How Passive Cash Flow Funded His Family’s Life Abroad in His 40s | Ep. 22

Where all of us talk to think about money the wrong way, many folks have been brought up to think  financial well-being is really about building the biggest possible pile of money. But the  wiser question may be, what amount of cash flow actually buys back your time, lowers your fear,  and lets you design the life that you actually want to live. And that conversation has shifted  more recent years towards the idea of financial freedom. Whether that’s traveling to Europe or  sharing the experiences with those that you love around you, or it’s just having another  bit of avocado on your Chipotle. Today I’m joined by Adam Cranber, he’s a CPA and Air Force veteran  and a real estate investor with experience on both sides of the table as an active investor,  as well as a passive investor. Adam, welcome man, it’s absolutely pleasure to have you on the show,  excited to jump on talk shop and honestly excited to have you giving your unbelievable background  right for those unaware. Airman got a military background there, CPA got some acumen in the  finance world, also sales, so the guy knows persuasion, good EQ along the way, just a bevy of  phenomenal traits in terms of the skill set in the background, and sophisticated and experienced  limited partners. So just can’t wait to jump on and talk shop man, pleasure to have you on the  on the podcast. Yeah, thank you very much Brian, it’s pleasure to see you man. We’ve hung out a  couple of times this year, so it’s exciting to see you again, even on the webcam here. Yeah, no,  likewise, likewise, and hopefully we’ll be in person in the not too distant future, but I think  we’re going to be together in Denver, if memory serves in about a month or so, so life is good,  man, hopefully we’ll have time to spend some time in person while we’re there, but in the interest  of time and adding as much value as possible to the listener, let’s just dive right in, you’ve now  done a litany of different types of deals and you’ve seen a lot along the way, some ups and downs,  but you know, what would you say? What kind of investor are you today? Right now today,  and what are you optimizing for now that you weren’t optimizing for earlier in your journey as a  limited partner? A passive cash flow investor today, so my focus is no longer on that growth,  that home run cycle. It’s all about limiting my downside, spent a decade kind of building this  lifestyle. Right now, it’s all about trying to get to that point of income replacement.  Not not in a huge hurry to do so. I love what I do. I actually don’t feel like I’ve worked  today in my life. The blood, sweat, the tears remind me that I have, but this was a massive pivot  away in the last kind of three years of investing where it was all a focus on growth. Now it is,  how do I find that income replacement? How do I do it as passively as I possibly can,  and frankly protect that downside? That’s the thing that will hurt me, will hurt my family,  is seeing that big dip. That big 40% correction in the stock market, I want no part of that.  That’s not me anymore. I want the steady active income, all about durability income replacement  at this point in time, which was a massive shift from years and years ago of how do we maximize  this and grow that capital as fast as possible? Fair. I mean, great points. I mean, I think early in  the journey a lot of people are, if you’re starting from nothing or a minimal base, you’re trying  to grow to the degree, that’s kind of the priority. But once you have it, folks realize you only  need to get rich once, and once you have the base, then you really do focus on protecting the  downside. When you were growing that base, and you were focusing on growth, do you mean focusing  on growth from an active side of the table, going out and actually buying deals yourself,  or even when you pivoted more to the limited partner side of the house,  were you still focused on ungrowing the base, even as a limited partner?  You know, starting out was how do I use as much leverage as I can to buy active real estate?  How do I go and purchase these single-family homes, these duplexes, etc. My wife and I got up to,  you know, 23 of those at one given time, and that was all the blood sweat, the tears of building  that, leveraging as much as you could, using government money to, you know, put my 25% down,  let them, you know, eat the 75% and grow that as much as possible. And as we started to sell some  of those down, that switch was on the LP side too, was like, okay, my mindset says growth,  that’s all I’ve ever known. We’ve watched these properties grow, you know, and by the way,  extremely lucky during COVID, right? That was the run-up of run-ups in the housing market,  unfair, but those that played the game won during that time. My initial years as an LP was that  same focus. My mind was telling me, go after the home runs, right, grow the base as much as you  possibly can. It wasn’t to like, I sat down and actually put pen to paper, right? The CPA,  it was like, you’re making decisions, just based on how you’ve always done it, and we started a  decade ago. Like, why are we thinking the way we’re thinking? You’re 40 now. Like, have that  discussion with yourself. So it started out active by the, by the houses, moved into active,  you know, active on the LP side where I’m going for growth, and it wasn’t until probably the last year  of life and investing here on the LP side that pivot became extremely obvious that we hit the  mark we were going for. We don’t need to do that. Let’s keep the pace and build it from there,  but even at a slower pace, I don’t, if I get 7% to 8% a year, we are good to go, good to go,  and I don’t have to work till I’m 65. So that’s, that’s the goal of this.  That’s beautiful. I think importantly, you said that you hit the mark that you’re shooting for,  right? That’s a beautiful way to put it, right? As you, I’ve had thousands of calls with LP’s over  time now, and you hear the same sort of refrains over and over and over. One of the first  evolutions is to move away from traditional investment advice, right? Stocks and bonds and  the financial advisor, everything that everybody’s ever told you for decades and decades.  