On this episode of the Passive Income Attorney podcast, Seth is joined by financial expert and author Mo Bina as they discuss how learning and networking will give you the confidence that you need to step off the Wall Street rollercoaster and stroll over to Main Street where the grass really is greener. Mo is an experienced investor in alternative assets, private money-lending, and various real estate sectors, and he shares how education can help you invest in a stable, prosperous future for you and your family. Enjoy!
“It’s important that people invest prudently and take a more empowered position with what they do.”
Here’s a breakdown of what to expect in this episode:
- How to obtain control over your investment portfolio by investing in with alternative assets.
- The pros and cons of investing passively and actively.
- Diving into The Empowered Investor Methodology, a powerful roadmap for getting started in alternative asset investing.
- Specific things to look out for within the market, the deal, and the sponsors.
- Calculating risk-adjusted returns.
- And so much more!
ABOUT | MO BINA:
Mo Bina is the Managing Principal and Founder of High-Rise Capital, a boutique commercial real estate investment company.
He partners with high-income and high-net-worth individuals and family offices to obtain above-average returns with reduced volatility and tax efficiency from high-quality investments. He is the author of More Doors, More Profits; A New Lease on Life: How to Build Wealth and Improve Lives by Investing in Senior Housing; and Industrial-Grade Investments: An Empowered Investor’s Guide to Building Wealth with Industrial Real Estate. Through strong collaboration, his clients are able to ultimately achieve meaningful investment returns as they generate multiple income streams to live the life they desire and participate in investments that enhance lives and provide tangible societal benefits. He has strategic partnerships with best-in-class operators and developers who have decades of experience in the commercial real estate space. He is a regular guest on real estate and investing-focused podcast shows.
He has also developed The Empowered Investor Methodology, a revolutionary way of helping people obtain financial security and transform their lives through alternative real estate investments. This methodology consists of a five-step process—Ethos, Educate, Evaluate, Execute, and Empower—that works as a roadmap for new and seasoned investors alike, helping them break down self-imposed barriers, build momentum, and find the keys to succeed. For more information, click here.
He is an experienced investor in alternative assets, private money lending, and various real estate sectors such as residential, multifamily, senior living, office, and industrial real estate.
FIND | MO BINA:
CONNECT | SETH BRADLEY:
Snag | The Freedom Blueprint: http://www.attorneybydesign.com
Subscribe and Leave a Rating and Review:
Join EPIC | The Esquire Passive Investor Club: https://passiveincomeattorney.com/join-the-passive-income/
Join | The Passive Income Attorneys Facebook Group: https://www.facebook.com/groups/passiveincomeattorneys
Seth: [00:00:00] Welcome ladies and gents. You know what time it is time for a new episode of the Passive Income Attorney podcast. If you’re ready to get started on your passive investing journey, pause this right now and go to escapethebillable.com to download our Billables to Abundance Bible, a field guide to getting started with passive investing.
Okay. The stock market roller coaster is in full swing. The line is long and it is wide open. How can you get off this ride and still invest in a stable future for you and your family? There are a number of ways, but it all starts with education and congratulations. You’re already taking that first step by listening to this podcast.
Learning and networking will give you the confidence that you need to step off the wall street, rollercoaster and stroll over to main street where the grass is green and the girls are pretty. Listen and talk to people like our guest of honor, Mo Bina. He’s an expert in analyzing financial markets and commercial real estate, and is also a good friend of mine.
Mo is a respected author in the managing principal and founder of High Rise Capital, a boutique commercial real estate investment company. He’s an experienced investor in alternative assets, private money lending, and in various real estate sectors, such as residential multifamily, senior living office and industrial real estate.
All right, without further ado on with the show!
Seth: [00:02:05] Mo what’s going on brother? Welcome to the show.
Mo: [00:02:10] ISeth, I’m doing well. How are you doing?
Seth: [00:02:11] Doing great man, doing great, really excited to have you on today. Mo is one my really good friends, so it’s awesome to have a recorded conversation about, about passive income and real estate and all things that, uh, related to that.
So I’m really excited to have you on today, man.
Mo: [00:02:25] Oh, I’m excited to be on as well too. So thank you for having me on it’s. Uh, , I know we have a lot of conversations and now we’re actually putting the first I’m going to record it. So we’ll see how it goes.
Seth: [00:02:36] Yep. Well, let’s do it, man. Well, let’s just start out.
What’s your story. Tell us, uh, tell us what your story feel free to brag a bit, a little bit start wherever you want.
Mo: [00:02:45] Uh, well, you know, I’ve, I’ve been in passive investing for some time now and I I’m past invested in a number of opportunities across different asset classes, uh, primarily in commercial real estate.
Um, although I’ve done some, you know, outside of commercial real estate as well too. And you know, as I’ve been doing that, I mean, you know, it’s, I hate to say it’s been a journey, but in a way it kind of has been because, you know, you, you start out a little bit kind of like unsure, you know, like you don’t know too many other people doing this and investing in commercial real estate or especially syndicated commercial real estate.
And, uh, you kind of like at times, like, am I doing the right thing? I don’t know what to me, other people doing everyone else’s investing in the stock market. You know, uh, why am I doing that? You know, and it kind of, uh, you know, when you, when you kind of buck the trend and, you know, you kind of gravitate away from the rest of their herd, you know, you kind of May 2nd guessed your yourself.
And in the beginning, I certainly did, but you know, uh, I look back on it now and I feel so I’m so relieved that, you know, there’s this whole world out there of alternative assets and alternative investments that. So many, uh, so many people don’t know about, and obviously, you know, shows like yours, you know, are out there trying to bring attention to it.
