Surviving Financial Chaos: Key Lessons from the Mortgage Crisis

Brett McCollum (00:00.862)
All right, guys, welcome back to the show. I am your host, Brett McCollum. I’m here today with David Priest. Today we’re going to be talking about reducing risk with syndications or inside of syndications. But before we do, guys, add investor fuel. We help real estate investors, service providers, and real estate entrepreneurs to 5X their businesses to allow them to build the businesses they’ve always wanted and live the lives they’ve always dreamed of. Without further ado, David, how are you?

David R Priest (00:25.196)
I’m doing wonderful, how are you, Brett?

Brett McCollum (00:27.118)
Man doing good is getting to know you just a little bit. We kind of jumped on a little bit later than we both probably had wanted to, but like it was the just a few minutes I got to chat with you ahead of time. I’m really looking forward to this. I’m sure you got a lot to share with us and I probably will have all the questions, but before we do, David, can you me a favor? Can you back up a little bit rewind? Give us some context in the history. Who is David Priest?

David R Priest (00:50.624)
Okay, well, I am a native Texan. So Texan’s in my blood. I was born in Houston. I’ve lived in the Houston area in different parts of my whole life. So I’m a native Texan, native Houstonian. In real estate, the Houston market or some other parts of Texas are what I specialize in. So I stay close to home. I feel like I’m an expert, particularly in the Houston market. And I’ve lived here my whole life. My family’s here. It’s like home. Traveled all over the world, but always love coming back.

back to Texas and back Houston, which is home. So that’s kind of where I came from. I got into sales like right out of college. So I was in sales. I was kind of a car die. I worked for BMW for about 10 years and really was in the car market for a long time. Got in real estate about 20 years ago here in Houston. Got in the mortgage business in 2003 and it was kind of the Wild West leading up to the great financial crisis. And that changed everything.

Brett McCollum (01:28.686)
Mmm.

Brett McCollum (01:48.908)
Yeah.

David R Priest (01:50.44)
thing and I started my mortgage company actually in 2008 which was a very weird time to start a mortgage company. I just got married at a very optimistic time and then everything kind of fell apart.

Brett McCollum (01:56.398)
Mm-hmm.

David R Priest (02:01.41)
And I continue with my mortgage company through that crisis. And I see a lot of parallels right now with the financial crisis and what’s going on with multifamily. The parallels to me are very similar. There’s a lot of things on sale. So I got through that. that, you know, I’d gotten married, had children, was more of a traditional financial kind of guy doing mortgages, doing real estate, very transactional. Got interested in commercial real estate around 2022.

Brett McCollum (02:10.094)
Yeah.

David R Priest (02:31.184)
diversion in my journey because right around the time I got interested in it I got leukemia and had to take about four months off and do some chemo and kind of had a life altering life-changing experience but that was the

Brett McCollum (02:39.192)
Wow.

David R Priest (02:44.43)
preparation to get me ready for to get into commercial went full time in 2023. And right now I’m a general partner in about 700 units. And I’m also a passive investor in more deals and more units than I’m an active. So I’m really passionate about the passive side. And I believe everybody should be a passive investor. Even if you’re doing active real estate, you should be putting money aside passively. So that’s kind of where I’m at in my journey right now.

Brett McCollum (03:11.074)
Wow, man, you’ve got a, we’ve got a lot that we could, I’m gonna take a breath, let’s rewind back. All right, so I love the, I think the, one of the best skill sets, from what you said, one of the best skill sets that we can prepare ourselves for for our future and what I aim to teach my children is sales. I I think it’s a,

David R Priest (03:18.753)
Yeah.

Brett McCollum (03:36.556)
whether or not it’s something you pursue professionally long term in your life or not, I believe that we’re always selling ourselves in some way, form, or another. So coming out of college, you mentioned that that was what were you doing? What kind of sales was that like?

David R Priest (03:51.064)
So I was in college and like in college during summers, I was working, I got a Honda dealership selling cars. And when I got out of college, I kind of realized like I’m making more money than anybody I know that’s like an engineer or doing any of the other things. Obviously if you stayed in school and became an MBA or Doctor of Law, you might do better. But my bachelor degree people, I was making like twice as much money as they were. So I just kind of stayed in sales and did that.

Brett McCollum (03:58.072)
Wow.

Brett McCollum (04:06.807)
Yeah.