You find out that alternative investments might be the easier path to the promised land of  getting to freedom, much, much earlier upstream, but even then there’s levels to the game.  Even after you start getting involved in the investment side of the house, most folks sometimes  misallocate what it means to be involved in alternative investments, whether it’s buying active  real estate, portfolio, whether it’s single family homes in the life, and you build 10, 20, 30 of  these. But all of a sudden, now you have a secondary job. You know, you can’t let sweat and tears,  you’re doing a litany of other things. You really don’t have that lifestyle and the freedom that  you really kind of have been seeking along the way. And then when you get into the LP side,  still an additional evolution between investing in, you know, fixed and flipped style deals towards  like the permanent income vehicle where it’s don’t lose my money. Let’s just get the cash flow  and live life that we want. And to your point of hitting your number, the way that I like to think  about it is, there’s a few different, a few different, a few different layers of it. First is  the freedom number like you’re talking about. And when folks actually sit down and put pen to paper,  I think people are shocked. When you sit down with your spouse and you think, what do we actually  need to replace our income? It is a much oftentimes more modest number than you would have otherwise  anticipated, because people having their mind, the traditional stocks and bonds of going and  building this gigantic multiple seven figure, eight figure, and then beyond net worth to try to  quote, retire and then live off of it. But when you’re just trying to create cash flow, oftentimes,  the number is significantly smaller to get you to the freedom number. Then after you determine  that freedom number, creating what the lifestyle number is, right? So the freedom number is just  to replace the income, live how you want. Then it’s about lifestyle. Where do you want to go? What do you  want to do? How do you want to, how, how, how, how, how, how much do you want to enjoy life above  and beyond just the freedom side of the house? But it’s been interesting to hear that journey over  and over and over from different limited, limited partners along the way. So, you know, how have you  felt now that you’ve kind of, you know, experience what it’s like to, to see that freedom number,  have more of a long-term perspective focusing on the cash flow. What’s, what’s next in the evolution?  Once you hit that number, what’s, what’s next for you after that point? Yeah, you explained it well.  That was, that was one of my light bulb moments, right? I, you know, I know that you know, it’s  funny to have a light bulb moment at all. But even at this age, it was, it was one of those that’s  like, man, if, if all it takes is for me to replace my income with some asset, whatever may be,  stock, spawns, alternative investments to the level of my expenses. And I’m done. Nobody tells you  that, which, which is wild to me. But that, that was truly that light bulb moment for me that,  it’s like digging into these books, you know, that the famous rich dad poor dad where they’re finally  explaining that to you. I’m like, where has this been my whole life? But I think your question was  around, you know, how, how does that changing in our life? One of the things we’re doing,  you know, we are moving to Spain here in what it’s, it’s April now. It’s about four months,  moving to Spain to go live to Madrid. Still will be working. I haven’t, like I said a bit earlier,  have no desire to stop working. But the fear is kind of gone, right? It’s in the event that I lose  my job and my wife loses her, loses her job or something happens to our son and we require extra  income or whatever may be, not to to the sunrise horn, but there’s going to be a check coming in my,  you know, in my account from sunrise and from the 15 other syndications that I’m currently  a part of because I’m making those selections that are based on exactly that parameter that I’m  trying to hit. I’m trying to say my, my expenses are too high. Don’t get me wrong. My expenses  are too high, but at least I’ve got cash flow that can cover it. And I know I’ve got this much fluff  that I can cut tomorrow if I need to. We live up here. We don’t have to live up here. I can cut  that. And that honestly, like, what does it change to my life? I don’t think it’s changed a lot,  except for the mentality of it’s going to be okay. If something happens, we busted our butts  for a decade to get us here, to find the cash flow, to understand how expenses work in our life.  And we get to move on, right? And just say like, it’s all right, the bills are going to be paid.  Our son’s safe. We’re safe. We’re happy. We’re doing the things we want. We can travel if we want to.  We cannot take first-class trips to Europe, right? That’s not in our budget.  We don’t have that level of investment yet, right? We’re not going to go spend eight grand on a flight.  But if we can get economy plus and we can go to Europe, hey, we want, right? And we’re  free to have that thought in our head. So I hope that answers the question. That’s kind of how I’m  thinking. It’s not changing my day to day. I’m not choosing to add the avocado at Chipotle,  right? If I want to do that, I do it. But it’s just a mentality thing. It removes some of the fear  and puts a little safety back in there. The way that I succinctly put it when this conversation  comes up is that I’m not chasing Ferraris. I’m chasing freedom. I want freedom for my family to do  what I want, when I want with who I want, and just have freedom, freedom of relationships, freedom  of time, freedom of money, so that you could spend time on freedom of purpose, doing what you want  when you want with who you want along the way. Love every bit. To me, the levels are financial freedom  first, right? That freedom number. Then it’s the lifestyle number. It’s the fun stuff. If you want to  go