RG 333 – Why Finding The Best Sponsors is the Best Way to Land The Best Deals with Jim Pfeifer

Have you ever wanted to belong to a community where everyone helps each other find success?

Jim Pfeifer went through five careers before discovering his passion for finding sponsors and educating people about real estate investing. He is the founder of Left Field Investors, a community of aspiring investors who want to achieve financial freedom through passive investing in real estate.

An educator by heart, Jim dedicates his career to helping others learn about real estate, find investment opportunities, and build actual cash flow. With other founders of Left Field Investors, he teaches and learns with the community through networking, collaboration, and the Passive Investing from Left Field podcast.

Interested in becoming an Investor with Reed? Click here to join his Investor email list.

Jim gives us a glimpse of what his community at Left Field Investors is like and their collective goals. We also get into Jim’s opinions on dealing with sponsors, riding out deals under challenging situations, and keeping your business running with so many unknowns in the future.

If you’re interested in joining a community of like-minded investors or finding sponsors that can help you choose the best deals, don’t miss out on this week’s episode.

Key Takeaways

• Passive investing in syndications is a great way to learn about real estate.

• One of the most important things to consider in looking for a sponsor is effective communication.

• In these uncertain times, it may be better to focus on the now than project too far into the future.

• Choosing the best sponsors can help you make smart investments for the uncertain future.
• A good sponsor will have flexibility and multiple backup plans.

LINKS
https://leftfieldinvestors.com/
https://www.linkedin.com/in/jimpfeifer/
https://leftfieldinvestors.com/podcast/

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Reed Goossens (00:00):

Good day Good day guys. Now, before we dive into today’s show, I want you to let you know that some of you may be aware that over the past eight years, I have built a substantial multi-family real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double digit returns. And now you too can invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to reedgoossens.com to find out more. That’s reedgoossens.com. Now, back into the show,

Speaker 2 (00:39):

You

Jim Pfeifer (00:40):

Don’t time the market. So although things are much different and have changed, and we’re not certain where it’s going, you know, interest rates are still at historical lows, right? They’re five, 6%. That’s still historically about average, maybe a little bit on the low side. So there’s still opportunity out there. You just have to be more careful. Now, a couple years ago, you could throw your money into anything and you knew it was gonna be successful and all, everything would work out great, right? But now it’s very different. So, you know, we’re, we’re changing things up. You’re looking for fixed rate debt deals, if you can get ’em, or, you know, solid rate caps, uh, that are, that are affordable, if you can find ’em. So there are ways I, I can’t just sit on the sidelines, right? I have to put my capital work because yeah, interest rates are going up, but so is inflation. So if you just sit on your cash, that’s not helping you either.

Speaker 4 (01:39):

Welcome to investing in the US a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market. Join Reed as he interviews go-getters, risk-takers, and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing.

Reed Goossens (01:59):

Good day good day, a ladies and gentlemen, on welcome to another cracking edition of investing in the US Podcast from Los Angeles. I’m your host, Reed Goossens. Good as always, Debbie with us on the show now. I’m glad that you’ve all tuned into it. Learn from my incredible guests and each and every one of them are the cream of the crop here in the United States when it comes to real estate investing, business investing, and entrepreneurship. Each show I try and tease out there incredible stories of how they have successfully created their businesses here in the us. How they’ve created financial freedom, massive amounts of cash flow, and ultimately created extraordinary lives for themselves and their families. Life by design, as I like to say. Hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.

Reed Goossens (02:46):

If these guys can do it, so can you. Now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you, you do like to show, the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show wherever you podcast on iTunes, SoundCloud, Stitcher, and Google Play. But you can also find these episodes up on my YouTube channel. So head over to reedgoossens.com, Click on the video link, and it’ll take you to the video recordings of these podcasts. But you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough outta me. Let’s get cracking in into today’s show.

Reed Goossens (03:34):

Turn the show. I’m the pleasure of speaking with Jim Pfeifer. Jim is one of the founders of left field investors and the host of the Passive Investing from Left Field Podcast. Left field investors as a group dedicated to educating investors about their nuances of passive investing and the world of real estate syndications. Now Jim is actually a former financial advisor and he became extremely frustrated with the one path fits all approach that is the standard in the financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning about different ways to grow their wealth through diversification. And Jim believes the most important factor to successful syndication is that you have to find the sponsor that he knows, likes and trusts. I’m really pumped and excited to have him on the show today to share his incredible knowledge with us, but enough outta me. Let’s get him out here. Good. Hey Jim, welcome to the show. How you doing today, mate?

Jim Pfeifer (04:25):

I’m doing great. Thanks for having me, Reed,

Reed Goossens (04:27):

Mate. My pleasure. Um, the first question I ask all my guests when they come on this show is, rewind the clock and tell me how you make your first ever dollar as a kid.