David R Priest (04:18.446)
And I really enjoyed it. And I really haven’t had like a salary in like 30 years, basically. So, I mean, we were always on full 100 % commission. If you hustled, you made sales, you got paid. If not, were, you know, you were, it was going to be rough. So I learned that early on and it helped me to become an entrepreneur because living off the 100 % commission was already in my blood. So making the switch to be an entrepreneur was not as difficult. And I had five years in the mortgage

Brett McCollum (04:25.942)
Yeah.

Brett McCollum (04:35.596)
Yeah.

Brett McCollum (04:43.662)
Mm-hmm.

David R Priest (04:48.4)
business before I made the entrepreneur transition. So I had a lot of confidence. I already had a book of business. I already knew what I was doing. And it was a good transition for me.

Brett McCollum (04:55.181)
Yeah.

Yeah, no doubt. That sounds great.

When you went into the mortgage space and ultimately you’re leading into, this is always, everybody’s always interested. I’m sure you’ve been asked this question a million times over. Let me actually, when did you start in the mortgage industry? What year was it? Three, okay, so that makes sense. right, so yeah, the three, four, five, six-ish pretty good years, you know?

David R Priest (05:18.722)
It was 2003.

David R Priest (05:27.342)
I was in the subprime business back then. That’s how I got my start. really didn’t know. started a subprime company that is bankrupt, was bankrupt in 2008 or nine, I think. And I worked that and it was like, it was like a boiler room. You know, it was like 150 calls a day. You know, you had like four hours and you’re just calling people and doing deals and closing people over the phone. So it was a really kind of a boiler room environment. Yeah.

Brett McCollum (05:43.523)
Wow.

Brett McCollum (05:51.914)
in Charningham Burn. Yeah.

David R Priest (05:54.124)
Yeah, when I went out on my own, I had already kind of graduated to doing more prime mortgages. And I named my company Houston Prime Mortgage, because I just wanted to do prime. I was tired of dealing with, you know, really rough customers, rough neighborhoods, bad houses going on. Back then, we were going and meeting people in person to sign loan documents. So I went in some areas that were pretty scary to get loans signed. And I kind of decided I want to really want to do that anymore.

Brett McCollum (06:18.592)
I don’t want to that, really.

David R Priest (06:20.074)
So I did that and then when I got married in 2008, my wife was working in oil and gas here in Houston, had a great W-2 climbing the corporate ladder. So we decided to live off of her income and then my business, we saved all of it. So we were saving like half of our income for many years. I was a stock market guy.

It crashed right after we got married in 2009. It bottomed out. We were putting a lot of money in the stock market. And so for about 12 years, I guess, going to the pandemic, I we were riding that wave. My wife thought I was a financial genius because the returns were really good. We were throwing in a lot of money every month and it looked really good on paper. I got shaken out of my stock market infatuation, I would say, in 2020 because when COVID hit,

I was on a ski vacation. came back and my portfolio got cut in half for about three months. And so when you have a lot of money in the market and your portfolio gets cut in half and every day you’re logging in and looking at your accounts and going, my God, this is like a total disaster. Yeah. And I always talk to like never sell and I wish I had sold then, but I got through it. And then we had, got sick with the cancer and I couldn’t work for a while. My wife had left her job because we were going to go do this real estate thing. And so we didn’t have an income for a while, but we had a lot.

Brett McCollum (07:22.048)
Yeah, at some point you get it.

David R Priest (07:39.014)
of savings and assets. And so for us, we were retired for like four months. And so I know what it’s like to build up a huge 401k IRA and then retire. And once you quit working, it’s like panic city. So I never want to be retired again. I hated it. I was retired for four months and it totally sucked. So we decided to get in real estate. And then at the same time, inflation and interest rates hit, choked off my mortgage business, real estate slowed down.

Brett McCollum (07:57.228)
Yeah.

David R Priest (08:06.4)
And so I wanted to go into commercial and it kind of gave me a kick. Those two things gave me a real kick in the pants. was getting cancer and realizing, hey, life is short, go for your dreams. I’m fully healthy now, which is fantastic. It’s great. It was a real, I’m thankful for my cancer experience, which sounds weird.

But I, for me, it was a real positive thing. I didn’t get really sick, but it scared me bad enough to make me really grateful for every day and make me go out and not, not, there’s no procrastination after you get cancer. You want to get it done now. So that was real helpful for me. And then the fact my other businesses were kind of withering and my life had left her job, we decided, Hey, we really got to jump in this multifamily and make this work. And I spent about a year, I was going to be like a great operator and go out and buy my own properties and start small.

