Zero to $1.4B AUM: Wealth Secrets of a Real Estate Investor Revealed

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Welcome to another episode of Making Billions. Today I have my dear friend Whitney Elkins-Hutten.

Whitney is the Director of Investor Relations at PassiveInvesting.com, a Private Equity firm with $1.4B AUM.

What this means is that Whitney has a mountain of experience in Real Estate and Private Equity and she is about to blow our minds on how to master your business and your wealth in your pursuit of Making Billions.

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[THE GUEST]:  Whitney Elkins-Hutten is the Director of Investor Relations at PassiveInvesting.com, a Private Equity firm with $1.4B AUM.

[THE HOST]: Ryan Miller is an Angel investor in technology and energy.

Transcript

Ryan Miller  
My name is Ryan Miller and for the past 15 years have helped hundreds of people to raise millions of dollars for their funds. And for their startups. If you're serious about raising money, launching your business or taking your life to the next level, in the show will give you the answers so that you too can enjoy your pursuit of making billions. Let's get into it.

When building your career in the private markets, you will need to master not only how to make money, but how to grow and keep it to. So my next guest comes from a fund with $1.4 billion under management and is about to hit you right between the eyes with these answers. So the question is, what are you doing to create and grow your wealth? All this and more coming right now? Here we go. 

Hey, welcome to another episode of making billions. I'm your host, Ryan Miller. And today I have my dear friend Whitney Elkins-Hutten, when he is the director of Investor Relations at passive investing.com. It's a private equity firm with 1.4 billion under management. So what this means is that Whitney has a mountain of experience in real estate and private equity, and she's about to blow our minds on how to master your business and your wealth. So Whitney, welcome to the show.

Whitney Elkins-Hutten  
Thank you so much for having me on. Ryan's be amazing.

Ryan Miller  
It's good to have you. So you know, you and I have gotten to know each other offline a little bit. And I'm just curious, like, where did this begin for you? And how did you even become an expert in this industry?

Whitney Elkins-Hutten  
Well, I first want to say start off that I am a huge follower of this show. So I just can't wait to provide value yours. Give me a How did I start off? Well, I bought a house in 2002 with a significant other in the relationship fell apart about a month later. And while up, I had a house complete, accidental landlord, but I panicked. I thought I was going to lose everything. So I stuffed it fully roommates and paid my friends and sushi and beer and pizza to help me replace the green shag carpet and paint over the psychedelic daisies on the walls. And fast forward. 11 months later, I had a completely beautiful house and I sold it for about a 52k profit profit. But during that time, I actually was making money because my roommates were paying covering all the bills for me. And actually, I was putting a little bit of extra cash in my pocket. I actually sold the house close. And that's when I realized, oh, wow, I made almost just as much money, probably more so. And it's something that I was working at nights and weekends on then I did in my day job that had me traveling almost 6080 hours a week. And so I was completely bitten by the real estate bud. So that's how I started off. First deal went well, second deal, not so much. I thought I was completely hot stuff. So I take this 52k And I'm like I'm moving to the mountains. I've made it big time, right, like we're talking about on a show that's called making billions, right? Pocket like totally had not made it but I had that's I was just completely beyond the moon. So I go to the mountains and buy this mountain home. And you know, a few months later, I lose my job. And my dad's at home, he's has failing health. So I was traveling back and forth. And I'm like, You know what, I just can't really float this mean, I need to get rid of this property. We're going through the closing process, and they flag the retaining wall and the backside of the house as cracking. And I'm like, you know, my neighbor has a bus, a tenant living in that bus and that bus is sitting on the wall, just have removed the bus and then we'll repair the wall. And you know, everybody's gonna go our separate ways. Now, fast forward, you know, about 3540 days of work repairing this wall like every contractor, I feel like in the county in in engineering, the county signs off on the structural integrity of this wall. And I'm sitting here the guy just moved his bus over my neighbor's portion of the retaining wall. Guess what it started cracking. I was like, guys, I don't I don't know about this. Anyways, we close on the property. My neighbor is a tenant is now allowed to move his back that bus back into position and the bus fell into the roof of the property.

