In this episode, I talk with Travis Watts. Travis Watts is a proven leader in the real estate industry, where he’s been investing since 2009 in multi-family, single-family, and vacation rentals. He began investing with Ashcroft Capital several years...
In this episode, I talk with Travis Watts.
Travis Watts is a proven leader in the real estate industry, where he’s been investing since 2009 in multi-family, single-family, and vacation rentals.
He began investing with Ashcroft Capital several years ago and has taken part in more than 30% of the Ashcroft opportunities.
After experiencing above-average communication, reporting, deal volume, and performance, Travis expressed interest in joining the Ashcroft Investor Relations Team.
Travis also has a background in traditional Wall Street investing and obtained a Series 7 and Series 63 license while working at a major brokerage firm with more than 400 billion in assets.
He now dedicates his time to educating others in the world of investing and has made it his mission to share passive investment strategies in order to help others achieve and maintain wealth in real estate.
In this episode, Travis talks with us about how he started multi-family real estate investing without help.
He discusses how he was able to add value to Joe Fairless and Ashcroft Capital and why his motto is "lead with value."
He also talks about how the way his parents raised him with the mindset to buy cheap, fix it up and sell high helped him succeed and why everything he invests in has a cash flow benefit.
You don't want to miss this episode with the legendary Travis Watts!
Casey Brown 0:06
Hey there, and welcome to the cash flow pro podcast. I am here today with Travis watts of Ashcroft capital. I know Ashcroft is a leader in this space. And I'm really excited to dive in here with Travis to see exactly what they've got going on, and exactly what they might be able to do to help you facilitate your investment needs your investment wants, or whatever they have going on. Travis, welcome. How are you today?
Unknown Speaker 0:36
Hey, thanks so much for the invite. I enjoyed our chat here before the show and looking forward to it.
Casey Brown 0:41
Absolutely, man, this is something like I said, I've watched Ashcroft from afar for a long, long time, just to at some point, even at the best ever conference, you know, learning and just just seeing how all of these pieces kind of fit together and how this this whole setup came to be. So, you know, I guess I'd like just a little bit of backstory on maybe yourself, and then maybe even how that kind of translated into, hey, let's go with Ashcroft capital and make this and build this business. So tell us a little bit about your backstory and how you got to where you where you got started.
Unknown Speaker 1:19
Sure, yeah, happy to so you know, a lot of folks in the real estate space get started and single family homes. And that was my story as well. It started with not having mentors, not listening to podcasts not coming from a family of real estate or investors. And just trying to figure it out, man like I you know, I like like a lot of people, I read the Robert Kiyosaki books and things like that. And I thought, okay, cash flow, passive income tax advantages, you know, it all sounds good to me, but I don't know what I'm doing. And so, you know, it started with some house hacking, having a roommate, you know, that effectively paid my mortgage on my first property. And I thought, well, that's pretty cool. You know, I didn't have to work for that income. What if I could scale that up somehow, you know, how do I get 100 of these checks coming in every month, not just one for my roommate. And so I got into fixing flips, vacation rentals, buy and hold single family, I did a whole bunch of stuff for about six and a half years from 2009, to about 2015. And then something really kind of crazy happened. I was, by the way, I was working in the oil industry at that time, just to make as much money as I could make. And I was being extremely frugal, and I was putting all of this extra money into real estate, you know, at a good time and in the market, as you know, started hitting a recovery around 2011 2012, something like that. So, you know, I'm building it up. And I finally decided I need some more education, right? It's really tough to scale to 100 single family homes, you know, I had this this, this thought in my head, I'm going to get one or two properties a year for whatever the rest of my life is of that. And it just really got difficult to do that, you know, and so I thought, okay, I don't know what I don't know, obviously, some people are, are at a much higher level in this real estate game than what I'm trying to do. And I couldn't really articulate that very well. So I joined this big Meetup group, it was out in Boulder, Colorado. And I was introduced to a couple gentlemen in their 60s and probably early 70s. And they had sold their companies in the mid 1990s. And they became full time passive investors. And that was a foreign concept to me, I didn't even know what that meant. What do you mean a passive investor? And a lot of what they were investing in were real estate syndications, you know, funds, individual deals, this kind of stuff. And so this was a big opener, because I finally realized that I can be in real estate, I can get tax advantages. I can get monthly income. I don't have to find these properties. I don't have to do the underwriting. I don't have to manage tenants, toilets, termites, three T's three Ds and so many more than three. Yeah, yeah. And so this was kind of what I needed at that time in my life. You know, I needed to free up some time and and I love real estate. I'm passionate about it. I just wasn't passionate about you know, swinging a hammer and managing. So, so yeah, man, that's where it all changed. 