Why Smart Real Estate Investors Are Diversifying Beyond Rental Properties | Brent Guyor

Brent Guyor (00:00)
When I first was, you know, exiting my landlord positions and stuff, and I was still looking for that passive income that was coming in every month when I had rentals, but I didn’t want to necessarily fix sinks every month, I was looking for places to put it. And I could fly all around the country and maybe find one of these projects that would take a minimum of a hundred grand. A lot of them are five hundred or more.

and I find one for a hundred grand, put my money there and hope that one project worked out. Or I could come to a company like Ironton that we run, I can put my hundred grand in a fund that’s diversified across 10 or 12 projects. Now with that diversification, it’s a more formulaic return. You know what I you know. If I’m in one project, it may boom or it may bust. Or or it may come out somewhere in the middle, but I’m all all my eggs are in one basket.

Joseph Crooms (02:16)
Hey everyone, welcome to Investor Fuel Real Estate Pros Podcast. ⁓ I’m your host, Joseph Crooms, and today I’m joined by someone I’ve been looking forward to chatting with. His name is Brent I’m gonna let him talk about ⁓ I don’t want to mess up his last name, but I think it’s Guyor but he’ll correct me going forward. ⁓ who’s been making some serious moves, I believe in the investor ⁓ I’ll let him explain that ’cause I don’t want to get it wrong ’cause it’s

It’s sorta connected very closely with the real estate niche. So I’ll let him do that. So ⁓ Brent, say hi to everybody.

Brent Guyor (02:51)
Hi. Thank you for having me, Joseph. And so far you’re right on last name spot on. And you’re right. We r we here at Ironton Capital run a private investment firm or private equity firm for accredited investors.

Joseph Crooms (03:02)
Right. So I think our listers are really going to get take something away from how you approach ⁓ you’re approaching business. So let’s dive into it. So first of all, can you tie how your business supports or or or or works with real estate?

Brent Guyor (03:17)
Sure. I’m a real estate guy by background in trade. I spent a couple of years as an accountant, then moved straight into development. And you know, here at Ironton Capital, we focus on not only real estate, but specifically we do focus on real estate and offering national diversified funds. and those funds are ten to twelve projects. They’re spread out across the US and they’re they’re diversified both in project type, timeline.

geo geography, sponsors, etc. And so, you know, just break it down to to, you know, what does that really mean to people?

When I first was, you know, exiting my landlord positions and stuff, and I was still looking for that passive income that was coming in every month when I had rentals, but I didn’t want to necessarily fix sinks every month, I was looking for places to put it. And I could fly all around the country and maybe find one of these projects that would take a minimum of a hundred grand. A lot of them are five hundred or more.

and I find one for a hundred grand, put my money there and hope that one project worked out. Or I could come to a company like Ironton that we run, I can put my hundred grand in a fund that’s diversified across 10 or 12 projects. Now with that diversification, it’s a more formulaic return. You know what I you know. If I’m in one project, it may boom or it may bust. Or or it may come out somewhere in the middle, but I’m all all my eggs are in one basket.

I know better as an investor. I didn’t do this with my rental portfolio either. I you know, my rental portfolio was several properties. You know, in case I got bed bugs or a fire in one, I didn’t lose all my income. Ironton really kind of brings that same kind of thing down to the accredited investor level.

Joseph Crooms (04:54)
So can you give me an example of w h what a real estate broker would do t ⁓ to diversify their real estate?

Brent Guyor (05:02)
⁓ that’s a great question. So you know just to clarify, are you talking about if he just wants to diversify his broker work or if he’s trying to start his own investment portfolio in holdings?

Joseph Crooms (05:13)
You can go you can go all you can go to all three. Tell me tell me tell me the week.