Jim Pfeifer (04:36):

Oh, boy. First ever dollar. Um, I think I, I had a newspaper route that I was horrible at, and then I think my first real job was, um, painting, uh, parking lot lines in, in parking lots, just like on a landscape company. I think I lasted three days cause I also had to mow lawns and I’m allergic to grass. So neither one of those were, uh, successful or long-lived.

Reed Goossens (04:57):

Nice, nice. Well, mate, walk us through your background. I mentioned just in the, be in the intro there that you have a background in the financial advisory world, and I also mentioned in your, in your bio that you, you got frustrated with that. So, so, so why was that and, and, and what led you down the path to become an entrepreneur and start investing in real estate?

Jim Pfeifer (05:16):

Yeah, you know, it it, I have to kind of take it all the way back cause I’m, I’m really on career number five. Um, wow. Yeah. You know, I started right outta college in the, uh, insurance industry as a reinsurance underwriter. And I, I kind of, my, my wife kind of identified that the through line, through all of my, um, jobs was education. Because as soon as I got into the reinsurance world, I started working as, um, kind of a mentor to new people and, and, you know, educating people wherever I, wherever I could. Uh, you know, I did that for 11 years and then I became a teacher, a high school teacher teaching, uh, accounting and finance to kind of, uh, you know, city kids in, in Columbus, Ohio where I live. And then, uh, I, as I was doing that, I, I, I, I really loved teaching, but I, I, it was hard being a, being a high school teacher is hard.

Jim Pfeifer (06:01):

And so I, I did that for seven years and then, uh, then I became a financial advisor. And that’s where, you know, I was a finance major in college. So I, I, as soon as I got outta college, I, and I got that first job. I was throwing money in the 401 K maxing it out day one that they would let me buying stocks, mutual funds, all that. And so when I started being, when I became a financial advisor, I was pretty confident that, you know, paper assets was the way to go, and I knew what I was doing. And then they started teaching me about how money works. And at the same time, we had, um, built a house because, uh, we, we had a a, we had a third, a third kid, and we needed more room. So we built a house. We couldn’t sell our old one.

Jim Pfeifer (06:40):

So I became an accidental landlord. And this was at the same time that I was a financial advisor and they were teaching me about how money works. And the more they taught me, the more I, and I, I realized, wait a second, these paper assets, they’re not really working for me, but this real asset I have is. And so that kind of opened my eyes and slowly over time, I, I did more and more of my own investing in real estate. And I prided myself at the time of, I’m gonna put my clients into things that I’m already investing in. And so the more I did real estate, the less I could do that with my clients. I can’t get them into real estate cause I’m not licensed and, and I, I don’t get paid for putting them in real estate. Right? So that’s what, that’s where most financial advisors are.

Jim Pfeifer (07:23):

So slowly, you know, then I, I just said, okay, I’m gonna go full-time into, uh, into be a real estate investor. And I thought I was passive, uh, because I was doing turnkey or I was buying multi-families and having someone else manage ’em. But it was active. And then I found true passive investing. So this is where I’m on like career four or five, I think . Um, and I became a full-time passive investor. And that is where I found my passion for just, you know, finding sponsors, working with people, educating people, helping people, and learning myself. I mean, I’ve gotten the most outta left field investors, the community. We started, uh, much more than anybody else. Cause I’ve learned so much just from interacting with other passive investors. So now I’m a full-time passive investor in, uh, real estate and other type syndications. And, and my mission really is to share this with other people because most people don’t know you can invest this way. They hear alternative investments and it’s super scary, right. Alternatives. Oh, no. But to me, alternatives, it’s the place you live, the place you go to work, the place you go shopping, you know, the place you store your stuff, it’s real estate. And so it’s not a scary thing. And more people should be in it. And, uh, passive investing in syndications is a great way to do that.

Reed Goossens (08:32):

Yeah. No, I, I love how you have the evolution and so many people who come on this show have evolve over time to get to a point where they become really focused and laser focused on the one thing that they want to provide in this life. And, and, and, and just hearing that story, you know, insurance teacher, you know, you became a, a, a landlord and then you became, you know, a financial advisor and then you came in, you know, true investing, you know, true passive investing. Uh, I will say just, uh, side note, um, kudos to being a high school teacher. My my parents are both high school teachers. I, I went to school and my dad was a deputy principal. I know how tough it is at, at a state school in Australia. So I, yeah, you know, it, it’s, uh, teachers and nurses don’t get enough praise. And, uh, just a quick shout out to all those teachers and nurses listening in right now. Absolutely. But, but, but I, but I know that it’s, it’s interesting as your, your wife says education, right? It’s always, always in the underlying trying to help others. Did that come from anywhere? You know, growing up, did, did it, did it did, did you have an innate ability to say, I want to help others, because ultimately that’s what you’re doing, even though it’s just through educating around financial, becoming, you know, more for financial literacy.

