Sleep Well at Night with Estate Planning w/Andrew McNair
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Episode Description
Welcome to the Freedom Point Real Estate podcast! Today's guest Andrew McNair shares the story of his financial journey beginning at the age of 14 and offers valuable insight into retirement plans, sponsors, and the importance of giving.
Andrew McNair is the President & Founder of SWAN Capital. He manages over $300 million in assets, exited an 8-figure personal real estate portfolio, and has 10+ years of experience in real estate investing including multi-family, RV parks, storage, short term, and industrial properties. Andrew enjoys sharing his knowledge with others. He is a public speaker, an adjunct professor, host of a weekly radio show called “What Your Money Would Say” and podcast host of Rich Young & Powerful. Some of his guests have been Dr. Ben Carson, Larry the Cable Guy, Dabo Sweeney, and many others.
CONNECT WITH ANDREW MCNAIR!
Website: https://swan-capital.com/
LinkedIn: https://www.linkedin.com/in/andrewsmcnair/
Facebook: https://www.facebook.com/SWANCap/
Youtube: https://www.youtube.com/user/SWANSleepWellAtNight
Instagram: https://www.instagram.com/swancapital/
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: Diversify Your Investments Across Real Estate Sectors
"With something like Signet, I'm invested in storage, flex industrial, apartment complexes, as well as short-term rental."
Diversification is crucial in real estate, just as in any investment strategy. By spreading investments across multiple sectors, you protect yourself from downturns in specific areas. Andrew emphasizes that this approach mitigates risks from localized events, like hurricanes, and ensures a steady flow of returns even if one sector underperforms. This mindset helps build long-term financial resilience.
Tip #2: Embrace Passive Ownership for Time Freedom
"The beauty of passive is that you're a silent owner... no one's calling you saying hey can you change out the toilets this weekend."
Passive investing allows individuals to participate in real estate ownership without the daily hassles of property management. As Andrew points out, busy professionals can enjoy regular dividends without the operational stresses. This strategy offers peace of mind and consistent income without the time-consuming tasks associated with active real estate management.
Tip #3: The Importance of Tangible Assets in Inflationary Periods
"It's really important to own a tangible asset... during an inflationary period is so incredibly important."
Andrew highlights the value of tangible assets like real estate during times of inflation. Real estate tends to appreciate in value, offering a hedge against the devaluation of currency. Owning something physical adds security to your portfolio, ensuring that your investment grows in line with or above inflation.
Tip #4: Market Timing vs. Long-Term Strategy
"In a three to five year period in something like Signet... you're not trading stocks on a daily basis."
Real estate is a long-term investment, and Andrew stresses the importance of patience. Unlike the stock market, where volatility can drastically affect prices in short periods, real estate investments often require a multi-year horizon. This perspective allows investors to weather market cycles and capitalize on the natural appreciation of property values.
Tip #5: Judge Operators by Their Communication and Track Record
"First and foremost is communication... if you're getting surprised, you're hearing it from other sources, that's a really bad sign."
When choosing a sponsor or operator for passive investments, Andrew emphasizes the importance of clear and consistent communication. Investors should avoid operators who leave them in the dark about issues or deviations from the business plan. A proven track record is also key, as it shows the operator's ability to navigate different market conditions successfully.
Tip #6: Understand Business Plans and Contingency Planning
"You should have assumed that things are not always going to go your way... it's called life."
Investors should carefully evaluate an operator’s business plan and ensure it includes contingencies for market downturns or other unexpected challenges. Andrew points out that those who blame external factors like rising interest rates for underperformance likely didn’t plan adequately. A robust business plan accounts for both good and bad market conditions.
Tip #7: The Value of Generous Giving in Financial Success
"I had to do something pretty radical... I had to give all of my money away."
Andrew's personal journey has taught him that true wealth extends beyond monetary success. His practice of giving away a significant portion of his income keeps greed in check and aligns his financial goals with his values. This mindset encourages listeners to think about how giving can bring deeper fulfillment and prevent the trap of defining success solely by net worth.
Tip #8: Be Cautious of Market Overvaluation
"If you look at the stock market... we're at 197%, two standard deviations above where the historical trend is."
Andrew warns that the stock market may be overvalued, making real estate an appealing alternative for cautious investors. He cites key metrics like the Buffett Indicator and Schiller PE ratio to underscore how inflated the market currently is. Investors looking for more stable, tangible assets may find real estate a safer option during periods of market volatility.
Tip #9: Assessing the Impact of Interest Rates on Real Estate
"Some of these bad operators... might just get saved by the FED manipulating interest rates to their benefit."
Interest rates play a significant role in real estate, and Andrew discusses how some operators may have been caught off-guard by recent increases. Experienced operators plan for a range of economic scenarios, and those who didn’t foresee higher rates may be at risk. Investors should evaluate how their chosen sponsors have managed interest rate risks before committing funds.
Tip #10: Traveling Broadens Perspective, Personally and Professionally
"I've been to 41 countries... I try to go to two new countries every year."
Andrew's commitment to traveling and experiencing new cultures aligns with his approach to investing. Just as diversification benefits a portfolio, broadening your personal horizons through travel can provide new insights and opportunities. His passion for travel encourages a balanced approach to life—seeking both professional success and personal enrichment.
