22. Forcing Equity Instead of "Buy & Hope" with Buck Joffrey
Buck Joffrey is a surgeon turned real estate professional with nearly $1 billion in real estate transactions including $400M in current real estate assets under management. He is also a financial educator focused on alternative assets. He runs a fantastic Community called the Wealth Formula Network and is host of the Wealth Formula Podcast as well. In this episode, Buck talks about the keys to forcing equity, investing in multifamily, self-storage and ATMs, and how to vet a sponsor.
Buck talks about how good students usually stay on the career path rather than become entrepreneurs and he was on that track until he discovered Cash Flow Quadrant by Robert Kiyosaki. That book helped him realize he wanted to be an entrepreneur and he followed that path which led him to real estate.
Buck discusses that the focus of his multifamily investing is not to “buy and hope”, rather to buy and force equity by increasing net operating income. He mentions that the math is simple, but you need a great operator to make it actually happen. He talks about Western Wealth Capital and their strategy to force equity and they prefer properties that are significantly underperforming which gives them plenty of room to force appreciation and provides velocity of money for investors.
Buck talks about self-storage and how the strategy of forcing equity applies there too – he mentions buying underperforming “mom & pop” properties that haven’t kept rent up or have space to build more units to add value to these businesses. He also mentions that it is sometimes easier to increase rents because the rents are lower in dollar terms than multifamily.
Buck discusses ATM’s and why they are a good investment, but not a replacement for real estate investing. The cash flow and returns are good, but the bonus depreciation is what makes the ATM investment really attractive. He also discusses using life insurance cash value or a HELOC to amplify the returns from ATM investments.
Buck talks about how to vet a sponsor and investing with sponsors that you know, like and trust who have a legitimate track records. He also talks about bridge debt and in what situations he would use it.
Podcasts he recommends:
To connect with Buck go to wealthformula.com.
If you would like to contact Jim Pfeifer, you can email him at jim@leftfieldinvestors.com or if you would like to find out more about Left Field Investors go to www.leftfieldinvestors.com.
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