How Airline Pilots Build Wealth Through Real Estate, Private Credit, and Oil & Gas Investing

Tait Duryea (00:00)
In traditional retirement planning, we blow up the balloon inside of a 401k and then we deflate it in retirement. We hope that it doesn’t run out before we die. That is ridiculous. That is not how the ultra wealthy play the game.

the ultra wealthy buy assets that cash flow and they live on the cash flow and they pass that golden goose down to the next generation. And you can do that whether you’re passive or active through trust structuring and investing alternatives that generate cash flow.

Dylan Silver (02:03)
Hey folks, welcome back to the show. Today we’re joined by Tait Duryea founder and CEO of Turbine Capital, an alternative investment firm focused on commercial real estate, private credit, and energy investments across more than 20 states. With a background in aviation, he has built a niche investor network primarily made up of airline pilots while scaling investments throughout the lower 48. Tait , thanks for joining us today.

Tait Duryea (02:28)
Thanks for having me, Dylan. You nailed it.

Dylan Silver (02:30)
Now, you’ve got a unique background, I think especially compared to a lot of real estate investors going from airline pilot into real estate. How did that transition come about?

Tait Duryea (02:42)
Yeah, it’s a good question. So I kind of had a dual track. So I didn’t necessarily, you know, fly and then decide, I want to get into real estate. was actually the opposite. I’m a third generation pilot, airline pilot. ⁓ My grandfather was an airline pilot back in the 40s through the 70s. My two uncles on my mom’s side were both airline pilots. so I started flying airplanes when I was about 11 years old. Had to have cushions on the seat so that I could see over the dash.

or the panel as we call it, you know, in the Cessnas. And, you know, that was always really fun. I loved that industry. But I got a hold of Rich Dad Poor Dad way too young. I think I was in eighth grade or something. And that really that gave me a look behind the next bend. And it was like, you know, I couldn’t quantify why my uncles who were making

really good money at the time, I in today’s dollars, half a million dollars plus per year in their W-2s. And I’m reading books about school teachers that have retired themselves in a decade by investing in real estate. And I couldn’t reconcile why they weren’t living a more elevated and wealthy life while ⁓ people who are in real estate investing were. And so that opened

this curiosity window for me. And I almost went into real estate and entrepreneurship and business directly out of high school. I wanted to go to business school, become an entrepreneur, become, you know, do something in real estate. And I’m really glad that I didn’t. ⁓ You know, there were a ⁓ few events that led to me flying instead. And I’m actually very happy that that transpired because I had just an amazing

career as a very young man in aviation. I mean, I got to start flying airplanes when I was 17 years old. In my first year of college, I was a flight instructor by the time I was 18 and pretty cool as a 18, 19 year old having access to a bunch of cool airplanes teaching other people how to fly as a flight instructor while I was going through college. And then I got to fly cargo and I flew on a military contract and I ended up getting hired by the airlines.

when I was 23. And boy, I mean, you get a six figure income, 15, 18 days off a month and free travel all over the world. It’s like, what a way to spend your 20s. But I never lost that real estate bug. actually bought my first rental property when I was 25, kept buying real estate, kept studying it, started going to conferences, you know, got deeper and deeper into it until eventually I decided I wanted to make this more of a centerpiece of my adult career.

and I started my firm six years ago back in, started in 2020 before the pandemic. So that ended up working out pretty well in terms of just having time to work on it. And in any case, we’ve built this up to the point today where we are the largest network of airline pilot investors in the world. We are, like you said, invested across over 20 states. We participate in about six different verticals within commercial real estate.

Obviously with ⁓ various partnerships within each one of those verticals, we also do private debt and energy, which we can get into.

Dylan Silver (06:01)
Now, airline pilots, have they traditionally been looking for investment opportunities? Like if you look at the history of airline pilots in the US for decades, have they been folks who are real estate investors or is this something that has been maybe only in a niche portion of the airline community?

Tait Duryea (07:11)
I would say it’s a niche portion. It really depends. think that pilots are an interesting breed. They come in all shapes, sizes, and walks of life. I mean, you have the very technical people who are more those engineer types. You have the, you know, just the surfer bros. I mean, it just, it totally varies. ⁓ You know, there’s a common thread where, you know, I mean,

Pilots tend to be analytical thinkers and reasonable thinkers. They don’t overanalyze because you can’t, you know, I mean, if you have an engine failure in an airplane, you don’t have time to sit there and think for 30 minutes about what you’re gonna do. You have to act. so pilots tend to be very reasonable. But ⁓ it really depends. know, we have a lot of investors ⁓ and I mean, we have close to a thousand investors in our network.