first class, it’s the lifestyle number, right? It’s get to that level and then over and above  that it’s legacy, right? It is now that I’ve got everything that I want freedom wise, everything  that I want lifestyle wise. Now what? Now you keep going for legacy, above and beyond purpose,  giving away money beyond that because there’s always levels to the game, right? There’s always so much  more that can be done just driving more purpose. But you know, with all the amount of experience that  you have along the way, right? Tons of different LP deals over time and so much experience actively,  passively, passively. What do you believe that what do you believe about passive investing or  syndications that most investors still get wrong? They still get wrong. I think the vast majority of  folks have too much trust in the shiny deck and not enough trust in the way that they look at  that sponsor. I think that operator quality is the most important thing you could possibly do.  And I think that most investors look at this and they just say, okay, I’m looking for  the highest IRR. I need something that’s going to get me a multiple on invested capital of  three X three and a half X. And I think that the like where they’re getting it wrong is they  don’t have this ability to like to spot the fake, if you will. And everybody has become so good  at PowerPoint presentations. You know, we the marketing is getting insanely good in that it’s  even even for people that have done, you know, tens of these hundreds of these, it’s still really  difficult. We’re fortunate now that we have cloud and chat GBT and all the AI tools to kind of  help us spot the fake, spot the BS, if you will. But this is such a green field space, right, that  you can still be unscrupulous and fake it till you make it. You can lose investors money and  restart is something else because this is not some massive field that makes it on to CNBC and  everybody knows about unless we reach the levels of the Ponzi schemes of the world. But I just  think that investors don’t put enough weight in finding that good operator integrity first. The  person who’s going to tell it like it is in the good, the bad, the ugly, you know, I actually don’t  care that much about your good stories, how everything everything went peachy from 22 to 25, like,  okay, shocker. Tell me about the bad ones, right? Elevate, tell me about all the bad stuff that  happened, like, how did this go wrong and what do you do? Because you can’t bat a thousand. But if  you bat 300, you’re probably in the Hall of Fame, right? And that’s, I just think that’s something  that a lot of investors miss is like they, they’re not focusing enough on the investor and they  really, really have to lean into that. And I think for lack of a better word, I think we get a  little lazy and we don’t go to the events to meet the sponsors and to shake hands and see how they  are after four beers, right? Like that people change, right? You get that liquid courage. But that,  yeah, that’s that’s kind of my big thing there. Love that, right? So I think it’s funny. You’re pulling  from the sales background, your EQ ability to spot the BS like you’re talking about just getting  to actually know people over time. It really does genuinely help to spend time in person with people  because you could fake it on a presentation and all these myriad of things for a brief period of time.  But the more that you get to know somebody, I mean, the more that somebody talks, the more that the  truth comes out over time, right? And especially like you said, with a little bit of liquid courage,  that on the jockey, not on the horse, 100%. Every time an LP says that it’s been in the game a while,  10, 15, 20, 30 deals, it always comes back to betting on the jockey. And I also think the reason  it’s been so hard the last decade, right? Is because during an up market, everybody looks like  everybody looks good. Everybody looks like a genius, right? During an up market. And we are in one  of the most profound up markets for like 15 years. And all of a sudden, you know, how do you tell,  right? When two different guys both generate a 15% rate of return, which of those investors is the  skilled investor, in which one is the lucky idiot? It is not easy to determine that, especially  during an up market. Not until the tide goes out, do you really find out who’s swimming naked?  And ultimately, the cream rises to the top. And the guys that were, you know, playing with the  house’s money and actually didn’t really know what they were doing along the way ended up in a  very precarious situation, pause distribution, capital calls, total loss of capital, a lot of precarious  stuff, right? But it’s very hard to see that in the moment when it’s happening. And not until after  problems arise. So from my perspective, right, trying to find out how people have done through  multiple cycles, right? What happened during the good and the bad times? And honestly, the longer  the duration of the track record, the better, because then they will have been through multiple  cycles. You will have seen how they performed during those periods of time, because everybody’s  going to make money when you’re in a decreasing cap rate environment, unless they are absolutely  ridiculous. That’s the truth, right? So very interesting. I mean, how has that shaken out in the  last couple of years for you as I’m sure some of your deals, personally, obviously,  of friends of yours have experienced some pain along the way as well. But how have you seen that  play out now that you’re looking with a more clean eye? How have you been able to dig in to this  newfound era, right? In the new track record era with so much blemishes? I mean, how do you view  those those sponsors who may have had some of those those issues right in the last handful of  years? How do you how do you deal with that today? Interesting to see now that, you know, I’ve  I’ve held some for two, three, four years at this point in time. And boy, can you tell when  they’re naked in that water? It is very obvious that the communication sometimes starts off great  and then dwindle sometimes the communication is just absolutely terrible. I’ve got a I’ve got a  couple of operators that have horrible communication. And you know, it’s obvious that they don’t want to  discuss this. But when when I look at organizations that struggled through, you know, they they  bought in 21, they bought in 22 in in Phoenix, for example, actually a really good friend of mine  has had, I don’t know, she’s she’s probably batten five for six at this point in time, right?  