Brent Guyor (05:18)
Again, if if you want to I I’ve been a bro I’ve closed deals literally from twenty-five thousand up to two hundred and fifty million. So I’ve done a ⁓ a a quite a wide range as a real estate broker. ⁓ if if you want to diversify your holdings, I mean some of that’s the beauty of the real estate market. I mean, when it every time it opens the door, every time it closes the door, it opens a window. So you can kind of move through, but if you really want to diversify your work as a broker,

You got to get out there and meet different people from different groups and really kind of work all the different areas. ⁓ the hard part is at some point you’re gonna want to kind of specialize into a niche. ⁓ and it’s gonna help you with productivity. But until you find that point, I would touch on a bunch of different areas and then kind of find which one suits you best and kind of matches your personality, right? Because everybody can sell to the right group.

I can’t necessarily know there’s some groups who wouldn’t buy from me. Doesn’t matter what I say. There’s some groups who will always buy from me no matter what I say. ⁓ and so you kind of find your group and your tribe, so to speak, and then and go through that channel, and then you become highly successful. And that’s exactly what I did. And again, you have to remember as a broker, you gotta watch where the market goes. And so if the market starts to give you something different, you may have to move a little bit into a different niche.

And you may have to adjust to what that market brings. So at one point I was buying a lot of land. When the great financial crisis hit, developers stopped buying land, they stopped building houses for the most part. So you certainly couldn’t sell them any land. So I moved over into a totally different side of the market and started building my own investment portfolio on foreclosed properties that were selling for pennies on the dollar. You just couldn’t you know again.

It’s kind of looking and seeing what the market is offering you at the time and then how can you best react to it and capitalize.

Joseph Crooms (07:11)
So ⁓ those foreclosed properties, ⁓ is that where you’re scaling at now?

Brent Guyor (08:05)
No, I wish. That’s where I scaled that during the great financial crisis. So there’s just not a concentration of foreclosure properties on the market anymore. ⁓ you know, if it came back that would be kind of a a a problem, ⁓ a larger problem for the nation, but we won’t get into that. no, that was a specific to that time. ⁓ but there is good value opportunities now, not quite on the foreclosure side, but we’re seeing prices come back down from the

what I would call euphoric highs of twenty twenty two finally. And things are coming back down into a reasonable range, where transactions can happen and and ⁓ rents can be sustainable and and so we’re seeing more value opportunities than foreclosure opportunities at the moment. That’s what we’re focused.

Joseph Crooms (08:50)
Thank you. So your main focus these days, is it commercial or residential? You know, I I know you said it’s a little difficult, p tapping into real estate, but which one is more attractive to them?

Brent Guyor (09:03)
⁓ currently at Ironton we are more focused on commercial at the moment. we still will do some residential in the right case, but to be honest with you, the residential market being in a bit of a ⁓ it depends on which market you’re talking about. ⁓ but some are coming up, some are flat, some are going down. ⁓ but none of them are really

overperforming at the moment and the land prices are still high. So a lot of the equations on the residential just doesn’t work right now. not all of it, but it’s it’s harder to find. ⁓ we’re finding again good value on the commercial side. The prices have come down a little bit more on the commercial side. ⁓ and we’re just seeing more value there. ⁓ things that, you know, ⁓ we looked at a couple of years ago and didn’t work ⁓ are now coming back around to us and at

at more reasonable numbers and do work. And so that’s again, commercials where it’s at for us as far as the best value.

Joseph Crooms (10:00)
And those commercial properties are they like malls or they are

buildings or w w w wh where w or are you moving in all or in all in all commercial areas?

Brent Guyor (10:11)
We’re moving in most commercial areas. ⁓ I personally love retail, but as a fiduciary responsible for other people’s money, retail can cycle sometimes, and I and I can’t always predict the cycle, so it’s harder to t predict when I’m gonna get out or what the exit strategy is gonna be. ⁓ similar for office, unless it’s medical office that people have to come to. That’s a little bit different story. ⁓ light industrial, I love infill light industrial at the moment.