Seth: [00:03:58] Yeah, for sure, man. So how did you kinda discover alternative assets? I mean, w where did you find out about those things that most people just note investor investment or 401k and stocks and bonds and mutual funds and whatever their financial advisor says to do, they do it. I mean, what kind of brought you to that place?
Mo: [00:04:15] Yeah. It kind of started, you know, when I, when I finished grad school and, you know, um, I, I graduated way back in the day. You know, when I was, when I was in grad school at Stanford, you know, that was in the, uh, the heyday of the.com boom. And I remember like everybody at school thought that they were going to leave campus and they were going to go start an internet company and they were going to make millions and then they would retire by the time they were a 23 and a half.
And, uh, so you know, and this was back in 98, 99, And, uh, you know, I kind of went through that because once I finished school and, you know, I had a job and made a bit of money and I invested in, in, you know, tech stocks. And of course it wasn’t even a year later when the whole thing just kind of crashed and it was funny.
Cause at that time, You know, I would go read the wall street journal. I thought I was, you know, a real academic type and I knew what I was doing. And, you know, I remember reading about the new economy and I remember reading about how well you can’t use traditional methods of valuation to value these internet startups and these internet companies, because it’s the new economy and, you know, and of course that all crashed and burned.
And, you know, we learn, we look back on it now. We’re like, well, no, there’s, there’s basic ways of valuing businesses and valuing assets. And those things never change. If you don’t make money, you don’t make money. There’s no other way of explaining it. Um, all the people who are buying Tesla stock these days, you know, maybe you have, that’s the one that I was thinking of.
Yeah. And, uh, but anyway, that was, you know, that was about 20 years ago or so, and yeah. And so I, that always, that kind of planted the seed with me, but it wasn’t. So some number of years after that, um, whereby you know, the next time around with a global financial crisis happened in 2008 and 2009, where I really like, you know, woke up.
And when I saw back then, and for the listeners that were, that were around then, and, uh, or at least paying attention to what was going on, um, may remember Hank Paulson. You know, and Hank Paulson, you know, who was the head of the treasury? If I remember right. Um, he had come out and he went in front of Congress and it said that we need $700 billion to save wall street and, uh, or else the, the whole system was going to collapse.
And I remember wondering to myself, like what kind of system needs to be rescued because, and how was $700 billion going to solve it? Because if the system is broken, then why don’t we fix the system? But, you know, maybe that’s just me. And like, I always want to fix and tinkers with things and always question.
But, um, that was pretty much the end of it. At that point, I realized, you know what, I’m just tired of this whole, like, you know, investing in wall street and giving them my money and seeing the volatility. You know, um, and all the things that come with that, you know, being disconnected from what your investments are doing.
Um, not having a say in how some C-level executive or some hedge fund manager is what they’re doing with your money. And so I just, uh, just everything kind of culminated for me. And so that was what, like 10, 12 years ago. And then from then on, it’s just, I I’ve. I really always just kind of looked at alternative investments and it’s just really kind of been something that, um, I enjoy more, it requires a little bit more homework, you know, but it’s, uh, uh, for me it’s a lot more fulfilling and it’s a lot more empowering as well too, to know that I control my investments to a certain extent, you know, but a lot more and, and being a lot more connected to them as well, too, especially on the real estate side.
Seth: [00:07:49] Yeah. Yeah. I think you named a couple of the really big things there. And one is the volatility. I mean, it’s hard to imagine, like right now, because everything is just bullets, right? Everything’s going up, you hear about Tesla, hear about all these different stocks that are just like through the roof, but it’s not that long ago when it wasn’t like that.
And it’s not always going to be like that. It’s always going to be up and down, up and down compared to something like real estate or alternative assets where it’s just a lot more consistent. And the other thing that I heard was, you know, control. And then we don’t always have control in commercial real estate when we’re investing passively, so to speak.
But we do have control of where, where we place that money. And we have control over speaking to the people that we want to invest with and have a pretty good idea of what we’re investing in when we’ve at the properties, in the deal. So there’s a lot more control over what we’re, what we’re investing in.
Mo: [00:08:36] Yeah. Uh, spot on that’s what I mean by control. It’s, uh, it’s not that we’re making day-to-day decisions about anything. And ultimately I don’t want to make day-to-day decisions because I have enough day-to-day decisions that I have to make. Uh, um, and I’m sure a lot of other people do too, but it’s still, it’s the control in the sense that I can control if there’s a particular geographic market.
I like if there’s a particular asset type that I like, if there’s a particular, let’s say deal sponsor or management team that I like. Um, you know, if there’s a particular type of investment strategy that I like, and I can combine all of these factors and find deals that fit the criteria and that’s the control that I have, you know?
Seth: [00:09:15] Yeah, for sure. And so let’s go into some of those passive investments that you started out with. You have one of the most diverse, passive investment portfolios that I know. So maybe walk us through some of those.
Mo: [00:09:24] Yeah. So I’ve invested in, uh, uh, multi-family, I’ve invested in, uh, uh, and senior housing as well.
I’ve invested in office. I kind of wish I didn’t do that one. Uh, I’ve also invested in, uh, uh, industrial. Uh, I’ve done value add, I’ve also done, you know, ground up development. So I’ve done, I’ve done a mixture of all these things. I’ve done different, different geographic markets. And so, uh, you know what we just kind of mentioned, you know, just a couple of minutes ago.
I mean, You know, you can build essentially your own portfolio. If you want to call it, you know, where you’re taking different investment strategies and you’re overlaying them with different geographic markets and, you know, different sponsors or different management teams, and you essentially build your own portfolio and the different pieces kind of come together because if you’re using different investment strategies, then more than likely you’re taking different off, you’re taking different risks as well, too.
Seth: [00:10:20] And I mean, that’s the beautiful part about it is you can diversify, right? I mean, you just said it, you, you, you went over your portfolio. I mean, you went into industrial and office and multifamily and all these different things that you can invest in. And I think you’ve invested in even ATM’s before.
