Passive Wealth, Real Purpose: Alternative Investments for Faith-Driven Leaders

Nick Stromwall (00:00)
I think there’s a lot of great ways to make investments. Maybe you have a financial advisor, you have a 401k plan at your work. Compounding interest, they call that the sixth wonder of the world, I think. So it’s smart to ⁓ live on less than you earn. That’s a smart principle in life. And the world of alternative assets provide often a quicker way to multiply your money. On average, you can double your money in the stock market

every seven to 10 years. If you look at the SMP, historical over the last 50 years, that’s just a fact.

Cody Crabb (02:05)
Hello and welcome back to the Real Estate Pros podcast. I’m Cody Crabb with Investor Fuel. Today I’m talking to Nick Stromwall, who helps faith driven leaders

multiply both money and impact through alternative investments like real estate. You know, I’m interested in, you know, it’s not just about how we make money. It’s kind of how do we do it in a way that lines up with your beliefs, which is kind of not something I hear a whole lot of. So I’m interested to talk today. Thanks for joining us today, Nick.

Nick Stromwall (02:31)
Yeah, excited to be here and share some of the things I’ve learned along the way.

Cody Crabb (02:36)
So just to kind of start out, I’d love to hear how did you kind of, I mean, you’re in a very specific, you you got your specific clientele that you’re looking for, it sounds like now. How did you get to that point where you, what came first, I guess is the better question.

Nick Stromwall (02:51)
Yeah, really good question. What kind of started my entrance into real estate was really generosity. My wife and I were involved with a college ministry here locally in the Minneapolis area where we live. And we loved just being around college students. We served as mentors and helped them think about what’s next for their life after school. We did some premarital counseling and I even officiated some weddings. So we got to know people pretty well.

Cody Crabb (03:17)
Wow.

Nick Stromwall (03:19)
But through that experience, you we’d get sent letters that they would go on these mission trips and they, you know, want some help getting there. My wife and I wanted to be generous. So, you know, we were missionaries, not making a ton of money, but we wanted to be generous. So we just thought about, how can we earn some extra money? I found myself running around downtown Minneapolis with my pickup truck, picking up those electric scooters at night, trying to become a juicer to, to, earn some extra money and did some consulting, but really just

through lot of research found that it seemed like a lot of people who wanted to develop some passive income, either they started a business or they started investing in real estate. So I decided why not try both of those at the same time? So after reading a bunch of books and listening to lot of podcasts, ⁓ we bought our first investment property, which happened to be a duplex right across the street from our house in South Minneapolis. And it was a labor of love. You know, we went to nine banks.

And they all said no first to get a loan. But the 10th bank liked my tenacity and my drive and they asked me, hey, what’s the nicest thing you own? And I said, my Honda CRV was paid off. So they gave me a loan against that. And that’s what got us started in our real estate experience. And you know, that first property made us $1,200 a month in passive income, 600 for my wife and I and 600 for my business partner. And we learned how to do everything, how to find tenants.

Cody Crabb (04:20)
You

Nick Stromwall (04:47)
how to fix holes in the walls, how to be a good landlord. And through that, we decided we were going to do a couple more. So we picked up a few more properties than we did in Airbnb. And we found ourselves starting to have kids feeling like, man, there just ain’t enough time to go around in the day. Right before us, we started here, Cody, you mentioned you were running to grab one of your kids from school. And it’s hard enough being a present husband father. That’s a hard enough job. You add on.

Cody Crabb (05:08)
Yeah.

Nick Stromwall (05:15)
you know, a full-time job and trying to lead a ministry. And now I’m trying to manage a property or multiple properties. We just felt like there’s just not enough time to go around, but we still wanted to be generous. So I learned about the difference between residential real estate and commercial real estate and started pursuing commercial real estate and commercial real estate syndications, which is, simply investors pooling money together to buy larger assets. And it’s been great because it really has become.

Cody Crabb (05:19)
No kidding, yeah.