And I mean, some are natural real estate investors. They caught the same bug that I did years ago. And maybe they were in the military and they bought a house in each place that they were stationed. And now they’re managing this portfolio. Others have no idea how to spell real estate. It’s like they own their primary residence and they’re paying off their mortgage as fast as possible, which makes my skin crawl. And I hear that because I’m like, why? They’re like…

I’m like, what’s your interest rate? 3%. ⁓ no. So I think that it’s been a blast building this platform because I think that just like doctors, mean, everybody’s kind of familiar with physician groups that have passive income MD and ascent equity group and white coat capital. And there’s all these physician groups out there. There wasn’t really a group for airline pilots. And so it’s been a blast to build this platform.

educate the broader aviation base about all of these unique strategies that you can use for tax mitigation and long-term wealth accumulation.

Dylan Silver (09:11)
For what it’s worth, I’ve seen a trend where it seems to be the case that people involved in the airlines in general, right, are interested in real estate and pilots more specifically. And I’ve had quite a number of pilots that I’ve come across with and a few that I’ve had on the show. And for what it’s worth, it feels like there’s maybe more momentum or more interest.

from pilots than in some other segments. I’ll throw in like pilots, police officers, and those are the first two that come to mind. Anybody in engineering.

Tait Duryea (09:44)
So

the common thread there is both have time off and when you’re off, you’re off. And that’s one of the most beautiful things about the aviation career. If you’re listening out there and you have a son, daughter, niece, nephew that’s interested in flying, it’s an amazing career. I don’t think there’s a ⁓ high income W-2 profession out there where you get paid more and you work less. ⁓

You don’t have to answer emails when you’re off. If you’re off for 11 days, you’re off. I you don’t have to answer your phone. You don’t have to answer emails. It’s incredible. And so I think that plays into it. Police officers kind of the same way. If you’re off duty, you’re off duty. Firefighters, ⁓ they’re able to dig into some sort of a side hustle or a different career because they have that bandwidth when they’re off.

Dylan Silver (10:37)
I want to ask you about the mentality when it comes to the pilots who are real estate investors, who are interested in becoming real estate investors. Are these folks who are looking to diversify or is this like a retirement plan or something that they want to do maybe after working for the airline?

Tait Duryea (11:32)
That’s a really good question. think the typical attorney answer, it depends. It depends on your personality type. I actually am a big proponent of passive investing. think that what we’ve built has taken a tremendous amount of time, effort, dedication, network, money to build a kind of platform like we have. I think that if you’re going to go out and buy

short-term rentals or long-term rentals or multifamily or whatever, and you want to have that in your portfolio, I think you need to wrap your head around how much work that is before you embark on that journey. Or if you want to just give it a shot, take a swing, go start buying properties. I think a lot of people are surprised how active real estate investing is and how much time it takes and how much there is to learn. And sometimes if you’re a doctor,

or you’re a pilot and you can make an extra 10 grand by working a couple extra days, maybe your time is better spent just picking up an extra trip, picking up an extra shift and just putting it into a debt fund or into a passive real estate deal where you don’t have to do the work. It’s much more scalable unless you’re going to really dedicate yourself to the craft, unless you’re really gonna dedicate yourself to learning how to manage properties effectively and build it as a business.

It’s difficult to get the economies of scale inside of a personal portfolio unless you get some economies of scale. ⁓ Accounting systems, property management systems, ⁓ entity structuring. mean, these are all things that are expensive and complicated when you only have a couple of properties. And I see this all the time where people end up buying a couple of rental properties and then there are these headaches that they just can’t wait to get rid of.

And they’re asking, can I 1031 into your deal? And I’m like, unfortunately, you can’t. can only do it at 1031 into a DST or into another property. But I think just, if you’re really, if you have that desire, great, go do it. Roll up your sleeves. You’re going to learn the worst case scenario. You’re going to educate yourself on what you like doing and what you don’t like doing. And maybe you go down the path to ownership. But I think your question was,

Is this a diversification strategy or is this something that gets people ready for retirement? It’s both.

In traditional retirement planning, we blow up the balloon inside of a 401k and then we deflate it in retirement. We hope that it doesn’t run out before we die. That is ridiculous. That is not how the ultra wealthy play the game.

the ultra wealthy buy assets that cash flow and they live on the cash flow and they pass that golden goose down to the next generation. And you can do that whether you’re passive or active through trust structuring and investing alternatives that generate cash flow.

I think that number one, yes, it is a diversification strategy. Absolutely. Because I think that most high income W2 professionals are way too heavy in the stock market, which

That’s great. Stock market’s been the best place to be over the last three years, but it shouldn’t be where all of your net worth is outside of your primary residence. So it is diversification strategy. And then of course, as you get closer to retirement, you’re shifting more from equity appreciation to cashflow strategies and capital preservation that all ties into to each other.

Dylan Silver (14:50)
Now, I do want to pivot here, Tait . ⁓ We had been talking in the green room about oil and gas, which is a segment of investing that very few people get into and even fewer people are able to stay in long term because I’ve been told that there’s actually quite a bit of difficulty not just getting in, but staying in for a variety of reasons. How did you get into oil and gas?