I mean, there’s just so many things you can diversify into, uh, within, you know, those, those passive syndications. So it’s pretty awesome. You’re able to do that and also across markets too.
Mo: [00:10:43] Yeah. Yeah, definitely. It’s uh, uh, and it’s, it’s. People starting out may be. I feel a little overwhelmed that they were done this top of passive investing before.
And, um, and there’s no reason I would say that they should be overwhelmed by it, you know? Cause if you take the time to really kind of understand what you’re doing, and sometimes it may take a matter of weeks or may take months, but you get to a point where you’re like, okay, I feel comfortable now. I’m gonna, I’m going to jump in and I’m going to invest, you know, because I like this particular type of asset class, or let’s say that I like this particular area.
Whether it be one that’s local to me, or maybe it’s not, maybe it’s an area or geographic market that, you know, is benefiting from the migration trends that we’re seeing right now in our nation. And so maybe that’s somehow resonates with people. Um, and so you just have to find something that, that you like, and that resonates with you.
And then, you know, just take action.
Seth: [00:11:35] Yeah. Yeah. I mean, you’ve got to educate yourself, right? I mean, you’ve got to get comfortable with, with reading doc, the documents, looking at different deals and kind of immersing yourself into it just to a certain extent. But at some point you’ve got to pull the trigger and just do it.
And I always talk about that. That first time you send out that far. $50,000 or 75,000 or a hundred thousand dollars wire. It’s a little bit nerve wracking, right? That first time you’re like, did somebody just take my money? No, you invested it pretty wisely, hopefully. So pretty, pretty interesting to hear that from you.
Um, maybe talk to us about investing passively versus actively. Cause you’re now on the active side, you do a lot of active investing, um, on the general partnership side. So, you know, how did you make that transition and. And, you know, what would you say to listeners who are thinking about either investing passively or actively they actively, they don’t know which way they want to go yet.
Mo: [00:12:26] Yeah. Um, that’s a good question. It’s, uh, they’re, they’re two completely different beasts and, um, you know, I, some people start off, you know, um, investing actively and they never even have invested passively ever. And, uh, there are of course, people that have actively or started passively invested and then they kind of transitioned to doing that.
Uh, on an active level. And, you know, for me, it was of course starting up, uh, Sibley and then kind of transitioning. And a lot of that happened because of, uh, you know, just really getting immersed into it. And, you know, when I, when I first got into commercial real estate and when I looked back on it now, you know, there was a, there were a lot of things that I wish I knew then that I know now, but you know, that, that kind of like growth, I guess, than that.
Desire to want to continue on and to become even more involved and to actually understand the other side of it and to be involved on the other side. And by the other side, I mean on the active side, um, of how these deals are done and how they’re put together, and also having that mindset of, you know, being a passive investor, looking at deals passively and understanding what passive investors.
Want to see and what their concerns are and also understanding risks well as well too. Cause that was something that I think probably the biggest thing in, you know, from beginning to where I am, when I first started to where I am now, I think the biggest thing is probably risks and understanding risks a lot better and being able to identify risks and then at the same time, being able to take them and.
And qualitatively, like digest those risks and then thinking, okay, is this something that is that uncomfortable with, and is it something that I want to move forward with? You know? Um, and that’s something that I think is probably the hardest part maybe is for people first starting out is because everything looks risky.
When you don’t, when you just don’t have the knowledge, but I think once you start to get it, then the level of you feel more comfortable because you feel more certain about certain things. And of course we’re talking about investments, there’s always going to be risk. You can’t eliminate every risk, but it’s all about a matter of identifying them and understanding of these risks that are there.
You’re comfortable with.
Seth: [00:14:38] Yeah, and I think that’s a common misconception with real estate that it’s inherently risky. I mean, any investment is risky. Real estate is risky. Stocks are risky, but I think the riskiest part is just having one stream of income. That’s what I preach. It’s if you only have one stream of income, that’s the riskiest position you can be in.
So you’ve got to create these alternative assets, asset streams for yourself.
Mo: [00:14:59] Yeah. Yeah, exactly. And that was a, that was a major thing for me. Um, let’s say my journey let’s say was, you know, reading a cashflow quadrant from Robert Kiyosaki, you know, and understanding that, you know, um, the whole paradigm of how people are told to invest is you put away a bunch of money in a 401k.
You’re going to go and primarily invest or entirely invest in, uh, securities, you know, Mutual funds, stocks, bonds, whatever ETFs, because most employers are the custodians of the, that most employers are using. They only allow these types of investments. And then you’re going to build this huge nest egg of paper assets, which provide very little if any tax benefits.
And then you’re going to go to retire one day. When you’re, I don’t know, 60, 65 maybe deal. And then you’re going to slowly start to liquidate all these assets. And who knows where when you take into consideration, volatility is going to be, how are you? Are you going to feel comfortable, even retiring? I mean, look at people that maybe wanted to retire, you know, when they’re maybe in their early or mid sixties and they were ready to retire, what did they do?
You know, when the last global financial crisis hit and the stock market tanked and. I know you can kind of look at that situation and it’s a little different than what’s happened just recently last year, because it took several years for the stock market to recover to where the pre-crash levels were.
Um, and of course what happened last year is that it’s more than recovered in less than a year. So I, again, you just never know right. In that volatility aspect and is, can affect you pretty, pretty dramatically. And then you go to liquidate and then now you’re living off your you’re liquidating on a monthly basis assets in order to pay your expenses and the cover your costs.
Well, why not just trying to acquire assets that generate income versus assets that you have to sell and liquidate. So it’s a complete different line of thinking and it was something that I never thought of until I read cashflow quadrant and rev. Some of Robert Kiyosaki’s works then, um, that was, that was a real game changer for me when I, when I stumbled upon that years ago.