2015 I was like, Alright, I'm going to try this out. I'm going to be a limited partner in a syndication and I'm gonna see how it goes, took about six months, did one deal sat back and watched want to make sure it wasn't a scam. I didn't want to dump all my money in and I was skeptical and fairness and you know, it worked out, you know, the reporting came through the distributions came through I started seeing the light at the end of the tunnel, so to speak. So, you know, since that point, I don't know how many deals I've done for you 50 deals as an LP I don't know and a lot with Ashcroft capital. And so, and a lot with other operators, quite frankly, I'm big into diversifying different markets, different business plans, different asset types, etc. So how it came to be as Joe, I was investing with Joe just as one of one of these, you know, partnerships and several deals. And Joe Fairless had his, his daughter Quinn about two and a half years ago and leading up to that he was on the road a lot. He was doing podcasts and webinars, he was on stage, he was doing all this stuff. And he kind of lost the desire to do that with a newborn at home, you can
Casey Brown 5:30
take it from me real quick. Yeah,
Unknown Speaker 5:33
it was it was just a timing thing, you know, and I'm like, Joe, I love these conferences. I love networking. I love educating love. Let me take some of that off your plate, let me try to fill that role, call it, whatever, call it. So he called it director of investor relations. And we've since built out an entire arm of investor relations over at Ashcroft but that's kind of how it came to be. So I started as an LP investor kind of work work my way into, that's how I added value to him into the company. And so yeah, man, now I'm just out there, you know, doing webinars and conferences, I did two big speaking events yesterday, I was also at best ever conference, you know, I just go out and try to help who I can help when I can help and sure,
Casey Brown 6:15
value it sounds, it sounds to me, like you all have got the lead with value kind of lined out there. And yeah, if you have the, if you have the want to and the passion to go out and just just simply educate. I mean, that's, that's what we're here for, you know, we're not here for we're here to educate people so that they can have, so that they can show up with the tools that they need, and don't have to be, you know, I heard a guy telling me something a long time ago, and it really resonated with me. And if you have to drag people in, you have to drag them around. And the thing is, is that if you catch somebody too, too far, or too early in the process of them learning, then essentially they're just being sold, they're essentially being dragged in. So if you can educate and lead with value, show that you're a company of great morals and ethics and everything else, then then you know, people just tend to come on and, and go with you. So, you know, much like your story. Mine was the same way with the single family, Oh, my Lord, I just, I would wake up in the morning, I would just say, Okay, what's gonna go wrong today, because it was just there was there was four walls that every house rather than four walls with, you know, whatever, how many people living inside and so so the scalability was just virtually you hit a point, I hit a tipping point where I was like, alright, this, this, I've had it this is I can't do this anymore. So so the same way. So when we when we bring your story up, and you're like, okay, hey, I'm going to start working with Ashcroft and Joe Fairless. And I'm going to start looking in this direction. What was your first? What was your I guess, you went through your aha moment of saying, Wow, this is, you know, I could scale this and all of that kind of stuff. But, but let's go a little bit deeper into that. I mean, as from an LP perspective now UGP on some deals to like, I mean, obviously, you said your director of investor relations, which is what the title is, but But are you Are you actively involved in any of the management and the end the other side of this token?
Unknown Speaker 8:28
Good question. I'm not so I'm a full time LP, every investment in my portfolio, real estate or not, is 100% Hands off and passive. So I went one extreme to the other. point out that I do all the time for people, most people don't do what I do, and that they're, you know, either full time active full time passive. Most people are kind of a hybrid blend, you know, you might be toying around with some of your own projects or flips or vacation rails, but then syndications can be added on to that to help scale passive income.
