The $10M Real Estate Deal Formula Explained | Passive Investing with Trevor Thompson

K Trevor Thompson (00:00)
let’s say we’re buying a 10 million dollar building our group will secure seven million dollars worth of debt we’ll raise three million dollars from our passive investors and here’s the magic they’ll own 70 % of the 10 million dollar we asset we put up so they’re only putting up three million dollars but that group of three million dollars owns 70 % of a 10 million dollar asset

Scott Bursey (01:55)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host Scott Bursey. And today we’re strapping in for a high octane episode with a guest who brings serious high grade fuel to the investment fire. We’re talking about market mastery, strategic growth and digging deep into what it takes to build a truly robust portfolio. Get ready to level up because our next guest, Trevor Thompson from Niagara Investments.

K Trevor Thompson (02:17)
you

Scott Bursey (02:24)
is about to drop some knowledge bombs that will completely change how you see your next deal. Trevor, welcome to the show.

K Trevor Thompson (02:33)
I’m excited to be here.

Scott Bursey (02:34)
It is excellent having you here, just outstanding. We are so pumped and for our listeners who may not be familiar with your journey, please tell us how did your career begin and what is your main focus now?

K Trevor Thompson (02:47)
Yeah, so I’m originally from Niagara Falls, Canada.

And I was in the attractions and entertainment industry for most of my life. So worked for Ripley’s Believe It or Not, Guinness World of Records. Then I switched to a company called iFly Indoor Skydiving. I was always interested in real estate, but terrified of toilets, tenants and trash. And I just didn’t want to get into that space. All the other people were. And I hear horror stories. I hear success stories too. And I always thought I had to be a millionaire to become a commercial real estate investor.

Scott Bursey (03:10)
you

K Trevor Thompson (03:20)
Luckily, I got a pretty decent payday so I said it’s time to learn. I went to a couple of weekend seminars and I found out about syndications. And I’m going to be honest, I went where have you been my whole life? This is exactly what I’m looking for. I can invest as a fractional partner in commercial real estate, somebody else does all of the work, and I share in all of the benefits and the rest is history.

Scott Bursey (03:49)
⁓ that is so cool, Trevor. That’s awesome. So let’s dive right on into a core question. know our listeners are going to want to hear from you. What is the single biggest strength in identifying an undervalued asset today in your view?

K Trevor Thompson (04:09)
Yeah, so market is everything, right? So I’m fortunate. I live in Texas. Most of my investments are in Texas. And so Texas is obviously on fire. For those that don’t know, it’s like the fifth biggest economy in the world. Texas has so many people migrating. We’re a pro-business state. No state income tax. Landlord friendly. So there are lots of things. So number one, your market, right? You want people moving here. You want rents increasing.

and you want a friendly place to be able to do business. So definitely finding the right market is super important.

Scott Bursey (04:48)
Absolutely.

Couldn’t agree with you more and you’re in a great market. Trevor, if someone’s listening to this and they’re thinking, hey, this is someone that I like to partner with or learn from. What do you want them to know first about your business?

K Trevor Thompson (05:51)
Yeah, so the most important thing is that everything we do is based number one on educating people. So I have a personal mission to help 100,000 people reach financial independence. And it started out, you know, I set it at a thousand thought, that’s a pretty big number. And then read Mr. Grant Cardone’s 10 X and went, well, that’s pretty wimpy. Let’s set it to 10,000. And then I actually became a mentor in one of the biggest Texas real estate groups and the leader of that group.

said, Trevor, your ambitions are way too low. We’re setting it at 100,000. So we have one of the biggest networks. And I do all of the educating within that group towards passive investing into real estate syndications. And it’s been a really good marriage. I’ve been able to reach so many people because, I’ll be honest, a lot of people don’t know that you can passively invest in commercial real estate.

Scott Bursey (06:48)
Absolutely. And they should know more about it. Trevor, where is the most critical blind spot in scaling from regional to multi-regional investment in your eyes?

K Trevor Thompson (06:53)
Yeah.

Yeah, so obviously I think the biggest thing is finding the right operator, right? You want to make sure that I always tell people who you give your money to is just as important as where you put your money. So you want people that are operating in that area. So obviously we operate in the Texas market. We live here, we’re all here. We own a lot of assets here. We have boots on the ground in North Carolina. So it’s super important to line with somebody that has experience.

in that marketplace.

Scott Bursey (07:34)
Those municipal

relationships

are so important. They’re so important. Diligence is non-negotiable. And this is ⁓ something that our listeners are going to want to know from you. Outside of traditional multifamily, what is the hottest emerging real estate opportunity that you see in your market right now, the hot market of Texas?

K Trevor Thompson (07:39)
Yeah.

It is.