⁓ there’s some great spots ⁓ along well known corridors. ⁓ with again, we’re not going out on the edge of the beltway. We like to go right into the middle of the beltway and find something where it’s an infill spot. ⁓ the other one that ⁓ has a bit of success, although it’s a little bit downturned at the moment, is extended stay hotel. ⁓ but again, you know, that fluctuates a little bit more with the economy than I’d like. We’ve had some good success there.

little bit of downturn over the last six months. I’m hoping we’ll shake out with some more consumer confidence. the other one ⁓ where we’re finding some good value, ⁓ and again this is the one where you know a lot of people wouldn’t touch it with a 10 foot pole, but we’re still looking some multifamily. Now we’ve taken a beating in multifamily stuff especially stuff we did three years ago or four years ago. ⁓ but again, you know, through the great financial crisis and some of these other

Downturns I’ve learned if you stop buying is when you lose. You know, you you gotta kind of if you buy all the way kind of through the bottom, and then this is where diversification comes in and not kind of blowing your sh your whole shot at once. ⁓ you know you put a little bit here and a little bit here and a little bit here and you kinda allocate all the way through. Maybe this one doesn’t hit, but that one will, or that one will. As long as you kind of stay focused and consistent.

You know, some are gonna work out better than the others, but you’re gonna come out on the other side, okay. So that’s kind of a long answer as to why we’d still be in multifamily, but we still do some multifamily because again, we’re finding some good values right now where the operations make sense. That’s the key I should add too. We’re looking at multifamily where there’s income and operations that make sense now, not based on a pro forma that shows it’s gonna be worth three times what it’s worth now in five years.

Based on a whole bunch of assumptions. It has to work now.

Joseph Crooms (12:30)
question What does your portfolio look like in the real for for your investors and ⁓ in real estate?

Brent Guyor (13:11)
Well, again, now this is where I come back to you and say, Joseph, what are your goals and what would you like to accomplish? Let’s help you set up a portfolio that accomplishes that. So I don’t have a one fits all answer, but here’s what I would tell you. I have some long term positions and I’d recommend that you have some long term positions too. And I’d recommend that you diversify those long term positions between things that you think are going to exit in three years, five years, seven years, and ten years.

And whether it’s the project exiting or you exiting the investment, either one. ⁓ again, I don’t know when the market’s gonna do in those time frames, and neither do you. So let’s make sure we’ve got set up the we let’s make sure we’ve got exits set up so that whenever there’s a boom time, you may have something set up to already exit in that time frame. And the other one, let’s focus on some income because most people need some income. So we’ve got some great medium-term income funds and a short-term income fund that does a little bit more liquidity.

It’s a great place to park your cash until you need it. so the short term spin ⁓ in particular, because you only need like 30 days at the most to get it out. So and I’m paying like eight percent or so on average, so it’s much better than a CD. You might as well come park your cash with me. ⁓ and again, the medium term income, this is my favorite one. ⁓ I I didn’t even expect to have this one. ⁓ we stumbled across it about three years ago.

And it’s become my largest single investment because it’s just such consistent and it pays every single quarter. It’s backed by medical receivables. And that that’s going to be a new one for a lot of people. ⁓ and when we have a short time frame, so I better not get too much into the details on it. But it’s kind of like account receivable factoring with a specialization in collecting from insurance companies, would be the short way to put it. ⁓ that’s what funnels are or that’s what ⁓ is the primary driver behind trying.

Behind our medium term income fund, that fund pays between 11 and 13% a year. We pay that out quarterly. ⁓ and again, I challenge you, Joseph. Who else has come on your show and you offered to pay you between eleven and thirteen percent, you know, a year every quarter on a on a pretty state ⁓ pretty safe investment? I’m I mean, it’s just it’s kind of an anomaly, right? This is this is what we do here at Ironton.

We go out and we try to fit find these hard to find investments or these kind of unicorns, if you will, and then we bring back to the masses.

Joseph Crooms (15:35)
Over the past year, what would you say since the market sort of changed, how has it affected your real estate portfolio?

Brent Guyor (15:45)
⁓ that’s a great question. ⁓ some things have definitely taken a hit. ⁓ I’m not gonna lie. you know, and whether it’s my personal portfolio, ⁓ which has been more or less flat or slightly declining on some of my condo and attached products. on the investment side, again, some of the residential projects that we started a couple years ago, which looked really good at the time, and there’s just no market for them.

the the buyer pool has is reduced significantly and so we’re having to put some of the pro some of the things that we thought we were originally gonna sell into rental programs until there’s a little bit more buyer activity and we can exit at a reasonable price. So that’s probably the biggest one is you know, delayed exits and having to you kind of go back into a landlord program and we thought we were just gonna develop and sell.