Casey Brown 8:58
Sure. So for the for the people out there that may be aspiring to to move into this space as far as as, I guess, one day at one point, we are competitors. What advice now, I know a lot of people try to to get speaking gigs and a lot of people of course, you know, you have to start somewhere like we with our podcast and you know, just kind of build out from there. But you know, you mentioned that you did had two big speaking engagements yesterday and that kind of stuff, but what how do you facilitate all of that along with everything else that you've got going on?
Unknown Speaker 9:37
Yeah, so I launched under Joe's podcast, the best ever real estate investing advice podcast, I launched a show it's once a episode I record called the actively passive show. And it's kind of the irony behind there's still a lot of active components to being a passive investor. And so my message to the world is this you know, passive income if you're really An investor focused on passive income, cash flow, interest, dividends, whatever you want to call it, then it allows you as you build that up, to spend more time doing the things that you love, doing less time on the things you don't enjoy. And that was kind of my whole story. Because I hated working in the oil industry that was simply like working for a paycheck, 100 hours a week, it sucked. And I was able to outsource that job through passive income, using real estate as the vehicle that never would have happened. If I had followed the traditional investing advice of buy low, sell high. Sure, put your money in an index fund. And when you're 65, take a peek, and hopefully you're good. I don't I don't follow that at all. And I never have. And so I think that's the biggest lesson learned. So how do I manage it all? Well, first of all, I'm grateful to have an opportunity to really be able to focus on the things that I truly, genuinely enjoy. Like, for example, this podcast we're doing right here, I'm not paid to do this podcast. I mean, you're you're not paying me Joe's not paying me to do this podcast, I choose to do these for educational purposes, because it's what I enjoy. Same with his podcast, you know, I'm not actually paid to do that. I just do it. Because I need to vent out the information that I consume on a weekly basis to people and I try to simplify and make it easy for him. So it's great to find the win win situation. So I don't have a traditional schedule. I do like yesterday was a busy day, I did two back to back big conference events, today's your podcasts and like three or four investor calls. Tomorrow, I really got like nothing on the books. So A's are kind of like that, you know, I have a little Calendly and in little Google Calendar, and I just it is what it is I wake up in the morning, and what do I got going on?
Casey Brown 11:54
So Hunter Thompson told us a couple weeks ago, he said that he said that he was interviewing for what was the I forget he was an executive assistant or something maybe and this executive assistant had come from a big corporation. And she had never heard of Calendly was like this lady was spent was getting paid 100 something $1,000 in a corporation to manage somebody's calendar, and she was like bohaterowie, these these big executives, don't figure out find out about that. But nevertheless, so let's talk a little bit about how you I want to I want to know more about these LP partner, you know, the limited partnerships that you're in. As far as like, how do you pick an operator? Are they all with Joe? Or obviously you mentioned diversification? So I assume not, I assume you have some other things that you're invested in passively. And how you choose operators and what you look at and what what kind of qualities you you'd like to see I think we all have our, our list of things that we like to see up front. But then when you dig in, and you say, Oh, hey, maybe I don't like this or that. But what's some of the stuff that you look for in a good quality operator? Yeah,
Unknown Speaker 13:07
and for everybody listening, it's really important to identify your own criteria based on your own objectives and your own goals. And I'm happy to share mine here, but they may not be relevant to everybody, right? If you've got a completely different perspective on things. So for me, it actually starts Believe it or not having very little to do with investing and really nothing to do with real estate, that's where my criteria starts. And it was being raised by parents that believed in buying something used or cheap, or, you know, at a garage sale or on Craigslist, and fixing something up and selling it for a higher price, you know, later on, you know, and whether we're talking about a vehicle and car, you know, I was just raised with, you know, never buy a brand new car off the lot, just don't do it. And you know, so find that, that that car through a relationship or a friend or a family member you can buy for cheap and fix it up and use it and you know, and that worked. You know, there were vehicles through high school and college that I made money on, and I have put 50,000 miles on them. Yes. Yeah. You're making it? Yeah, exactly. I just made logical sense to me, okay. And again, that's not everyone's story or experience or opinion. And so that rolled over into real estate even when I did single family. So I would try to find an off market or a bank owned or a beat up property and try to fix it up and either rent it out, make it a vacation rental or flip it, you know, what