Money for Tomorrow: How to Build and Protect Generational Wealth

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend Whitney Elkins-Hutton.

Whitney is the director of Investor Education at passiveinvesting.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 teach you and I the areas, you're losing money and the ways you're going to make it back. So Whitney, welcome back to the show.

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[THE GUEST]: Whitney is the director of Investor Education at passiveinvesting.com, it's a private equity firm with $1.4 billion under management. 

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• 17:06 [Ad] Everyday AI: Your daily guide to grown with Generative AI
• 17:54 (Cont.) Money for Tomorrow: How to Build and Protect Generational Wealth

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, and the show will give you the answers, so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

If you're struggling to make cash flow, but don't know where to begin, then you need to listen to this episode. See, in this week's episode, I bring on my friend Whitney, who helps manage $1.4 billion in real estate and private equity and she's about to drop some major wisdom on how to get started earning cash so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend Whitney Elkins-Hutton. Whitney is the Director of Investor Education at passiveinvesting.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 teach you and I the areas, you're losing money and the ways you're going to make it back. So Whitney, welcome back to the show.

Whitney Elkins-Hutten  

Thank you so much for having me on Ryan, this is gonna be fun. 

Ryan Miller  

Yeah, it's certainly an honor to have you and you know, we've been very fortunate to have wonderful guests just like you. We've been rated in the top 10, investing podcasts in America, at the top 2% in the world and we are just getting started. So before we jump into anything, like 30 seconds, what's your origin story, how did all of this begin?

Whitney Elkins-Hutten  

Well, first of all, I want to say congratulations, because you're being really modest with top 10. I saw, I saw that Making Billions hit number four yesterday and climbing. So you're being really modest here. 

Ryan Miller  

Thank you. 

Whitney Elkins-Hutten  

I wanted to celebrate that, it's a huge win to the Making Billions community for sure. As far as me, my name is Whitney Elkins-Hutten, the Director of Investor Education at passiveinvesting.com. One would think I have a degree in real estate after you know, working with a large private equity firm like this. No, I actually started off in real estate completely by accident and I bought a house in 2002 with a significant other and the relationship fell apart about a month later and I had a house. And so got, got scrappy, bought a book from Home Depot, took some classes there. Rehabbed the house, got rid of the green shag carpet and psychedelic daisies and 11 months later I sold the property. I thought this whole entire time that this house, this real estate house was going to sink me okay. But when I sold that property, I mean more money in that one transaction, just selling the property than I did in my day job that had me traveling 80 hours a week. And I had outsourced all my utilities, principal, interest, taxes, insurance bill, to my roommates, to my tenants. And that's what I really fully understood the power of real estate and what this could do to help me create cash flow and build equity in my life and really, you know, help me create the life that I love. 

Whitney Elkins-Hutten  

Now, my journey starts there over the course of the next 22 years, scaled real family rental portfolio and then bought a, build it multifamily billion in partnership and then after that, decided I needed to go bigger, faster. So joined up with a couple partners, and we scaled a private equity firm, so we co syndicated 26 deals, you know, in a four year timeframe. And, you know, that's where I still do a lot of my portfolio, the 6500 units, I have under management, myself with me, my husband and I and self storage, we also did some express car washes. And then we also were partners with passiveinvesting.com and when our partnership, when we parted ways in that partnership, that's when I transitioned over to passiveinvesting.com. And doing what I love, which is educating investors, like the people here on how to leverage that, not only build their for net, financial foundation, start investing the right way, but to actually scale their portfolio because most people have a higher and better use in their day job or scaling their own business. So how can we leverage the power of real estate to complement that portfolio as they grow?