Ryan Miller  
Oh, no. Yeah. Oh, my goodness. So a bus collapsed through the roof of that house. ,

Whitney Elkins-Hutten  
Yeah, literally the wall, a bomb-proof wall, gave under the weight of the bus and that bus just toppled into the roof of the house. I think on that property, I pretty much broke even but then by this time, I've met my now husband and after this experience, I was like, Okay, I got it. Let's go start buying property and fix and flipping property. And you know, living at it. He was like, Are you sure there's real estate things for you? And I'm like, no, no, no, no, I got I got it all figured out. I've made you know a plethora of mistakes. We're all good here. But that was just like kind of the Kickstart to my journey because you know, it really taught me that I can unhook my value from my time the value I created in the world from the time that I was putting into it

Ryan Miller  
brilliant you know, when you and I were talking holy cow and these are real stories, folks, this is your jumping into the private investing game whether it's real estate or any other asset classes, anything can happen and so these are how you learn this is how you become a pro and you know I'm sure now you're at you know, a huge funds 1.4 billion under management and maybe you had dreams of that but these are the things that you have to go through right as the saying goes right column C's do not make a great sailor something like Yeah. And so going through some of these, these challenging deals make you a better deal maker. Right. And so I'm curious, you know, you know, we've gotten to know each other offline. And you also have your PhD. I mean, you have done so many things, you've mastered almost everything. You're the classic, they grow where they're potted, right? So everything that you've done, you've grown, and you've done very well with your PhD. I mean, during this time, I mean, where did it go from taking your PhD working to full time real estate, maybe walk people through because this is a journey, a lot of people go through, when they're, they're working, they've got great accolades through education. And then they make the jump in the private market, maybe walk us through a little bit on that moment, so that, you know, other people can understand what that's really like to jump from a nice secure job and cozy into the carnivorous world of private equity.

Whitney Elkins-Hutten  
Yeah, well, you know, I kind of think of it the other way around, I mean, you know, stay in a job for 40 years, you know, tied to a cubicle that can be a little more daunting. But, um, yeah, so, you know, I had this first deal. And quite frankly, the second deal, you know, I, it was a lot of lessons learned, and, you know, but this entire time, you know, I'm working towards my PhD, I'm building a nutrition practice a personal training business as well. I never, I thought of real estate, kind of as a side hobby, and like, great if I can eliminate my housing expense, you know, bolster my savings and retirement, you know, I've, I've, that's what the real estate supposed to do for me, but I'm going to, you know, make my mark in this world with the nutrition and the personal training. However, the more every project I did, I was like, I, why am I doing this? Right, it was really kind of a lesson learned to me, I was like, I was able to create value in the world a much different way. And I think that's really I had to connect those dots. Like, you know, my background was in public health total, Rene Russo Dustin Hoffman style in you know, outbreak, like I wanted to, you know, investigate diseases, that I can also make an impact by providing, you know, clean, affordable housing. And so, you know, my husband and I were doing these fixin flips, you know, making, you know, buckets to equity, but we couldn't figure out how to, like, unlock those golden handcuffs. And it was really, when I kind of put two two together that if I actually can change my mindset to think about how I can create a similar type of value as I would in public health, through real estate, then I can, like, you know, Reorient, like my purpose in the world did that. And then we were off to the races, we decided to start keeping some of our flips. And, you know, we were, we built a portfolio of 36, single family rentals, bought a 52 unit building, we're continuing to fix and flip about 10 properties a year, you know, probably on average, generating just under a million dollars in capital gains, which now we've got a whole tax problem here, while we're doing, you know, scaling up this way, and then we hit our next level ceiling of achievement. And we needed to figure out how to leverage more, because when you have single family properties, and you're doing fix and flipping, you're very active in your business. And we were in this to get our time back. And we wanted to have freedom of location, freedom of choice pretty much on time, so we could have freedom and to go create this impact on the world. And so we're like, Okay, I think multifamily is the next logical step. Are we going to do that on our own? Are we going to find partners? Are we going to, you know, am I going to try to like, learn the whole private equity realm and join a partnership? Well, I did all three. Don't don't suggest doing that. But like, you know, ready fire aim, let's go figure out which one of these strategies is going to work the best. And then it was kind of like a little test, you know, the 15 unit building, you know, we bought that in partnership, you know, we learned took a lot of lumps, we learned a lot of lessons I raised, you know, stepped into a position to be able to raise on 29 deals with a private equity group, and made partner, my minority partner that group and, you know, became the general partner on Tenovus deals. And that was really where the the lightbulb started to. Come on. For me like, yes, with single family rentals, I could achieve unlocking my value creation in the world from my time, but I could create a much larger impact with these larger communities and be rewarded for it.