its best potential was, and so that carries us into the syndication. So to answer your question I my criteria is about Class B properties. Primarily. I've invested in C's and B's and A's and we're talking about the age and the demographic and the quality type of the asset, but my sweet spots Be and so it's kind of finding an operator that's going to find like a b minus, that's a little outdated, but still has some good structure, bones and amenities, and sprucing it up again to the current market standard and redoing amenity spaces and units and clubhouse and landscaping and signage and all that goods, adding things that didn't have before. So it's a value add plan. That's usually the whole periods between probably three and seven years. sweet spots, kind of five years. And the markets I tend to like the most again, I invest in a lot of markets with a lot of operators, but it's the Sunbelt markets. Yeah, so I've done a lot of Texas and Florida and Carolinas and, gosh, I don't know, Phoenix, and yeah, just all over the place up markets. And then what else can I tell you about 200 to 600, unit size properties, generally speaking, I have invested in some smaller ones, not a whole lot that's bigger, other than some portfolio purchases and stuff like that. And so you know, it's just, again, it's buying something, hopefully off market or at a discount or below market rents, or whatever you want to say about it, having them fix it up, make it better, and proving it. And then hopefully, there's some value there. But the main point, is everything I invest in has a cash flow emphasis, so I never invest in new development, and nothing against that stuff. It doesn't match my recall, doesn't meet my objectives, because I live on cash flow. So it doesn't cash flow. Why would I do it? You know, that's kind of what it is,
Casey Brown 16:34
especially if you got a hold and put a bunch of in up front, and then you have you have market risk during that period. And you have Yeah, I mean, it makes perfect sense. And like you said, there's nothing wrong with it. But that just and I'm a big proponent, like is matter of fact, when somebody comes in and sits down, I am a huge proponent of them defining their risk profile, they have to decide I am X number of years old, I this is what I have to invest. And then, of course, diversifying from there. When you say, you know, new construction, the risk there is probably a little bit higher than something that's existing that you could that has active cash flow. But again, you're almost your two to three year period there, why everything's being built, especially if you're building something that's four or 500 units, you know, it can be it just doesn't tend to flow and it doesn't fit a lot of people's risk or, or their market tolerance, you know what I mean?
Unknown Speaker 17:40
Yeah, and and it's a great thing you bring up because in private placements, that usually an illiquid investment. And the last thing you want to do is look at some shiny numbers on a piece of paper and go put 100k and a new development and then a year and a half in realize, you know, we might be in this thing for five years, and they're not gonna see that money until then, or if I see that money.
Casey Brown 18:03
Yeah, yes, yeah. That's
Unknown Speaker 18:05
a little unnerving to sit yours on that and just hope and pray. And it's kind of like the buy low sell high mentality, I just, I don't subscribe to it. But that's yeah, my preference.
Casey Brown 18:16
Yep. And you know, and again, somebody that that has $10 million in the bank, and again, it all comes down. That's the other thing that we, you know, when we're talking about this stuff is, is deciding what your economics need to look like. And if you have, you know, if you have plenty of other money to live off of $100,000 investment that's gonna set five years is not gonna is not going to be a huge deal. But if you you're like, Hey, I got half money to invest, I'm gonna put 250 into something like that, that just sits there. I mean, that can be like you said, Yeah, that could possibly cause some sleepless nights later on down the road. But nevertheless, it is for some, it's not further so. So let's, let's kind of transform here just a little bit and, and discuss, you know, where, where do you envision, obviously, you're going to just continue building a little layer at a time. But is there any is there any big hurdles or any big things you see kind of coming down the pike that you're gonna, that you're going to aim for, or invest in or look for or anything like that?
Unknown Speaker 19:21
I think one thing that's really important, I like to be just as unbiased as I can. In fact, the first thing I did when I left the oil field with the cash flow, I had to support my lifestyles. I went to go work for like a Wall Street firm, a big brokerage firm, and I wanted to learn stocks, bonds, mutual funds, so that I wasn't so biased, you know, like the only thing I ever knew was was real estate even though I love it. And so I wanted I got licensed I did a dog and pony show, and I just realized that I don't like it. It doesn't match my objectives, my risk tolerance. I hate the volatility of the markets. You know, it's all surrounded by assets under management and clipping a big fee. And there's nothing wrong with that. It's just that the people usually advising you on what to put your money in, they're not putting their money in it. And it just felt very disconnected. You know, I just wasn't a fan of that system.