Nick Stromwall (05:45)
a passive way for us personally to invest and then to educate others on how to go about investing in alternative assets.

Cody Crabb (06:42)
So the phrase you used when we were kind of chatting was faith-driven leaders. I’d be curious to know kind of what, who do you mean by that exactly?

Nick Stromwall (06:52)
Yeah, really good question. You know, I’ll help anyone multiply their money and impact. But specifically having been in ministry for over 15 years and interacting with a lot of, you know, people who would call themselves faith driven Christian. That’s why the people I want to help, it’s the people that they want to earn some passive income there, but they’re thinking way more than just a couple of years down the road. have something, some type of impact that

has been stirred up in their heart, a problem that they see in their community, maybe a passion for a certain place in the world that they want to be able to invest in, and they’re looking for a vehicle to produce the opportunities and the resources to make that impact. So the phrase I use is I want to be one of those people that lives on 10 % of my income and then just gives the rest away. So I’m looking for those driven ⁓ investors who have

disposable income that they want to deploy, but specifically there’s a deeper purpose. It’s not just about making money to afford the nice whatever things. Nothing wrong with a nice car or a second home. I’m not saying that that’s a bad thing to pursue, but there’s something much deeper. The impact that they want to have is because they’re stirred on creating some change in their local community or somewhere abroad.

Cody Crabb (08:13)
Can you give me some examples ⁓ of ways people can do that? What are some examples of investing in those ways?

Nick Stromwall (08:23)
Yeah. So, you know, have, I have a couple of investors that are really connected to wanting to provide sustainable water in third world countries. So a big why behind why they want to be a successful leader, why they want to be a successful entrepreneur is they want to help tackle that problem. I have a few other friends that, ⁓ have started, ⁓ businesses in the Philippines because they went there on a trip and they saw the need in the community of

just not enough sustainable jobs. So they said, I’m gonna start a business there and I’m gonna create some impact or change there. Other friends who are trying to help end ⁓ sex trafficking and they’re just really passionate about getting involved in those things. their investment dollars and their investment resources, the way that they want to use those resources are to help solve some of those world’s greatest problems.

Cody Crabb (09:19)
So it’s not so much

like investing in something that is local and helpful. I mean, I suppose it could be, but you’re saying the main focus is let’s make your dollars go where you want them to go to help with the problems that you’re passionate about.

Nick Stromwall (09:32)
Yeah,

and

I think there’s a lot of great ways to make investments. Maybe you have a financial advisor, you have a 401k plan at your work. Compounding interest, they call that the sixth wonder of the world, I think. So it’s smart to ⁓ live on less than you earn. That’s a smart principle in life. And the world of alternative assets provide often a quicker way to multiply your money. On average, you can double your money in the stock market

every seven to 10 years. If you look at the SMP, historical over the last 50 years, that’s just a fact.

Obviously the last few years have been pretty awesome in the stock market. But in alternative assets, specifically I focus on multifamily value add, 100 plus unit multifamily buildings, we’re seeing the ability to double your money every three to five years. So in essence, you’re multiplying your money twice as fast. You’re getting cashflow and appreciation and some pretty significant tax savings.

that can all help amplify your investing dollars. Like I said, I like to help anyone multiply their money and impact, but feel most excited to work with people that have a deep why behind why they want to, in essence, make money. What kind of impact do they want to have with those dollars? And impact is a lot more than just writing checks. I think impact is time, talent, treasure. Like, you’re making a batch of cookies with your family.

Make two badges and bring one over to your neighbor. There’s so much more to making impact than simply investing financial resources.