Ryan Miller  

Then that's the right question and so how is what we do here, right? So we don't just talk about what, we get into how, because people listening to this show called Making Billions. They just don't want to talk they want to do and so you're certainly one of them, anybody at a firm with 1.4 billion and understands how to make their roommates pay their tax bill, I mean, you've got some skills, and I think we can learn a few lessons from that. My roommates happen to be my children. So I keep trying to get them to pay my taxes, but it's not working, but you know, in all seriousness, there's people, you've been a beginner, I've been a beginner, we've all started our journey of the first steps. Now we're gonna get into some more advanced techniques later on in the show, but let's just address the beginners in right out of the gate. So what would you tell someone who's just starting out on their private investing journeys, particularly in real estate, how do they win in the early days?

Whitney Elkins-Hutten  

Well, oftentimes the I get that question, how do I get some quick wins or like if I were to do it all over what would I do differently? I would do, serving my real estate journey the same, maybe not by accident, but start with a roof over my head. So how can you take where you live and create some sort of arbitrage, maybe you get roommates. If you own your own home or even if you're renting, get some roommates, help reduce your bill there. Another way is to get like a multi unit type property, a duplex, triplex, one to four unit, you know type property because you can get conventional financing for that. Sometimes an FHA, a first time homebuyers loan, which means you can come with as little as 3% down for that type of loan, then you can bring on, you know, one, two, maybe three additional streams of income to help offset the cost of that property and building your rental business. Maybe you're a little bit more seasoned, maybe you have a wife, maybe you have kids, you don't want to share walls with people you know, bringing in roommates just sounds like a complete nightmare, even then you have options. Could you move into a property where say there's a main house and then maybe there is a carriage house on the property. A mother in law suite, attached dwelling unit or accessory dwelling unit? How can you let, leverage that additional dwelling unit on the property to bring in streams of income? 

Whitney Elkins-Hutten  

Here's the cool thing, like if you live in a very high density area, like this is becoming really popular in places like Washington, Oregon, along the western Gulf Coast, even where I live in Colorado. We're struggling for affordable housing and so the cities are actually kind of incentivizing homeowners to build these accessory dwelling units to create high density housing, you need to put another unit on an existing property. They're loosening the guidelines and making it easier for homeowners to do that. So that could be like one, how can you just leverage what you have, what's available to you and then a second way, would be how could you create a business out of that? So I have for my husband and I, we have our property and when we're not here we Airbnb it. One, we've got somebody staying here, like, you know, nobody's gonna mess with our property while somebody staying here, but two, we get to have an additional stream of income. Now, if you're giving even savvier about it like some of those home upgrades that I want to make, I'm bringing in additional income from the Airbnb in order to pay for those home upgrades and guess what I get to ride them off and so you're creating like a little business there. So those are just some ways to get started with what you currently have.

Ryan Miller  

I love that last strategy that you brought up and even think of that. So it's like if you go on vacation or business trip, or whatever it is, you can squeeze out some cash flow in the place that you're in, what Whitney's talking about, you could tell that she's dialed in and especially I can tell you've spoken to a lot of beginners and given that advice. It's just to say start with where, what you have with where you're at, that's absolutely the best advice. So get roommates have a multi unit mother in law suites, carriage homes, if you travel, rented out short term for a few days, or whatever it is, and just keep getting cash flow out of that asset. I love it. 

Ryan Miller  

Now, getting early points on the board is only half of it, there's also some risk out there and there's some silly things you can do or silly things that can be done to you to knock you out of the game. A lot of times the investing game is just a game of attrition and as long as you can last, you can actually make some money. So the goal also is not only to make money, to make cash flow, but also to stay in the game as long as possible. Sounds like that also means doing some defensive things. I'm just curious, can you address the beginners in the audience and help them to understand how to avoid getting knocked out of the game too early on? What would you say? 

Whitney Elkins-Hutten  

Yeah, well, as people get really good at building skill sets and creating wealth, right, you, maximizing their take home income, they naturally want to start jumping to like, how can I grow this and I've got some great tips there. I think there's an intermediary step that people should focus on that anybody can focus on is like, how do you keep what you have already coming in, right? So that would be kind of defensive step number one, how do we keep it and then defense step number two, it'd be like, how do we grow it in a principled manner, how do we create a framework that's going to allow us to make money whether the market goes up, down or sideways? 