Casey Brown 20:14
I got a, I got licensed in series three, several years ago. And when you look at that, and Alright, so you made a 40 or 80, or $120, commission off of three, three contracts, and then you turn around and tell the guy hey, I need a $8,000 margin call. Yeah, there's a big disconnect. And so and then the options and yeah, I'm 100% on board with you. They're absolutely,
Unknown Speaker 20:41
yeah. And so I guess where I was going with that story is that as an investor, if you're really going to have a true investor mindset, and by the way, Robert Kiyosaki talked about this, about two years ago, he was at some event that I was I was at, and he was he was talking and he said, people think of me as a multifamily real estate guy. And he said, I'm not, I invest a lot in that asset class, but it's because the leverage the tax benefits, the cash flow, he said, You give me any other asset that does the same thing. I go invest over there. And it may not be multifamily, you know, and so that's how I look at it, too. I'm a big fan of what we're talking about on the show. But let's fast forward 10 years and say, cap rates are at 1% cash flows at 2%. And US Treasury bonds are at 4%. I'm going to be a US Treasury bond investor. That's right. Pivot, because it just doesn't make sense. You know, when you look at the risk and everything, you know, that you have to factor in, so so, you know, asked me in 10 years, but you know, for the last seven, it's been amazing, I'm continuing to invest this year in value add multifamily, I still see some growth and some running room to what's going on economically. But that's just my opinion, I don't have a crystal ball. And so there may come a time I pivot, I'm a big believer invest 80%, in what you know, and understand the best and then invest about 20% is what I do in experimental things. You know, maybe it's cryptocurrency, maybe it's single family, vacation rental, maybe it's self storage, mobile, home parks, whatever. So I invest in a lot of different asset classes, but most of its multifamily, just because I know what the best
Casey Brown 22:22
Yeah, yeah, the value and especially the value add part of it. And everybody just everybody thinks that I know. It's just it's a it's a very simple business model, sometimes can be very complicated to complete. So now, do you see there being so alternative investments? You You mentioned that they're just Just briefly, and I want, I want to tie a little bit of your oil experience to the alternative investments? Partially because where we're located at here, there's a there seems to be a big push for like natural gas, like, like people are investing in natural gas wells and such as so on and so forth. Do you have any experience in that kind of alternative investment stuff? Like, whether it be oil and gas, whether it be a road advertising? I know guy that's in the ATM fund? I mean, is that alternative stuff? What's your experience like in that?
Unknown Speaker 23:18
Yeah, it's hit and miss, to be honest with you. And I'm a firm believer that your risk goes down when you're investing in what you know, and understand. I just am that's just been my personal experience. The only times I've lost money is by putting money in something I didn't really understand. And almost every time I lose money, whether we're talking about you know, should I buy the stock right now? I don't know. But it seems like every time I do the stock goes down, you know? 15%, right. Yeah. Yeah. Like holding the bag or taking a loss or whatever. I lost money in this like debt thing years and years ago. That and you know, but you know, to your point, yes, I invest in ATM machines, note lending, self storage, mobile home parks, even publicly traded REITs where and I'll tell you my philosophy on that the publicly traded market, as you know, is very irrational. Sometimes it's down 20 30%, like we saw in March of 2020, just because of uncertainty, not because fundamentals have have really shifted not at that point. So I was scooping up REITs that held multifamily and self storage, mobile home parks, yeah, that fundamentally hadn't changed. They were still getting their collections and their occupancy was still high. And so then we saw kind of a V recovery. Again, I couldn't have predicted that. But you know, it's like double your money in one year. I mean, as a pretty soil that. So yeah,
Casey Brown 24:45
the cash flow hadn't changed. I mean, still, the only thing that really changed was the some of the moratorium stuff, but at some point, you had to know that that was going to that the rents weren't going to be decreased. I mean, all of a sudden it wasn't going to go down unless there's a commercial or something like that, possibly, but yeah, unless residential and that's that, that that's brilliant man, that's, that's wonderful and, and you know, the, when you kind of step back and look at those alternative investments it can be, it can be very daunting, like you said, when when people when you invest in something you don't know and I read a book several years ago called the psychology of the market. And and I feel like when you know, something, you understand the psychology, you understand what it takes for that business to tick every day, what it takes to make that money. And that way, then you know, what points of analysis you need to pluck out and make sure that they're either in line or something you expect or have a potential to be raised. So I get that and it really, it's, it's pretty good business plan, and I advise anybody to, to understand the psychology of what you're investing in. And that's why a lot of stockbrokers Get, get what they get because they know what's going on, they understand what makes that company tick. So well, Travis, anything else you'd like to add or give to, you know, people to, to really understand and then I'd like for you possibly to even discuss, you know, Ashcroft and how maybe how people can get in touch with you and and if they want to, you know, of course I are you all doing 506 B or 506 C?