Jim Pfeifer (09:41):

That’s a great question. And, and it’s never been asked in, in that way. So thank you for that. But, you know, when I was growing up, I always knew I wanted to be a teacher. I wanted to grow up and be a teacher. But at the same time, I also liked money, right? I wanted money. And I knew those were kind of incompatible. And, and so that’s why I went into finance. That’s why my first career was a place where I could, I could make legitimate money. And that’s why after 11 years there, I went and became a teacher because that’s what I always wanted to do. And I’d earned enough money that I thought, okay, now I can have both. Right? I can be a teacher and have, have the, uh, the kind of lifestyle that I wanted. And, and, you know, then I realized what I don’t, I, I wanted to teach people who were really excited to learn about something.

Jim Pfeifer (10:24):

Mm-hmm. And, you know, I don’t, I was a high school kid, I wasn’t excited to learn about that stuff. Anyway, so I get that, you know, that, that’s why being a high school teacher or any kind of teacher is, is difficult, right? But, um, that’s, that was where my passion is. And slowly, I, I think I kind of realized that, you know, my passion is, is educating people to, to help them in some way. And I prefer willing learners, right? And, and so that’s kind of where left field investors is nice, because, you know, I don’t, as a financial advisor, I also was teaching, right? Teaching people about different products and things, but it was kind of teaching them and then hoping they would take action on it, right? Because that’s what you need to, to make money as a financial advisor. And I knew I could help people, but I, I couldn’t quite figure out how to convince them that they needed help.

Jim Pfeifer (11:07):

And with left field investors, I don’t, I’m done with the convincing, I’m done with all that stuff. I just, you know, we provide education and content and a network and come and get it if you want it. But it’s, it’s not something that I have to go out and try to convince people, Hey, do this. It’s, they have to do that themselves. And I think that’s where, you know, I’m, I’m not, uh, I’m not the kind of person that can force people to, to learn. And I, that’s just not in me. And I know teachers that deal with kids all the time, that’s kind of what they have to do sometimes. And they do a great job of it. And that just wasn’t, it wasn’t for me.

Reed Goossens (11:38):

Right. Right. Well, look, it’s not, it’s, it’s a tough gig. I know growing up. Yes, sir. With, with, with two parents two parents that are teachers. Um, good holidays. But I will say you get your time off with, I remember growing up with, with my parents, having time off the same time we had off. Um, but now segueing into the left field investors, where did it start from? You know, you, you, was it I know it’s around your, your urge to teach, but how did you go out and create the platform? Because, you know, so many people listening to this would be like, okay, well I have an idea, but how do I go grow it and start it from, from scratch?

Jim Pfeifer (12:10):

Yeah. None of it was intentional. I didn’t think, oh, I’m gonna go teach people. I, I did kind of a little bit. So when I was an active, what I thought was active real estate investing, I started a, a meetup because there wasn’t a good one that I liked in Columbus, Ohio. And, you know, I was still a financial advisor. So it was a great way to meet more people. And I loved that group. And when I became a passive investor, I was like, okay, that group doesn’t really fit me anymore. So I, I thought I’ll just start a small dinner club in Columbus, Ohio, uh, 12 people, largest room I could get for free. And we’ll just sit around and talk passive investing once a month. And yeah, I’ll share my knowledge cuz I know so much, you know, , that’s kinda what I thought at the time.

Jim Pfeifer (12:46):

I’ve learned since that, uh, I, I didn’t know anything, but, you know, our first meeting was supposed to be March 18th, 2020. And depending on where you live in Ohio, that was, that was when everything shut down. Mm-hmm. . So we didn’t meet mm-hmm. . And we in fact, didn’t meet until, um, a couple weeks ago in, in October of 2022. So over two years later we had our first meetup. But so the group went online as soon as we, we couldn’t, uh, meet in person. And this is the, the pandemic really did, it’s why left field investors is what it is today, because everyone was sitting at home. So we did these zoom meetings and we would get great guests who would come speak with us, because what else are they gonna do? They’ll come talk to 20 people online, right? Because no one was doing anything. And so we restricted the numbers, we wanted to be like a mastermind.

Jim Pfeifer (13:28):

We tried to keep it as small as we could for as long as we could. And then we just realized that so many people were interested in this former financial advising, clients of mine, friends, neighbors, they all kind of wanted to know what we were doing. And so we decided, hey, we gotta start a brand. So we called it left field investors. We started a website, a podcast, and now we have over 1200 members and we’re just, uh, you know, continuing to grow and we’ve developed this great community, but none of it was intentional. You know, we, there’s, there’s five founders of left field investors and our joke is we’re just five guys trying to figure stuff out. And that is how we’ve done every step of the way. So I can’t take credit because it was not intentional. It’s just grown. And, and we’ve, we’ve developed a pretty cool culture in our community. I, I think,

Reed Goossens (14:11):

Well, speaking of culture, because that’s usually the underlying message that most people build a community on. What are you, what is that culture and, and how are you attracting people? Is it seems to me just from meeting you, you know, a couple of times that it’s, it’s a down to earth approach to to being no nonsense, no bs, no fluff, you know, we’re just gonna give you the facts and this is how you can go and, and, and become, you know, or create wealth. Is that, is that the culture or is it goes more or deeper than that? I