Whitney Elkins-Hutten  

So to address point number one, like how do we just keep what we have coming in? How do we build a form, a fortress financial foundation? You know, you know, I've heard the analogy, you know, if you had a boat, how you plug the leaks in the boat. There's really six ways here that somebody can, anybody can really start tackling these. We'll touch on taxes, because for people, my investors, my real estate investors in particular, they like love talking about how to save on taxes, but that's just one of five ways. 

Whitney Elkins-Hutten  

The first one is, taking a look at like how you're leveraging debt and you know, if you have investment properties, or you invested in investment properties, you're probably looking for ways to use leverage and get compensated, you know, to outsource that debt. That's great, we're not talking about that, we're talking about your car loans, your personal loans, student loans, maybe loans on primary residences, things that aren't bringing in cash flow, like how do you pay off this debt in a systematic manner. If you follow the advice of like Suze Orman or Dave Ramsey, they would have you either pay off the highest debt first, the largest one, or they have you pick out the highest interest rate and start paying there. But there's even a more savvy approach. We want to you know, find that debt, simply you're going to take what your minimum monthly payment is, you're gonna take like what your balance is divided by the minimum monthly payment and you're gonna get an index. Okay, that index number is going to form which debt you should pay off first, any index that's 50 or below, get a gone, pay it off, you're probably going to get a 25-35% return by paying off that debt quickly, get it gone. You know, if it's between 50 and 100, we're gonna save that until we get the first round of debt paid off, we're going to sit on that, and we're going to try to figure out how to renegotiate that next. If the index is 100 or above, that's probably pretty optimized debt, that means your rate of return is probably around 6, 7, 8 percent, maybe 10 and you know, down to 6%, you might be able to find an investment, that you could take that money rather than paying off the debt actually go make more than 10%, right? So that's kind of rule number one, how can we like understand how to pay off debt in a proper manner. 

Whitney Elkins-Hutten  

Rule number two, or strategy number two, outsource your liabilities appropriately and I mean, like insurance. I think a lot of us think about health insurance, car insurance, home insurance, but also think about disability insurance, you know, you guard against you losing your stream of income, W2, or business income, right, can you guard against that kind of payroll income that's coming in until you scaled your portfolio and you don't need anymore? Think about getting some sort of term or life insurance policy? So should you pass away that all your debts are paid and your loved ones can then either figure out like what do we do next? Or not trying to struggle and figure out how to like take cash flow and pay down like a house or a car or pay off student loans, right? Student loans don't go away when you die in most cases? So can you make sure that you're carrying enough life insurance for that. And then of course, you have umbrella insurance that will help kind of coordinate all these policies, especially for my business owners, for my real estate owners and investors. Your work, kinda one area, an umbrella policy to help coordinate all these different insurance policies. And really, it becomes a carrot that you can dangle should you get into a situation where you are at fault, and usually, that's going to be in a car wreck, right, or like liability and slander in online situations. So we think of LLCs, that helps protect us from a bottom up attack from somebody slipped, tripping and falling on our property, you know, a business and misdealing. But we also need a thought, think of that top down attack, in that you know, that liability policy can be very critical in helping us protect that. Now I want to go back to the home insurance really quickly, is asset prices have done a huge run up and then past four years since COVID. You know, we're talking 10 in some markets 10 to 15% compounded return year over year. You need to go back and look at your home insurance policy and look for two things. One, are you adequately covered should you suffer a total loss? Could you actually rebuild because in the same time that we've had this asset price run up, we have also seen labor costs skyrocket, as well as construction materials skyrocket, could you actually replace your home. Two, with post COVID, working from home is more attractive these days. However, home insurance policies mostly don't cover that type of activity, you have to add an additional liability rider. So make sure that you're adequately covered, especially if you have something more than just your laptop, like if you have proprietary like property at home client files, stuff like that, you're gonna want to make sure that you have those things in place. So we've gone through two, I've got three more, I'm gonna kind of cruise through those, right, and we can dive deep, but those are the two biggest ones that I think people anybody can tackle right now. 