Ryan Miller  
Wow, that's brilliant. And so you're, you can see folks said, you just keep doing deal after deal and you keep leveling up just like Whitney has done. And then pretty soon your general partner or minority partner and majority partner and you just keep scaling in progress, right. As the saying goes, progress equals happiness. So you mentioned So you went from just doing one deal paying people with beer and sushi to buses falling through roofs and all of these wild things, and there's early in the early days of your journey, this is absolutely crazy. And then you keep going and it gets you know, refined a little bit. And so now you're at passive investing.com maybe walk us through a little bit of what that firm is and really why people you know, what's, what's the value you bring to the market?

Whitney Elkins-Hutten  
Yeah, passiveinvesting.com we're a private equity firm focused on you know, providing high quality institutional grade assets that provide cash flow, equity, Growth and Tax benefits in the hottest communities in the United States. Our current focus is in the south and south east. We love multifamily You know, buildings of 150 units or larger, we love self storage units as well. And kind of our unique asset that we have currently is the Express carwash. So we do both acquisition strategy as well as development. And we're looking to scale that to 150 to 200 locations and possibly IPO that or do a roll up exit to REIT. And then we also have a first position real estate debt fund. And I was really hoping to be able to talk about some of our new private equity funds that we're going to be rolling out here soon, but not quite ready for that. Yeah, I mean, we are, you know, we are, you know, looking to, you know, you know, partner with operators that have nice high quality stable, you know, deals, you know, not ones that are distressed, where you know, the vacancy is going down, the rents are going down, but maybe they're just struggling to, you know, make that new cap interest rate, they need that, you know, a little bit of diffusion of equity, and we can take on a private equity position, private debt position, and that, and so we don't have all the specs worked out on that fun, you know, but we're going to have that really not here very soon. But that's what I do professionally. And also personally, you know, I also coach investors on how to start building and scaling their portfolio in real estate and more specifically in private equity, real estate and have a book coming out here with bigger pockets here in the next couple, probably two or three months, whenever this gets aired early 2024. Money for tomorrow as sensible guide to building wealth.

Ryan Miller  
Wow, so you're writing a book, like you could see, like Whitney is classic, someone who just will not be stopped like this is this is amazing. So you're writing a book called money for tomorrow, and then you got private equity with bigger pockets. I mean, shoot, most people have heard of them, they've got a wonderful production. And so you're partnering up with them, you're teaching other people how to do it, you've jumped in with both feet into private equity and multifamily Self Storage carwashes, and your first position debt as well. And so you've really rounded that out. And that all culminates up to 1.4 billion under management, like you've got a plethora of experience. And a lot of people listening to this show, this is what they come for. They come to cure wonderful people who have pulled off amazing feats that you have. And I'm wondering for those people who have come to hear you today, is there any pieces of advice? Or better stated? Are there any cheat codes that you can provide our listeners, based on your experience? What are some of those lessons that you know, that can really add value to your space?

