On this episode of The Passive Income Attorney Podcast, Seth is joined by Senior Director of Tauro Capital,  Alisa Freundlich, and Associate Director of Tauro Capital, Jennifer Santoso. Alisa started her career as a real estate attorney, while Jenn ventured into consulting and business leadership, leading both of these preeminent women towards more prominent industry positions. In this episode, Alisa and Jenn offer creative advice on how you can capitalize on adaptive reuse real estate and how you can effectively evaluate potential risks when buying investment properties. Enjoy!

 

“When you look at a mountain, climb the mountain and don’t label how high it is until you look down and you see how short the path was.”

-Jennifer Santoso

 

“Over time, the market will go down, and the market will go up, but look at any long run…and you’ll see what real estate does.”

– Alisa Freundlich

 

HIGHLIGHTS:

[02:27] Backstory on Jennifer and Alisa

[07:42] The “a-ha” moment that came when deciding to invest into real estate

[10:48] The big win for California real estate investors

[14:08] Goals for creating a Meetup and how to effectively build positive relationships through networking

[15:14] Advice for high income professionals looking to diversify their traditional portfolio

[19:49] Building value for the future

[20:54] How to help conservative investors overcome reservations

[25:15] The biggest risk investors should be aware of

[28:40] Knowledge gained from previous financial crashes and what to expect for the future

[34:24] What is “adaptive reuse” in real estate and how can you capitalize

[39:37] The Freedom Four: What is the best thing to keep your mind and body healthy?

[42:34] The Freedom Four: Where were you 5 years ago & where do you see yourself 5 years from now?

[42:51] The Freedom Four: In an alternative universe what would you be doing?

[47:37] The Freedom Four: How has passive income made your life better?

 

FIND | ALISA FREUNDLICH AND JENNIFER SANTOSO:

• Website: Tauro Capital Advisors
• Website: R.E. Reset – Twitter

FULL TRANSCRIPTION:

SETH:  What’s up Law Nation! I hope everyone is having a fantastic, productive week, that you’re living in the Discomfort Zone and making positive changes in every aspect of your life. I remember when I was working at a big firm, I felt like I didn’t have time to do anything else but bill hours, but I didn’t know deep down inside that I needed to find a way to create financial freedom because I know exactly what that felt like. I’m inviting you to join EPIC, the Esquire Passive Investor Club, so that you can really become part of my world and open yourself up to passive investment opportunities and a vast network of like-minded folks. It’ll only take a minute so just go to passiveincomeattorney.com and click “join the club.” Alright today will get a double dose of a fresh female perspective on investing in a male-dominated industry. This is the first time I’ve had two guests on the same time so bear with me a little bit. Our first guest of honor is Jennifer Santoso, who I met in person at my very first ever real estate meet up, which she herself was the host. She began her career in consulting and business leadership through leading firms like Booz Allen and Deloitte. She’s now the associate director at Touro Capital Advisors and is an expert in all thing’s commercial real estate. Our second guest of honor is Alisa Freundlich. She’s a Loyola law grad, fully recovered attorney, and Senior Director at Tuaro Capital Advisors. She brings over 25 years of business experience and legal expertise and just like me she’s passionate about educating attorneys and other professionals about creating multiple streams of income outside of their primary career. Alright folks, let’s get it going.

SETH: Alisa and Jenn welcome to the Passive Income Attorney podcast great to have you guys on.

JENNIFER: Great to be here.

ALISA: Thank you so much for having Seth.

SETH: Absolutely. Absolutely, thanks for coming on so let’s just jump right in I mean tell me what your story and feel free to brag a little bit. Jennifer, you want to go first?

JENNIFER: Sure, I started a real estate investing meet up 2 1/2 years ago in person before Covid. I focused on multi family’s syndication, I was attracted to the complexity of it into the passive come potential of it I did raise funds for two local properties to local syndications and I met you threw that Seth now happy to be here today connected with Alisa and other members of Tuaro Capital Advisers also through the meet up.

SETH:  Very cool, Alisa?