Whitney Elkins-Hutten  

Number three, reducing the fees in your portfolio. Now get rid of the banking fees, you get rid of the pain, credit card fees, those are pretty low hanging fruit. If you're doing real estate transactions, or any type of lending transaction, try to get the best deal that you can on that transaction, your title fees, stuff like that. But for most people look at your retirement phase, you could save 10s, if not 100s of 1000s of dollars over the course of your investing career. 20, 30 years by reducing your fees and most retirement portfolios have like a 1 to 2% asset under management fee, guys that compounds to almost a 31% loss in your retirement income. Who can afford to lose 31% of your retirement, I don't want to, right? And they get paid whether they perform or not. 

Whitney Elkins-Hutten  

Number four taxes, as investors, especially in real estate, we love talking about taxes. We should be looking at all the ways we can maximize the deductions smart use of entities I mean, work with a tax strategist to do all this. How can we hire our kids into our business? Are we maximizing all the tax credits we possibly can and once we've done those four things, only once we've done those four things, should we start thinking about stuffing money into a retirement account. But what are we trained to do as Americans?

Ryan Miller  

Yeah, invest, spend, consume, 

Whitney Elkins-Hutten  

Yeah, consume, but also go to school, get a good job, get married, contribute to your retirement account. There's four other steps that we should be doing at first that can even compound later on. Because if you're going to retire with more than $500,000 in your retirement account, the odds of you triggering what we call provisional income and getting double taxation on your Social Security skyrocket. So if you're five to seven years away from retiring, you need to be talking to a tax strategist now to figure out how to start smoothing that path into retirement. Don't retire, I just got off the phone with an investor yesterday, he was like, I'm 65, I've already retired, I want to get my money out of my 401k, like with the state of California, and I'm like, ouch, okay, there's a way we could still solve this problem. But the best time to taking care of this was five years ago. 

Whitney Elkins-Hutten  

And then the last thing and this is the kind of the ugly truth of the matter, nobody loves talking about death or incapacity, illness, or anything like that. But make sure you have planned for your incapacity and I mean, I don't mean wills, I don't mean trust, that's part of estate planning. That I mean that you have your living well healthcare directives and power attorneys in place, because you want to make sure your health doesn't drain your wealth. Nobody loves talking about that, but the time to talk about that time to make these plans as now while you're young and while you're healthy.

Ryan Miller  

That's right, just to summarize those six areas you will lose or are losing a lot of money or somewhere in between looking to accelerate a debt payoff, do that indexing formula, you can kind of get a good balance to say, can I use this capital in other areas or not? Is it a better return to pay this debt off or is it better return to not, either way, and when he gave you a bit of a formula to do that. Second one is insurance, make sure your insurance is up to speed. Third, reduce fees in your portfolio, number four is work with a tax strategist. Number five is work with any credits or things that are out there to our employees, we talked a little bit about that. And then number six is just plan for some of that incapacity that you may or may not have. So I absolutely love that. So those are some areas that you can implement to just not lose just to make sure that if one or multiple of those things happen too close together, you could get wiped out. And so what Whitney is trying to help us with is just to say it's not enough to just make money, you also have to hold on to it, you have to protect it, and build enough of that armor around your assets, that's absolutely brilliant.

Ryan Miller  

Thank you for watching, if you've made it this far, we must be friends. So don't forget to like subscribe and click that notification button. Now, let's get back to the show.

Whitney Elkins-Hutten  

Creating money, growing money, each of those on their own are two different skill sets, right? You know, somebody can build a business, somebody needs to learn how to invest their profits, keeping money is an entirely different skill set. So we have to build that third skill set. And quite frankly, that's where most, most investors I know that are fearful in today's environment. That's where they're kind of missing out on is like flexing those muscles, right? It's just like weightlifting, right, anybody that you can't just go to the gym and like bench press like 150 pounds, you have to work into it. Right, we have to start flexing those muscles and if your head spinning right now guys, I have a book money for tomorrow how to build and protect generational wealth, all this is in there.