But she bought in Phoenix. And it was very unfortunate that it was it was one of her first deals.  She like everybody else kind of fell into that trap that that Phoenix was going to be the answer.  It was going to continue to rise that the sun belt market was going to do everything that everybody  promised. And that would be a total capital loss. I’m not in that deal. I lucky in the fact that I  don’t like to invest in deserts because I think we talked about at some point in time together,  you know, I own a water treatment company. I think water is our is our number one concern in the  world. I think that if we’re going to have trouble, it’s going to be with water, right? It’s that’s  something that we can’t we just can’t get enough of and desalination is very hard. But anyway, you know,  I don’t invest in deserts. So I was lucky not to do that one. But I grilled her and I’ve known this  woman for a decade and is in is one of my best friends in business and life. Her family’s fantastic.  I visited her when I go out to Denver. But it is truly asking those questions of, right? So  so we’re betting on the jockey. Catherine, what happened? Like, why did you make those decisions  that you did at the time? And how would you change that now? Right? That’s that’s always my thing is  like we shouldn’t be afraid because you have a scar or a blemish. That scar tissue is fine. Right?  That’s how you learn. We all have scars and various fronts. We hope that, you know, one, one,  you know, sunrise fund for doesn’t have a total capital loss. Of course, right? Those are rough scars.  But overall fund one, fund two, fund three, fund, right? All of them gain money. So it is what it is.  But it’s it’s true. That question of how are you approaching it today? What did you learn?  What were you thinking then? How did you communicate that? Send me some of those emails.  Like show me what that looked like when you were in the moment, when you were just getting  smacked on the head with the bat, what were you telling your investors? Were you hiding it? How long  between man, this is a total loss to that email? How long did that take? You know, was was that  like guys I’m being as open and honest as I can? I don’t have the information today, but things are  looking poorly, right? And that makes a huge difference to me is, do they continue to communicate?  Did they learn from it? Right? Are they going to avoid that in the future? That’s how I look at that  scar tissue. It obviously is an immediate red flag for me that has to get over way before I even dig  into the numbers. If you have any loss whatsoever. But that’s what’s kind of going on in my brain.  It’s like, did you learn, did this, does the scar tissue remind you to not do that again? That’s  that’s the kind of best part of it. I think we all have one of those scars, at least on our arms,  right? That we’re like, oh, that was a bad decision. Love that. Yeah, of course, nobody’s perfect,  right? I like to say that I’m a recovering perfectionist, but nobody is perfect. It’s literally  impossible, right? You hold yourself to a high standard, but none of us are perfect. A couple  points there. One, I love the inside associated with not just the transparency, but the expediency  of the transparency. Very interesting, additional insight, I think, very, very skilled, great stuff.  And then beyond that, a little nugget that I would share is just entrepreneurial stuff. So we got  this tool called the Experience Transformer, kudos to Dan Sullivan over at Strategic Coach,  absolutely phenomenal entrepreneur, teaches entrepreneurs how to run businesses and the like,  been doing so for 50 years. And this tool, this Experience Transformer tool aptly named,  tries to help you extract all the things that all the learnings from that experience, whether  that experience is positive or negative, what are the learnings from that and how can we iterate  and improve what we’re doing moving forward to try to better everybody involved, right? So just,  you’ve got to always be compounding, right? Knowledge, interest compounds, right? As you know,  but so does knowledge. And you’ve got to actually be able to extract it. The good and the bad.  If a deal goes well, it doesn’t mean that that’s, you know, everything was hunky-dory and you’re  perfect, right? You’ve got to still try to find ways to extract it. How can we improve small,  edges compound over long periods of time? So beautiful stuff. I love the insight regarding the  expediency of the transparency as well. That’s absolutely beautiful. What about asset classes?  It’s just a little bit of color in terms of what you’re looking at right now.  Asset classes, maybe a little color in terms of asset classes, as well as capital stack.  Like, where are you looking at in the capital stack, different types of investments,  whether it’s equity debt and just different stuff? What are you looking for in the current marketplace?  Yes, I’ve actually made kind of thinking through this. And if, you know, in a couple of weeks,  I’ll be up on stage kind of talking through this. But I am heavily leaning into,  I don’t put this simply, things I believe in, right? So I believe in cash flow. I believe in  steady income and preserving my income. I believe in things that we need. Let’s pick on sunrise  for a second. Do we need mobile home parks because housing is becoming affordable? Absolutely we do.  And we need a lot of them. And while we can only make a dent by doing this, at least we’re  making a dent. Do we need affordable housing? Yes, we do. Do we need places to park? Yes, we do.  Do we need more housing overall in those workforce housing places? Absolutely we do.  I don’t believe that we need significantly more class a multi-family.  