Tait Duryea (14:56)
Yeah.

Great question. Well, first off, I’ll preface this with airline pilots burn a lot of fuel. so, you know, if you’re curious as to how much fuel an airliner burns, if you look at a 777 going from, let’s say, London to LA, that thing’s going to burn about 150, 160,000 pounds of fuel just on that segment. Download an app called Flightradar24.

and look at all the airplanes flying around the world. And it puts it in perspective. And then consider that aviation is only about 4 % of global oil consumption. So I think that there has been a realization over the last, especially over the last six months with AI and the geopolitical turmoil in the Middle East, that the world, unfortunately, still runs on oil. And there has been underinvestment in the last

say two decades, due to a shifting towards green energy, which is wonderful. I’ve said many times on our show and on others that I’m a bit of an environmentalist, but I’m also a realist. And 87 % of the world’s energy needs are still fossil fuel based, even after trillions of dollars of investment. as we wean ourselves off of oil and that energy mix goes

from 87 % down to more of a 50 % number. The problem is the goalpost keeps moving. Our energy demand continues to increase. And that’s even before the AI boom, we were expected to be using 20%, 25 % more electricity in 2050 than we are today. that’s sort of to set the stage. Why oil and gas? I think there’s a realization that it’s a great asset class.

and it balances real estate very nicely. So we got into the energy business a few years ago. We ran a couple of funds in a different strategy to what we do today. But today we run an oil and gas fund called Waypoint and it is a diversified non-operated working interest portfolio. What that means is that we own a minority interest in a lot of wells that are being drilled and operated by

big companies, so big multi-billion either private or publicly traded companies. And we really like that strategy because it spreads your risk around and it spreads your returns and your risk. And ⁓ the tax benefits are undeniable for any high income W-2 professional.

Dylan Silver (18:33)
was just going to ask you about that because I’ve heard from investors who’ve bought Wells that it can be hit and miss. So with your strategy, you have the ability to not be so dependent on the acquisition of one well.

Tait Duryea (18:47)
Absolutely. If you ever heard somebody say like, oh, I lost a bunch of money in oil and gas, they probably invested in one, two, three wells and they were probably vertical. So we used to drill wells vertically. was like sticking a straw down into a cake and you hope that you hit something. mean, wells, as recently as 30 years ago, had a one in three failure rate. So 33 % chance you’re going to lose all your money. And this is where the tax benefits came from is

The tax benefits were written in the 1940s. They’re codified into the Internal Revenue Code in 1950s. They still exist for a very risky proposition. And yes, if you’re wildcatting, if you’re doing exploratory stuff, it can be risky. But what we invest in is horizontal drilling, which it’s more like mining. I mean, you have two, three, sometimes even four mile laterals. So you’re going down and then across two to four miles.

and you’re right next to a bunch of other laterals. And so you have all this data and you’re going right next door. the seismic that they shoot today is super advanced. have, it’s now it’s like one in a hundred that are non-commercially viable. And when you have a portfolio of 40, 50, 60 wells in a ⁓ overall portfolio, you de-risk it to just a ridiculous amount. And the other thing where people lose money is they drill with

you know, Uncle Joe’s drilling co, you know, out of Louisiana and it’s, you know, they don’t have super deep pockets. They’re raising all the money from private investors to drill these couple of wells. You know, we’re drilling with XTO, is Exxon. We’re drilling with EOG. We’re drilling with Continental Devon. And we’re getting into these programs where we own a minority stake in their overall well. And so you’re riding the coattails of the big boys.

And that’s why we like this strategy.

Dylan Silver (20:39)
Yeah, and I can imagine big boy technology is got to be next level when it comes to locating, you know, where the oil is flowing. We are coming up on go ahead.

Tait Duryea (20:47)
Well, and

I was just going to say, it’s wild. I mean, these new horizontal wells that are doing three mile laterals, those can be $15 million per well. So if EOG is drilling a 10 well package, you’re talking about $150 million capital outlay for that.

Dylan Silver (21:02)
We are coming up on time here, Tait , any new projects that you’re working on and then also anything you’d like to mention directly to our audience.

Tait Duryea (21:10)
Well, if you’ve ever been curious about how the tax benefits work,

we have a very robust ebook that breaks down those tax benefits for oil and gas projects. That’s really our main focus now. ⁓

We do about a half dozen real estate projects per year as well, but oil and gas tends to be our main focus just because it balances real estate so nicely. So if you want to check it out, can. ⁓

Let’s see, should we put it in the show notes?

Dylan Silver (21:34)
we can put it in the show notes.

Tait Duryea (21:36)
Okay, if you want to check it out, think it’s in the show notes, Dylan.

Dylan Silver (21:38)
All right, all right. Well, Tait , thank you so much for joining us today. Thank you for your time. It was great having you on our show here.

Tait Duryea (21:46)
Thanks for having me.