Ryan Miller  

I love that. Yeah, so Whitney, you last time you're on the show, you talked about writing that book. Now it's done, we definitely want to get into that. So I'm assuming a lot of the wisdom that you already have you put it in a book, but some of the stuff we're going to share today are some of those excerpts out of that book. So I love it. It's one thing to have tactics and to have strategy, it's an entirely different thing to apply it in a market that works and likes those strategies or does not. So I'm just curious, what are you seeing out there? What's what's going on in the market as far as real estate or in any other way? What do you see in the market?

Whitney Elkins-Hutten  

Well, I mean, you know, certainly there's a lot of turbulence, there's a lot of you know, ambiguity, there's a lot of unknowns. It's a market that we really haven't seen in any form or fashion since 2008 and quite frankly, I would challenge since the 1970s. Where you've got this, not only confluence of real estate cycling, you know, the stock market cycling, but now you have inflation. You might even have stagflation coming into play, the Fed rate has raised interest rates very aggressively, you know, even though we're not too late the 10, 11 and 12% in the 1970s. The run up we saw in 12 months was greater than any than any time during the 1970s. That's how fast the Fed was trying to put a damper on inflation. Everybody thought coming out of COVID inflation was going to be transitory once we got the supply chains back up and running, people would call that exuberance would calm down, that's just hasn't been the case. But you know, for me where I'm at in like real estate, specifically like multifamily, Self Storage, Express car washes, while there's a macro cycle to pay attention to real estate is still extremely hyper local. You can't just say real estate is struggling or multifamily is struggling because in certain parts of the southeast and it's not, it's like booming. You know, but our primary markets like San Francisco, San Diego, of course, you know, multiple pockets along the east coast, Chicago, even a little bit in Houston, we're seeing a huge softening of that those markets. But fundamentally especially in multifamily, we're still very, but the macro trends are still much and you know in our favor right? Where, depending on the stat you read 4.3 to 10 million homes under supplied that was as of 2023, and if we stayed on the same construction pace, in 5 years we might get within 80% of that housing supply. Well, when the Fed raised interest rates, as much as they did, they killed the construction. So we're seeing a lot of construction stops, but also, there's no more new starts. So once the supply of multifamily has absorbed in most markets from, through the remainder of 2024, into the first quarter of 2025, there's nothing, no new supply coming online behind it. Okay, so even if the Fed starts dropping rates this year, and people start filing for new permits for construction, we still have another two to three, maybe move five year gap before new deliveries will start happening. So this is an amazing time to buy, in kind of one of the lower parts of the market cycle, especially for like multifamily and self storage real estate. Now cash flow is compressed, but when that supply is absorbed, we're gonna have more people competing for the same units and so we can expect rents to start rising. We can only globalize so much we have to look at the micro situation. 

Ryan Miller  

Yeah, in a big part of investing is not only looking at where it's at, but also where it's going. So I'm curious, just getting your opinion, obviously, we don't have a crystal ball. So financial advice, we're just talking about what we think in our opinion. But I'm just curious, what are you seeing out there and maybe where do you see the smart money going in the near future? 

Whitney Elkins-Hutten  

Yeah, I mean, I, you know, again, you know people like looking at these trends trying to see like where different asset classes are in their particular market cycles. Multifamily, and probably, you know, towards the lower end, so self storage, you know, pretty stagnant towards the lower end. We talked about that supply issue, so you know, that's going to compound where these, these particular asset classes are in their market cycle. When we talk about where are things going, I like to think pretty literally about this, right, so one report to really take a look at is the U haul movement report, because that will tell you where the population is moving and where they're moving to. And right now, like the Carolinas, North Carolina, South Carolina, Tennessee, there's a huge booming areas with the influx of population. They're not the only states but you know, they're near and dear to our heart at passiveinvesting.com, we love investing in those states for that very reason. We have a property in Nashville, Tennessee. Oracle just announced that they're moving their headquarters there, that's huge, that's gonna be amazing and influx of jobs. So you want to start looking for those trends. So not just where are people leaving, but where are they actually going? And, again, one of those tools we'll look at is that movement report by U haul.