Whitney Elkins-Hutten  
Yeah, and I mean, there's two that I sent her on, like building your foundation, one of the foundations of building is just how you think through problem solving, and setting up your your objectives, your strategies and your tactics. Now, everybody, you know, is used to saying goals, like, let's read a SMART goal, like strategic, Measurable, Attainable, Realistic, and time bound. I, you know, those, that's great, that's a nice tactic, but I want to back it up even further with three fundamental questions that you should be asking yourself, you know, initially like every couple of months, but then, you know, eventually, you know, you can space it out over like every four to six months, you know, as you hit your levels of achievement that you need to, like, bust through first question is, what do you want, let's get super clear on what you want, and attach an emotion to it. So it's not just I want $10,000 a month, or I want $100,000 A month, let's I want $100,000 A month, because I want to buy the beautiful lake house, you know, in Seattle, or I want to have, you know, the top of the line, Mercedes Benz, whatever that happens to be or Porsche or Shelby, Colt, Cobra Shelby, and my husband's going to kill me, but I didn't get that right that anyways, you know, you know, let's attach that emotion to it. And then the next question is, why do you want it and you know, you're gonna have two Y's right, you're gonna at first you're gonna have a y that is very painful. There's usually something a problem you're trying to solve or a pain, you're trying to run fun. That's gonna keep you motivated on a daily basis to continue moving forward. But we want to dig deeper. Tony Robbins says dig deep seven layers, like let's get down to the, to the the layers of wire that you just cannot viscerally mean. And usually, those are freedoms like financial freedom, time, freedom, freedom of choice, freedom, location, freedom to create an impact on the world. Okay, that freedom is going to be your Northstar. That's how you should be building and scaling your business. Okay? Because how many times have you talked to business owners and entrepreneurs that they build one product, and then they are the business one way and they pick their head up two or three years later? And then all of a sudden, they're just like, it doesn't work? Right? It worked for me anymore. I'm working too hard, or it's not the right mark, product market fit or whatever that might be. We got to have the pain and we also have to have that guiding Northstar. And then once you have those two anchors, let's collapse time and try to get you there as fast as possible, which is what do you have to become in order to get that? What kind of mindset do you need? What kind of skills do you need? Okay, what kind of network do you need? And here's a little cheat code on the skills you don't actually have to learn on the skills. You just need to have a large enough network to bring those people into your world to help you with that dream.

Ryan Miller  
Yeah, that is brilliant. Love that. So the was a wonderful book that he reminds me and you're spot on. So to many of us, I think, you know, as a fan of Tony Robbins, that you mentioned his name, and he talks about the tyranny of how right you ever hear him talking about that. And so he's just says like, of course, he calls the thought process the tyrants, right. So you just, it just encompasses you. And it's really hard to just get things off the ground, right? So we would say, this is a guy that kind of No, we would say, he knows what he knows a few things. So, you know, the tyranny of how and what when he's talking about is like, Well, I mean, yes, there's a point, someone's got to do something, eventually things need to start happening. But what she's saying is, it doesn't all have to come from you. You can be a connector, right? You can connect people. And I think there was a book called who, not how by Darren Hardy. And it's just saying, like, find the right people in your network. And for those who have been following the show, for a while, we know that the two most valuable assets in your possession are your reputation and your relationships. You see how Whitney is tapping into when you want to achieve over a billion dollars, what got us here won't get us there. And what that means is often reputation relationships are what's required. So you can start today and buy a house where a bus falls through the roof, right? You could do that? Hopefully not. But you can, right you can you can go get a property, there's lots of things take courses. And there's so many resources available that Whitney and I didn't have in the early days, and we started in this world. But now if you really want to take this seriously, when he did, you could tell she went from a solopreneur. And now she's like partners on deals and has minority and majority and all of these things. As you scale up, it's a function of your reputation, and your relationships. Many other things obviously had to go right before that. But finding those skills can be from your group, not necessarily from from your own energy. That's absolutely brilliant. So building the right foundation, what do you want? Why do you care? And there was a study that was done if I could echo because I absolutely love what you're talking about. And there was a study that was done on highly successful people. And in fact, it actually echoed exactly what you're saying is they found that there's this pull, and push forces that have pushed and pulled someone towards success, meaning there's this big golden carrot in front of their face. So they got this, what do I want, and it's in front of me, and it's super close, and I'm gonna chase after it. But they also they got the metaphorical big, scary dog behind them stuff that freaks them out. And that could just be I'm freaked out to not have freedom, like you talked about winning a freedom of time, or location or freedom to take my kids to school, you know, because I, you know, I'm the person that wakes up when it's dark, and I get home when it's dark, and kids are always in bed. And I you know, and you can say look, that is terrifying to think that I'm going to live like this for 40 years or 30 years, or however long your career is. And so you have this big, we'll say the metaphorical dog chasing and nipping at your heels, as well as a big golden carrot. And they found that people who are wildly successful in their careers, or whatever it is, is they take time to really clarify what those competing forces are. And then they grab the bull by the horns and align that energy of what's chasing me and what I'm chasing to motivate them and propel them towards success. Would you say that's a fair statement?