Brett McCollum (08:38.54)
Yeah.

David R Priest (08:55.368)
And that was a real diversion. We decided that wasn’t the best way to go. I was much better at capital raising for other people’s deals. And through my education, I also figured, it’s a lot smarter to partner with great operators. Also, the great operators are getting better deals. They’re getting access to deals that a newbie really can’t get. So nothing wrong with working your way up from the bottom like that. But a lot of it was I was too old and there’s like a lot of opportunity now. And I’d rather just

Brett McCollum (08:55.447)
Right.

David R Priest (09:25.018)
jump in with great operators and help them raise money. And when the market’s bad, it’s hard to raise money. So it’s a skill that’s valued. And that was my path. Another thing that I did is at the same time, I was starting to do a lot of passive investing. I have more passive deals than active, and I’ll continue to invest passively.

But I started doing what I call networking through passive. So if I have a group I really want to work with or I’ve got somebody that’s on my list that I work with in the future, I’ll go invest passively with their deals.

Brett McCollum (09:56.686)
Mmm.

David R Priest (09:56.878)
because I already have an in. A lot of people are like, having to keep my powder dry, don’t want to invest in other people’s deals. I probably have 300 real estate professionals on my phone and they very rarely invest with me. But my whole thing is invest passive to other people to network with them. And also, you need to put your money in other people’s deals. I know people that went through the financial crisis, a really good person I respect, and he lost everything.

And he said, asked, why did you lose everything in the financial crisis? Well, the same story, over leveraged. I didn’t have enough reserves. And he goes, and I had all my money in my own deals. So when everything went south on my deals, I lost everything. And if I’d been in other people’s deals, I would have scraped out of there with a lot of my net worth and I had to totally rebuild. So I’m a big believer that if you are a syndicator and you make a big exit or if you’re a flipper and you hit a home run,

Brett McCollum (10:40.856)
Yeah.

David R Priest (10:47.628)
put that money in somebody else’s deals passively and spread it around. That way if you have a bad time or if you make mistakes, you’re not going to lose all your money, you know.

Brett McCollum (10:58.294)
Right, no doubt. Yeah, that’s really good. Rewinding back again, sorry to keep going back to it. I wanted to ask you this and I didn’t want to miss it. So you mentioned that in 2008 you get married in 08 and you’re in the mortgage business.

David R Priest (11:12.856)
Yeah.

Yep.

Brett McCollum (11:16.686)
How many people have I talked and you talked to that did not make it through that? You mentioned that your wife was working and you guys were kind of banking that. Is that what saved you from getting through that or what ultimately was?

David R Priest (11:29.966)
I think two things saved me. I number one, not only was I in the mortgage business in 2008, but I started my own company in 2008. I went in like February of 08, I was starting a brand new company. I broke away, I went on my own. I decided I’m gonna do this myself. I got married, which definitely helped because I had a supply of income for my wife. So if I had a bad month, it wasn’t like the end of the world, it wasn’t like we couldn’t pay bills.

Brett McCollum (11:44.92)
Yeah.

David R Priest (11:57.868)
but it allowed me to go through it. But what I learned is if you’re in a highly favored business and mortgage and real estate was highly favored up to 2008, and then there’s some kind of blow up or meltdown, if you were good in that business and you stick with it, everyone that’s weak or everyone that’s not serious about the business is going to quit.

Brett McCollum (12:19.213)
Yeah.

David R Priest (12:19.278)
And I think the same thing is happening right now in syndication and multifamily. The herd is getting thinned out a lot and there’s a of people that aren’t going to make it. There’s a lot of people that for them it was kind of a get rich quick scheme five years ago.

and it hasn’t panned out for them and they’re going to get pushed out of the business. So the people that are left are going to be strong, they’re going to be serious. So I think persevering through that hard time, it makes you a better person. But also, like with the mortgage business, by 2010, there was no competition.

The Fed lowered rates, was refinancing everybody and there was nobody around to compete against. People weren’t even shopping deals. They would call other people and the phone would ring and it’d be like, you the line’s disconnected. People are out of business, you you can shop around.

Brett McCollum (12:57.208)
Sure.

Brett McCollum (13:03.374)
Yeah, I mean, you were one of the few that made it through, and that’s where I was at. I’m like, jeez, man, like, it’s such a rarity to hear, like, yeah, I was in the mortgage business, and I survived. You know, like, yeah.