Cody Crabb (11:42)
⁓ One thing that I find interesting about this is ⁓ I feel like it would be really easy to slip into emotion mode. I got to make that money to, you know what I mean? It’s your duty to kind of get into it. ⁓ How do you kind of separate that from the, know, if someone’s going to make a bad investment, you know what I mean? It’s very, I imagine it becomes emotion driven after a while because you’re like, if that’s your goal, it’s not just for you.

higher than that,

Nick Stromwall (12:13)
Yeah, I think, you know, I always coach my investors like every investment carries risk. Like it’s possible you could lose all your money, just like you invest in a stock and the company goes belly up, right? You could lose, lose all your money, but you know, diversifying and having, you know, a wise kind of overall financial plan. You you’re investing dollars that you don’t exactly know what’s going to happen two, three, five, 10 years down the road, but planting those seeds today, you know, one.

$50,000 investment today, if it doubles every five years, after 30 years of doubling and multiplying, you’re looking at over $3 million, right? So it’s amazing what can happen when you make those decisions today to set yourself up for the type of impact or things you wanna do down the road.

Cody Crabb (13:03)
So ⁓ do you help people with kind of the backend, like aftermath, once you’ve got the money to make the impact or is your focus on, let’s just build it and you figure out how to do that part.

Nick Stromwall (13:16)
Yeah, I mean, I personally am connected to several different nonprofits that I’m really passionate about. And I give away a percentage of my company profits to those nonprofits because I’m really passionate about that. So I’m trying to lead by example and trying to increase a little bit more every single year. But at the end of the day, like every single person has a unique calling and a unique gift set and a unique ability to make impact and a unique network of people that they’re connected to.

by no means is there any mandate in working with me that has to go a certain place. But I am trying to give people vision. And I’ve found the conversation with investors is way more about, what’s your best stock pick? What’s your best investment opportunity? Those things matter. But at the end of the day, you’re helping people think about, hey, if you were to die in 10 years or in 20 years, or if you fast forward to your funeral and you start working your way backwards,

Cody Crabb (13:52)
Mmm.

Nick Stromwall (14:14)
What kind of impact do you wanna have? What kind of legacy do you wanna leave for your wife, for your kids, for your friends, for your neighbors? And those conversations really matter, I think, as you’re talking about being a capital allocator or helping people multiply their money and impact.

Cody Crabb (14:30)
So why don’t you, apart from the kind of mission side, the reason is, I mean, that adding a good mission for anything will drive you to be better and do better and having a good reason, having a good why. But I would also be curious to ask you kind of what are the kind of day-to-day, you know, what kind of things do you look for in deals? I mean, you’re also a real estate investor. I mean, I’d love to hear kind of what your view of the market is and what you look for.

Nick Stromwall (15:40)
Yeah, that’s really good question. You know, I think there’s opportunities in lots of different asset classes, in lots of different markets, and I’m open to exploring a lot of those different opportunities. I’ve personally invested in over 18 different projects across the U.S. from industrial to oil and gas to multifamily to Airbnb’s to private credit. All of those are really, really good opportunities. I’ve found that a lot of my investor community

really wants to kind of hit what I call the triple win, where you’re getting the first kind of hitting a baseball bat, you’re getting a first single of consistent, reliable cashflow, that’d be the first win. Second win, it would be the upside of appreciation. So typically real estate goes up in value over a three or five or 10 year period. And then the third win, which I think is really the secret sauce of real estate investing, is when your asset can give you some tax savings and you can then, you

pay less in taxes and then therefore have more resources to deploy into those things that you call. traditionally in stocks and bonds and mutual funds, you’re hitting singles. You’re getting good consistent dividends typically, ⁓ but you’re missing out maybe the upside of appreciation and you’re missing out on those tax savings. Now again, I think there’s reason to invest in the market, personally invest in the market and this alternative world. ⁓

is a really amazing place to make some investments too. If you look at some of the most wealthy families out there and they have these things called family offices where they’re having teams manage all their money for them, when you look at that, 40, 50 % of their entire portfolio is in this alternative bracket. And in that alternative bracket pie, probably 40, 50 % of it is specifically in real estate. So I think there’s a lot of opportunity.

when you look at the people doing their investing the best, how they’re doing it, and then modeling how you do it based on that.

