospital, [00:23:00] for example, on nights, weekends and holidays all the time. So, um, and that that kind of was my motivation. So, going forward I just my goal is to expand my investments and to be more on the what's called the general partner side of multifamily investments, as opposed to the person that just brings capital to an investment.

Jeremy:

Yeah, I think that's great. Right. So as you evolve, so starting through, you know, as a limited partner, investing in it, you know, being able to bring some capital, continue to build your career, but then as you're evolving into the next phase of your investing career and the real estate career is really being able to, , collect additional assets, performing assets.

Work more and more to where you can be having more of a say of what's going on as a general partner and, and working through some of that and building that assets, building that portfolio with the [00:24:00] intention that you're going to be able to replace your, your active W2 work in a way that, Partially passive, you know, mostly passive you know, obviously you get more and more to where you can be part of the day to day type of stuff, but more wanting to build those to be able to get that passive income, right.

To get that monthly check coming in and be able to have that, the growth of the asset, because again, as you, as you get more and more of the equity and owning the properties as the equity increases, you know being able to have that, right. So it sounds like. As you're learning through, or as you're moving into that kind of the things you're looking for is deals to be part of partners to work with operators that you can become, you know, get more involved with on the general partnership side you know, and properties themselves as well.

So if you're looking for deals, is there a specific area that you're looking for? Are you looking just in Texas? Or is it anywhere in the country? As long as it's performing, what are you kind of looking for in that area?

Stevan:

[00:25:00] Uh, that's a good question. I'm looking in Texas.

I'm interested in Kentucky, Indiana and Tennessee as well. I didn't really mention this, but along the way, I've done a number, several, I guess, educational training events, related to multifamily property, how you underwrite them, how you acquire them, how you operate them. So, I've kind of increased what my background and knowledge base is in anticipation of this.

But there's, there's a few important determiners of properties that you need to look for. And one of them is not surprisingly where a lot of people are moving to. So those are the reasons primarily that I'm looking in those areas currently.

Jeremy:

Makes sense. Cool. So we've got just one minute left in our call.

So if people want to reach out to you. What's the best way to reach out to you? Is it through social media, through [00:26:00] email what's the best way people can contact you?

Uh, currently the, the best way to reach out to me is through my email, which is

Jeremy:

Okay, perfect.

So I will, I'll put that down in the, notes for the show if people want to be able to reach out to you and, and work with you on some of that stuff, Steve, I think it would be great to be able to have, have another conversation with you where we can kind of deep dive down into the education side of it, because I think that's an interesting tidbit that we didn't be able to get into today.

And so I'd love to be able to have another conversation with you. That's focusing on that piece of it, because I think that'd be cool piece to have as a training and to be able to get some additional value there as well. We're out of time for today but I do appreciate the conversation.

This has been very insightful and hopefully we can be able to get some people to come contact you and, and reach out and network.

Hey, future Jeremy here. So my call with Steve was cut a little bit short, but I wanted to just wrap up real quick. [00:27:00] You can find out more about Steven and network with him on his website, shift change, capital. com. The link is below. Thanks for watching and happy investing.

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