Whitney Elkins-Hutten  
Absolutely. Yeah. And we call that in business business alignment. And so why can't we translate that skill into our daily lives? I mean, it sounds unsexy. Like, let's, let's take a business skill and apply it to our life. But it's true. Like, you know, I just got finished listening to a leadership masterclass by Jocko willings. And I'm like, Yeah, and I think he just taught me how to raise money. It had nothing to do and the whole masterclass had nothing to do about like communicating with, you know, a tweet, you know, I was like, oh, that's what I need to be doing.

Ryan Miller  
That's brilliant, and you know, you've you've made, we'll say, you made a few bucks throughout your career, which is great. That's why we're here. That's why people are listening. Making money is one thing. So the ability to create wealth, and we've kind of talked about, and we mostly talked about that on that show. But what have you found throughout your career that goes beyond that? Because it's, I mean, yes, obviously, you need to create it. But there's so much more that follows beyond that. What have you found in your your career that ties into saying, Say mastering the whole wealth game, not just making it but everything involved? What is there any advice that you found over having financial success that you can share with our audience around the world?

Whitney Elkins-Hutten  
Yeah, well, absolutely. And so, you know, my path is, like, you know, lad, my husband and I to be able to sell a portfolio of over 6500 residential units, 2200, self storage units, 15, express carwashes and myriad other, you know, businesses and stuff like that, but that's just a I mean, it those are vanity numbers, right. Like it's all in service of this greater why that we have also at the same time, I've also had been had the unfortunate experience of dealing and settling with by the states, three of which were trust and to probate and the total loss between all five of those states, you know, and we're not talking about like, it was just unnecessary loss was $700,000. Now, right, I don't know if you're, you're you're a math guy. Okay. Like you're a finance guy. Yeah, compound out $700,000 by 7%, over 30 years really fast. Yikes. That's really not. It adds up very quickly. And so that's just that and here's the thing is, my situation is not unique. Now somebody else's situation, you know, may not be as great as my what has been in my family, but you know, I'm seeing this loss happen over and over again. With colleagues with friends and family, and so it really propelled me you need to take what I have cultured and grown as an investor to go back and pull together the underlying fundamentals on how do you create and build wealth and pass it on. So if you think, you know, follow me, here we are, we call the wealth game, or the multi generational wealth a game, this, we have to understand the objective of the game, to have as much income coming in to cover your expenses to do what you want, when you want, whenever you want. Yeah, and be able to pass that on to the next generation. Okay, but understand the objective, like, I don't know, if anybody's ever played Settlers of Catan, or something like that, you know, are seven wonders like you might go okay, get the objective, build the longest road or get 10 points, victory points, but now I need to know the rules. And then somebody tells you all the rules, you're like, Okay, great. I know the objective rules. But now what's the strategy? Like? How do you actually win the game? And so that's what I do with people at ash wealth. And so here, what we're trying to do is connect again, the objective, the strategy and the tactics together. So I'll just kind of impart just the four rules that you know, somebody if they're going to win the multi generational wealth game, they need to understand they need to understand, like you said already, who read wealth, okay, how do we move our income from linear income, trading time for dollars to residual income, we're earning income that doesn't require our day to day involvement. Now, especially for real estate investors, that's who I work with. A lot of them are like, I'll just start acquiring single family properties. That's fantastic. But at some point in time, we need to elevate you out of that business. Either you need to scale it to where you can hire a team, or you need to pivot and learn how to invest in other people's businesses in order to get yourself out of that, which leads to the second part of creating wealth is how can we take advantage and move our, our limit our time involvement, okay, and this is where venture capitalist is the perfect vehicle for this, like, you know, as a way of moving from linear to residual, then you get it, once you start figuring out how to like in your, you know, exit that trading time for dollars, you know, how you create value in the world. Now, you got to keep it now, in real estate most people get in real estate, because they love saving on taxes, we don't want to pay Uncle Sam, but there's actually three different other three other areas that you need to pay attention to, like, how many fees are you paying? How much are you paying in insurance? Are there junk insurance is there, if you're investing in any type of retirement account, what are the retirement deeds there, and you combine all that together, that can actually erode a considerable amount of wealth, and it can actually rob you of your future earning power. If you're investing in retirement account, you also have another ticking time bomb, potentially, and that is provisional income. Okay? Now, I'm not an accountant. But you guys go look at provisional income, you get double taxation, if you are investing in a traditional retirement account, especially if you plan to withdraw more than $25,000 a year in retirement out of that retirement account. Okay, then growing wealth. And I think this is where especially in the real estate world clients that I work with, they're very focused, how do I become the best investor possible that as you can see, that's only one little sliver, that's one little skill, that's one little tactic to master, you have to master all these other areas of money. And so but to grow your wealth, I, you know, you know, quick little nugget I can impart is learn how to invest on principle, not headlines. So always invest in assets that protect your capital, have an element of cash flow to equity, growth, tax benefits associated with them, you know, smart use of leverage inflation hedging. And then if you're not going to be the operator, the assets that they are there are infested with an amazing operator, okay, somebody that can actually run that business and protect your capital. And then we get to the fourth stage, like if you think of it, this is like Mario Brothers, maybe I'm dating myself, you gotta like be able to scale up to all the different levels, you know, now we're getting towards the end of the game. How do we pass this on? Well, here, we want to focus on three areas. And most people are like, Oh, I got my will I got my trust. I'm good. Are you what would happen if you slipped and fell and like, knocked yourself out and you're wrong, you know, in a coma for, you know, a month? No, have you planned for your incapacity. So make sure to sit down, you have all these documents in place to actually and plan in place to plan for your incapacity, make sure you have all those, you know, all the wills and trusts in place to pass the assets on. But don't forget to train your ears. So that is probably the number one area and you know, you and I were talking the other night, you know, it's not just about how do I have my emergency binder, you know, listed out with all the accounts and who to talk to and passwords and all that no, this is literally training your errors on Hey, this is what you're going to be inheriting from me. And this is you know, our philosophy, our money, philosophy, these are our values as a family and this is you know, why we built this and why we want to continue to build and scale it and let's start thinking about what you might want to do with money as you grow it and you think about passing it on.