Seth: [00:17:07] Yeah, it’s just something we’re just, we’re we’re not taught that in school and you shouldn’t, we should read rich dad, poor dad when we’re probably in middle school, you know, I mean, you should be. Opposed to those types of ideas when you’re young, um, rather than like you, and I way, way too late, right? I mean, you should have read it when we were young.
Um, but it, it changes your mindset and it gets you out of that. Like, okay. Work nine to five till you’re 65 mindset. Cause that’s just an old school way of thinking. And when you really break it down, like you just did, it doesn’t make any sense. It just makes zero sense.
Mo: [00:17:39] And he says it all the time. He talks about how there’s no financial education.
And he talks about how the system doesn’t want you to have it. Um, and, and he’s right. You know, because they want you to do what they want you to do. And yeah, there’s, there’s some people in there that kind of stray off straight away, you know, from the rest of their herd, let me be like you and I, and, uh, you know, we stumbled upon, you know, the holy grail, if you want to call it.
And, you know, we ended up doing something different. Um, but what’s interesting is when you look at the alternative assets space, You know, it’s continuing to grow. When you look at the amount of investible capital worldwide, um, it’s increasing year by year. And a lot of it has to do with, you know, what’s going on in the markets.
For example, like the stock market is, is having difficulty arsons that has ever been having difficulty, but there’s, there’s no yield anywhere where it’s very hard to find it. And so pension funds and sovereign wealth funds and financial institutions and so forth. They’re, they’re looking for yield somewhere.
Uh, just because of where, how low rates are because the monetary policy by how many of the central banks and so more and more of them are turning to alternative assets to get the returns that they’re looking for. And of course, they’re trying to do that at the same time without having to take excessive risk.
Seth: [00:18:56] Yeah. Yeah, for sure, man. Let’s switch gears a little bit. Um, I I’ve heard about this empowered investor methodology you put together. Um, I’d really like you to dive into that and talk about that and tell us what, what, what is that.
Mo: [00:19:11] It’s, uh, it’s kind of a reflection of kind of, you know, the experiences that I went through and, and, you know, talking to people, you know, over the years when they would ask like, oh, well, what is, how are you investing in commercial real estate?
And what does a syndication and, you know, alternative assets and, you know, and of course, you know, for some time now the word alternative maybe kind of has a, uh, Uh, kind of, it’s almost developing, you know, a negative perception or connotation to it where they think that it’s some type of like something on the fringe, you know?
And it’s, I would say that it’s going to complete opposite because like I just mentioned, you know, the, when you look at the global investible capital, More and more of it is going into alternative assets and, and maybe one day me or someone else will come up with a better term or a name for alternative.
But at this point it’s basically anything that’s non-stock market or paper related, you know? Um, and I should be careful when I say paper, cause you know, you can invest in notes, for example, like note investing and that’s paper, you know, but by paper, I mean specifically like investing in stocks and bonds and ETFs, but yeah.
The five-step method. Uh, I call the empowered investor method and, and, um, it basically speaks to, uh, of this five step process. And it’s actually based on what I call the five E’s. So the first E is ethos. The second E is, um, educate. Uh, the third E uh, is evaluate the fourth one is execute and the, and then the fifth step is empower.
And so the, the five step process, you know, is kind of like a roadmap for someone who either has been investing or. Whereas, no idea how to invest either in commercial or alternative assets. And if it’s all built on a foundation of the first D, which is ethos, which is your mindset and your thinking and your beliefs, and we’ve already kind of mentioned, you know, the beliefs and the thoughts that people have, or some of them, at least, you know, when they think that.
They need to invest like everything, everyone else investing in the same vehicles, investing in the same types of retirement plans, investing in the same asset classes. And when you look at the alternative universe, it’s so much bigger, you know, um, than investing in stocks and bonds. I mean, we’re talking about investing in crypto.
We’re talking about investing in commercial real estate. Investing in fine wine and collectibles and, you know, investing in, in liquor stores if you want investing in mobile home parks. So when you think about the, when you think about alternative, it’s actually so much bigger than in terms of variety and depth.
Then the traditional world of investments that most people have been geared to invest in. And so the five E’s is basically a kind of a roadmap to get people from that first step of changing their mindset, changing their beliefs. And then it culminates into this like empowered step where they feel like they’re in control and they are, and also not just in control of the direction, but also more connected to their investments as well too, because one of the.
One of the themes of the whole empowered investor methodology is the fact that I think more and more people, um, they, they don’t like the fact that how their money’s being used. And, and I know I’m going on a little bit, but you know, I’ll tie this back in with what happened in the last global financial crisis.
You know, with the occupy movement, do you remember there all these people that, you know, they went and they were hitching up tents and, and parks and corners and all this other stuff. And, you know, they were trying to buck the system well, and it was funny because even a lot of like professionals at the time that I knew, uh, were upset, but.
Within a matter of weeks or a month, once they were putting their money back and 401ks and investing in wall street. And it was kind of like, well, I thought you disliked that whole system. Right. But there were back partaking in that system. And I think something important that people should probably realize is that instead of trying to rework a broken system, just go make a new system.
You know, we’re not going to fix wall street. We’re not going to fix, you know, this, um, the. The fact that, I mean, we can even talk about GameStop, right? I mean, that’s a perfect example about how to a large extent, a lot of it is rigged against, you know, the average person. Right. And, and how in essence, you know, were not nearly as powerful, even if we’re acting in mass or in a large group compared to like the forces at play.
And so why try and change it. You know, I think it should be changed, but I could just concentrate on something else on, on other asset classes and invest in other ways. And part of the empowered step is being connected to your investments and investing in commercial real estate. Something that you can drive and go see you can go and touch it.