ALISA: So, I just want to say Jenn is an amazing connector, because she connected me to you and I have been a real estate attorney for over 30 years started with several different Law firms Sequentially obviously in LA. I live at most of the time in Los Angeles. I was with a big fairly well-known law firm that did a lot of land-use in my background was purchase and sale land-use finance you know pretty much everything before that actually my first job at a law school was a banking law firm so I started and bank regulatory law. Which later became helpful. So, as I got into real estate Date and the whole field of real estate was fascinating to me and when you’re in a big law firm they try to pigeonhole, you know you just do the loans for a particular client or the lease is for a particular client and I really wanted to know how the whole thing worked. Didn’t want to be stuck in an in one little lane and you know as I stayed there, I learned I got put on a huge development project called Playa Vista, it was the development of like hundreds of acres it was it was an amazing thing to work on and a lot of other really relevant experience and the more I learn the more I just felt like one day I wanted to own and be involved in real estate. I wound up going in house with a client couple law firms later and this client was at high-net-worth family, not a real estate family that made their money in a different business. But they wanted to diversify into real estate so I came in and help them put together a family office and a portfolio and ran that for eight years as a general counsel and also co-invested. So that really got me launched in before that I sort of started buying on my own but it was houses. My first purchase was a house and we can circle back to that later actually think that’s a really good way to get started, when you’ve got a job and you need to work your day job you know. Now I am I am doing investing I’m doing advisory work; capital advisory work and I work with several clients and help them run their portfolios really at a strategic level

SETH: That’s awesome. Very cool so I have a lot in common with you there. I started in residential and house act into a duplex so I think you know it’s a good place to start and you know you can still make a lot of money doing that. I can certainly agree with you with the pigeonhole thing I got pigeonholed a large law firm in to see MBS loans and then I change first because of that and I got pigeonholed into a Ford welding line. So, I can certainly understand what you’re coming from with story.

ALISA: Yeah I mean that’s the dynamic of the law firms to have efficiency they need you to do a certain type of business for them and I had sort of resisted that successfully and was able to pop around to a bunch of different departments which came in very valuable as I became a general counsel I was you know thrust into a lot of difference we are doing a joint ventures with developers we were doing development projects we were doing regular investment I did some very large Brownfields redevelopment of a former landfills in other states that we turned into golf course projects I mean you know when you’re in a family office you probably know this year is sort of anything goes and you never know what you’re going to be doing It was a pretty exciting time and I loved it you know being in the business side of things and becoming a partner in the real estate with this family really gave me away to participate and build equity and that became a small. amount of equity but it was important to me to start that and it became my nest egg for later.

SETH: Awesome. That’s awesome, the day that they offered that to you the equity and that’s kind of what we strive for to want passive income we want something that we can participate in and be a business and we can grow. So, he told us a little bit about your previous law practice and what you what your kind a loved about what you heard about it but you know, did you have an aha moment where you were like you know what I need to invest in real estate myself rather than just doing it from the attorney side of the table.

ALISA: That was always my goal. My parents were both are in real estate actually my dad was a broker my mom was a sales agent so they sold houses in multifamily and I sort of grew up watching that end and overtime what you know is so interesting we grew up in the San Fernando Valley and my dad would say like he bought his first house in panorama city. I think when I was born for $18,000. Right imagine buying anything for $18,000 that you really realize that real estate is a long game. If you try to time it to get out at the top or by at the bottom you know I always tell people forget about it the way to get in is to buy something that in my view you would want to live in. So, in case you don’t find a tenant right what’s your fallback If your tenant walks out can you live in your place and pay the rent. Conversely if you can rent it and pay the mortgage and an even pocket a little extra the mortgage the taxes the insurance obviously so you to put together a budget of your operating costs and if and if you can work it to a place. My rule of thumb is always been if with 20% down you can get to positive cash flow then it’s a buy, because overtime the market will go down in the market will go up but look at any long run 10 years or 20 years or longer and you’ll see what real estate does in California. Anyway. This is a conversation geared to California because if we went to Detroit or another metro, we might see something different but Look in California in 1998 I bought my house in Brentwood which is a nice part of LA and you know it was a stretch it was all the money I had and I borrow a lot of money from friends and family and I bought it for 800,000. You know I thought wow that’s a lot but it was in an area of really good homes and it was on a big lot and you know the appraised value now is more than you know 400% of that number. You know it’s over 4 1/2 million dollars and there’s a property in my neighborhood that are more and it’s outrageous to me I don’t know how I would buy that house today and I’m so thankful I invested in that. But more important the others are the big win in calf Is the property tax savings because once you get in and you buy property you have so far, I mean there’s been some legislative tests on prop 13 but it’s held. For single-family or 1 to 4 family at least I think that’s a pretty safe bet that it’s not going to go away. So, you know you get a huge savings in your property taxes, based on when you bought it.