Jim Pfeifer (14:37):

Think it’s a little bit deeper. You, you have it right? We are, we are just kind of laid back and we’re just trying to create, uh, financial freedom for people. You know, for me it’s timed freedom. So I don’t have to work if I don’t want to, that kind of thing. But I think the, the culture of the group is laid back. We have, we have people that haven’t gotten into their first deal. We have people that are in hundreds of deals and everything in between. But I think the real part of the culture that I like is everybody helps everybody. Everybody educates everybody else. I’ve learned just as much from the people that have 150 syndication investments as I have from the person who hasn’t done any yet. And I think, you know, I, I joke about this, but there’s other communities and I always say, you don’t have to join left field investors.

Jim Pfeifer (15:16):

Join a community. That’s how you get success in the past for investing world. I truly believe that some communities, if they have a meetup, you know, you wear a tie and you’ll, and you’ll fit right? In our meetup, I even put in the, you know, in the, in the email I sent out to people, you wear a tie, you’re not going home with it. Cause I’m bringing scissors , right? We’re just, we are laid back. And that’s, that’s kind of the ethos we wanna have. And there’s nothing wrong with the other groups. Um, some of them just seem a little bit uptight for me. And, and we like to have fun, you know, work hard, play hard kind of thing. That’s our culture. And you know, I, I think it, it works for us. So the thing is, you have to find a community that fits you and that’s the most important thing. But a community absolutely is what’s gonna put you over the top as an investor. I, I, I believe that very strongly.

Reed Goossens (15:59):

So now pivoting a little bit to what you are teaching today, because we’re in such a different economic environment to probably when you guys got started. So how are you, what, what, what’s your, what’s your take on the, the landscape and the investments coming here at the end of 2022?

Jim Pfeifer (16:15):

It’s difficult, right? Because it’s uncertain. And that un uncertainty means everyone has to just slow down. Now, I’m, I’m a believer in, you know, dollar cost averaging, right? Where you, you don’t time the market. So although things are much different and have changed and we’re not certain where it’s going, you know, interest rates are still at historical lows, right? They’re five, 6%. That’s still historically about average, maybe a little bit on the low side. So there’s still opportunity out there. You just have to be more careful. Now, a couple years ago you could throw your money into anything and you knew it was gonna be successful and all, everything would work out great, right? But now it’s very different. So, you know, we’re, we’re changing things up. You’re looking for fixed rate debt deals, if you can get ’em, or, you know, solid rate caps, uh, that are, that are affordable if you can find ’em.

Jim Pfeifer (17:05):

So there are ways I I, I can’t just sit on the sidelines, right? I have to put my capital work because yeah, interest rates are going up, but so is inflation. So if you just sit on your cash, that’s not helping you either. So we’re paying attention even more than we have before to the operator and to some of the, the terms of the deals and deal flow has slowed down significantly. There are not as many deals floating around out there, which gives you more time to evaluate the deals that are coming, coming through. And I am still investing, not as much, not as often, you know, and deals aren’t selling, so you don’t have to reinvest as much anymore either. But yeah, we’re, we’re still, we’re still looking at deals and making evaluations and investing where it makes sense.

Reed Goossens (17:50):

Have you seen any of your operators have to pause distributions or, um, you know, alter the, the business plan a little bit given how quickly interest rates have risen in 2022?

Jim Pfeifer (18:00):

Yeah, and it’s really frustrating and it tends to, in our forum, cuz left field investors, we have, we have a forum for our, our, uh, infielder members. Um, there’s a lot of people kind of, oh man, they’re not paying distributions and getting upset about it. And I get it, especially since I’m a cashflow investor, right? I don’t have a w2. So if you stop distributions, I, my income stops. But at the same time, I would prefer them to stop distributions if they, you know, if, if that’s the safe thing to do to make the investment better, um, down the road, right? Because one company said, Hey, we, we, we’ve hit our interest rate cap and so our interest expenses increased 34%, so we’re pausing distributions for a month. And my thought is that’s a smart conservative thing to do. And so yes, it’s frustrating cuz I love that cash flow, but I would much rather have them be conservative then, you know, not be able to pay for operational things because they’re so concerned they have to keep their distributions going to the, to the investors. Mm. I prefer people to be, to be cautious. And it is, it’s very frustrating. But if they have, if they have a reasoned explanation and they give that reasoned explanation, I’m fine with it. If they don’t communicate it and it just, I didn’t get the distribution, then I’m gonna have a problem. And that, that brings me to the, partly the most important thing, uh, for me when I’m looking for a sponsor is communication. Because whether the deal’s going good or whether the deal’s going poorly. If you’re not communicating with me, I’m frustrated.

Reed Goossens (19:27):

For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multi-family value add deals, then head over to reedgoossens.com And sign up for my monthly newsletter. By signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news hu in the United States and much, much more. So head over to reedgoossens.com and sign up today, now back into the show.