I think that we do need some more industrial. And I’m looking at that as well.  I think self-storage will kind of never go away, but I think we might be a little bit past  our peak on self-storage. But it’s like looking back into my heart and saying, okay, I want singles  and doubles. How do I get singles and doubles? I go after the things that I know in my soul we need.  I’m a firm believer and will forever be a believer in American businesses, but beyond that real estate.  And I think that if we can solve the problems with real estate,  manufacture housing, class B, class C, workforce housing, that’s where I want to continue to lean.  But before all of that, it has to cash flow today. I want money in my bank today, whether it’s  return to my own capital or it is from the property. Whatever it is, I’m either delivering my risk  by getting my capital back or I’m getting cash flow that I can put towards other investments.  But I need you to show me today that this property is making money, losing money every month  in this environment where we are in a hectic time. I want to see some money coming back in,  which tells me that if we get it, we get a dip, we get into some trouble. We’re not talking about  total capital loss. We’re just talking about pausing distributions and there’s nothing wrong with  that, right? Sometimes you have to do that to move forward. But I’m looking at that way. And then  just to aid in my cash flow and honestly just kind of invest in separate asset classes. I am  looking at debt funds. Again, they’re tied to real estate. But looking at some in many different  areas that I can in the capital stack of, okay, I want this one to be prepped. I’m okay if this one  sits behind other ones. I want this one tied purely to the equity side for maybe a little bit more  more cash flow but more risk. But the name of the game for me, steady income and shotgun approach  of diversification. Just how do I get it out there in the areas that in in my soul, I know we need.  Like that’s how I how I’m thinking about this day in and day out. Absolutely beautiful, right?  So I’m going to refer back, read a lot of books over time, study a lot of different investors,  right? Referring back to the circle of competence. Charlie Mugger talks about this,  Buffet talks about this all the time. Invest in what you know, right? You have to you have to  have an edge in the marketplace and you have to invest in things that you understand that you know  better than others, maybe better than others that give you a little bit of an advantage in an edge.  So it’s within your circle of competence, love everybody. And I could not agree more in the cash flow  first. That’s one of our evergreen principles, right? Cash flow first at the end of the day.  The business models that are built on profit, we’re going to we’re going to buy a deal. We’re going  to put on just a nominal amount of cash and we’re going to try to leverage it up to the gills,  leverage buyout style, right? 80% to 85% LTV, whether you’re taking mezzanine and all these  myriad of different things, get creative with financial engineering to try to drive the highest  and turn a rated return, right? Because you’re trying to go for the growth, right? All the myriad  of stuff. And you’ve got really slim cash flow along the way, maybe even cash flow negative.  But the intent and that model of buy, fix, and sell is to try to get out as quickly as possible,  get a big windfall on the back end. I always have felt that that’s just speculation. It is gambling.  It is gambling. And sometimes when you make a speculative bet, you win. But sometimes you lose it all.  And I’m unwilling to do that because I’ve already been so fortunate to be in this crazy  universe to have already kind of made it in the eyes of society, right? You make a little bit of  money over time. You only need to get rich once. And then it’s about protecting the downside.  So cash flow first. At the end of the day, if you’re focusing on trying to grow NOI, grow  grow profits, that’s a good thing. But it is not the most important thing. Revenue is vanity.  Profit is sanity. But profit is only an opinion. Cash flow is a fact. Cash flow is the only thing  that matters. After tax cash on cash return, you send a dollar out. How many dollars actually come  back to me? It’s the only thing that matters because it buys your time. It buys your time and buys  your freedom. That’s what really matters at the end of the day. From my perspective, but I love  every bit of it. It’s a beautiful thing. Couldn’t agree more. I was thinking through, you know,  I know you’re a, you’re a baseball guy, you know, former captain of the baseball team and I was  thinking, how, you know what, what analogy can I use to impress Brian, right? The analogy king  is like, okay, Brian’s a baseball guy. Okay. I want to be in this instance. I want to be  Etro Suzuki, right? One, in my opinion, one of the best modern day contact hit, you know,  contacting hit guys to ever play the game. You know, I came from the era of Sammy Sosa and Mark  McGuire, the home run race, like just all the incredible everybody has their opinion on those two,  obviously, but incredible, right? But that’s not my game, right? So I looked at us and, okay,  what’s the analogy? In 1997, Sammy Sosa had more strikeouts than hits. And to me was just like,  okay, there it is, right? I’m not swinging for the home run at the expense of the strikeout,  right? You only need to get rich once. And while that was very exciting, everybody could not get  enough of that back and forth between the two of them. He’s going to hit 62, internet, you know,  70 something, whatever he hit, incredible, but more strikeouts than hits. That’s a no for me,  all day long, cash flows, the only real number. So I don’t, it took me a while to come up with that.  I hope it’s worth it, Brian. No, it’s money. Love everybody. I love each of you. Most hits of all  time, if you include a stuff in Japan, absolute stuff, rocket for an arm, he’s a stud. Love the guy.  Plus he’s got a hilarious sense of humor. He’s a great guy. But beautiful, beautiful analogy.  