Ryan Miller  

Man in U haul we trust, I still remember covering that and I was grad school or undergrad or something like that and that U haul trend report that's that's a real thing. If you're into real estate investing, or you want to get into real estate investing, or invest in someone who is, understanding where are the trends, and then finding deals or investors that you could potentially place with registered investors is also a good way. But understanding that one strategy, whether you're an investor, or you're gonna put money with one, if you understand that you can ask more intelligent questions, either with yourself, your team or with an investor you're gonna place capital with. Those are some good ones to say, what's your opinion on the UL metric? I've read it and turns out these areas are looking good. Are you investing in these areas and if not, why? Right, so those are some good questions, so Whitney's given you a leg up just as, as always, I would love to hear some competitive advantages. We're kind of moving up into the crunchy stuff that we get out of your book and now to you, what would you say as far as giving a competitive advantage to our listeners? 

Whitney Elkins-Hutten  

Yeah, especially if somebody's looking to invest passively in a project, you know, there's a wealth of due diligence checklists, you know, for investors to kind of like, you know, take and make their own, most of them are like 50 to 100 points long. I think investors really lose sight of what they're trying to truly evaluate. I encourage any investor, take that due diligence checklist and organize it into seven buckets. Because really, there's Seven Pillars of Wealth and what you're trying to suss out from an investment. Where is it going to make your money and there's seven ways that you make money. 

Whitney Elkins-Hutten  

So number one, how well does that asset preserve capital? Our buddy Warren Buffett said, rule number one, investing don't lose money, rule number two is rule number one. The idea is don't get knocked out of the game, right, it's not about swinging for the fences. It's not about did I, like make triple or like lose it all. No, you don't want to lose because even today, if somebody has a struggling asset, as long as they got their capital back on that asset, they're not going to get knocked out of the game they live to play another round. So number one, make sure that your, any asset, you go into preserves capital. Make sure it has cash flow and the plan to grow that cash flow, for me that knocks out a lot of development and an entitlement deals. Those are, they have a time and place in somebody's portfolio, but I think if you're just scaling a portfolio, probably not now, especially if you're new, not now, we want to make sure things like cashflow. It tells me it's stabilized in today's market, if there's a plan to grow, it tells me that it's going to be successful in tomorrow's market. Make sure it can it has a clear plan to grow the equity, we don't want to rely just on market appreciation because as we see now there's cap rate expansion in a lot of markets. Okay, so that equity growth is actually like going away, we want to make sure there's a clear plan to follow, worth the value of that asset. Increase the income, decrease expenses, add additional streams of income, we want to make sure that that asset when you tweak the net operating income and asset or the expected expected gross income and the asset, that it maintains and grows value. Tax benefits, you can get paid with tax benefits, okay, tax benefits create velocity that, you know, helps you create losses on your tax return that way, when you have those losses, they offset your tax liability. Now you have more money in pocket to guess what, invest. So we want to make sure that you know, we're taking advantage of depreciation, salary depreciation, where we can, that we're taking advantage of tax benefits, like 1031 exchanges, bonus depreciation, then there's some other tactics in there as well. But I would certainly make sure any investment you go into takes advantage of those basic tax benefits. Those are the core four, any asset I go into, I want one of those four. 