SETH: Right and I love that rule of thumb I mean it if, when property value goes down typically in definitely in California, they’re always going to go back up but you get yourself in trouble when you can’t pay that mortgage payment. If you can’t pay the debt that’s where you get in trouble when you had to sell it, you’re at a major discount or you going to foreclosure or something like that but if you’re able to hold it and it can rent out for enough to pay the mortgage, you’re good to go.

ALISA: I don’t know about you but I really council my friends and clients most my clients are commercial, not residential but I always take the 30-year loans and I know for a long time everybody was in or taking the short-term money because they might’ve gotten a break on the interest rates. But you can keep refinancing unlike commercial real estate where you’re where you should’ve walked in and you may have pre-pay prepaid isn’t allowed on residential right so I always take the 30 your money because I figure if somebody’s going to loan me money for 30 years at 3-4 % I’m going to grab it because I remember that there was a time where we had inflation and interest rates are at 12% and so you know that’s unlikely given the burn rate at the fed these days. But we don’t know what’s out there right we don’t know when the next you know crisis happens and the dollar changes, dynamics and interest rates shift. So, you know to manage risk I love the 30-year. I mean you can’t get a 30 year if you’re doing commercial you good luck, you’re between a five and a 10 year. So, it’s a gimme to be able to borrow 30 your money right yeah, I want you now right and once you owe me house than what you do is you refinance it you pull the money out and then you use it as your piggy bank to go buy other real estate.

SETH: Yeah absolutely. I couldn’t agree more. Jenn do you want to jump in did you have kind of an aha moment we started looking at alternative investments in real estate.

JENNIFER: I’ll take a slightly different approach here so I’m not an attorney. I have a management leadership consulting background of 14 years I was with them and avoid smaller companies as well my client base was mostly departing the department of defense. It was a really interesting career because I was constantly learning something new constantly being challenged with different clients etc. and I also was not somebody who was born and raised loving money. I just it just wasn’t you know a central focus to me but like with most everybody we get to the point in our life where we learn and we realize there’s never a point in our life we’re not going to need money. So, I just decided to take my leadership skills that plus my interest in developing passive income to intercept those two and then produce my meat up the goal of my meet up was to do three things but myself in a positive position where I could develop positive relationships with people see who the major players. See how they perform three times I like and trust and get connected to a group of people that I wanted to take the next part of my financial path and career with. So, I’ve checked the box with all three and also have gained a bit of equity on some financial raises some more to lease that’s not the hugest amount but same thing it’s important to me it’s good to watch that money grow and continue to grow the passive income otherwise.

SETH: Right. Yeah, I love that I mean it’s just it’s about building multiple streams of passive income right in multiple streams of income and not just relying on 1 stream of income from your W-2 invest in real estate invest in businesses start side hustles. Whatever it might be you just can’t be depended on one stream.

JENNIFER: Not at all.

SETH:  yeah, so let’s start transition of a little business is kind of a general question but you know Alisa what advice would you give attorneys or other high-income professionals who are thinking about transitioning out or at the very least looking to diversify into something outside of the stock market. Whether it’s in your house or the stock markets whether it’s real estate maybe look at a side hustle I mean where do they start.

ALISA: Well, I really try to tell people don’t quit your day job, because I think that particular on the brokerage side you know it’s very tough as an agent our sales person when you’re paid on commission. Yeah, you may not make a commission for a year and being on the sales side is great because you get to see deals happening but you’re not getting the income conversely as a lawyer or an engineer or somebody with a strong day job you’re working so many hours that you don’t have time to really go out and look at deals and said yeah you could do that on nights and weekends. So, I think really the best place to start and by the way having that day job is essential because you need to qualify for a loan and so in order to get a lender to give you money to buy the duplex or the four Plex, you want the income that you’re showing off you know your day job so I think that balancing that and buying you know 1 to 4 units at the beginning it’s sort of a safer way to start. I say 1 to 4 units you could certainly buy a car wash you could certainly buy a commercial building anything you like there’s no maybe you’re a mechanic and that’s something that you would benefit from. So, all those are available but just know that the unique I’m saying it for your viewers is that housing you are protected on what they call non-recourse. Meaning you know unforeseen black swan event and you can’t pay your loan they can’t go against you personally, but on a commercial loan they can and again you’re not going to get that 30 your money you’re going to get I 5–10-year loan and the terms are going to be a lot tighter so that’s why as a first purchase I really like a 1 to 4 unit which falls into that basket of residential.