And yeah, of course, no, any, any number, no matter how large, right? No matter how large,  any number multiplied by zero is zero. So you got to avoid the strikeouts. That’s what you got to do.  Avoid the strikeouts. And you can put it in the spreadsheet. Check it out. I mean, slow,  steady compounding over long periods of time, even at a modest rate, right? That flat rate,  if you’re getting it every single year, compared to the more volatile rate of return where one year,  you get 15 or 20 percent. The next year, you get zero, or the next year, you go down 15 or 20 percent.  The slow, steady guy that just gets 10 percent every year eventually wins the game.  It’s the, it’s the, it’s the, whatever, the rabbit and the turtle, whatever the analogy is.  The turtle race, the turtle’s in the hair. It’s literally slow and steady wins the race.  That’s the God’s honest truth. Real estate is not a get-rich style business over a short period  of time with a low probability of success. Real estate is a build massive amounts of wealth  over a very long period of time with a very high probability of success, but you actually have to  be an investor. You can’t speculate. If you do that, eventually you’re going to get burned.  It’s going to hurt everybody dearly yourself, your family. That’s my personal perspective on  the topic. I love it. Phenomenal background here. You’ve done a myriad of things, but given,  you know, the background, the track record, all the things that you have done and are currently doing,  what, what is all of this ultimately for? What is this ultimately for?  I love the terminology of lifestyle by design, right? It’s how do we  pick the lifestyle that we want? Okay, there’s your end point. How do we get there?  For me, and I know what we’ve talked, we’ve talked about Spain, we’ve talked about the wine,  we’ve talked about all the good things, you know, in our various conversations we’ve had together,  but one of the things that I haven’t really talked about was my son. His name’s Winston. He’s  nine years old. Just an absolute spitfire of a child. I have no idea where he got it from me.  I’m a firm believer that it’s really hard to be mean to others, to be, you know, a nasty person  if you travel the world. I think the minute that you have the opportunity to fly anywhere,  get on a plane, I don’t care where it’s to preferably outside of the United States because I think we  are very homogenous here. I understand the New Yorkers are a little bit different than us,  Floridians, but we are 98% the same. But go fly to Spain, go fly to Italy, go anywhere,  go to Germany, right? They are all fundamentally different than us, maybe 90%. But it’s all about  when we got to this point, how do I design what I want my son to get out of this wealth,  this richness that we’ve created. And for him, it’s to see other cultures, is to eat other food,  eventually to drink other wine, right? To go and learn from other people, just like I try and do  and educate others, but I want him to be able to experience as much as he possibly can in the world  because I think that’s going to shape the way that he designs his lifestyle, right? And I want him  to at least see the whole, the world as it is, go to Japan and see how they think about things  differently than we do. Neither one of us is right, neither one of us is wrong. Go see how they do it,  design your life to be able to do that. And I think travel is that one thing that, man, if,  if I can use what I’ve accumulated by designing this lifestyle to push that onto him, I’m an  extremely proud father already, but man, that just pushes that to the next level of success for me is  investing in my son and obviously my wife and everything else. But if I can focus that on him and  help him become a world citizen, I’ve done my job, right? I did it. I checked the boxes of  dad and I’m ready to, you know, do the victory lap and retire in my rocking chair.  Absolutely love that vision. Of course, I think each of us individually aspires to provide more  to the next generation than we had when we were growing up. I share the sentiment. I will confess  that one of my fears is ultimately given the fact that we’ve been able to create some semblance  of wealth over time. And we will provide them with these unique opportunities that, you know,  the children will not know for want and trying to instill in them the idea of hard work and  try to avoid spoiling the kiddos along the way while they experience all these amazing things.  Walk me through your thoughts on that. How do you, how do you juggle these two things of wanting  to provide simultaneously the most unbelievably profound lifestyle by design that you possibly  can for your next generation while also ensuring that you’re not setting them up for failure  by spoiling them along the way? Great question. And if I had the answer, I feel like I should write  a book here and sell it for millions and millions of dollars. Since we’re admitting our fears that  it’s identical to mine. I grew up scraping by in Houston. The reason why I joined the Air Force was  because it was a financial decision. You know, I had to get out of Houston. I had to make something  for myself, you know, and I went through it, you know, and my son doesn’t have to. You know,  he has lived on the on the right side of the tracks. He does not suffer from want by any means.  It is it is a daily balance for us of ensuring that not everything’s tied to money.  Their money does not make you a better person. Oftentimes it makes you a worse person.  