Reed Goossens (20:02):

Right. No, I, I completely agree with that. Communication is key. People don’t like, uh, surprises, right? Yeah. Surprises are the worst. So keeping up as a sponsor myself, I make sure it’s monthly, you know, communication with, with our investors and then the quarterly, you know, investment reports that go into a deeper dive. Um, my question, you know, in and around as interest rates have gone up, a lot of the deals I’ve seen and including my own, you know, when you, when your, when your debt service increases 34% or whatever that number you just mentioned before, I bet you your your revenue hasn’t increased 34%, meaning you haven’t been able to keep up the business plan hasn’t been able to keep up with that increase in costs i e debt costs. And so I I I’m of the belief that I think some of these pauses and distributions and I’m, look, I’m, I’m acro I know a lot of sponsors in the industry and a lot of guys are, are pausing.

Reed Goossens (20:53):

It may be paused for longer than we think until interest rates start coming back down or until you can start get the, the business model where it’s going, but then there’s a sort of a trade off, right? Because we’re coming into a recession like, do you wanna spend money? Right? If you, you know, do you need to spend the CapEx dos or should we pause the CapEx for right now and just like bunker down the hatches, not give any distributions where it keeps enough cash on hand and then, you know, try and ride this thing out. What’s your opinion on that in and around the, the, the, the, the, the riding out of the recession in an active deal now versus maybe something that’s coming down the line that, you know, someone might need to sell because they’ve run outta cash?

Jim Pfeifer (21:27):

It, it’s really difficult because this this to me is similar to when we were in, in the, in the midst of the pandemic, right? Because we thought the world was ending, we’re never getting back to normal. What, what is going on? Total panic, right? That’s where we are right now. But no one knows what’s really gonna happen because Right. You know, this time is different. You never wanna say that at the same time, we are coming off of an, an historical pandemic, right? Where everything closed down and all those businesses made major changes to their operations. Now we have a war in Europe, so we have all of these things that we haven’t had before at the same time recently, at least maybe in the 19 hundreds. But so we don’t know, right? Because now inflation seems to be leveling off. Maybe, maybe not, but it seems to be a little bit, but that’s not because of the interest rate increases, right?

Jim Pfeifer (22:20):

Because those take six to nine months to, to filter through the economy. So why is it plateauing? If it is, well maybe it’s because there really are some supply chain problems and the war in, in Europe is causing other issues. So maybe if some of those get resolved a little bit, it won’t be quite as bad as we think it will be. Right? You know, we still have a maximum employment and that’s what the fed’s trying to do by raising interest rates is, is increase unemployment so that people don’t have money to spend. So inflation goes down, right? So there’s all kinds of things happening. So I just, I don’t know what the right answer is. So what I’m gonna do is I’m gonna keep doing what I’m doing, investing where it makes sense, understanding where things are right now, and making investment decisions right now based on that. And I’m not gonna project too far into the future because, you know, six months from now Yeah, six months from now could be totally different in a good way or a bad way. And, and if someone tells you they know what’s happening, I’m gonna avoid that person because I, I don’t think they do.

Reed Goossens (23:22):

It’s a lot. It’s a load of bs. We don’t have a crystal ball. Everyone does it. No. And and, and to your point, I remember when the pandemic hit and we had to pause the distributions then because we thought everyone’s gonna, oh gosh, you know, we’re gonna fall off the face of the planet because yeah, we, you know, no one’s gonna pay, uh, their, their rent. Well, guess what? It wasn’t as bad as we thought. Maybe eight to 10% delinquency. I will say that we’re, so we are seeing in some of our deals, and I don’t know if you’re seeing the same thing, a bit of a, a covid lingering, you know? Yeah. Particularly if you’re taking over a deal, you know, new value add, you’re coming in, guess what you’re seeing under the hood? There’s probably a little bit more people who are delinquent than what you thought.

Reed Goossens (23:55):

Yeah. And I think that’s a, that that’s a, that’s tying to the inflationary environment, right? Like I’m sure you’re investing in class BC assets where people are owning, you know, 40 to $70,000 a year. There’s coming to a limit of like the, the, the pressure on the, you know, the old, the old pocketbook in terms of, you know, gas prices are going up, groceries are going up, you know, rent’s also going up. We’ve seen historic rental growth and there’s gonna be a limit when wages aren’t increasing at the same time. So I think, you know, back in the day it was, you know, back in 2020, it was all about panic about not being able to get through, um, people paying their rent. Right? Today, as you’re saying, there’s all these other factors going on, but in six months time, it, it may be different and it’s just about what you said earlier, continuing to put money out in, in, you know, conservatively and in a way that, you know, you feel comfortable because the average over 10 or 20 years is that you’re still gonna do just okay. Right?