SETH:  Yeah, I like that too I mean if your significant other will allow it house sagging is the easiest way in probably the most beneficial way to jump into something and if you can get into a fourplex or at triplex or something like that and live in one unit If you’re up for it and your significant other is up for it I mean that’s the way to go and you’ll have to put in a 3 1/2 % down or 5 % down and you get that low interest rate and 30 year mortgage that we were talking about.

ALISA: Yeah, I mean most of the residential is it is going to be a 20% down these days unless you’re under a special program but I agree with you about really, you know, the significant other thing when I I bought my first house before I met my husband. It really you know it was a great starter but I kind of had visions of going further and then I bought like two more houses within three years in one day and he would come home and he’ll be like you know not sure if you wanted to ask me what I did today and because it might be I bought a new house and then he said to me you know can you buy shoes like other women?

JENNIFER:  So, I’ve had this conversation with Alisa before and the joke is that she’s already bought all the shoes that she’s wanted so she was moving on up other more exciting purchases.

ALISA: How many pairs of shoes do you really need? See that’s the thing is I love owning something that’s going to have long-term value and I actually wish I had sold my first two homes that I bought him I needed to in order to move up you know in what I was doing, but you know there’s so much value in owning real estate and over the long term you really if I look back to those in at the first house, I bought was 30 years ago I wish I still owned it.  I mean it was amazing Cheviot Hills it was great little area in LA. So, you know I think that at the end of the day I’d rather own something that’s for not just money it’s not about money for me it’s really about building value for the future. I would love if everybody thought this was something they could have and when rents were going up crazy in LA and I think there’s San Diego’s had crazy rent appreciation too you over the last couple years, I worry about how are people going to make it work you know if you are at the risk of a landlord and your rent’s rising, I mean owning a house is a safety net for your family.

SETH: Yeah, yeah, I couldn’t agree more and you know it that’s the thing is if you can hold onto the real estate hold onto it as long as you can. If its cash flowing keeps it, if it’s in a good market keeps it it’s just going to keep going up. I know that you love and you enjoy teaching others about real estate and investing but in a lot of attorneys are conservative by nature so how do we help them overcome that and just start thinking about investing in real estate and other alternative investments?

ALISA: That’s a great question by the way it’s not just attorneys right you know it’s also accountants you know, accountants and CPAs who are really smart with taxes who know that the tax game of real estate is great but they just want to be a renter and they don’t want to worry about taking care of the house, being a landlord, signing the paperwork. So, you know there’s a level of willingness. You have to be willing to learn all the new things you’ve never done. I’m a lawyer in the first time I got a stack of loan docs to sign for a house not just the loan docs but like the paperwork to buy the house remember that so you bought something south right for the first time you get a stack of paperwork in your life. You know I can’t sign all the stuff in the lawyer and he was like wanting to write it you know rewrite it and negotiate it, and your kind of just have to close your eyes and sign.

SETH: Yeah, I mean they give it to you on the day of closing and you’re sitting there and is like sign it that’s it. Sign it, take your leave it and you’re like wait we’re not going to negotiate this?

ALISA: You can’t negotiate your loan docs on a residential form a menu each you pretty much have to fine as is. Same if you start negotiating a purchase and sale agreement in a hot market nobody’s going to do you have to sign the standard form, you just have. And you know you have to make your office clean or you’re not going to win the bid so yeah there’s a lot of faith involved and what you are relying on is you’ll have an inspection period It’s usually in California and residential you know 14 to 21 days. During that time, you’ll do your due diligence and you’ll have the right to get out of the deal right so in as a lawyer your kind a know you can pretty much get out of any deal because you’ll find something wrong. So, you know the first step is make an offer, and sign the purchase and sale agreement, and then you just have to go baby steps inspection. Baby steps you know financing. Baby step move in and once you do it once you’ll get, you’ll build up your skill set and you’ll realize this wasn’t so hard you know millions and millions of people have bought real estate doing this. I used to have when I was practicing law I had a client who is a flipper we called him flipper Joe and he would literally all he would do is tie up it was a buried it was a time It was a very hot market and what he would do is he tie up commercial real estate with a purchase and sale agreement he’d have that 20 day to negotiate and do his inspections and during that time he’d flip it to another guy for a higher price and he just pocket half $1 million or $1 million or whatever he could get for a signing the contract. I watched guy make money he had no legal background he really had a limited real estate background and he was making so much money and I thought why do I limit myself in the way that I do, right?