David R Priest (13:13.366)
I mean, I had a small company too, so it would have been a lot more difficult. It was just me and an assistant. Now, if I had 60 loan officers, yeah, I mean, you’d have to shut everything down and fire 90 % of your staff and kind of downsize, but I wasn’t in that situation. But it also, there was a negative effect of that is I really was like, keep it small, keep it all for a long time. And when I got into commercial, I had to learn how to partner and network with people and I had to change my whole mindset. Like you can’t do it all. You don’t have all the

skills you need. So that was a switch that it took me about a year, a year and a half to really figure that out. So that was, had to adapt to a different world and that was something that was a challenge for me.

Brett McCollum (13:48.077)
Yeah.

Brett McCollum (13:53.11)
Yeah, and you had said this too, like going through that, but then also going through the cancer battle and going through that. It’s like there’s a lot of resilience that you built up to do hard things. And I believe, my strong belief is that we have to do hard things in order to accomplish something big. If it was easy, everybody would do it. I think potential.

going through 08 for you, going through that, and now starting this new venture into commercial like that. Probably, and by the way, I hate that you had to go through that, that sucks. I’ve walked it through with my own family and seen it, and it’s a difficult season, no doubt. But I see you now, and I see people that have gone through it on the other side, and it’s like, you know what, I’m stronger from it and for it.

How does that idea? It feels like you kind of said that in touch a little bit, but it seems like, man, like you can get through anything. You can do it.

David R Priest (14:53.57)
Yeah, I I caught it extremely early. I don’t want to like my cancer experience is far different than a lot of people. It’s a terrible thing for most people. With me, I caught it early. I was able to get in and get chemo that was not very strong. I wasn’t getting really sick from the chemo. I wasn’t losing all my hair. You know, it’s funny is when you’re worried about losing your hair more than dying, you know, it’s not that serious. So

Brett McCollum (15:00.066)
Sure.

Brett McCollum (15:18.04)
You know.

David R Priest (15:19.778)
Basically, but going to the chemo ward and being in with people and looking around and being like the healthiest person in the chemo ward, that’s where gratitude really starts. Like you’re looking around going, these people look terrible. I mean, I look relatively normal. I’m not being wheeled into the chemo room because I can’t walk because I’m so weak. And being around that environment, you know, it made me super grateful, but also it clarified and purified my life. All the stuff, the extra stuff gets cut out.

Brett McCollum (15:26.326)
Yeah.

Sure.

Brett McCollum (15:37.741)
Yeah.

Brett McCollum (15:42.542)
I’m sure.

David R Priest (15:48.814)
Time becomes so important. I don’t watch television at all. wasn’t watching a lot, but now I don’t ever watch television ever. I completely cut television out of my life. Unless there’s some kind of an emergency or something, you might have to turn the TV on if you know what’s going on. I just do it on the internet. Quit watching all sports unless the Astros are in the World Series. I don’t watch baseball anymore. And so yeah, yeah, so it’s not gonna happen this year, but.

Brett McCollum (15:49.069)
Mm.

Brett McCollum (16:09.518)
which was a lot.

David R Priest (16:14.892)
Basically, it clarified everything. And then I also stopped wasting time on anything. Like basically, if I don’t want to do something.

or if I, you know, it made me a lot more focused person. And then it also made me contemplate my life. Like when you’re 55 and you’re healthy, you think, I’m going live to be 80 years old. I got all this time to do things. Then when you get that diagnosis and there’s a couple of weeks in there before they do the testing, you’re thinking I could be dead three months or I could live 30 years. I don’t know what’s going to happen. You start thinking about your life. And I was living a very mediocre version of myself. I was kind of coasting for years, hadn’t developed new skills. I was having a nice time, but I wasn’t really,

Brett McCollum (16:26.615)
Yep.

David R Priest (16:53.014)
evolving as a person. So coming out of that, I was like, wow, I’ve got to really go do something spectacular. I don’t want to die as a mediocre person. I want to change my life. And so it changed my life. And I think one of it was like,

Brett McCollum (17:02.658)
Yeah.

David R Priest (17:08.438)
I think I had said a prayer, like I kind of wanted to go do the commercial thing and I was like, is this the right thing to do? Am I ready for this? God kind of show me the way, you know, and make me ready if I need to be made ready. Well, be careful praying that prayer because you’re going to get, know, whatever it’s for me, that had to happen to get there. But my mindset is I’ll always do it today. Don’t put it off.