Yes, so…

We did, I did my first investment into the assisted living space. ⁓ We were able to find a really good asset. Somebody had built it. Unfortunately, they built it during COVID. It’s a tough space to operate in, but if you have a good operator, you can do very well. And so we partnered with a local operator, managed to buy an asset. And so I think that market, you know, the silver tsunami is coming. I’m one of them. I always joke that I’m going to live in there soon. ⁓

The Silver Tsunami is coming and a lot of people are going to need the services of assisted living. So we bought a 32 bed, 16 beds assisted living and 16 beds memory care. And so as your parents age, they can age in place. So they can come and get the help they need while they’re still somewhat mobile. And then once they need the intensive care, they can go over to memory care. And so it’s very, very important.

to be able to do that.

Scott Bursey (09:00)
That is

so rewarding. It’s not only a business, it’s a great mission, Trevor. That is fantastic. Where do you see?

K Trevor Thompson (09:06)
Yeah.

Yeah, and it’s

super lucrative if you think about it. again, we bought a bigger facility, but some other folks in our mastermind and our group, they’re buying single homes. So if you think of this, they’re buying a home and they’re renting out a bedroom for like a thousand dollars a week. Okay. And if you can have eight to 12 bedrooms with people in them, you have a significant cashflow. Now the operational logistics are huge, right? Because you’re, you’re, you’re, you’re carrying

for people at the end of their life, but if you get that part down, it is a very lucrative space to be in while still providing a necessary service for our aging community.

Scott Bursey (09:51)
Now this is an interesting question. Do you see AI playing a role in your operation? Has it already played a role? What’s your vision? Could you take us down that path a little bit, Trevor?

K Trevor Thompson (10:38)
Yeah. So unfortunately, you know, being an older guy, it’s tough to get some of the AI implemented, but the AI can make you so much more efficient. So the AI can do things. I, a lot of people still talk about AI doing all the work and I don’t believe it will do all the work. Anybody who tries to replace the human contact, the connection with people is going to miss out. Where I try to use AI is to make sure. So Scott, you and I talk.

I want my AI agent to make sure that they took good notes from what we talked about and they make a plan for our follow-up. So I want to use it to say, you talked to Scott and you said you were going to connect again in two weeks. I want to remind her in two weeks that I need to connect with Scott and I’m okay if AI connects with you and says, hey, you’re supposed to connect with Trevor again. Would you be able to set a call up? And, but I want it. I want to still talk to you. ⁓ but I think AI is

going to make us more efficient, ⁓ You know, make us to where we can be better service to people. And then on the operational side, AI is super powerful. So in some of our apartment complexes, you know, they can actually be trained to ask intuitive questions for maintenance tickets. It’s crazy. And so you’ll say, hey, this is working. And it’s trained to say, well, did you try this? Did you try that? Did you try that? And it’s all automated. And at the end of the day,

As long as the system connects you eventually with the human if they can’t solve it so that you can get whatever’s fixed Right your AC is not working. This isn’t working you need and then and then AI does the follow-up and says Scott how happy were you with ours and that’s powerful right because I may fix your problem, but forget to follow up with you and Then I lose that value of what I did right? I’m just I’m just now you know and so that follow-up

is so important and it kind of reminds us to keeps our systems going.

Scott Bursey (12:44)
That was a great breakdown. You want to incorporate AI, but you in no way want to lose that human touch, that human element that creates those relationships, those long lasting relationships.

K Trevor Thompson (12:56)
That’s

Yeah. And then hopefully it frees us up for more of that time because the way of me trying to remember everybody and setting up reminders takes away from my time. And I’d rather say, okay, I’m going to take an hour a day and automate that so I can spend an hour a day talking to somebody. And that’s where the real power is, right? To make you more efficient and help you do what you do best better.

Scott Bursey (13:25)
Absolutely. ⁓ You hit it right on the head. Where do you see Niagara Investments? ⁓ two, three, four years down the road. What’s your vision?

K Trevor Thompson (13:36)
Yeah, so I’ve partnered up with Massive Capital. So Massive Capital is part of what I’ve done. We’ve created a mastermind where we help people become actual GPs, general partner sponsors of syndications. And then so the role of what we do is we’ll help support them. They’re out there looking for the deals and we teach them all the systems. How do you find it? How do you underwrite it? How do you put it under contract? And then we help them making sure so they can use our syndication attorneys, our lawyers, our

all of our systems and then I connect with them on the capital raising side because that’s what I like to do the most and then what we’ll do is we’ll set up the webinars and again we use all of our systems in our databases and then the goal is I’ll raise about 20 to 30 percent of the capital they need but I’ll help them. So again it’s the first time they’ve ever raised capital. So we’ll start a deal and we’ll say okay Scott you’re going to be part of this deal you found it you join it you bring your first set of

friends and family in to invest and then I don’t know them so they can invest when it’s not in a 506c deal and I don’t want to get too complicated but you can bring your friends and family that I don’t know. I bring in my contacts that I know and combined I call our students are the tide of our ship. They make us rise up to the next level. So again, know, ⁓ I mentioned before, you know, I do passive investing so I was a

limited

partner on 20 syndications and I just closed my 18th deal as a sponsor and 15 of those are part of this group. So this group is people that would be their first time being a general partner in a deal and then I partner with them to make them successful and of course I become successful with them.