SETH: Yeah, I had it’s kind of a similar moment I mean just closing deals as an attorney you see these guys that are closing in $100 million plus deals and they’re not Donald Trump. They’re not even all the prince of Wales or something or just regular dudes. Man, I can do this like I’m sophisticated I should be on that side of the table.

JENNIFER: So, there’s a quote that I’d post it up on I think it was somewhere in social media recently and it’s something to the degree of you know when you look at a mountain climb the mountain and don’t label how high it is until you look down and you see how short the path was. That’s always scary looking into it but the moment you’ve done It’s you know not so bad and you can potentially do it again easily.

SETH: Right, I mean once you’ve done it and you look back at me and that was easy now let’s go bigger and bigger and bigger and it’s just gone the pathway that you take. So, let’s just pretend that we’ve taken that leap of faith you know it will either actively as investor or even passively while you’re vetting deals. What are some of the biggest risks that investors to be aware of?

ALISA: So, when you get over to the commercial side the risks are exponentially greater than the 1-to-4-unit residential side. And that’s because on the 1 to 4 you are protected on your loan docs from a lot of things that don’t happen on the commercial side, right. So, there are a lot of debt covenants that can become problematic and for me I think had a 30 year career and watching guys big and small and it’s mostly guys let’s face it in a commercial real estate. For the most part has been a guy’s game. It’s changing now but it but it’s you know it’s been a guy’s game and where are you get into trouble is your loan is coming due and your tenant leaves the building and now you can’t make your mortgage or your loan didn’t come through just maybe have another two or three years left but your tenant left and you can’t get another tenant. So, with a tenant and building cash flow and risk management vis-à-vis the debt become super important. Now you can look at just this past year under Covid as a great example right multifamily was one of the hottest sectors. I mean everybody’s buying multifamily rents were rising like crazy Covid hits and what happens federal government and state government slap on a moratorium. You can’t evict anybody and so now you can’t pay your mortgage. Thankfully you know there was some concessions given by the banks and the banks were giving everybody forbearance agreement. I don’t know how much longer that way and now they’ve just extended the eviction moratorium on renters until June 2021, June 30 is the date now. So, you know I don’t know where that’s going but that’s a great example of risk in the system when you’re on a commercial other risk can be environmental problems but you know your greatest risk is a mismatch of your revenue and your debt. And if you don’t have that you can weather the storm you know there are people who’ve on their buildings paid off their debt, they’re OK or they have a big nest egg. At least enough nest egg I always try in my mind to have enough money if I’m syndicating or doing a partnership, I try to hold back in my reserve accounts enough to pay the mortgage for six months minimum. Six months of mortgage also taxes and insurance. Ideally it would be a year and if I end depending on my investors some of them agree some of them don’t, but you know that’s where you start to have risk. It’s just it’s just a payment problem and it’s manageable it’s manageable by having cash flow that you set aside for the rainy day.

SETH: Right. Right and you had mentioned kind of the unknown I guess the other unknown effects of the pandemic but let’s rewind a little bit. I mean you’ve been in real estate world for a while and seen a couple different crashes so you know what I guess to start out with did you learn from those crashes and then will kind of go into what you might be seeing in the in the near future?