Jim Pfeifer (24:45):

Yeah. And it really depends on the person, right? If you are a person that has a W2 and you’re pretty confident in that and you just want to, you know, maybe hoard some cash because you’re, you don’t know what’s happening over the next few months, that’s totally fine. If that’s how you wanna operate. Me, you know, I’m a full-time passive investor, this is what I do, so I’m still gonna evaluate opportunities. I’m still gonna allocate some capital here, there, it’s gonna be slower. But that’s my strategy, you know, so I think mm-hmm. , it, you really have to make sure that this, whatever you’re doing matches who you are and what your strategy is and what your goals are. And, and you can’t just listen to somebody else. You can’t listen to me and say, oh, well Jim’s still allocating capital, so I will too. You know, you gotta figure it out for yourself.

Jim Pfeifer (25:27):

Now that’s part of, you know, when we talk about community, left field investors, we’re a do-it-yourself community. We will give you tools, we’ll help educate you, we’ll connect you with all kinds of people, but you gotta make these decisions on your own. We’re not making ’em for you. And, and it’s the same with the strategy on, on how to invest in, in these difficult times. It’s just, it’s so many unknowns that I think you just have to be really careful, really thoughtful. Where before you could just throw money around a little bit easier and, and you were confident that you could make some, now you have to really choose the sponsors carefully that you’re gonna invest with and make sure they understand what they’re doing. And just like, you know, a couple years ago, one of the things I always looked at was when a sponsor presents their business plan, do they have options?

Jim Pfeifer (26:05):

Can they pivot? Right? There’s one sponsor that I, that I did a lot of deals with, and I really like them. And, uh, you know, they’re basically apartment flippers, right? They would hold these things for two years, three years was their goal, and, and they would do a bunch of value add leaves and meat on the bone and then, and then sell it and, and make, make a bunch of money, right? And so that was awesome. But my question was, okay, what happens if the economy turns and things change? What are you gonna pivot to? And you know, their answer was, well, we could, we could pivot to cash flow instead of selling so quickly. We could, uh, slow down renovations. You know, there’s all kinds of things they could do, but they’d thought of that. And so that’s what I’m looking for now is, is operators that have backup plans and then backup plans to those backup plans,

Reed Goossens (26:46):

Right? Right. Because there’s so many, you look at a proforma, and I’m sure you’ve seen a ton of them. It’s Yep. The proforma’s, it’s gone out the window day one. It’s, it’s a snapshot in time. You know, I don’t think there’s ever been a performer That’s exactly correct, . No, that’s because that’s deal.

Jim Pfeifer (27:00):

Yeah. That’s the only thing you know about the proforma is that it’s wrong, right, .

Reed Goossens (27:03):

Yes.

Jim Pfeifer (27:04):

Yes. That’s the only thing that’s, that you know about it. It’s,

Reed Goossens (27:06):

It’s a, it’s a very good guesstimate, right? Is what you think is gonna be, and, and having a range and having flexibility and being able to pivot means that as an passive investor, you need to go eyes wide open understanding. If someone’s saying, I’m gonna get your 16% irr, well, the reality is probably gonna be somewhere between their 12 to 16, right? It could, or it could be more, it could be 18, you know, you could, you could go over. So if you’re okay with the 12 at the low end and you can, you can survive and you can p that’s palatable. Fantastic. But just understand that, you know, um, sometimes when we present these performers, they’re not, they’re just a snapshot in time. They’re not actually, you know, things can happen. And, and, and we need to be a sponsor to be able to pivot and be able to adjust to what’s happening in, in the market.

Reed Goossens (27:45):

Because the number one thing is we, we don’t control the market, right? We we’re just investors. We, we we’re entrepreneurs and we’re investors. Um, one, what what are the, some of the big, you know, you’re looking, you say you’re looking at deals coming out now, are you seeing cap rates expand? Are you seeing, you know, business models change? Um, you know, I think you, you probably, and I’m just guessing here, self-storage, multi-family. You’re probably in some mobile home parks. What are you, what are you seeing in terms of the flavor of deals that are coming out in those specific niches?

Jim Pfeifer (28:13):

Yeah, I think that right now it’s, um, when someone says they have a fixed rate debt deal, that’s where everyone’s like, that’s the one I want. Right? So I think that’s becoming more common. And, and like I said earlier, I, I think interest rates are still, you know, low enough that you, the deals can still pencil if you have an operator that’s, that’s doing the right stuff. And so it’s just really, um, being a little bit more discerning with some of the terms, especially the debt, making sure that the debt makes sense, making sure that if it is debt, that there are caps that, that make sense. And so I, I think it’s really just digging down in into that because that’s where the main uncertainty is, right? Mm-hmm. , I mean, I don’t think we’re gonna have rent increases like we have, um, in the past, but still, you know, everyone needs a place to live.