Scott Bursey (16:06)
Trevor, gotta ask you, with all your experience, if you had to bet on one factor, what will separate the successful investor from the struggling one over the next 18 months in your view?

K Trevor Thompson (16:19)
So on the investor side, it’s getting over your fears. The whole system in America teaches us to go get a job, put money in our 401k, let a whole bunch of people that we never met manage our money.

put it in systems that are designed to make them wealthy, whether you get wealthy or not. And the whole thing is changing that mindset. where you can, and you can study, 90 % of millionaires in America are real estate investors. And it’s because you can really compound and grow your money. You’re growing it at one of the most tax efficient ways. And you’ll be able to actually own real assets. And a lot of people don’t

this right they just don’t understand it you know and I like to explain

let’s say we’re buying a 10 million dollar building our group will secure seven million dollars worth of debt we’ll raise three million dollars from our passive investors and here’s the magic they’ll own 70 % of the 10 million dollar we asset we put up so they’re only putting up three million dollars but that group of three million dollars owns 70 % of a 10 million dollar asset

and they get proportionately their pay

Payments

and that’s like when people hear that they almost don’t believe me ⁓ and so it’s getting people to understand the power of it and Then of course Warren Buffett said if you don’t find a way to make money in your sleep, you will work till you die I was doing it. I lived on the Monopoly board going around I did well on my corporate job, but I never created those extra streams of income and that’s my mission

Scott Bursey (18:05)
And it is a great mission. Trevor, we also have to ask you, given your tenure, your experience, if you had to start all over, ⁓ let’s say right now, where would you put your first 200,000?

K Trevor Thompson (18:21)
Yes, so let me back up. Start over, I would start early. Anytime you ask a real estate investor, what was the one thing you learned, you say, wish I had started earlier, right? The best time to plant a tree is 20 years ago. The second best time to plant a tree is today. ⁓ So again, I think that I would, I

spend, it took me a while to find people. There’s a lot of noise out there, right? There’s a lot of noise and try to cut through the noise. You know, don’t, don’t invest with people that you don’t know, like or trust, right? You know, I get all the time you see these things on Facebook and other places. Don’t do it. Don’t do it. Find people, take the time and energy to find somebody that you connect with, that you know, like and trust, and then go on a journey with them. And then don’t

just put all your eggs in one sponsor’s basket. I know that sounds crazy like because I want you would think well Trevor you want everybody to invest. I want to actually have some people I want them to create some diversification in their passive investing. ⁓ And so I think that’s the most important thing to do is to find the who.

Scott Bursey (19:33)
Pure gold right there. Pure gold. Trevor, what sort of golden nugget or takeaway would you like to leave with our listeners today?

K Trevor Thompson (19:43)
Yeah, so I think the most important thing is you’ve got to get over your fears, right? So again, you need to educate yourself.

You need to find a sponsor that you know, like and trust. And at the end of the day, you just have to do it. Right? At some point you have to, so many people are frozen by analysis paralysis. And I was for 30 years. I knew I wanted to be a real estate investor and I just didn’t get, I didn’t find the person that told me one little thing. And that was about syndications. And the second I learned about it, you know, I’m in 38 now in seven and

half years. I think I’m an addict but ⁓ you know once I found out the power of it I was like where have you been? ⁓ And so finding somebody that can inspire you to do this and to create that second stream of passive income is going to set your family up for life.

Scott Bursey (20:44)
Trevor,

this has been an absolute master class. Thank you so much. And if our pros wanted to follow your journey or collaborate with you, what is the best way for them to reach out to you?

K Trevor Thompson (20:50)
That’s my honor.

Yeah, so the best way is on LinkedIn. You have to remember the K. So my legal name is Keith. And when I was 16, I worked for a guy who used his first initial, thought it was cool because I was never called Keith. I’m a junior. So you look me up on LinkedIn, K Trevor Thompson. Just connect with me. Tell me you saw me on this podcast. And I love helping people learn.

Scott Bursey (21:16)
Trevor, thank you so much for being on the show.

K Trevor Thompson (21:21)
Thank you, it’s my pleasure.

Scott Bursey (21:22)
And to our listeners, appreciate each and every one of you. If you got value from today’s episode, please subscribe. We’ve got a lineup of exceptional guests, just like Trevor, who are making huge moves in the market. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.