You can go see the lives that it’s, that it’s affected. Hopefully improved. I should say, and you know, or it’s provided some societal benefit. So that’s what I mean by this connectedness and this empowered feeling that, that people then get, because now their money is being used, not just to build wealth, but also to improve communities and lives.
Seth: [00:24:20] Yeah, definitely, man. I love, I love the ethos and educate portions of that because if you get your mindset and the education piece pieces together, it just kind of, it opens your mind up to all those different things that you mentioned about, you know, investing in mobile home parks or apartment buildings or crypto, or all these different things that are outside of the traditional assets that we all know about.
And, and, and it just allows us to just. Start thinking on a different level about how we can diversify into different types of things. And I, I love what you said about trying to, you know, why do we try to fix the system? I mean, you can see from the last few months about trying to, trying to, you know, take it over and try to try to rig the game in our favor and it just doesn’t work.
You can’t do it. W we’ve been doing it the wrong way for so long. Why fix it? Let’s create our own economy and invest in different types of things.
Mo: [00:25:10] Totally. I totally agree. You know, if, if wall street didn’t get, you know, the, I don’t even know how many hundreds of billions of dollars or more a year and money that people pour into the stock market and, you know, the poor into, you know, uh, mutual funds and fund managers, collecting fees regardless of how they perform.
And, you know, if, if people withdrew from that system and I’m not saying that that system shouldn’t be there because really, you know, it’s, it’s, it’s all about, you know, Uh, companies that go from being private to them being public or raising capital, because they want to take that capital. They want to do something with it.
But in a lot of cases, you know, the system has gotten to the point where it’s like, you look at valuations of certain stocks and you know, it almost kind of reminds me of, you know, the, the.com days again, you know, and I don’t want to name any particular stocks, but, uh, I think people know which ones they are, you know, and, you know, it’s like, Well, why do I want to be part of that?
Because like you said, you can withdraw from that system and participate in other systems. And this is one of the things that I know that, um, for example, people that are heavily involved in crypto and blockchain, because these are all decentralized systems, right? And these decentralized systems, you know, are outside of the traditional, let’s say banking or the traditional system of, with financial institutions.
And so, uh, that resonates with a lot of people. You know, it also allows people to invest in things that don’t have, um, that can’t be, uh, expanded or inflated. Let’s say. You know, so if you have, let’s say like a Bitcoin that can at most we’ll ever have 21 million coins, you know, um, in essence, it’s, it’s very deflationary, right?
It’s, there’s always going to be scarcity there just by virtue of the fact that there’s a finite supply. And I was explaining to somebody just recently, like, When you think about it, not even gold is finite. Well, I mean, I guess at this finite, because it’s only the goal that exists on our planet, but you know, if you’re willing to spend more and more money in terms of extraction and production costs, you can always go and find more gold, at least as far as we know about this point.
Um, but something like Bitcoin. You know, which, you know, we’ll never have any more than 21 million. If that’s known, you know, then that can’t be changed. And so you already know what that finite supply is, who knows? I mean, maybe one day, you know, someone will be able to dig, you know, miles in the ground, which I know they do in parts of the world, like in South Africa.
And they can extract gold, you know, where it’s like 120 degrees or hotter, you know? Cause they’re so far deep down in, you know, uh, mines and so forth. But, you know, can someone truly say how much gold is known in the world? That hasn’t been mined. I mean, maybe someone tried to estimate it, but again, it comes back to Bitcoin where it’s like a known supply and a, I know I’ve gone off on a tangent on the whole Bitcoin thing, but again, it’s, it’s part of that whole universe.
And people look at that and they think, oh, well, it’s, uh, I remember a couple of years back, like people were saying, oh, this is, uh, this is the tulip mania again. And I was like, Yeah. Okay. The price run up to $20,000 in late 2017 was, was, was abnormal. Let’s say, um, that was definitely a lot of speculation, but I told people that you gotta really understand that there’s, there’s a bigger story behind all this.
Don’t let the speculation, you know, throw you off. And now you look at Bitcoin has more than doubled that, you know, in less than three years,
Seth: [00:28:37] Yeah, pretty insane. Pretty insane, man. So let’s say we we’ve graduated from the school of the empowered investor methodology. We’re looking at, let’s bring it back into kind of your traditional types of deals when you’re looking at a potential deal.
You know, what are some of those things you look for? Cause you’ve looked at a lot of different types of deals. So I guess we can kind of keep it general, but you know, generally we look at the market, the deal and the sponsors. So what are, what are some of the specific things within those three, three items that you look for?
Mo: [00:29:07] Yeah. You know, one of them obviously is going to definitely be, you know, when you’re looking at the people involved, you know, and there’s that element of, you know, the, the sponsor of the management team, you know, um, what experience they have, you know, what is their track record? And it doesn’t always have to be in real estate.
I mean, yeah. You want them to be real estate? You know, you want someone or one or more people on the team. Uh, but I think a good team also has a mix of people as well, too. And I think it’s also good that you know, that there are people who have been involved and they’ve been at least through someone on the team that has been through one market downturn.
I think that’s important. So, you know, they’ve been through a recession. Um, and so they know kind of what that pain feels like. And hopefully they also know what needs to be done when you do go through something like that. Cause you remember talking about investing in, um, that, you know, we’re holding onto for years at a time.
And so we’re not, it’s not like stock market investing, obviously where you jump in and you can jump out, you know, literally like seconds or minutes later, if you, if you think like you made, you made a wrong mistake, you know? And, and I think a lot of, uh, commercial real estate investors, they understand that.
And so I think they always tread cautiously, um, but definitely understanding who the management team is and understanding the particulars of the deal and understanding the market and why they’re getting into it. You know, for me, a big thing is understanding, you know, the underlying fundamentals and the drivers.