Jim Pfeifer (29:01):

We, we are short with, uh, housing units in the US so, you know, there’s a lot of reasons why apartments and mobile home parks are still good investments. It’s just, you know, you were mentioning IRRs three years ago, you’d look at a 17 i rr and, uh, you know, 8%, 9% cash on cash, and you’re like, okay, that, that’s, that’s what I’m hoping for. And now you just have to make adjustments to your, to your outlook, right? I mean, a 6% cash on cash return is not horrible. I would argue that that’s gonna beat the stock market because likely that 6% is tax free, right? You’re not paying taxes on that if you do things right, where you might get a seven or 8% hope for in the, in the market with your, with your paper assets, but you’re gonna pay tax on that. Mm-hmm. and tax is the largest erod of wealth. Mm-hmm. . So it, you can, you can live with lower returns if you’re in real estate because it’s more secure. You have an asset or real asset that backs it, and the tax code is in your favor.

Reed Goossens (29:57):

Yep. I completely agree. And, and for those people listening, you know, the fundamentals of real estate haven’t changed. And in this high interest rate environment, well guess what’s pausing, right? Sellers aren’t wanting to sell, because if we sell a house, I’m, I’m a householder, I, I own a house, I don’t wanna go now pay 7% on a new house, right? New construction’s coming to a grinding halt because all of a sudden that floating construction loan debt that they’ve got is now a lot more expensive. So they’re probably shelving a lot more projects, but there’s still a massive need for, for rentals, right? So it’s, it’s, it’s understanding where the demand is coming from and what’s gonna continue to push, you know, we’ll call it housing in general, whether it be mobile home parks or, or, or multi for the, the, the, the average person who’s just gonna wanna rent for a longer period of time. So, um, uh, with, with Jim, with with, with everything that’s going on in the world, what are you, what are you trying to hope to achieve in the next 12 months with left field investing and personally with your own investments?

Jim Pfeifer (30:51):

Well, with left field investors, you know, we are still kind of in, in growth mode. It, we’re really passionate about sharing this message that this is attainable for everyone, right? You know, minimums of 25, 50, a hundred thousand dollars can be challenging, but there’s ways to get around the minimums. We work with a company called Tribe Vest that allows, uh, that helps people invest in groups. So I think group investing is something we’re really looking, looking to do, uh, in 2023, because what that does is it does three things. If you are investing with a group of 10 people and you have $50,000 to allocate, well now you could maybe get into 10 deals in instead of one, right? Because now you can invest $5,000 in each deal. And, and what does that do? It does. The second great thing is you get diversification. Where before you’d be in one deal, now you’re 10, so you’re diversified.

Jim Pfeifer (31:39):

But the most exciting thing about being in a, you know, investing this way is that you created your own little mini mastermind. You’re taking action within your small community, right? Left field investors is a big community. Your tribe or your group that you’re investing with is a small community. So if I bring a deal to our group, you’re gonna say, Hey, Jim, what about this? What about this? And I’m gonna, I’m gonna learn and you’re gonna learn, and we’re all gonna get better at it. So that’s why, you know, that’s one of the things we’re really pushing, is just to give access to everybody. You don’t need to have large amounts of money to do this. You have to have some, right? This isn’t like just getting into, into real estate with no money down. That certainly you can’t do that in real estate syndications, but you can get into for lower than you think.

Jim Pfeifer (32:21):

So spreading that, that knowledge is, is part of what we’re doing. And, and as far as me personally, I’m still just looking for cash flowing assets because what I want is cashflow. I want the what I, whatever I’m investing in, I want it to have a current benefit. That’s what the stock market doesn’t have. That’s what mutual funds don’t have. There’s no current benefit. I am buying a piece of paper, I’m holding it and hoping that, you know, a few years from now, I can sell it to somebody else for more. Right. And hope is not a strategy. So I prefer to have real assets that produce cashflow, because cash flow is money in my pocket, which means I can do stuff with it.

Reed Goossens (32:55):

Yep. I love it, mate. At the end of every show, we like to dive into the top five investing tips. You ready to get into it?

Jim Pfeifer (33:00):

Sure, absolutely,

Reed Goossens (33:02):

Mate. Question number one is what’s the daily habit you practice to keep on track towards your goals?

Jim Pfeifer (33:07):

Um, it sounds maybe weird. I, I work from home now, and so I lost my commute. And my commute was where I listen to podcasts. So now I walk, I walk an hour every day in the morning, first thing, you know, once I get the help, get the kid to school, I go for a walk, I listen to podcasts and, or I, you know, turn off my headphones and just walk and think. And it’s just a, it’s a nice way to start the day. And, you know, I listen to my podcast on two and a half times, so I, I get a lot, I get, I get a lot of knowledge quickly. My, my wife doesn’t think I can understand it all, but I understand enough and it’s just, it’s a nice start to my day.

Reed Goossens (33:40):

Oh, love it, love it. Question number two is, who’s been the most influential person in your career to date?