Brett McCollum (17:22.678)
Yeah. Yep.

David R Priest (17:29.646)
Go for it. Be smart about your decisions. But at the same time, don’t think, well, I’m going do it in five or 10 years, because you don’t know if you’re going to have five or 10 years. Every day’s a blessing. And I need to get my gratitude back, too. Now I’m out walking my dog, and sun’s coming up, and I see the colors of the sunrise. I hear the birds singing. I mean, I’ve got all that back. mean, it sounds hokey, but it actually, for me, it’s been very real. And it’s.

Brett McCollum (17:38.51)
Have a look.

Brett McCollum (17:52.462)
It’s not hokey at all. I think some of the most successful people I’ve talked to and met and read about it, like, I would argue nine out of ten. Gratitude’s at the top of the list.

David R Priest (18:04.002)
Yeah, I had to develop it and it took cancer for me to be grateful. So that probably is the way it happened.

Brett McCollum (18:08.396)
Yeah. And what a perspective on that. But I do I do want to get into the kind of how we let off the show with with in regards to syndication. There’s so many people on syndication today. You and I both know these people probably. And here’s the demographic.

syndications were all the rage 2021, 2022, because rates were incredibly low. You could get into these projects and do these things, raise all this capital to it. And then maybe some of them weren’t, they were buying it on adjustable rate mortgages and things like that, you know, and guess what happens? know, taxes go up, insurance goes up, everything goes up, rates, interest rates go up. And now some of these people with at their, you know, hey, we had a five year on this thing and here we are and it’s come and do and they have no way to

recoup and losing and we’ve heard these stories okay you’re coming in to kind of give some counter perspective of like this is what you need to do to protect yourself and do it the right way can you talk a little bit more about that

David R Priest (19:13.518)
Yeah, I don’t want to judge anybody that has gotten in trouble because I think I would have made the same mistake. So if I got in the business in 2018 or 19, I would have been doing bridge debt. I would have gotten a mentoring group. I would have bought like nine properties and probably lost by three of them by now. So I’m not judging what happened in the past. However, when I got in the business in 2023, it was starting to be kind of a train wreck. And it was like coming on the scene of an accident.

Brett McCollum (19:15.736)
Sir, no doubt.

In there.

David R Priest (19:40.618)
And seeing like, okay, well, this person was speeding or this person had too much to drink or whatever. And realizing that was the problem. So I want to learn lessons from other people and not repeat the same mistakes. So there was a purple patch in there for about 10 years that rates were going down. Cap rates were going down. People are not really focused on management. They were really flipping properties. were buying properties, improving them, raising rents, getting some good numbers on the books, then immediately flipping them to somebody else.

Brett McCollum (19:48.727)
Yeah.

Brett McCollum (19:55.16)
Right.

David R Priest (20:10.632)
So I think that that period is over. It’s a real asset now. You’ve got to go in and manage it. And right now though, deals are on sale 30 % and you’re picking up stuff that’s down 30%. So coming out of my financial crisis issue where I bought stocks that were on sale, it was down 50%. I like those numbers. So on the deals I’m buying now, I don’t have to worry about if the market’s going to get bad or not. It’s already bad.

Brett McCollum (20:28.738)
Yeah.

David R Priest (20:39.598)
I maybe have to worry a little bit if it’s going to get worse, but if it gets a little worse for a while, it doesn’t really affect me. And my timeline is five years. So I think right now you try to find gills that have a good story that are on sale, that are good properties. You get fixed rate debt. You get set this cash flowing day one. I like a DSCR of about 1.4, 1.5 right out of the bat. You pick good areas that don’t have a lot of crime and you stay away from the construction heavy value add.

Brett McCollum (20:39.854)
brother.

Brett McCollum (21:06.072)
Right.

David R Priest (21:09.312)
especially right now with tariffs. We don’t know what construction costs are going to be three or four months from now. No one knows. So you don’t want to close it on property and find out your construction costs doubled. So there’s a lot of good deals out there where you don’t have to do a serious value add. You can find stuff that’s neglected, sign stuff that’s being poorly managed. And if you’re trying to underwrite deals, why not lock in the only cost that you can lock in and it’ll never change for seven or 10 years? Lock in the debt.

Brett McCollum (21:15.885)
Yeah.

Brett McCollum (21:19.532)
Yeah.