ALISA:  It’s a great question so you know, 2008 which was sort of glass big crisis before this one was unique crisis in there it was really a bubble from the SNL lending and not just SNL but in a bank lending for housing the big bubble was like countrywide and all these guys were out making loans, and people were buying multiple homes without really having the ability to service it and then when the market turns south you know the thing just all went back to the banks and there’s just massive destruction in the housing market. So that was a very unique time. It tanked a lot of you know financial institutions and there was fallout from it won’t be on the housing but it but in terms of the real estate ramifications it was most targeted to housing. Wind back to the crisis that I remember before that which was the savings and loan crisis. That was a lot of construction lending that when I went South B of A, a lot of big banks were caught up and that’s the weather just SNL but a lot of us and I was wiped out well and I had been a bank regulatory attorney. So, I was sort of in that time period where I had banks that were my account and savings and loan, they were my clients and it was amazing because my savings and loans guys were just making ridiculous loans to like anybody that walked in that was a nice guy could get a loan you know $10 million to build a building, it was nuts. My bank guys were at we’re not making those loans it so you know there was a real mismatch in how the regulators were allowing loans to be made. Similar to the housing bubble so that one blew up and that really was development deals and a lot of multifamily and some office. So, we are we today where is the bubble today as you know a question that I’ve sort of meditated on and the bubble to me today is in the debt markets. And also, in generally the commercial market. I think that we’ve had a lot of discipline you know our bank lending platform that I’ve seen through Toro we work with a lot of different capital sources, and the banks tend to be pretty careful in their underwriting and their due diligence but you’ve had a lot of sort of newer lenders that are not banks, right? They are private debt funds and they’ve been out making loans. Some of them have a lot of discipline some of them have less discipline but this cycle it’s just a huge debt bomb. I mean I look at how much debt it’s not even just in the real estate market it’s the dead at the fed level right how much can we just keep printing money and creating debt and how does that end, I don’t know.

SETH: Gotcha and you know I guess from a standpoint of a typical individual investor is there is there any way that we can kind of prepare for that in a way that we can prepare ourselves to capitalize on that?

ALISA: Well Jenn has been an amazing leader of a group that we’re putting together called CRE Reset. So, you know one of the things that we see particularly right now is that there’s a tremendous amount of dead mall space all over the country and there’s going to be I think a fair amount of office space that isn’t going to come back. You know work from home has become a thing and some people will go back to work but I’m not sure officing is going to be the same. A whole host of other sort of unused real estate a city out there and only certain small percentage of it it’s going to become Amazon warehouse space, right? So, what are we going to do with the rest of it and weep as a team grappled with this to think about where are the opportunities and there’s a whole segment of real estate investing called you no value add. And value add is sort of the art and science of working for opportunities. And I think we are going to go into that in the next cycle and it’s going to be an amazing time.

JENNIFER: So, I had to that quickly, I’d say we’re looking in the space of adaptive reuse as well. So, you know Seth you and I had talked earlier about the unused properties or the property types that are sunsetting and we’re absolutely applying adaptive reuse to these opportunities. That’s where the future of commercial real estate ‘s going. Our group Siri reset we’re not shy about looking at those opportunities and spinning them to the purposes that are going to be valid today and tomorrow.

SETH: Gotcha, what are maybe some of those specific adaptations that you guys are looking at right now?

ALISA: So, by the way CRE reset it is for obviously commercial real estate. That’s the C, the R, and the E, and so we’ve started to look at some very interesting developments. One has been church parking lots that have been turned into affordable housing. There’s somebody that’s been doing that and I have to get more Intel on this you might look into it, but there was a law passed in the state of California zoning law apparently at the end of the year December that says that house of worship cannot be penalized if they use their parking lot for affordable housing by the local zoning authority. Because you know parking ratios are huge and, in a church, or you know the house of worship is only using that lot maybe on a Saturday or Sunday once a week and otherwise it’s sitting there just wasted. So, it makes great sense to use those lots for affordable housing and adaptive reuse there. If they can get out from under the parking ratios you know in in their local city or county. So that’s one huge turnaround places I’d be looking in.

JENNIFER: And I’m going to add something real quick Alisa just add a little bit of color and detail. So, the individual All connected with our group thread taking that opportunity on and noticed that in one particular church parking lot that but he owns their RVs parked up, and instead of initially thinking I need to kick him out they don’t belong here he added hook ups and started charging them. So that’s where the idea came from very opportunistic and it’s you know it very much takes advantage of the concept of adaptive reuse.

SETH: Yeah, that’s incredible I don’t think I’ve ever heard that one before that’s the first time that I’ve heard that and it’s crazy that’s actually part of you know a regulation or a law. I had no idea that was going on I’ve heard of him turning malls into self-storage and things like that the people are doing at the Kmart into self-storage, but that’s it’s a very interesting one I haven’t heard before.

ALISA: So, that’s one of the things that we want to do as we want to highlight the stories for people who are creating you know, solving problems and figuring out how to take unused real estate. The thing I love about real estate why I love investing in it they’re not making it anymore, right? But it’s only got value if you can figure out how to drive income from it. And they are in is the value add so I think you know we’re starting to see there was a deal that crossed my desk today for an empty prison because private prisons are going to be closed now under Biden. So, what can you do with an empty prison I don’t know but there’s going to be a whole slew of them out there.