Ryan Miller  
Well, brilliantly said, Holy smokes, you know, as we round third base and we take this our time together, and we're closing in towards the finish line, is there anything else that you would want our fans around the world to know? How to contact you anything, anything at all?

Whitney Elkins-Hutten  
Yeah, um, if you are wanting to learn more about passive investing and you know, understand your goals, risk and timeline and how we might be able to help you a passive investing.com You can visit passive investing with whitney.com that gets you right to my free ebook, my calendar, we can talk all things passive real estate. And if you're somebody that are like, wow, I really need to figure out how to win this multi generational wealth game. You know, I'm an amazing investor. I'm an amazing venture capitalist, but I need to like, kind of get all my ducks in a row around the finance, please reach out to me at AshWealth.com

Ryan Miller  
Perfect. Well, you know, just to synthesize everything that Whitney and I talked about, really build the right foundation. So in your pursuit of making billions it's important to build that foundation. And that really starts as I always like to say success is an inside job meaning you got to understand stuff build the blueprint of your life in your mind first, right So success starts by getting whatever's going on on the inside, get that good, get it calm, get it focus, right, whatever that is, starts with what do you want? Why do you want it? Who do you need to be? And that goes into mindset, beliefs, skills, all of that stuff in order to get it. The other thing is the four years to master and create, to create and keep money is create, keep, grow and then pass it on. You do these things, and you too will be well on your way in your pursuit of making billions.

Wow, what a show. I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode where we dive even deeper into the people the process and the perspectives of both investors and founders. Until then, my friends, stay hungry. Focus on your goals and keep grinding towards your dream of making billions