Cody Crabb (17:41)
Yeah, like a micro version of that or even just like a scaled down version of that. Because I mean, if they’re doing that and making tons of money, why would we not want to kind of emulate some of the choices they make for sure? ⁓ So when you’re talking to someone, can you kind of walk me through the process of what is it like when someone comes to you ⁓ and they want to kind of look at this? Like what is a conversation like that look like? And what do you help people with specifically?

as they’re starting out.

Nick Stromwall (18:13)
Yeah, really good question. I’m giving people an alternative way to think about investing capital they have. That could be cash. That could be a former employers for a 1K plan. They just maybe sold a property. Maybe they’re a real estate investor themselves and they’re kind of tired of being a landlord dealing with, you know, tenants and always fixing up a place. So I’m providing them a truly passive vehicle for them to get kind of that consistent cashflow, the upside of appreciation and tax savings. So

⁓ I find the operators, I find the unique opportunities, and then I present those opportunities to my investors and to my community.

Cody Crabb (18:53)
So is passive

like a sliding scale? is there, I will never hear about this again passive and then there’s also like check in once a month passive or are we just talking like passive is passive?

Nick Stromwall (19:05)
Yeah, so I own this duplex, right? And I thought it was going to be passive income because I made $600 a month. But passive income also meant every week cutting the grass and in the winter shoveling, ⁓ dealing with tenants that had questions or concerns or people wanted to move rooms or tenants were moving and situations in life changed or there’s tension. That all falls on you, right? Paying your taxes and dealing with the city and all the things. Like passive to me means hands off.

means you make the decision once and you just kind of sit back and get that mailbox money, right? So passive opportunity for me now means I do my due diligence. I find the unique ⁓ team that I want to get behind. And then I make that 50, 100, that investment of whatever capital that I’m going to be placing. And then I just read the reports monthly or quarterly or even yearly.

Cody Crabb (19:41)
Yeah.

Nick Stromwall (20:03)
And I get the benefit of consistent monthly dividends shown up in my bank account and that yearly tax statement to help me offset some, some, some depreciation. And then I’m, ⁓ you know, invested in that, that community where there’s a deeper why even to the investment, it’s not simply just make a good return on this money, but it’s also build communities. the, the team I work with now, we’ve got community managers at all of our locations whose job is to

take care of the residents, right? It’s more than just being a front office person to kind of handle administrative things. It’s get to know the people. So I visit these properties and these community managers are walking around high five on the grandmas that live there and low five in the two year olds that are running around and providing, ⁓ you know, a real source of community through events and meals and organizing different events like Easter egg hunt for adults and for kids and putting in new playground facilities to help.

Cody Crabb (20:34)
Mm.

Nick Stromwall (21:01)
produce a sense of community. And when you do that at a property level, when you really focus in on the residents and the people there, guess what happens? Your financial performance also goes up too. So it’s kind of a double win.

Cody Crabb (21:14)
Yeah, wow. Well, this is I think this is really this is really great for as we’re kind of wrapping up here for someone that wants to kind of think more about more intentionally about kind of this passive investing and maybe even maybe also kind of using capital for something bigger than yourself or your family. ⁓ Where should they start? Where should they go to learn more about you?

Nick Stromwall (21:35)
Yeah, just check me out on LinkedIn. Just find me Nick Stromwall. ⁓ I post about this every single day. Would love to help you maybe think differently about how you can multiply your money and your impact.

Cody Crabb (21:46)
Well, thank you so much for coming on. This is a really different angle than we usually get. So I really think it’s valuable for our listeners and thank you listeners as well for hopping on. If you liked what you heard today, go ahead and give us a like, subscribe, all the things and make sure you follow us so you don’t miss more awesome conversations like this. Nick, it’s been a real pleasure. Thank you so much. Have a good one.

Nick Stromwall (22:03)
Yeah, thanks Cody, great.