Joseph Crooms (16:42)
So talking capital, how this gives some roundabout figures. Where were you at last year, where are you at now?

Brent Guyor (16:49)
⁓ for capital under management at Ironton, we were roughly right around 60 or so, 62 last year. ⁓ and we’re ⁓ sorry, maybe 70. Sorry, I’m trying think. At this time last year, we’re probably around 67 under management, and we are currently right around 107 under management.

About a forty million dollar increase. ⁓ and again, that medium-term income fund is is what most people are interested in, that steady return of income.

Joseph Crooms (17:22)
Thank you for that. So you know, I know it’s not real easy in this climate. What’s been the key to keeping your machine running smoothly?

Brent Guyor (18:11)
Key to keep our machine running smoothly has to be good staff. And and good good processes and good execution. It’s really the combination of the three. ⁓ you know, ⁓ we were fortunate we haven’t had a senior management turnover now in I think fifteen months. ⁓ our team is gelling extremely well. the communication, the collaboration, all that is is really

I wouldn’t say it’s peaked yet because I I don’t want to I don’t want to underestimate them, you know, but it it’s really coming along nicely. ⁓ and again, that collaboration of because no one no one’s smart enough to figure out all this stuff on themselves. And the collaboration of on these ideas is what, you know, comes up with it. If somebody’ll come up and have, you know, maybe two or three pieces and start to have the basis of a new fund.

But then someone else will have the other piece and they’ll be like, hey, what about this? Hey, have you thought about throwing this in? Hey, what if we rejigged and did the percentages this way and restructured it? And that collaboration is really getting our products to be much, much better. ⁓ and much more what the what the investor wants. Again, we’re we’re LP and investor focused. So my first thing when I get up every day is making sure that what we’re putting out is exactly what people are looking for.

And the collaboration is what’s getting us there.

Joseph Crooms (19:33)
Now, every operator I know ha has a moment where things just got real, Brent. Maybe a deal that went sideways or time that had to pivot fast. You mind sharing one of those moments with us?

Brent Guyor (19:45)
⁓ God. We just got hit with one in the last year. we had a sponsor unfortunately come ⁓ commit systemic fraud on us. they recapitalized assets, they cross collateralized assets, they did it all without proper notification and somewhat in the dark. And having to go back and kind of face the music on that and you know and it you know

Money was lost. I’m not gonna sh I’m not gonna, you know, dance around that at all. ⁓ money was lost, ⁓ sponsors declared bankruptcy. but to go back and face the music and tell the LPs that you’ve not only are you not gonna give a return, but you’ve actually lost money. ⁓ probably one of the worst days I’ve had the last ten years. ⁓ and it wasn’t one day. It went on for, you know, like any of these things. All those conversations take place over a month or two, right? ⁓

So that’s to be honest with you what keeps me up at night because I treat this money like my own. I don’t like losing my own money. I don’t like losing anybody else’s money. ⁓ and so having to face that and again had the market not been downturned for so long, had there been a bit more liquidity on the lending side and everything, I it may have been a different story. But it is what it is at this point, and I gotta own the music, ⁓ and my part in the music.

And ⁓ you know, fortunately, ⁓ we were able to kinda do so ⁓ by presenting ourselves ⁓ with exactly what we’d done. And you know, we had done some things right. ⁓ unfortunately we just placed our bet on the wrong person in the wrong group.

Joseph Crooms (21:26)
Thanks for sharing that. So that’s the kind of stuff that people don’t talk ⁓ enough about. honestly is what separates the folks who just dabble from the ones who stay in the game long term. One, how long have you been in in doing this? And give us some long term advice.