But those of us that, you know, do it the right way and we give back to charity and we invest our time  in teaching others and doing what we can. There’s no shame in having wealth. But man, I wish,  I wish you would use it appropriately. That’d be great. But it’s it’s a daily struggle that,  you know, I walk him through the fact that I’m never going to give you  mom and my’s money. It is our money. We earn that money. It is not yours. Will he get inheritance  absolutely? Right? If we don’t burn it all on wine, yes, he will get inheritance. Is he going to get  some of the properties? Yes. I’ve already earmarked one of our quadplexes for him. But it’s not his  today, right? It is his wealth that he’s building. He is a, or his trust is an owner in every LP  investment that we make. So he will ultimately have that ability. But I continue to instill in him that  small business is an incredible way to go. And if you ever get to that point in your life that  you want to start a small business, that’s where dad gets to come in and give you a really big  interest-free loan that if you don’t pay this thing back, so be it. It’s not about the money,  but if you need seed money to not be afraid to go bust your butt and make it happen and you need  more seed money and more seed money, I will give and give and give until it hurts as long as you’re  trying, as long as you’re pushing forward. And I think my final point on this is they model what we  do. And while I try not to work as hard as I possibly can, it’s always like, okay, how do I show him  I’m putting in the work? But I’m still being a failing man. I’m still being a dad. They see  every bit of that. Unfortunately, he repeats everything I say, right? We have to say these are  car words. We don’t say those words to school, right? That’s dad getting yelling at the people.  We don’t say those words. That’s in here. You can say these words in this box. Don’t say those  outside of this box. But it’s just, I think it’s a modeling thing. I think you have to just do what  you can and explain to them that money does not mean you’re a better person. Some people don’t have  money. You know, it is what it is, but we’re going to work as hard as we can, give as much as we can,  give it till it hurts is one of my favorite things. But I don’t know the answer, Brian, I really don’t.  Other than my family safety is my number one concern in life is raising a spoiled brat,  who’s at 18 years old is going to come to me and say, I don’t want to get a job. I’m rich.  Like, you’re not. You’re not rich at all. You’re not mom and dad. Mom and dad are not rich about it.  That’s not true. The way that I like to try to phrase it, and again, I don’t know how  well the answers. I don’t think any of us do. We’re all working through this together, this crazy  journey called life. The way I phrase it is, I don’t want to rob my children from the ability to  become self-made. Because I know what it did for me. Like you said, to start a small business, to  work exceedingly hard to overcome enormous amounts of adversity over and over and over and fail  forward over and over and over and over. And just like each year, I’ll bet 300. What does that mean?  I failed seven out of ten times, and I stepped back up to the plate as if I was the best  thing since life’s bread. You have to have that mindset. And it just makes you a better man to  have that backbone to continue to persist over and over and over. So I would not want to rob my next  of kin of the opportunity to go do that for themselves. And so I haven’t solved that riddle, but the  closest I’ve come to it in modeling, it was JP Kennedy, who ultimately built the Kennedy dynasty in  his book, The Patriarch, outlines kind of what he did for his family, where the wealth that he  amassed in the dynasty trust that you’re referencing, he did not provide that income to his kids  until they were 36 years old. And it forced the kiddos. From the time they were 22, paid for their  education, but from the time they’re 22 to 35, they got to go do their own thing. And by the time  that they’re that age, you know if these are unbelievably phenomenal, upstanding citizens,  or if they’re going down the wrong tracks. And also, they know in that decade of laid out a  lessons in early adulthood, that they have the freedom that you’re talking about. You go start  a business, dad’s going to give you a pretty good loan for that. Okay, please do, right? You know,  you have that freedom, a little safety net. You know that we’ll be there if it really gets hard.  If you’re pushing as hard as you possibly can, you know that in the back of your mind, overtly,  though, it’s on you, right? It’s on you. Go figure it out. So anyway, this is my my contention.  The best that I’ve seen so far. So we’ll keep it ripened. But I hope that that adds value for  somebody out there. You’ve got such an amazing background, an amazing journey. And what I say is an  amazing vision, an amazing vision of what you want to achieve with your family moving forward,  right? Expat traveling to Europe, now residing in Spain. I think you’re a multiple country  citizenship and then eventually potentially going to Italy downstream. I know a little bit about  the background. It’s beautiful, buddy. What is your paint the picture of your ideal day? Paint the  picture of your ideal day. Thank you, by the way, for the compliment. It’s it’s it’s fun to  hear other people say it, right? When you when you when you’ve you’ve busured your tail for so  long and you’re like, Oh, actually, that’s pretty cool. You should be problem. I ideal day  running the Italian bed in breakfast. So Spain is kind of that hop skip. I told I tell everybody  Europe’s cool to you know, two hours on a plane. You can be in, I don’t know, 10, 15 countries.  I don’t know. Count them out. There’s a lot. Ideal day is time kind of everything together.  I feel like people are going to think I’m a whineau here, but owning an Italian bed in breakfast  where I bring over global citizens, Americans, right? People who think like I do that the world’s a  great place and we should see others and we should talk and we should embrace cultures and we  we should fight and we should love and we should be all everything in between. But it is too wake  up. It is to run that small business with 0% focus on making another dime. You can’t can I pay for  my expenses for the day? Educating those people those guests should they want it driving them around  the small towns, letting them meet the locals, teaching them about finances and wine or whatever  that may be hanging out with the family and doing it again. You know, and then you know when it’s  when it’s summertime or like it’s too hot in Italy, we fly to Sweden. We got to Denmark. We go  somewhere that’s significantly cooler or we go we go we go you know on the other side of the  equator where where you know it’s winter and we have that freedom because of the lifestyle  outside that we can do whatever we want. But it just goes back to the fact of like I just want  to continue to educate as much as I can. I want to learn everybody so they’re all the other  cultures and learn as much as I can from other people maybe get in a fight in Spanish or Italian.  