David R Priest (21:38.414)
Maybe get some interest only to make the cash flow better in the beginning. So I like those type of deals. I think there’s plenty of them out there, but I think this is not a time to go for home runs. To use a baseball analogy, you just have a consistent swing and sometimes you really connect and it goes over the fence, but you’re not swinging for the fence every time. And I think people that are going for these 25, 30 % IRRs doing bridge debt,

Brett McCollum (21:49.89)
There you go.

David R Priest (22:04.398)
We have no idea what’s going to happen with rates next year. And inflation could come back and the Fed could jack these rates back up again. And you could have bridge debt that’s at 9%, 10 % again. So I just don’t make that same mistake again. I mean, you want to be greedy as far as buying great deals right now, but don’t be greedy on the debt. And I think it’s unfair to investors, too, to go in and take this kind of risk. If you’re going to take this kind of risk, find five guys with a lot of money and do a joint venture.

And then if you lose your own money, it’s no big deal. But when you’re raising money from other people, there needs to be a different level of care there. You need to be a lot more careful and a lot more risk averse and trying to preserve principle. Because if you’re going for the high returns, if people lose their principle on 25 % of the deals, it negates every return you can possibly get in real estate. And real estate’s a long game. It’s a game of singles and doubles. If the market works out, maybe you hit a home run.

Brett McCollum (22:34.145)
I think.

Brett McCollum (22:56.227)
Yeah.

David R Priest (23:03.792)
for your wealth. I mean, if you want to go take massive risks and you want to go, you know, brag at the bar about the home run you hit, go do angel investing or venture capital or something where you can get a 50X on a deal and you can brag about it. But real estate, it’s the wrong place to look for that. It’s a foundational type of wealth. Go for 15 or 20 % returns every year and don’t lose money and you’re going to do great in real estate.

Brett McCollum (23:27.83)
Yeah, and I look man the people that I see succeeding at the top, know, even now it’s like that doesn’t mean that today isn’t hard and it is for so many, you know people out there but the ones that are You been through the weights and the ones that have been through heck You know what? The best ones that I talked to the ones that went through the 80s and then and then and made it through that and then the 90s the dot-com bubble and also a all and by the way also today, know, they’re all saying is This is not your short-term

short like looking through the lens up close in a magnifying glass is not the way to succeed is you’ve got to have the long-term vision on this thing. And every my thoughts are like if everybody says it that are successful why do we tend to put things under that microscope so often?

you know, and stress ourselves out. So, man, I appreciate you sharing that perspective again, because it’s just one more reminder for us as investors, like, hey, take the base hit, it’s gonna be okay, take another base hit, and another base hit, and another base hit, you know, and live to continue versus going for big, that’s what a lot of us is we go for bigger deals, because it looks nice and sexy on paper.

David R Priest (24:41.89)
Right. Well, the size of deal is great. I think bigger deals are actually less risky.

because you can put together a really good team. So I think in syndications, one of the biggest risks is doing a really small deal with a rookie or a rookie team or a husband and wife team. And it’s like, you know, it’s a 40 unit and they’re going to self-manage. It’s a husband and wife. And, know, what if they go off to Belize and the plane crashes mean he was going to get the deal of the finish line. So I like deals with really experienced teams that are like, say 200 units or more or 150 units. And you’ve got four or five really experienced people on that team. Maybe you have a lead that really

Brett McCollum (24:55.882)
Mm-hmm.

David R Priest (25:17.692)
is calling all the shots, but something happens and then there’s people that can take it to the finish line. And also, everybody’s got skin in the game. They’re putting money in the deal themselves, so they have an incentive. Like you said, if you’re working with syndicators that were doing it during the financial crisis, okay, they always look at what’s our risk, what if we buy this property and three or six months in, the whole world falls apart.

Brett McCollum (25:22.647)
Yeah.

David R Priest (25:41.536)
It’s always in the back of their minds. So that’s a powerful thing to have. And even if the people were like doing single family or doing flip spec during the financial crisis and got through that, they just have a different perspective. They’re a lot more careful. They’re more risk averse. They realize bad stuff is going to happen. And I think when the industry for years was kind of spoiled with only good things happen and people got very overconfident and they got over their skis and they forgot about the fundamentals and they figured.

we could just solve any problem and you know it just became where people got in situations that they weren’t ready to handle.