So for example, whether it be in multifamily or let’s say senior housing or industrial, you know, what are the drivers there because. If you’re investing with a long-term trend and that is in your favor, then, you know, that’s hopefully will bode. Well, then it’s a matter of making sure you’ve, you’ve looked at the sponsor team.
Uh, the geographic market checks off and the actual specifics of the property, you know, they look good as well, too. And, and as part of all this, you know, it’s identifying risks and I think that’s something that people don’t do enough of. Uh, it’s easy to kind of see the upside. But I don’t think too many people understand or trying to evaluate what all the downsides are.
And I think that’s a, that’s a very big thing that I’ve learned myself is being able to look at a deal and seeing all the potential risks and figure out like, which of the risks have been mitigated for. Um, and, and how they’ve been mitigated. And in what way have they been mitigated and also understanding, um, do all those risks taken collectively?
Do I feel comfortable with them, you know? Um, no one’s going to sit around and do a decision tree analysis and assign probabilities to all these various risks. Cause that’s impossible. You know, you know that that works in school and probably in academia where you can try and estimate risks and give a probability to it all and, and do a whole decision tree analysis.
Uh, like I remember doing a college, but. In the real world, it really is about qualitative. You, no one really knows, but you have to identify the risks first and then kind of understand, you know, do, do they sit well with you? You know, do they align with what you’re, what you’re looking to accomplish and what your investment goals are?
Seth: [00:32:12] And we’re talking about risk adjusted return, right? I mean, if there’s more risk, let’s say if it’s a development deal, then do those returns that they’re promising. Do those meet that risk? Are they, are they worth taking that additional risk for those additional returns? And you’ve kind of got to just balance those things to figure it out.
Mo: [00:32:33] Yeah. Yeah. And it’s, it’s really, it’s really just a qualitative analysis. You’re like I said, you’re not going to be able to assign numbers and, um, and no one should I, and I, and I should, I should make that clear. Um, I don’t, and I don’t know anybody who does and anybody did. I don’t even want to do that.
It’s, it’s, it’s really just a matter of, a lot of it comes down to experience and I think a feel like, does it feel. Right based on what you know, and what you’ve seen and if it feels right, because all the things seem to line up and it feels like, you know, um, the, the team and the people involved in on the team have been able to mitigate for risks, uh, where as many of them as possible.
And again, like you said earlier, like all investments carry risks, you know, there’s no way around that all investments carry risk because risk just means there’s uncertainty. You know, and some risks, you know, they’re, they, can they actually turn out in your favor? Right. You know, we, we think of risks as being negatives, but they can actually be positives.
Right. So there may have been some type of risks and the risk may actually have turned out favorable in your, you know, um, in the action. And when I say favorable, I mean, in the favor of the investor and the, and the deal sponsor, right. But we always tend to think of risk as something that’s bad, but sometimes it works in our favor, you know?
Um, and that’s important to understand that there’s. Uh, threats and opportunities, I guess, you know, some risks, you know, uh, can be utilized in terms of, in a good way, in a positive way. And it, sometimes they work out negatively and it’s always the negative ones that people try and focus in on. And it’s important to also understand that, you know, maybe if you have a risk that could be, that could turn out to be a positive, then maybe what you want to do is you want to try and, you know, figure out a way of making sure that that likelihood of that event is more than.
Can more than likely happen versus mitigating for that. Right. So when I say mitigate, I’m talking about mitigating for the negative outcomes, not the positive outcomes, right
Seth: [00:34:27] Yeah. We don’t want to mitigate the, the positive outcomes for sure. All right. Maybe before we jump into the Freedom Four what’s one last golden nugget for our listeners?
Mo: [00:34:38] Golden nugget…
Seth: [00:34:40] Very general. Very general.
Mo: [00:34:44] Uh, wow. Well, um, I, I think I would say to the listeners, if they’re, if they have. Never invested in alternative assets and especially in commercial real estate, I would say that I would highly recommend that they do. And I’ll give a few reasons for that. You know, right now, I think more so than at any other time in our history.
I think that, um, the middle-class especially, um, professionals and people. Who have, you know, uh, careers and that have, you know, um, incomes and they’re doing fairly well. I think that now we’re rather versus any other time in our history, you know, the middle class is I think, on the verge of really shrinking even more.
So, you know, there it’s, it’s been diminishing over a number of decades now, largely because of globalization. Right. And so now, you know, people in lower. Uh, skilled jobs, we’re competing against people in other countries. And so that that’s shrunk the middle class, especially manufacturing jobs to quite an extent, but you know, over the next five to 10 years, there’s a lot of other things taking place, for example, like automation.
Um, and that’s going to affect professional level of positions as well. And, you know, there’s also other things going on. Like when you look at the monetary and fiscal policies, when you look at what central bankers are doing and how, uh, they’ve telegraphed, or they basically have stated, you know, as recently as when I was reading the FOMC minutes from the, from December of last year, you know, they basically said that they’re going to continue, you know, flooding the system with liquidity and making, you know, barring rates as cheap as possible.
And we know that one of the things that their policies have done is they’ve increased asset prices. So those people, that own assets, okay. They’ve experienced, let’s say some, some that wealth effect from that. So their wealth has increased, but there’ve been a large segment of the population where there’s this growing wealth and income.
Uh, gaps that are taking place. And I think now even more so than ever people in the middle class, which is going to continue to shrink and get smaller, I believe it’s important that they make the right decisions with their investible capital. And so I’m largely talking to professional level people because even some of their jobs too will be effected by automation and things like AI and other, other trends that are taking place.
And even more reason. Not just to make sure you’re making right decisions, but to have other streams of income as a, as a safety blanket, right. As to make sure you have a bit of a cushion. So if you know, the next recession happens and you get laid off, or maybe your job is affected by automation, people don’t even understand that.
