Most Interesting Man in the World Finds Passive Real Estate w/K. Trevor Thompson
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Episode Description
Welcome to the Freedom Point Real Estate podcast! Jeremy Dyer welcomes K. Trevor Thompson to this week's show to share about his real estate investing history, his investing mindset, his advice to new investors, and more.
K. Trevor Thompson is based in Austin, TX. He has invested in 31 commercial real estate syndications - 20 (8 full cycle) as limited partner and 11 as a general partner sponsor. Over the past few years, he has become passionate about learning about real estate investing. His goal is to help 1,000 people to reach financial independence though real estate investing. Trevor is an avid learner and loves connecting with like-minded people.
CONNECT WITH K. TREVOR THOMPSON!
LinkTree: https://linktr.ee/ktrevorthompson
LinkedIn: https://www.linkedin.com/in/ktrevorthompson/
Youtube: https://www.youtube.com/@KTrevorThompson
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: Build Trust with Your Sponsors
"I actually watched that sponsor for one year. I went to four deal webinars... he answered questions every time I had a question."
Establishing a strong relationship with investment sponsors is key to a successful investment. Trevor emphasizes the importance of getting to know the people behind the deals by attending webinars, asking questions, and evaluating past performance. A strong sponsor relationship provides confidence in future investments and helps mitigate risk by ensuring alignment of goals and transparency.
Tip #2: Overcome Analysis Paralysis
"Analysis paralysis or paralysis by analysis... it's a real thing, but the growth really happens in taking those actionable steps."
Many first-time investors struggle with overanalyzing deals to the point of inaction. Trevor explains that while thorough research is important, you'll never be completely ready or know everything. The key is to take the leap and make that first investment, as each one will teach valuable lessons and build confidence for future decisions.
Tip #3: Learn from Failures
"Unfortunately, they got repossessed, and we did lose all of our money... but you have to remember, what happened is not normal."
Real estate investing isn't without risks, and occasionally deals can go wrong. Trevor shares a story about a deal that failed due to rising interest rates and insufficient capital reserves. His experience highlights the importance of accepting failure as part of the learning process and remaining vigilant in future investments to avoid similar pitfalls.
Tip #4: Stay Vigilant with Market Trends
"Interest rates shot up to the top of the hockey stick... that's not normal."
Trevor warns that market conditions can shift unpredictably, as seen with the rapid rise in interest rates. Staying informed about macroeconomic trends and adjusting investment strategies accordingly is crucial. Investors should be flexible and ready to pivot, especially in volatile markets where opportunities may arise or disappear quickly.
Tip #5: Seize New Investment Opportunities
"I think the next 18 months is going to be one of the biggest buying opportunities of my career."
Despite market uncertainties, Trevor identifies the current environment as ripe for real estate opportunities, especially as asset prices have dropped. Smart investors should view downturns not as times to retreat but as chances to acquire undervalued properties that could yield significant returns when the market stabilizes.
Tip #6: Understand Debt Leverage
"This deal was leveraged at 80% of loan to cost... I would never invest in a deal like that again."
High levels of debt can be risky, particularly in volatile markets. Trevor reflects on a past investment that failed due to excessive leverage and warns against overleveraging. Understanding the balance between debt and equity is essential for investors looking to minimize risk and protect their capital.
Tip #7: Diversify Your Portfolio
"There are opportunities to invest in real estate at all different stages of the economic cycle."
Diversification remains a key strategy in real estate investing. By spreading investments across different asset types and market cycles, investors can better weather downturns and capitalize on growth areas. Trevor stresses that, while no one can predict the future, a diversified portfolio ensures resilience.
Tip #8: Focus on Stable Debt
"We did get fixed debt on it... certain things I never even thought were as important, like stable debt, are hugely important."
Fixed-rate debt offers a layer of protection against interest rate fluctuations, a lesson Trevor learned firsthand. In an environment where rates can rise unexpectedly, having stable, long-term debt is a critical factor in maintaining consistent cash flow and minimizing financial risk.
Tip #9: Passive Investing Mastery and Learning Resources
"We're going to get a lot more into new-build retail development, neighborhood shopping malls, and strip centers."
Trevor sees significant opportunity in neighborhood retail developments, especially in growing markets like Texas. As online shopping expands, neighborhood retail centers that provide everyday services remain resilient. These retail investments can offer stable returns in both good and bad economic times, as they serve immediate consumer needs.
Tip #10: Connect and Network Actively
"Find me on LinkedIn... love connecting with people, love talking to people."
Networking is critical for staying informed and connected in the real estate investment world. Trevor encourages investors to actively reach out, join webinars, and engage with others in the industry. These connections can lead to valuable insights, new opportunities, and collaborations that can significantly boost an investor’s portfolio and knowledge.