Whitney Elkins-Hutten  

The other three are kind of like pouring gas on the fire, these are great to have, do they do you have to have them? No, but they're gonna help you go further faster and that is, if there's leverage on the asset, make sure it's smart. Make sure that leverage is matched to the business plan and this is where a lot of people really got nabbed in the past two or three years, variable rate debt. Okay, in that whole situation, we want to make sure that the asset, the lending plan matches the actual business plan for the asset. So what do we mean by that? If the asset plan is to hold the asset for 10 years, don't put a bridge debt on it for two put longer debt on it, maybe even fixed rate debt and for like, you know, 10, 15, 20 years on an asset, right, we're gonna match the lending plan to the asset plan. Then how can we leverage inflation, okay, and this is why I love businesses, I love investing in real estate, is because I can actually take out a loan, lock in today's dollars and allow the devaluation of the dollar to erode the cost alone. What do I mean by that? Easy example is everybody's house, okay, they have a roof over the head. Especially if you put a loan on it, you know, back two or three years ago, and you're right, like 2 1/2 -3%, that payment 10 years from now is gonna look like peanuts compared to what it looks like today, because your income has gone up, right, but your spends on the property has stayed the same. 

Whitney Elkins-Hutten  

Another way to look at inflation hedging is can you raise the income and pass through expenditure increases to the end customer, because we want them to share in that. So if you can't move your income, you can't move the expenses that are being, you know, charged to the deal, that's going to be problematic for you. When inflation starts occurring, it's gonna be hard, right? Like, we see that in debt, like if I issued a debt, I know three years ago, and it was at 4%, inflation. There for a while, was at 8%, I'm losing four points to inflation, but if I can take possession back of that asset, or get the note paid off, now I can issue new debt at like, 9, 10-12%, I'm winning again, right? So we want to make sure that we're investing in assets that adhere to that and then number seven, invest with experts. If you're not the expert, if you're not the one running the deal, make sure you find somebody who is the expert, and they know what they're doing and that they are running the deal.

Ryan Miller  

By the way, that's brilliant and when you talked about one that just reminded me, if I could chime in there, we talked about smart use of leverage. But I remember even, you just remind me of, believe it or not, I do remember a million years ago when I was in school, but we had super smart people, former economists of a $200 billion fund was one of my professors. He said the exact same thing is that your whole period return and your duration of your debt should be matched. It's a very simple, easy strategy when you're doing long term planning for your capital stack. Or if it's internal finance is your whole period, if it's 10 years, you want a 10 year note whatever that might be. So I absolutely love that. I just wanted to chime in on how brilliant, like they teach these things in advanced finance classes, and Whitney's just boiling it down to very easy to understand terms. So I love that, I can't wait to read your book by the way. So what would be a, because we're all about cash flow in this one and alternative investments will be a second competitive advantage that you can provide for our listeners. 

Whitney Elkins-Hutten  

Yeah, cashflow on real estate has been compressed in this market cycle, I totally get that it will expand again, you know, as we just talked touched on like, you know, ended 2024 beginning in 2025 cash flow is going to start growing again. But what do you do in the interim? Right, investors are still chasing yield, they still want cash flow. Well have you thought about investing in businesses where you own the underlying real estate. So you kind of get a double, you get to double dip a little bit, right, you're still gonna take advantage of all those tax benefits that we love. But now you've got an income producing business, hopefully really low maintenance income producing business on that on that piece of real estate. So I love laundry mats, okay, that is you know, something that that can be a little active for people to get involved in. We syndicate Express car washes, we can run that facility with two to three full time employees and wash about 4-500 cars a day. The car wash itself only costs 83 cents. If somebody washes their car twice a month, which which is the average and we charge 25 to $30 a month for their membership. You can imagine the margins that we have they're, pretty crazy, right? Our customers love it, like we're providing high value service there for them and then also self storage. Self storage is kind of this enigma, we've got the stable month to month lease that's there, but self storage, you have so many ways to add additional streams of income like you would a regular business. You could sell supplies, you can sell boxes, you can sell insurance, you can even like have moving trucks, they're so, so many different ancillary products that you can add to a self storage facility that you can make it a pretty stable business. If there's any parking lots there, now you can, you know, also rent out RV and boat storage and stuff like that, so.

Ryan Miller  

Yeah, so having not just the real estate, but having a cash flowing business or an operator, like you mentioned, investing in those, I like to call it the McDonald's model, right. So not only do you have the business, and that generates cash, but you also own the land that you have that business on. So it's another way to increase your cash flow and I love that. 