Unknown Speaker 26:24
Well, Ashcroft's now doing 506 C as of the last two years. So that means accredited investors only. It also means we can talk about it on the show we can advertise so no legalities surrounding that. So just from a high level, anybody listening Ashcroft? Really the reason I've done so many deals with them, you know, so I mentioned earlier I've done 4050 deals in the space, I've probably done 13 or so with them. So not everything's with with them. But they they just match my criteria. So the criteria I shared earlier on the show of B class value, add Sunbelt markets, monthly distribution, so they're doing a fund 506 C fund where they're trying to target six to 10 properties this year. And fun number two, and we're under contract now with the property distribution sometime in the summer, you know, and monthly thereafter. So if that's of anyone's interest, then that's what they got going on. And I guess what I'd like to leave with from, you know, shifting away from that a little bit is this. I just can't stress it enough. And I struggle sometimes with articulating big points that I think are so monumental for people to understand. But this buy low sell high is just how most of us were brought up and taught. It's how Wall Street teaches us. But I'm telling you, you got to remind yourself of things like the last decade from January 2000 to December 2009, in the stock market, where if you had said, I'm going to buy an s&p 500 Index Fund, I'm just going to diversify and be in the market with whatever account there was a decade that went by with almost a 0% return because it went down, it went up, it went down, it went up but went down. You ended up at the same place a decade later with nothing to show for it eaten up by inflation. So when if you take that same decade, and you say what if I did a multifamily syndication, and just to be super conservative, if you had a 6% cash flow a year, and it never changed for 10 straight years, never in a flat or even a slightly declining market, you still were pocketing, you know, six grand a year off $100,000 investment, which would leave you at the end of that decade was $60,000. And so that's the way I look at it is I look at price and equity as a secondary factor. I look at cash flow as a number one factor. And like I said earlier, I never could have left a job I wasn't happy with if it weren't for cash flow and passive income being my primary emphasis. So I think that's really something to consider and to think about in your own portfolio or goals.
Casey Brown 29:03
And there's a I think it's gene Trowbridge says are totaled, and I think it was one of his books, or maybe it was maybe only written one book. But anyway, he said, if you're buying or investing for appreciation, you will be out of business fairly quickly. I mean, it just it just doesn't make it ever don't get me wrong every once in a while people hit and things go just exactly right you buy the appreciation is great. But if that's the only thing you're focused on, you know, you have to have something to bridge that gap. So anyhow, well Travis, thank you so much. How can the listeners get in touch with you if somebody wants to reach out and talk about investing with with you or with Ashcroft or whatever, however, how can somebody get in touch with you?
Unknown Speaker 29:44
Yeah, I open you know myself as a resource to anyone and everyone in the industry, whether it's Ashcroft or not. And so I've put my calendar. We were talking about Calendly earlier before the show, but I put that on www dot Ashcroft capital dot COMM forward slash Travis, you can book a 15 minute call with me whether it's over zoom or phone call, happy to answer any questions you have about any of this stuff. Again, it doesn't have to be Ashcroft related. And I'm all over social media. I'm on Instagram and Facebook at passive investor tips. I'm on you know what bigger pockets LinkedIn, I'm all over the place. So Travis watts, who TTS I'd be happy to help any way that I can for anyone that has an interest in cash flow investing.
Casey Brown 30:29
Awesome, man. Well, thank you so much for your time. And again, Ashcroft is something and you all are something and a company that I've been watching from afar forever, and I can't tell you what it means to have you on here so that so that we can meet and talk and I can learn some of your philosophy. So hopefully the listeners learned some as well. And again, Travis, thank you so much for your time. Appreciate it, Casey. Yes, sir. Hope you have a good day and as well. Yes, sir. See you later.
Transcribed by https://otter.ai