Brent Guyor (21:43)
I have been doing one form of real estate or another since nineteen ninety eight. So twenty eight years. one piece of advice. ⁓

Find a win-win. Find find something that doesn’t cost you very much, but the other side has a huge value on and find a way to work it into the deal. ⁓ a lot of people love to negotiate the win-lose or let me see how much I can get out of this and stuff. And I’m not telling you I don’t too, but when we get up from that closing table or when we walk away, the best PR I get is if the other guy feels like he won too.

And so I try to make it so that the other guy feels like he won too. And when I do that, my deal flow has never stopped. It’s amazing. I I’ve had sellers now I’ve had people on the other side come back and compliment me and bring me referrals. And that’s rare. ⁓ but again I think it’s mentality. So if I only if I can only give you one after twenty eight years, make it a win win, find something that doesn’t cost you much.

You know, and and but is very valuable to the other side to incorporate it in your deal.

Joseph Crooms (22:51)
Thank you for that, Brent. Let me ask you this. What are you focusing on solving next? What’s your next real goal?

Brent Guyor (22:59)
My next real goal is to see how many people I could help retire. and see how much good I can help do with that money. I gotta be honest with you, we we held our last annual event and we asked people kind of what they’re planning to do with some of their investment earnings and stuff. And the amount of higher education goals and philanthropy goals and things like that was humble. And to know that I can actually make those happen for people and help or not make them happen, help make them happen for people.

It’s all I mean that’s what that’s what drives me now. That’s what gets me out of bed every morning. That’s what keeps me from going to bed at night. So I sure hope we can help a whole bunch of people retire and and reach those ⁓ higher education goals for their loved ones and philanthropy goals.

Joseph Crooms (23:41)
That’s big, especially when you’ve already got ⁓ a s significant ⁓ things in place in your business that you you you can really offer them a a diversified ⁓ look into where they can invest their money. The next move can either compound things or create chaos depending on how you play it. So ⁓ you’re talking about, you know, wanting to help them long term.

Now I know a lot of our people are listening are either early in their journey or looking to level up and I think there’s benefit for hearing this. When it comes to building relationships and to groundwork growing your network, what’s made the biggest difference for you?

Brent Guyor (24:21)
Being honest and being real and being true to myself. Again, I I’m not everybody’s person and I I’m okay with that. ⁓ but for the people I really resonate with, I stick with those people. ⁓ and you you know you’ll get the best of me every single time you call me. ⁓ and again, there may not there may be nothing in it for me. I may be just listening to you and what’s going on that day and and giving you some advice. ⁓ but again, you gotta be real with people.

⁓ and you gotta again, you gotta offer value. And and it’s not just financial value, sometimes it’s emotional value. Sometimes it’s just you know a little bit of support because we all need it. So ⁓ when it comes down to those relationships, I’m a hundred percent real at all times. and sometimes that comes with a little bit of tough love. Sometimes I’m a little blunt. I’ll tell you something you may not want to hear. ⁓ but again, in that case, usually we have the conversation.

And a day or two later, I’ll get an email thanking me for, you know, at least keeping us focused on what we were trying to focus on or whatever, even if we had disagreed on it. and again, I value this because that means I’ve got the relationship right. Again, if I was just a yes man and we we did we agreed on everything, we’re not going to get to the best part. That’s the collaboration we talked about earlier. You gotta disagree and have a little bit of the friction to get the best result.

That’s where you get the hottest fire, so to speak.

Joseph Crooms (25:43)
Thank you for that. ⁓ so you can’t fake those relationships are everything in this space. All right, before we wrap up, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way to reach you?

Brent Guyor (25:58)
⁓ best way to reach me is first initial last name, so [email protected] And you’re welcome to research us more at www.irontoncapital.com

Joseph Crooms (26:12)
Perfect. Well listen, I appreciate your time, Brent, your story, your philosophy, and your perspective.

We need more people in spaces who are doing the right thing and thanks again for being here. And for those of you tuning in, I know you got something for Brent. Get in touch with him. Make sure you subscribe to our Investor Fuel Station. We got more conversations coming on with operators just like Brent who are out there doing real business.

Thank you. We’ll see ya at the next episode of Investor Fear Real Estate Pros Podcast.