For example, like, um, a lot of, a lot of articles now, and a lot of like things in, in newsprint is actually generated by AI. It’s not a writer or an, or an author. That’s actually writing a lot of this stuff. Now it’s actually all are, are mostly written by, you know, AI and algorithms. And so, you know, journalism, which was already like, you know, um, without getting into fake news, but, you know, journalism has been affected by AI and most people would have said, well, that’s a professional level position.
Right. And so, you know, and so more and more jobs are going to be affected. And I think it’s even more important that people understand that if they have investible capital, they need to make the right decisions. And I know I’m giving a long explanation on the, uh, uh, to the question, but I would also throw in as well to, uh, also look at what fiscal policies are taking place.
And this is not a commentary to be political in any way, but just look at the trillions of dollars that we now embark on in deficit spend annually. And that was a lot of money. That is a lot of money and someone has to pay for it. So it’s either going to be paid by way of inflation, you know? So the loss of your purchasing power, it’s going to be paid by way of the debt increasing.
Um, and so. Either way everyone gets affected, you know, inflation affects everyone. It affects people on the lower end of the scale. Let’s say, you know, disproportionately, but it affects everyone. So the loss of your purchasing power, um, and hopefully if you own assets, then you know, the, the appreciation you feel in your assets will be effected by will be positively affected by that increasing of the wealth gap.
But, uh, I think the next five to 10 years are going to be very, very tumultuous and it’s important that people invest prudently and, and, you know, kind of take that more empowered position with, with what they do.
Seth: [00:39:24] Yeah, you’ve got to take control of it and do your best to create your own economy. So to speak.
I hear a lot of people talk about that so that you just have more control and you’re not just dependent on that one single income stream, and you’re not worried about who’s going to be the next president, cause it’s not going to affect you as much because you’re already taking control of your life and your finances.
Exactly. Yep. All right, man, let’s jump into the Freedom Four. What’s the best thing you do to keep your mind and body healthy?
Mo: [00:39:55] Yeah, you know, right. And exercise. So, um, uh, it’s important, you know, to oxygenate the blood. Right. And it helps with the thinking. It helps with your health and, uh, you know, uh, several times a week, it’s important to like, you know, really exercise and to really like eat well, too.
You know, so one of the things that I’ve done, you know, over the last year or so is really cut down on sugar, for example. And, um, you know, I think taking, taking control of your body and your health, I think is a very important thing. And I think it also kind of like. Brings that like empowered sense too, where it’s like, you don’t feel like you’re lethargic.
You don’t feel like you’re, you’re constantly tired. Um, you know, nobody likes to have a few pounds, you know, on them. And when you take control of your health and your body, then it just kind of like, you feel like you want to take control of other things in your life too. You know, everything just like has like a cascading effect.
Seth: [00:40:52] Yeah, for sure. It’s definitely like a holistic type of thing. I did the whole 30 last month when you cut out alcohol and sugar and, you know, dairy and pretty much everything. So it’s the first couple of weeks are rough. And then after that though, you feel great. I mean, your mind is clear, you’re sleeping better, that you don’t really miss those foods anymore.
It’s crazy how that, that just kind of changes you, you just have to work your way through the hard part.
Mo: [00:41:16] Yeah. Yeah. Definitely like, like intermittent fasting. Like I try not to eat late at night. Um, most days I will not have breakfast at all. So, you know, the first meal of the day isn’t until well into the late morning hours, if not sometimes even like lunch is the first time I’ll eat, you know, other than maybe some, some water or some other, like for tea or something in the morning.
And you know, that, that seems to help tremendously as well, too. Um, and there’s a lot of health benefits to intermittent fasting and, uh, you know, that’s, that’s, that’s something that, that I’ve done. And I read so many good things about it. It gives your digestive system, you know, kind of a break. You know, the very active eating actually creates free radicals in your body, which, you know, ages you and has other health effects as well.
So, and that’s even if you eat well, just the very fact of your digestive system working creates free goals. And so that was very eye opening when I, when I first found that out. So, uh, just something, maybe another tidbit, I guess, with people to kind of look into, if they’re not already, they’ve never heard of it.
Truman, fascinating. The health benefits of it.
Seth: [00:42:15] Yeah. Yeah, for sure. I’ve heard a lot of good benefits from that. I do it naturally. I don’t, I don’t really eat breakfast. I just need a lunch and then a dinner and then I go like 16 hours without eating again.
Mo: [00:42:22] Yeah. And that’s actually supposed to be really good for your blood sugar as well too.
Cause it kind of gives your blood sugar, uh, is able to kind of stabilize for a longer period. You know? Um, I mean I, and I even read there, our ancestors never ate three meals a day, so there’s an evolutionary reason for it as well.
Seth: [00:42:37] Makes sense. It makes sense. In an alternative universe where you weren’t involved in your current businesses, what would you be doing?
Mo: [00:42:46] Wow. Um, in an alternative universe, will I probably be about six foot seven and I probably could have an NBA. I would be averaging about 26 points, a game, uh, 10 rebounds and maybe about seven or eight assists. I
Seth: [00:43:00] love that, man. I think we have the same dream. I held onto that even through high school, even though I was five 10, but I love it.
Where were you at five years ago and where do you see yourself five years from now?
Mo: [00:43:13] Well, five years ago, I felt like I was, um, I felt like it was still trying to like, kind of figure things out. Um, and I still am, and I think five years ago it was, it was still trying to better understand, you know, alternative investments, trying to better understand kind of like, you know, where I fit into all that, you know, in terms of like my investment thesis.