Whitney Elkins-Hutten  

I don't know, many people really, really fully understand that McDonald's and Starbucks their real estate companies.

Ryan Miller  

Yeah, I didn't know that about Starbucks. So there you go, right, so they're valued at a few bucks as well. So we'll assume they know what they're doing, to put it lightly and what would be a third competitive advantage?

Whitney Elkins-Hutten  

You know, just working with a mentor, you need somebody that is where you want to be or a little bit beyond and getting like as close as you possibly can to them. This can mean you're just starting off trying to figure out the time and the money to do this, read their books, listen to their podcasts, get as close as you possibly can. But I always tell people, I always show them this analogy, like if you're here, point A and you want to get to point B, I ask people, what's the fastest way to get there and most people say, oh, a straight line, right? Like if I'm not making all these mistakes and bouncing around, I get there and I'm like, actually, it's not true. It's actually you fold the paper in half, and you collapse time and that's what a mentor can do for you is, you know, they can help you collapse time. Something that you said to me once writing was like, I can turn months and years into days, right? That's what a mentor can help you do? 

Ryan Miller  

Yeah, so you've written a book and you've helped hundreds of people, probably 1000s, and you know, I've helped 1000s of people, I'm commonly known for raising capital. I actually launched a course on how to raise capital and I think capital raised today was around 4 billion reported off of a lot of my lessons and teachings as well and so we launched that. And so working with a mentor, reading their books, listening to their podcasts, working on a deal together, taking their programs, if that's what they have. There's a ton of people that have been on the path and they're a little bit further than you, absorbing their knowledge, taking their courses, reading whatever that they put out there. That is another way and obviously, if you're listening to the show, you're certainly figuring that out already. So you're 10 steps ahead of the person that's not listening to stuff like this, or reading Whitney's book, or taking my course, it's all out there. People like us, we just want to help, we know what it was like to start out, we said, oh, I want to be the person I wish I had in the early days. So you know, before we wrap things up, is there any final words, closing remarks? Anything else you'd like to say? Well, how do they contact you? Where did they find your book, anything at all? 

Whitney Elkins-Hutten  

Yeah, you can find the book, Money for Tomorrow: How to Build and Protect Generational Wealth, either on biggerpockets.com/moneyfortomorrow. You get some free extra goodies that you wouldn't get if you bought it on Amazon, but I know a lot of people were are totally attached to their Kindle device, I am to, so you can also find it @amazon.com. But yeah, you can also go to ashwealth.com, I have a financial edge quiz that really helps you understand, like when you take that quiz, it's like 12 questions, but it'll help you understand which of the mindsets practical skills, life skills and networking skills am I missing, that could be a roadblock for me building wealth. And not only do you take the quiz, you get 10 days of free mentoring from me after that, to help you unpack those obstacles. And you know, if we can get you unstuck in 10 days, fantastic, you know, if you want to turn decades into days on building your financial moat, but also like becoming an unstoppable investor, you know, certainly we have our programs from there as well. And then if you're just ready to invest in real estate, you're like wait, I got this, I want to like do a deal with you, you can check us out at passiveinvestingwithwhitney.com.

Ryan Miller  

Man I love that. So just to summarize everything that we talked about, make money in those seven ways. You can go back if you need to rewind it, do it, but definitely that is one of the areas that you can really zone in on to optimize your cash flow and making money. Second thing we talked about is incorporating cash flowing businesses or operators into your operations or your deals. It's another way, especially when you have compressed as I would call it profit margins, or you would call it cap rates, whatever that is, when the cash is really tight, it's not quite what it used to be. Well, there are other creative ways and that's what's so cool about this industry is you can be creative in any industry, real estate, venture, hedge funds, there's so many areas. And the third one and that also helps with creativity is just compress decades into days by working with a mentor reading their books, taking their courses, listening to their podcasts, going to their website, anything you can to work with Whitney, myself or anybody else you do these things and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller  

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, once you head over to YouTube and see extra takes while you get to know our guest 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.