SETH: Yeah, I have to think about that for a little bit but it seems like there should be something I mean it specially built. They have living quarters they have kitchens they have all the stuff I need to live in them so there’s got to be our best and highest used outside of being in prison.

ALISA: Right so you know I think that there’s going to be a whole lot of reimagining that goes on and we feel toward, one of the things I love at Touro is that we have a database of thousands of lenders. All kinds of lenders private money, regular lenders. Credit unions can be a great source of loans and bridge loans permanent loan so we now have the resources to put together debt and equity for these creative projects and that was one of the reasons I really wanted to join Tuaro two years ago with that I imagine that this time would be coming. And that the great strength would be the ability to match debt and equity when the project started to hit that were of interest.

SETH: Awesome. Awesome yeah, I was going to ask before I jump in the freedom for if you guys wanted to add a little bit more color about what Toro capital advisors does.

JENNIFER: Tuaro capital advisors we really take more of a consultative capital advisory perspective to financing a lot of people might go to intermediaries or lenders just for the that the financing but we really do the advisory service in addition to it all. So, we provide options just like Alisa mentioned, equity options there’s LP investing options as well so even if you are a senator has an opportunity where you’re looking for LP folks we are happy to talk to you about that too. We also provide fractional CFO services as well.

SETH: Gotcha very cool. Alright let’s jump into the Freedom Four.

SETH: What’s the best thing you do to keep your mind body healthy?

JENNIFER: So, for me I’ll just start I’ve been I’ve been on this conversation for a while I’ve really been challenged with sleep so I’m consistently getting myself in the right routine, whether it’s not getting sunlight at the same time every day. Eating while working out and I’ve noticed the two things that I’ve been the biggest for me is the regular sunlight and just really intentionally reducing my stress day to day. So, you know solid sleep it’s the one thing that raises all the ships in your harbor.

SETH: Agreed.

ALISA: So, I for me this past year I mean I’ve had years of stress but this past year was with something else right because it wasn’t you regular stress. It was stress combined with I could die at any minute by going to the grocery store. I mean I could die just by going for a walk with my dog I mean it was just you know if you tapped into the fear that was floating in the collective, you know it was enough to her to feel like you just like went into the twilight zone. So, I really, I have found that I’ve always had a meditation practice, actually develop my meditation practice about 10 years ago. I really had to cut back on the on the media, you know because anytime I picked up media whether it was social or otherwise antisocial and then we had of course all of the rhetoric around the election which was so polarizing. I would say in the scheme of life 2020 has to go down as one of the craziest stressful times on the planet earth. So, for me you know to exist in that cut back media, meditate. Really have an even if it’s a five- or 10-minute time out don’t talk to me, I’m not listening, quiet space and go for a walk. Jenn says in a fresh air talk to the trees look up. That was magical for me to just be able to get away and be outside in nature.

SETH: Yeah, yeah, I mean it’s about living in the now right like just enjoy the air. Enjoy the sunshine get out there and walk like you can’t be in front of a computer in your desk and reading the news and watching the news all the time and especially in 2020 when there is just like you said so much polarization in the media it was ridiculous. I mean you couldn’t help but watch and get just upset no matter what side of the table you were on they just forced you to pick a side and it was just insane. All right so where were you guys at five years ago and where do you see yourself in five years from now?

ALISA: So, I five years ago got my broker’s license and moved sort of transition to out from just being a lawyer, that owned real estate more into the capital markets financial world. That’s been really helpful to give me sort of the confidence I think that as a woman in case there’s any women out there that are listening you know when is it, one of the things I always thought is that to buy real estate commercial real estate or do big development projects I needed a man. You know I didn’t think banks would give me money and so by being a broker and brokering money for people now I know the banks and I yes, I got bank money for a couple storage deals I bought but those were already sort of rented in and going. A really big development deals where banks gave money mostly to men. So, you know getting confidence in my ability to raise a bigger money and do development projects this turnaround time that was a goal of mine five years ago and so going forward we are in the time I’ve been waiting for. I am so excited to be able to meet this challenge and look for opportunities and help people do that. That’s really important to me. When I met Jenn, you know she can speak for yourself but I just thought what an amazing communicator and a visionary person and I Like I wanted to connect with her. So, I feel like the next five years is the time to do this.

SETH: Awesome. Jenn?