And I’m really trying to understand, like, you know, the bigger picture and the trends. And so I embarked on this, this kind of like book reading, you know, uh, I don’t know if you want to call it a journey, but you know, for, there was a few years there where like, I just read dozens and dozens of books about all different types of subjects.
And I, and I took the time to really kind of like broaden my horizon, let’s say, and I read books on all different topics. The topics from, from geopolitics to, to health, to how, um, our monetary system works, you know? And, uh, it really kind of like gave me a bigger picture view and it gave me an appreciation for how so many things are interrelated and interconnected.
And back then, I didn’t really quite see it or understand it. And I know there’s a, there’s a simplicity to our human mind. And that kind of also falls in line with kind of like the first step of my method of the ethos is, is also, and also actually say the first two steps where it’s about understanding that there are a lot of things that are interconnected and there are trends that take place and understanding, you know, where those trends are going.
And I’ll give a good example, like in commercial real estate, understanding. You know, what are the trends in multifamily? What are the trends in senior housing and some of these other asset classes, because like we mentioned before, you’re investing for the long term and when you’re investing for assets, you’re going to hold anywhere from five to seven or more years, you want to know what those trends are and whether or not you’re investing, you know, in line and parallel to what those trends are.
And so I always like to look at, you know, the bigger picture and then I kind of hone down on more of kind of a granular micro level. And, um, five years ago, I didn’t feel like I have it, or I had it, I should say. And now I feel like I have a much better appreciation for it. And I’m always trying to learn more and always trying to piece together other things and see whether or not there are pieces that fit into the puzzle or maybe they don’t.
And then when you realize that don’t you just kind of discarded and then you just kind of move on. Um, and that’s kinda like one of the reasons why written some of the eBooks that I had was a kind of pass along some of that, uh, that knowledge, you know, and sharing that with others
Seth: [00:45:53] Five years from now?
Mo: [00:45:55] Five years from now.
Thank you. Um, I forgot about that part. Well, you know, I, I don’t want to sound cliche, but hopefully having made a difference in, you know, helping people help other investors kind of realize the benefits of. Alternative assets and alternative investing. Um, I would say that one of the things that I really dislike, if it hasn’t already come out so far is I really don’t like, you know, uh, systems that take advantage of people and yeah, largely, you know, uh, wall street has turned into one of those systems and, uh, so helping people realize.
You know that they don’t have to participate in that system where at the very least maybe they can minimize their involvement. And so it’s almost like I’m hacking into the matrix, right? You do it on your terms, not when not sort of always being plugged into it. Maybe you want to invest in the stock market or have that to be a certain part of your portfolio.
And that works very well. And I think you can be very successful, but I think also understanding and building a larger portfolio that includes at least some alternative investments, especially in commercial real estate. And combining that with stocks and other things, you know, I think is a, is a better way to go and helping people come to that realization.
And if I can be a part of that movement like you are, um, and helping people get there, then you know, that’s, that’s what I love more than anything else.
Seth: [00:47:16] I love it, man. Love it. Last but not least, how has passive income made your life better?
Mo: [00:47:23] Cause that just an extra sense of having income that comes. You know, from another source other than maybe what you do, or if you were maybe, you know, there are some passive investors out there that literally make, uh, make a living off of all of their passive income.
And so, but they have multiple streams of income. And it’s, it’s not an easy thing to do by far. Uh, I will, I will attest to that. Uh, I’m certainly not there. Uh, but you know, when you have multiple streams of income coming in from your various investments, you know, you have, uh, you have a sense of like, oh, okay, well, if, if something were to affect your livelihood, in some way, if you have an illness or an injury, you know what we do, you know, what most people end up doing is they have to liquidate assets, right?
But instead of liquidating, if you have passive income coming in, you know, maybe it covers some or most of your expenses and you’re able to kind of weather the storm, let’s say. And, you know, I think that type of like comfort, especially moving forward, like I said, over the next five to 10 years, I think that’s going to be even more important for people to have multiple income sources and to actually be able to rely on them, or hopefully they won’t have to rely on them, but if they ever had to.
Then, you know, just having that sense of security that, you know, I’m okay. I’ll be okay. I can, I can weather the storm and, and I can get past it. Yeah.
Seth: [00:48:46] Love that answer, man. Love it. Uh, let’s wrap it up brother. Where can our listeners find out more about your Mo?
Mo: [00:48:52] Yeah. Um, my website is a high-risecapital.com and, uh, I have a free book. So if anyone’s interested, you know, they can sign up for my newsletter and my ebook. It’s called More Doors, More Profits. And I’ve just recently finished writing two more, one on investing in senior housing and also one on investing in industrial. So these are, these are three great asset classes that I like.
And these aren’t the only ones I I’ll, I should say, um, that I like in commercial real estate, but these are definitely three that I’ve been focusing on. And, uh, those are three that I I’m basically trying to bring attention to, to other investors out there.
Seth: [00:49:35] That’s awesome man. I highly encourage everyone to look up those downloads and download those books.
There’s so much great content in there. I mean, he should be selling these books, not giving them away for free, so it makes sure you download a copy of those most. Thanks again for having for coming on today, man. Really appreciate it.
Mo: [00:49:51] Yeah. Thank you, man. It was, uh, it was a pleasure being on. Thank you so much and thank you for.
For helping spread the word to all your listeners out there about the tremendous opportunities that exist in alternative assets.
Seth: [00:50:02] All right. Always a pleasure talking finance and investments with Mo if you want to expand your knowledge about global financial trends, real estate, and just about anything else on this planet, talk to Mo he has something intelligent to say about it.
It will also make you realize how much you don’t know. Major key root wine and go back through the empowered investor methodology. And it all starts with education and awareness. To learn more. I invite you all to join EPIC – our Esquire Passive Investor Club by going to passiveincomeattorney.com and clicking “join the club.”
Until next time my friends, enjoy the journey.