Brett McCollum (26:18.158)
Yeah, and we see a lot of that today too, right? Like you just get in, you’re over leveraged, you press too hard on stuff, and next thing you know, especially the single family home folks, that are, hey, I over leveraged this because the market’s just appreciated and it’s gonna continue to rise and da da da da, and next thing you know, now it’s sitting for eight, nine, 10 months at a time and interest accumulates and they’re on hard money loans that are now being called, there’s a lot.

of investors out there seeing there’s a lot of similar vibes to this is the 08 kind of thing different but similar you know and man I’m glad you’re speaking to it and I love the confidence score that you bring to the table of there’s still a way to do it positively and you don’t have to get hurt like some of these other folks are

David R Priest (26:54.414)
Yeah.

David R Priest (27:07.31)
There’s great deals. I take advantage of great deals, find stuff that’s got a good story, that’s on discount where the seller has to sell, get a great operator, get long term fixed debt, and get stuff that cash flows day one and there’s some runway on it. And you’re going to do really, really well. Because if the market bounces back to where it was in 22, you got a 30 % right there. And if you’re putting 30 % in the deal, you doubled your money just on the market bouncing back.

Brett McCollum (27:19.064)
Yeah.

David R Priest (27:32.098)
But I think people just have to be really, really careful. This is not the time to go out and try to hit home runs, don’t think. I don’t think it ever was. I just don’t see his real estate as a home run. I just think people got spoiled. Another thing that was happening is years ago, there were so many good exits that people were underwriting deals to show a higher IRR because they were competing against people.

I mean, I remember I had an investor one time that went early on a deal and it was like a 19 IRR. We’re being really conservative. He’s like, well, that’s that’s not that good. I really want a 25. And I kind of jokingly told him, said, look, if you want to look at the business plan and you can find a way for us to take more risks, to increase the return. And it’s acceptable to me.

Let me know, but I mean, we’re not trying to take more risk in this environment. So I’m really big on never losing money, never losing principle. can’t guarantee that won’t happen on one of my syndications, but that’s what I look for. But finding the people that have been there and done it like for 30 or 40 years and been through those crises, for lack of a better word, those people have a different perspective and your money is safer with them generally than people that are a flash in the pan or the new like hot shot.

Brett McCollum (28:15.692)
Yeah.

Brett McCollum (28:35.277)
Yeah.

Brett McCollum (28:44.524)
Yeah, and there’s a lot of wisdom there, man. So I appreciate you sharing that and bringing all the knowledge you have today to this. And there’s a lot, guys, I encourage you, rewind this back 10, 12 minutes and just really start, there’s a lot of wisdom being shared, know. But David, if people wanna reach out to you, moving forward and connect to the InSumway, what’s the best way for that to happen? What does that look like?

David R Priest (29:08.918)
The best way is LinkedIn.

Brett McCollum (29:11.192)
Okay.

David R Priest (29:11.766)
David R. Priest on LinkedIn, you can book with me directly there or you can get my contact information directly there. Also, if you’re interested in reducing risks and passive investing and want to see the way I look at deals, my YouTube channel, David R. Priest, there’s a five hour program on there that is an hour session at a time that I did live and it shows the way that I look at deals and the way that I analyze deals. And it’s an evolving process the way I do it, but

I’ve got a pretty good system set up that’s worked for me and I’m giving it out there for free.

Brett McCollum (29:47.432)
man that’s incredible guys you there are some things that are no-brainers that is one of them we’ll make sure that gets in the show notes too David all of that but man guys do definitely take advantage of that before I let you go David I just want to tell you thank you so much again for being here spending your time with us we appreciate you having having us here today

David R Priest (30:06.946)
Thank you so much. And for the people watching, this is not the time to sit on the sidelines and not invest. So don’t be afraid to get out there when you find good deals. think people that are in good deals right now buying at this buy point, there could be some more chaos in the next year or two, but you go out five or six years and everybody in the business, I think is going to wish they had bought more deals this year or maybe next year. And if you talk to people that went through this crisis and the great financial crisis,

Brett McCollum (30:12.973)
Yeah.

David R Priest (30:36.544)
Almost to a person, they’ll tell you, wish I’d bought more deals in 2009 and 10 when things looked really bad. I’ve never talked to anyone that went through that didn’t tell me that.

Brett McCollum (30:45.026)
Yeah, yeah, no doubt, no doubt. Well, David, again, thanks for being here with us, and guys, to you as well. Thank you so much for spending your time, and we will see each of you guys on the next episode. Take care, everybody.