That would be so fun to fight in a different language. Just you know doing things that they’re  just kind of goofy and and and setting the alarm clock because I want to get up not because I  had an 8 a.m. meeting a 7 a.m. meeting of work. I want to set the alarm clock because I want to  get up. I want to clean my establishment. I want to make sure that I’m ready that I’m mentally  prepared to teach that next lesson. Whatever it may be if I’m a professor or I just run a shop  it’s just teaching others setting my own schedule going wherever the heck I want to go in the world.  And you know taking my family and friends along with me and in hopes that hey man if you can  afford a plane ticket I’ll give you free free food free housing for you know the week the two  weeks whatever it takes but man come see the world come come see it even if you get to see the  small piece of Italy while I’m there at least she at least she made it there at least she made it  over the Atlantic and you can say I’ve now been to Europe right that’s that’s a huge win for me  and pick pick whatever you want if it’s not Europe pick some other place you don’t have to love  Europe like I do that doesn’t matter me one bit maybe it’s Australia for you right that’s what I  want for for US citizens because I think it’s becoming more and more rare that we’re not traveling  outside of our own borders and I think that’s that’s something that I’d love to encourage as I  before. Thank you for dropping so much amazing knowledge here buddy and we’ll round out with this  one question okay if somebody could only remember one sage piece of investment advice from your  entire life all of the experience that you’ve had along the way what would that one piece of sage  investment wisdom be I’m telling people to lean into those who have done it before you so  the the young Adam didn’t want to listen to others right you you your sage because you’re old  well I’m a sage because I’m young I wasn’t I had no idea what I was doing the blood the sweat the  tears and a decade of work is what what it took me that one piece of sage advice is lean into the  network look at others for guidance don’t ever be afraid to ask the dumb questions they they are  you know it’s a silly saying if there are no dumb questions there are in fact dumb questions but  don’t be afraid to ask them right so lean into that go to your network and and ask them how it’s  done it’s surprising to me the number of people I’ve gone to in my life excuse me that I’ve asked for  those dumb questions nobody sought to take my money nobody sought to you know say no I’m not doing  that it could be a no right not right now but they always come back so some people are always  willing to help other people most humans are pretty awesome especially people in this industry  we are a nerdy group of real estate people of syndication people of LPs that like to talk about  this stuff I you know I don’t care about the money on this side of it my entire intent in life if  I can put something on my gravestone it would be that you know Adam enjoyed teaching others right  and hopefully someone somewhere learned something be it you know I love to teach about wine I love  to teach about real estate I love to teach about money any of those things if I have that one  piece of advice though is is lean to the network ask the dumb questions and learn from learn from  what they tell you just listen you don’t have to take all the advice but maybe listen to some of it  right 18-year-old me if I could go back man I could have saved a lot of heartbreak if I would have  just taken that sage advice and just listen to some of my some of my folks who had been there before  me that would have been a big change for me I couldn’t agree more love everybody that resonates  with me I share the sentiment Adam what a wonderful conversation and thank you so much for sharing  all of that wisdom with us here today I tell you what I will take you up on that advice about wine  and that recommendation I’ll need that at some point so hopefully in the not too distant future  I’ll be able to take you up on that but for today we’ll get the heck out of here guys until next time  you be great you know what I appreciate most about this conversation with Adam is that it  it brings investing back to the real question what was it all for what is this all for it’s easy to  get caught up in the size of the nest egg the projected return or the next deal but Adam’s story  is a reminder that cash flow is not just a financial metric it is a fear reducer it is an option  creator it is what can give a family the confidence to move to travel to teach to build and to live  with much more intention there were a few really key ideas that are worth sitting with here first  your freedom number may be smaller than you think if passive income can ultimately cover the real  cost of your life the game changes second once you’ve built a really solid base the priority shifts  you do not need to keep swinging for home runs sometimes the wiser move is steady cash flow  lower downside and fewer strikeouts and third wealth is not just something that you transfer  it is something that you model Adam’s point about teaching his son through work travel generosity  and exposure to the world is exactly the kind of legacy thinking we want to highlight here  so the takeaway it’s not just invest for cash flow the deeper takeaway is know what you’re  trying to buy with that cash flow for most of us the answer is not more money it is time it is  freedom it is family and the ability to live the life that you actually designed play life on  offense with that we’ll get out of here for today guys until next time you’d be great