Co-living and Other Creative Cashflow Asset Classes w/Pascal Wagner

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Episode Description

Welcome to the Freedom Point Real Estate podcast! Today's episode features Pascal Wagner who shares about the pros and cons of various asset classes, strategies for achieving returns as a passive investor, and the co-living real estate niche.

Pascal Wagner generates over $100k annually in passive income from 20+ LP investments and another $100k from a 100+ unit co-living portfolio in Atlanta. With $150M deployed across 200+ companies at Techstars, he combines institutional knowledge with real estate expertise. Pascal’s newsletter offers exclusive deal flow, while his workshops share strategies that have driven his success. He provides LP investors a direct path to financial freedom and the chance to invest alongside him. To begin building your cash-flowing portfolio, sign up for his starter kit at PassiveInvestingStarterKit.com.

CONNECT WITH PASCAL WAGNER!

Website: https://growyourcashflow.io/home2

LinkedIn: https://www.linkedin.com/in/pascalwagner/

Youtube: https://www.youtube.com/@PascalWagner

CONNECT WITH JEREMY DYER!

Website: https://startingpointcapital.com/

Instagram: https://www.instagram.com/startingpointcapital/

LinkedIn: https://www.linkedin.com/in/jeremydyer

Facebook: https://www.facebook.com/startingpointcapital

Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12

Summary

Tip #1: Start With What You Know

"I personally had lived in co-living arrangements for over eight years... The model just made a lot of sense to me."
Analysis: Pascal emphasizes starting with investment strategies you understand firsthand. Drawing from his own experiences, he built a co-living portfolio that matched his expertise. For aspiring investors, leveraging personal experience can reduce risks and help navigate challenges in unfamiliar markets. Focus on areas where you have insight or a competitive edge.

Tip #2: Be Aware of Local Regulations

"There’s a lot of gray area in this space... I’ve been in lawsuits, but these often get thrown out at the state level."
Analysis: Investing in co-living properties can involve navigating complex city and county zoning regulations. Pascal’s experience highlights the importance of researching local laws and understanding potential legal risks. To mitigate these challenges, investors should consult legal professionals and stay informed on fair housing laws and municipal rules.

Tip #3: Optimize for Your Goals (Equity, Cash Flow, or Tax Benefits)

"You can optimize for equity growth, cash flow, or tax benefits... Many people don’t think about what they actually want out of an investment."
Analysis: Pascal urges investors to align investments with specific financial objectives. Whether aiming for long-term equity growth, immediate cash flow, or tax advantages, clarity on goals prevents misaligned decisions. Before committing capital, assess how each opportunity fits into your broader financial plan.

Tip #4: Diversify Across Risk Levels

"I have a portion of my portfolio in high-risk, high-equity growth investments like crypto and stocks, but my LP investments focus on cash flow."
Analysis: Balancing your portfolio across different risk levels ensures stability. While higher-risk investments may offer larger returns, steady cash-flow opportunities, such as real estate syndications, create reliable income streams. Diversification also safeguards against market volatility, making it essential for sustainable wealth building.

Tip #5: Avoid Emotional Decision-Making

"Don’t fall in love with the pitch deck or the messenger... focus on whether it aligns with your goals."
Analysis: Emotional decisions often lead to poor investment choices. Pascal stresses the importance of objective evaluation, looking beyond persuasive pitches to prioritize alignment with personal financial objectives. Developing a systematic approach to evaluating opportunities can help investors make informed decisions.

Tip #6: Reduce Risk by Starting Small

"Many people start with the hardest approach—equity-based investments where you can’t touch your money for years."
Analysis: For beginners, Pascal recommends starting with lower-risk investments, such as debt or private credit funds. These offer predictable cash flow and faster feedback on investment performance, making them ideal for building confidence. Gradually progressing to higher-risk opportunities can lead to better outcomes.

Tip #7: Learn From a Mentor or Community

"I even had my own coach who guided me through identifying my goals and adjusting my portfolio."
Analysis: Guidance from experienced investors or mentors can shorten your learning curve. Pascal credits coaching for helping him clarify his investment strategy and align it with long-term objectives. Joining real estate masterminds or communities can also provide valuable deal flow and insights.

Tip #8: Vet Operators and Sponsors Thoroughly

"I only look at a deal if it has at least an 8% cash-on-cash return... and communication is critical."
Analysis: Pascal emphasizes evaluating not just the deal but also the sponsors managing it. Key factors include transparency, communication, and alignment with your financial goals. Asking the right questions and reviewing an operator’s track record ensures confidence in the partnership.

Tip #9: Look for Investments That Provide Immediate Feedback

"When you invest in something with monthly distributions, you quickly know if it’s working or not."
Analysis: Investments with faster cash-flow returns allow for real-time learning and adjustment. This is particularly beneficial for new investors who may be unsure about evaluating complex opportunities. Shorter feedback loops minimize uncertainty and build trust in the process.

Tip #10: Build Deal Flow for Better Choices

"If you see a lot of deals, you can be more choosy."
Analysis: Access to multiple investment opportunities allows investors to compare and select the best fit for their goals. Pascal’s Passive Investing Starter Kit exemplifies how cultivating deal flow empowers better decision-making. Expanding your network and resources ensures a steady stream of vetted options.