Jim Pfeifer (33:45):

Well, that’s a tough one. As I said, I’ve, I’m in multiple careers, but I think influential, well, first of all, you know, my, my father, I kind of followed his footsteps into insurance and finance and, and I really looked up to how he, uh, provided for the family. So that, that’s one. And I think really my, my first realtor, um, when I was looking to sell my, uh, my acci when I was an accidental landlord, I wanted to sell that property when I finally could, when the market changed. And that realtor is the one that got me hooked on real estate because he said, Hey, how about instead of selling it, I manage it for you. And I had that house paid off, and he said, why don’t you refinance it and we’ll go buy two more. And I did that. And without him, I don’t think I’d be in real estate and I don’t know where I’d be. So he, he gets a lot of credit for that, for sure.

Reed Goossens (34:29):

Probably still chasing kids around the school, telling ’em to pick up trash after at recess, right?

Jim Pfeifer (34:34):

Probably. You’re right about that.

Reed Goossens (34:35):

question number three is, what’s the most influential tool in your business? When I say a tool, it could be a physical tool, like a journal or a phone, or it could be a piece of software that you just can’t run the business without. What is it?

Jim Pfeifer (34:47):

Well, I mean, everyone struggles, I think, with email, but I, I spent all day on email and, and it’s become easier for me to utilize since I met, uh, I dunno if you know Derek Clifford, but he, he taught me some, some tricks with Gmail, how to filter stuff and how to clean up your inbox. And I know it’s lame saying email is influential, but I spend so much time on it and, and his tips and tricks of filtering and, and making, you know, making it just easier to use. So that, that’s really, I think, uh, I think what’s been helping me lately now, you know, six months from now will be something different, but right now I’m really kind of trying to knock out the email in a better way.

Reed Goossens (35:23):

Love it. Uh, question number four is, in one sentence, what has been the biggest failure in your career and what’d you learn from that Failure?

Jim Pfeifer (35:30):

Biggest failure, um, was not adequately, um, screening sponsors and just throwing money at sponsors who were not qualified. And, and now I’ve learned through my community ways to avoid that. But that, that, that is definitely the biggest failure and it costs me some money.

Reed Goossens (35:49):

Yeah. Right. Last question. Where can people reach you to continue with the conversation? Wanna be in your sphere? Where do they go?

Jim Pfeifer (35:55):

Uh, you can go to leftfieldinvestors.com. There’s a subscribe button to get on our newsletter. There’s a, uh, contact us button, which goes directly to me. Or if you just wanna chat with me, you’re welcome to email me jim@leftfieldinvestors.com. Um, I talk to three or four new members almost every day and, uh, and so, so do some of the other founders. We’re happy to talk to people about what left field investors is and, and how it can help you.

Reed Goossens (36:20):

Awesome stuff, mate. Well, look, I wanna thank you for taking some time to jump on the show today. I just wanna reflect some of the things that I took away from today’s show. I think, you know, in the beginning, your story about pivoting five different times, and I think that is so, so common to all the people I have on this show. We we’re, we’re, we’re, we’re curious beings. And we always like to, to keep, you know, you know, being curious about different things until we find the passion that we want to go out and do for the rest of our life. And I think you’ve found that, and it was all, as you said, through education. Uh, but you’ve been able to combine, you know, the earning the money with the education piece, which is really to your core, what you’ve been put on this earth to do, which I think is freaking awesome.

Reed Goossens (36:54):

I like what you said earlier, we’re in an uncertain times. I think it’s so true. Uh, pe humans are innately wanting to have certainty in life to know that this is gonna be the right decision or this is where we’re headed. But right now, we’re not in uncertain times, but still keep placing money, you know, with, with, you know, with, with a caveat that you’re doing it in a prudent way with prudent sponsors, because over the long term, you’re still gonna make money in real estate. And then the last thing is that, you know, we don’t know what’s coming down the line. You know, uh, keeping educated, joining groups like yourself, creating a platform of left field investors to, to have a community of other like-minded investors coming together, sharing knowledge so the greater good of others can go out and make those smart investments, I think is so key to your success. Um, did I leave anything out in that quick summary just then?

Jim Pfeifer (37:37):

No, it’s amazing. You, you nailed it. You know, I, i I do a podcast as well and, um, that the summary was awesome. You did a great job.

Reed Goossens (37:44):

Awesome, man. Well, look, again, thank you so much for jumping on the today’s show. Enjoy the rest of your week and we’ll catch up very, very soon.

Jim Pfeifer (37:50):

Thank you very much.

Reed Goossens (37:51):

Well, there you have another cracking episode jam pack with some incredible advice from Jim. If you do want to check him out, go over to les leftfieldinvestors.com, or it’s jim leftfield investors.com. Check him out. All the, today, all the links from today’s show will be on our show notes on reedgoossens.com. But Jim’s got some incredible stuff going over at left field investors in the community who’s trying to comma create to share the knowledge with others about the benefits of investing in hard assets and not just in paper, paper assets. I wanna thank you all for taking some time outta your day to tune in, to continue to grow your financial iq. We’re gonna do this all again next week, and the easiest way to give back to this show is to give it a fivestar review on iTunes. We’re gonna do it, as I said all again next week. So remember, be bold, be brave, and go give life a crack.