JENNIFER: That’s really sweet Alisa I appreciate that. Seth, would you repeat the question please?

SETH: Yeah, so where we at five years ago and what do you see yourself five years from now.

JENNIFER: Thank you, OK so five years ago I was doing direct strategic and tactical consulting to a captain in the department defense. Very interesting work, it was in the field of change management and organizational restructuring strategic advisory. So, on a creative level it’s so much autonomy and independence and that’s exactly where I was when I realized even though I really love this I also want to generate as many streams of passive income that I enjoy doing at the same time. So that’s when I decided to learn little bit more about investing, I came upon you know specific episodes of syndication about syndication on bigger pockets and then I decided from there to leave my meet up. I have gotten my real estate license which is enabled me to connect with the capital advisors. In five years from now you know I’m still connected with Alisa, Anthony, and Avy having multiple interesting creative deals behind your belt and just broadening our influence to all passive investors and even providing education as well.

SETH: Awesome. Awesome in an alternative universe for you guys weren’t involved in your current business is what it would you be doing and feel free to be creative with this.

ALISA:  I’d be baking. I love baking. It’s my secret hobby.

SETH: Awesome.

ALISA: What’s your favorite cookie Seth?

SETH: You know what I actually didn’t even like sweets until recently. It was not a thing for me in but recently I don’t know what it is now I crave it I hate it I’ve gotten over that hump so now I crave cookies and cream ice cream all the stuff that normal people always eat. Now I can’t help it eat it and it’s just like what did I do open up Pandora’s box.

JENNIFER: So, can I give you a piece of information that might help with that Seth?

SETH: Yeah, sure.

JENNIFER: So, I learned that your micro biome is driving your cravings. So what happens is before when you didn’t have that craving you didn’t have a certain threshold of the bad bacteria that feeds off of sugar and processed foods. So now that you said that specific population it’s grown and when you do feed it it gives off the toxins that you read as hunger pains that can only be satisfied by sugar and carbohydrates and processed food and what not. So as long as you choose to go against that which I know you have the discipline to do it then you’ll be totally fine you’ll start to kill off the population and you’ll eventually end up where you started.

ALISA: We’re killing off the cookie population?

SETH: The cookie monsters in your inside.

ALISA: Well, very therapeutic to throw sugar around in the kitchen I can assure you.

SETH: I’ll try some samples sometime. All right last but not least how is passive income and made your life better?

ALISA: So, for me it’s allowed me to work because I want to instead of because I have to. So into doing that I want advisory couple advisory work I do because I really enjoy helping people and I like the problem-solving. But you know the passive income is allowing me to turn on the lights and live at a certain level you know it’s not unlimited I can’t go buy a G4 or a G5 yet. But you know it’s fine I can I can live I can be comfortable and I don’t have to worry about money. And you know what not worrying about money is a freedom I wish for everyone.

SETH:  I agree it gives you just a certain confidence, right? Like whenever you know that you have that passive income coming in you don’t have to worry about that job all the time it’s just it’s just a freeing feeling.

ALISA: Yeah

SETH: Jenn?

JENNIFER: Yeah, I’ll back up the one thing that ALISA said she very clearly mention she wants to make sure that that anybody who wants to have options with money can right? So, it’s up to her desires to be able to give out that education or mentorship if we can make that connection due so. For me I’m definitely not at the place right I’m job optional but I am building my passive income. I do have significant gains through Stocks at the moment so it’s just one less thing to worry about you know. Less stress less worry kind of like what you had mentioned/

SETH: Yeah, for sure I got a really appreciate you coming on today we’re going to listen to find out more about?

ALISA: We will be setting up CRE reset on Twitter, LinkedIn and other social media and for loans and debt and equity taurocapitaladvisors.com

SETH: Awesome. Alright ladies really appreciate you coming in today. Thanks!

ALISA: Thanks so much for having us, Seth!

SETH: Alright folks that was awesome thank you Alisa and Jenn for sharing your stories. These ladies don’t buy shoes, they buy buildings. I loved that they not only shared some of the great benefits of creating passive income through different types of real estate but also some of the biggest risks namely the role of that in your equation what you need to always carefully consider. Alright kiddos I want to personally invite you into my world of passive investing so that you can start buying back your time in the best way to do that is to join EPIC, our Esquire Passive Investor Club by going to passiveincomeattorney.com, clicking “join the club” and as always until next time, enjoy the journey.